A Brief History
Co-founded by Ray Youssef and Artur Schaback in July 2015 and based in Tallinn (Estonia), Paxful first started as a payment processing platform for mainstream merchants, eventually being re-introduced on the Bitcoin market as Paxful, Inc.
Paxful’s claim to fame is it’s facilitation of Bitcoin purchases, and also emphasizing an enormous peer-to-peer network which has become the service’s chief focus.
Languishing in relative obscurity under the name EasyBitz up until late-2014/early-2015 (and having fully re-branded to Paxful Inc by mid-April 2015) the platform saw a large up surge in users after a classified advertising website named “Backpage” suffered the removal of their online credit card services- which in turn lead the site to provide Paxful links to their users, which was then known as the “Backpage Effect” by the platform’s co-founders.
By 2016, Paxful Inc had seen further increases in their popularity among users (with the launch of the Pay with Paxful feature – a system allowing users to pay with Bitcoins in an instant) and by 2018, Paxful Inc had provided more than 300 payment methods for users and has expanded its services worldwide (including financial hubs such as New York, The Philippines and Hong Kong, just to name a few) and is the one of the largest USD peer-to-peer Bitcoin marketplaces in the world by volume, with a revenue of over $20,703,199 as of December 1, 2018.
To date, one of the most popular payment methods available on the platform is through gift cards, which makes up 64% of the trades conducted on the platform and over $880,000,000 worth of Bitcoins being purchased.
The Pros
By connecting buyers and sellers on their platform, Paxful allows people to trade in Bitcoin relatively safely and with minimal effort; they do not function as an exchange that stores crypto-assets, but rather simply provide an exchange platform for their users and providers.
This allows Paxful to offer more than 300 payment options for its members, from cash and/or digital payments and everything in-between, users can choose how to pay for their Bitcoins – which in turn is what allows Paxful to offer such a lucrative service for first-time or inexperienced users.
Transitioning to that subject for a brief moment, Paxful’s interface is extremely user-friendly and welcoming for beginners. Anyone who wants to buy crypto-assets using digital payments can easily make a purchase, meaning that you do not need to spend time going around the website and learning about its functionality (except when dealing with unknown or untrusted traders, which is obviously NOT recommended for inexpert users).
Orders are processed quickly on Paxful; their payment process is seamless and has many different pay-out options, and if you want to make a cash deposit to your Paxful account, you can do that just as easily too. Later you just need to upload your receipt- after which you will receive your Bitcoins in your wallet, with no fuss, fretting or even excessive time needed.
Finally, users are not required to share their identification details for cash purchases (you can even meet people in person if you want to make a cash payment in exchange for cryptoassets- so you can choose from the most reliable, locally based people dealing in bitcoins if you so wish), which gives them the freedom to be anonymous on Paxful and deal in bitcoins without the due worry of trackers and other, more insidious forms of Internet hounding.
Alternatively, users have the option to activate 2FA (two-factor authentication) on their devices to add an extra layer of security, and you can also verify your mobile numbers and email ID if needed.
The Cons
One of the most commonly discussed disadvantages of Paxful is it’s limited payment options for users who wish to remain anonymous (though the platform still provides more options for incognito transfers than many of its competitors).
The bottom line is that, if you are buying Bitcoins using your debit cards, you might have to verify the bank account first and submit a valid ID too.
Also, and not unimportantly, Paxful charges 1% of fees from sellers, prompting them to raise the fees of overall trade in order to provide incentive to use their trading platform! Since only sellers are charged, it is natural that the price of Bitcoin will always be higher than other exchanges.
Last time we checked there was a $10 dollar fee for sending crypto from your own wallet, something to take into account if you are going to be using Paxful often.