xCoins Review - Should You Use xCoins to Buy and Sell Bitcoins?
There has been a lot of chatter recently regarding a bitcoin lending service called xCoins. It is one of the only services that allows you to buy bitcoins with Paypal, and you also have the option of using a credit card. In my xCoins review, I will give you a breakdown of how xCoins works and if it is a service worth using.
After registering your account at xCoins.io you will indicate that you would like a bitcoin “loan”. First-time users are required to undergo a verification process where you submit a copy of your ID, along with a photo of yourself holding the ID with a note that reads “xCoins”. This helps to protect sellers, but we will discuss this more in the “Lending Bitcoins on xCoins” section.
Once you are verified, you can deposit the USD-equivalent of the amount of BTC that you would like to borrow, any PayPal or credit card fees, and a fixed amount based on the interest rate of the loan. The fixed amount is not based on the length of the loan, and all together you can expect the additional fees to add up to about 20%.
One of the main selling points that I want to mention in my xCoins review is that you can use Paypal to buy bitcoins. This payment method has long been associated with chargebacks by fraudulent buyers, but xCoins is able to offer it to buyers because their policies help to mitigate this risk.
It is also impossible to get scammed out of your money when you make your initial deposit and sign an agreement. xCoins will only match buyers with lenders that have an adequate balance in their xCoins wallet. Your BTC is reserved instantly and automatically transferred to your wallet by xCoin, not the lender.
You can pay the loan back in one lump sum at any time, whether it’s days or months later. All loans are paid back in the amount of BTC equivalent to the dollar price that you paid. So if you borrowed $200 when the price of bitcoin was $2,000, without fees you received .2 BTC. If the price of XBT is at $3,000 when you go to repay your loan, you only need to give back .1 BTC.
Lending bitcoins on xCoins involves funding your xCoins wallet with bitcoin and specifying the maximum amount that you want to invest. The site says that you can set your own interest rate, but it seems as if the amount is currently set at 15% around the board. The xCoins platform will automatically match you with interested borrowers and you will receive their USD deposit amount plus the 15% commission. xCoins makes around 10% in profit.
I touched on it briefly earlier, but xCoins makes bitcoin Paypal transactions less risky. By requiring the borrower to send in a selfie with “xCoins” written on a post-it, it protects you as a lender should they initiate a chargeback. It would be nearly impossible for a buyer to deny making a purchase when there is photo evidence that they were using the site.
One point I want to make in my xCoins review before diving into that answer is that you shouldn’t get confused by the borrowing/investing aspect of xCoins. Though advertised as a “bitcoin lending service”, it is really just a platform to buy and sell bitcoins. By not requiring a date that the BTC “loan” must be paid off, it makes it somewhat obvious that people are purchasing the digital currency for keeps. It might be that the company classifies itself as a lending company for legal reasons.
With that out of the way, I would say that the fees for buyers seem a bit high compared to other bitcoin exchanges. Depending on the state that you live in you may be able to receive BTC for as low as 1.5%, but this is still a relatively new service that I personally have not been able to use. Also, with the hurdles that you often have to go through when attempting to buy BTC with Paypal the fees may be worth it. xCoins makes it pretty easy to buy with their platform and they are reliable thus far.
Sellers can make decent profits with the site but there is still a small risk of chargebacks when using Paypal. There is also a chance that Paypal will flag your account, but not many lenders have reported having this particular issue. The fact that the platform will vet potential borrowers and then automatically handle transactions is extremely convenient. Saves you a lot of time, and though there will still be shady buyers here and there, you are better protected against them when you use xCoins.
It does seem that the site is notorious for having slow customer support which can be frustrating. When you read through forums and other reviews you will likely see this issue mentioned.
Aside from this, I would say our bitcoin review of xCoins shows it's a legit bitcoin site that you can use to buy or sell bitcoins. You can buy bitcoins quickly and you actually can use other payment methods besides Paypal for borrowing/lending. xCoins.io is still relatively new, so I personally would wait until it has matured a bit more before buying or selling large sums of bitcoin.