The Secret to Buying Bitcoin with Cash

By Rich Apodaca | Updated

Let’s face it – getting ahold of your first bitcoin isn’t easy. It may seem like buying a “digital currency” should be as simple as entering a payment amount and a credit card number into a website form. But if you’re like thousands of beginners, you’ve discovered the surprising, disappointing truth: it doesn’t work that way. Worse, buying bitcoin seems to either involve the digital equivalent of root canal or a shady cash deal with a total stranger.

Fortunately, US residents can take advantage of another option. It does away with the need for credit cards, bank accounts, picture IDs, and biometric scans. It can work with as little as $5 cash. Best of all, this option eliminates the need for awkward meetups with total strangers.

Rethinking Localbitcoins

Localbitcoins helps match bitcoin buyers with sellers. Since 2012, this international service has earned the reputation as a top marketplace for in-person bitcoin trades. Localbitcoins counts over 110,000 active traders exchanging 1,400-3,000 bitcoins in daily volume.

In-person meetings are only needed during the actual transfer of cash. Localbitcoins handles the rest of the transaction online. Fortunately, Localbitcoins supports a variety of payment methods. The one I’ll show you here is called “Cash Deposit”.

Cash Deposit

Cash Deposit offers a legal, effective, and reliable way to get your payment to a Localbitcoins seller without an in-person meeting.

You may have previously deposited cash into your own bank account by filling in a deposit slip and handing both cash and the slip to a teller at a local branch. It turns out that anyone who knows your bank account number can give you money by doing the same thing. Banks generally don’t care whether you own the account. Cash can be deposited in any branch nationwide - not just the one the account owner normally uses.

Localbitcoins uses this standard banking service to eliminate the need for an in-person meeting between buyer and seller. Cash Deposit offers these advantages:

  • Buyers are protected from fraud by Localbitcoins escrow.
  • Buyers can arrange a payment time that best suits their own schedule.
  • There is no need to maintain a bank account at the payment bank branch.
  • The payment bank branch can be chosen to be close to the buyer’s own bank or ATM.
  • The buyer’s risk of being assaulted or threatened is reduced.


Localbitoins requires that buyers register with the service before making trades. If you haven’t yet created an account, do so now by visiting the registration page. Log into your account after it’s been created.

1. Find Offers

Begin your purchase by visiting the Instant Bitcoins page. An orange form appears near the top. Enter your city and the amount of your purchase in dollars. If it isn’t already selected, choose the “Cash Deposit” options from the “Payment method” pulldown. That leaves only the dollar amount of your purchase to decide.

Instant Bitcoins

You may wonder how little you can spend. It’s not necessary to buy an entire bitcoin; fractions of a bitcoin are traded all the time. For example, I’ve successfully bought as little as $5 worth of bitcoin on multiple occasions from Localbitcoins. Keeping the initial purchase price small reduces risk all around when you’re new to Bitcoin.

After entering a dollar amount of your purchase, click “Find offers”. Matching offers appear below the search box. Each offer shows the trader’s username, the bank branch at which payments are accepted, and the exchange rate. Choosing an offer from a seller who is currently online may increase your transaction’s processing speed. These sellers are shown with a green circle next to their names.

Seller ratings play a critical role on Localbitcoins. Next to the name of each seller appears the number of trades made and buyer satisfaction rating. Choosing a seller with an established track record increases the chances of success on your first trade.

Finding Localbitcoins Offers

2. Place an Order

Having found a seller, click the “Buy” button next to the name. You’ll be directed to a page listing the details of the seller’s offer, also called an “advertisement”. If you’re curious about your seller, you can view his/her profile by clicking on the name. Below the USD and BTC amounts of the offer, you’ll see a link labeled “Send trade request”. Click this link when you’re satisfied with your order.

Finding Localbitcoins Offers

Localbitcoins protects sellers from fraud through an escrow system. After submitting your order, the seller’s bitcoins are locked. The only way for the seller to recover them is for your order to be canceled or fulfilled. On receiving your cash deposit payment and receipt, the seller will release the bitcoins to your Localbitcoins account.

After clicking on the “Send trade request” link, you’ll be directed to a page with instructions on completing your transaction.

3. Pay with Cash

On sending a trade request, you’ll see an order page. This page contains instructions for depositing cash into the seller’s bank account. At this point the seller’s funds have been transferred to a Localbitcoins escrow account.

Bring your cash and the seller’s account number to a local branch of the seller’s bank. Pick up a deposit form and fill in the date, the seller’s bank account number, and the seller’s name (if given). Approach the window and hand the teller your cash together with the deposit slip.

Sample deposit slip

The banks with which I’ve used Cash Deposit (Wells Fargo, Chase, and Bank of America) asked no questions other than to confirm the name of the account holder. No teller has ever asked to see my ID.

On completion of the deposit, the teller will give you a receipt. Keep it safe for the next step.

4. Send Receipt

To release bitcoin from escrow, sellers require proof of cash deposit. The most common form of proof is to send a direct message to the seller through the Localbitcoins site. This message often contains your order number and an image of your deposit receipt. Because sellers require varying degress of proof of deposit, it’s best to follow the specific instructions given with your order.

5. Receive Bitcoin

The amount of time you’ll need to wait for your order to be fulfilled depends on the seller and the conditions placed on the order. For example, some sellers offer instant escrow release, meaning that bitcoin is released as soon as a buyer says the transaction is complete. Other sellers can be found online frequently and are ready to release from escrow as soon as they receive notification of payment from their bank. A few sellers process orders at a more leisurely pace.

The level of service offered by a seller depends at least partially on the exchange rate being offered. The best rates are often offered by sellers with slower turnaround times. In my experience with four sellers, turnaround times have ranged from a few minutes to about an hour.

After the seller marks your order as complete, Localbitcoins will move your bitcoin from escrow to your online wallet. To access this wallet, click your username in the top right of any screen and select the Dashboard pulldown. The link to your wallet apppears in the top-left of your dashboard. Bitcoin can be transferred out of your Localbitcoins wallet to a Bitcoin address of your choosing.

Wallet link

You’ll be notified of completion of your order via email and the Localbitcoins website. To improve quality, Localbitcoins encourages both buyer and seller to rate each other after every trade. Rating a seller also helps the buyer because these ratings are and can be used when screening sellers in the future.

Fast and Convenient

One of Bitcoin’s best-kept secrets is the Localbitcoins Cash Deposit payment method. This option makes it possible to pay for bitocoin orders with cash at a bank branch. No in-person meeting or bank account is needed, and the bitcoin being traded is protected through a third-party escrow.

Whether you’re starting out or have made several trades already, the Localbitcoins Cash Deposit option is a fast and convenient way to pay for bitcoin purchases.