I tried trading bitcoins on localbitcoins iTunes payment section. There is a huge trade happening between gift cards and bitcoin. This surprised me as well at first. Why is this, why would anyone want to sell bitcoin for gift cards? Why would anyone want to buy a gift card and then purchase bitcoin with it?
The answer is simple – 2 billion people in the world are unbanked. They do not have the option of just getting their bitcoin at the market price on an exchange. Also if you need bitcoin fast and you’ve not gone through the verification process with an exchange, you can get bitcoin pretty much instantly with a gift card.
So, I tried it out. Why? Because people will buy bitcoin with quite the high markup when paying with gift cards.
I created some offers on localbitcoins.com iTunes gift card payment method. Why? Firstly, just as an experiment. What could I do with these iTunes gift cards? I purchased a whole lot of music, apps and books – all at a discount. So if you are a regular spender with iTunes, you can save 20% when selling bitcoin for iTunes gift cards.
Localbitcoins iTunes gift card trade is over?
To my sadness I found out yesterday that for some reason localbitcoins iTunes payment method has been removed. This is the official announcement on their forum:
They didn’t exactly give a reason why the localbitcoins iTunes payment option was removed. There are threats on the forum that if anyone tries to trade on the forum or even talk about it, they will be banned. I have got in touch with their support as well, no answer still.
Why have they stopped this? One can only speculate. Maybe they don’t see it as a viable payment method, perhaps they are worried about the risks. The fact is though, for people who do not have access to banking services, like 70% of Africa for example, it is one of the best ways to buy bitcoin with. Does this mean that people will start to take advantage of this payment method? Of course! There are scammers in every field of finance. Credit card fraud and money laundering through cash is still leading it.
I’ve been asked this before – gift cards, surely this is all scammers? The thing is, most people do not scam. Same thing with gift card trades – this solves a problem quickly for people who cannot use another payment method to buy bitcoin. Most people are honest and are just trying to go about with their daily lives, yet a few of the bad apples give a larger group of people a bad rep. For example the Nigerian princes that have some money for you. Does this make the whole nation fraudsters? Absolutely not.
Paxful as an alternative
So, even though still an experiment and also getting fascinated what other stuff I could get for a lower price through selling bitcoin for gift cards, I had to quickly find another place to sell my bitcoin for gift cards. Luckily there’s another way – Paxful. Actually maybe this is a bit better. On Paxful you can buy bitcoin with over 300 ways to pay. This means I can trade my bitcoin for almost anything. I will see how this goes and perhaps write up an update soon.
Where do you normally sell your bitcoin? Let me know in the comments!