XCoins: A Comprehensive Review

Launched in California on August 5, 2016, XCoins strives to solve one of cryptocurrency’s biggest issues.

It lets you pay with traditional centralized methods like PayPal and credit cards.

This is something that cryptocurrency exchanges have been wary of for years, and with good reason that we will get to shortly. For more information on buying and selling cryptocurrency check out our Exchanges Guide.


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But does XCoins actually solve the problem? Is it a safe and secure system?

Let’s find out together!

How does it work?

The main issue plaguing PayPal and credit card transactions in the world of digital currency comes down to one issue. Finality.

By that, I mean Bitcoin transactions are final. There is absolutely no reversing them. PayPal, bank, and credit/debit card transactions are all reversible. This creates a perfect storm for scammers.

I could buy $1,000 worth of Bitcoin from an exchange using a credit card. Then, once I’ve got the funds safely in my Bitcoin wallet, I just dispute the charge, get my money back, and now I’ve got my $1,000 and my Bitcoins.

Many exchanges have tried to fight this by placing a hold on these transactions, forcing the buyer to wait a few days.

XCoins claims that they’ve found a loophole in this issue. Through their platform, you don’t buy Bitcoins, you enter into a secured Bitcoin loan.

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A secured loan takes place when a borrower pledges financial collateral in exchange for a loan. Many of the most important purchases in our lives come in the form of secured loans.

Mortgages and car loans are a perfect example of this.

Through XCoins, a lender gives a borrower a set amount of Bitcoins. In exchange, the borrower pays the worth of those coins in actual US dollars, plus interest and fees.

The transaction is instantaneous and the borrower can use those coins as they see fit, and pay the lender back on their own time. When they pay the lender back, they receive their cash back.

If the borrower doesn’t pay the lender back, the lender just keeps the cash. The buyer can also return any unused Bitcoins in exchange for their collateral, minus the fees.

Let’s be clear, this is a “loan” in name only. It’s a creative way to dance around the PayPal and credit card scammers, but the borrower doesn’t ever have to pay the lender back, and the lender loses nothing from it.

Privacy- How Secure is it?

Any peer-to-peer network is going to raise some safety concerns, and make no mistake, this is very much a peer-to-peer network. All fees are determined by the lenders and XCoins acts as an intermediary between the two users.

XCoins provides protection for accounts in the form of a two-factor authentication. This security measure has you input an additional code at login after you’ve already entered your password. The code is sent out, usually via text message, but can also be accessed using Google Authenticator.

Two-factor authentication is a pretty common security step for crypto exchanges, but most of them make it an optional service. XCoins requires all users to have it. When you sign up for an account, they immediately ask for a phone number before you can start trading.

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The greatest security concern that XCoins addresses is the ability to use a credit card or PayPal without being scammed out of your coins.

However, the company was successfully hacked in January 2017, so their ability to protect borrowers and lenders alike falls into question.


XCoins rightfully touts their impressive list of pros all throughout their site. It’s fast, it addresses a key safety concern of the crypto industry, it’s easy, and it’s an automatic process.

1. Refunds

Refunds are not something typically associated with Bitcoin transactions, but XCoins is a refundable service.

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If you borrow from a lender and then change your mind, you can return the Bitcoin for a full refund of its value, minus any fees that you’ve paid into it.

2. Quick and Easy

XCoins might be one of the fastest and easiest exchanges we’ve ever seen. It’s always easier to pay for something using tried and true methods like credit/debit cards, PayPal, or ACH bank transfers. We use these everyday for purchases. This makes crypto trading as easy as shopping on Amazon.

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It’s also lightning fast. You have your funds instantaneously. Can’t beat that!

3. Automatic Peer-to-Peer System

XCoins might be a peer-to-peer system, but it does not share the weaknesses inherent in other P2P platforms like LocalBitcoins. These exchanges make it necessary for buyers and sellers to constantly communicate and take action.

XCoins automates the process. The lender places Bitcoins into their XCoins wallet, then, once the borrower has paid the collateral, interest, and fees, XCoins automatically releases the currency into their wallet.


There is risk inherent in any P2P platform, and XCoins is no different. While they may automate the process, their pricing structure borders on outrageous. Repayment on loans also might negatively impact buyers and sellers due to the volatility of Bitcoin pricing.

1. High Fees

All fees are dictated by the lender, but XBase makes recommendations to help these lenders keep up with the market.

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While that sounds great, XBase’s actual recommendation for new lenders is a whopping 15%. (More on this later)

2. Price Volatility

Bitcoin fluctuates in value minute by minute and experts agree that this is not going away anytime soon.

“Unfortunately, the same model that told us we would be going to $5,900 is telling us that there is more blood to come,” said Ran Neuner, who runs the enterprise tech company Onchain. “The model is calling a 62% chance of a bear market, and a bear market means that we are going to test $5,350 as the next point.”

That means, when it comes time to pay the loan back, borrowers and lenders could see either a profit or loss, depending on how the market has shifted.

If someone borrows $1,000 worth of Bitcoin right at this moment, they’d be receiving 0.16 BTC. If that were to depreciate before repayment of the loan, the borrower still returns $1,000 worth of Bitcoin to the lender.


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Let’s say the market tanks, and Bitcoin prices drop by 50%. The lender is only getting back 0.082 BTC.

3. No Lenders Available

Your ability to trade on the platform depends upon the availability of lenders who meet your budget. You might want to get $1,000 worth of Bitcoin, but if there are no lenders who are offering that, then you’re out of luck and will have to try again later.

With non-P2P exchanges, you would never have to worry about such a thing.

Limits & Liquidity

All borrowers on XCoins have to adhere to certain limits.

All transactions have a minimum requirement of $10. That’s super low, which is great. It assures that anyone will be able to use the system.

The maximum limit starts at just $200 for brand new users and goes up from there for 90 days.


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The most you can ever spend in one day on XCoins is $1,000. That’s $7,000 per week and up to $31,000 per month. While this may seem like a lot of money, it’s nothing to some of the big name crypto players, who make trades in the hundreds of thousands to millions of dollars.

These limits keep XCoins grounded as a low-end exchange.

How Fast are the Transactions?

The overwhelming majority of XCoins transactions go through instantly. First-time borrowers may see some extra time tacked on to the approval process.

If the transaction occurs between 8 a.m. and 6 p.m. PST, it could take up to three hours. First-time buyers who have made their purchase between 6 p.m. and 8 p.m. PST could see delays up to 12 hours.

After that initial exchange, all transactions will be instantaneous.

Ease of use

The XCoins sign up process is pretty straightforward. First, you have to fill out a very short form that asks for your first name, last name, and email address.


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You will then confirm your email address. They will give you a confirmation code that you’ll have to enter.

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Then you’ll be asked to create a password. It must have eight characters, including capital and lowercase letters, numbers, and a special character.

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Once you’ve created a password, you’ll have to provide your mobile number for the purposes of two-factor authentication. After that, you’re ready to start trading.

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Once you enter the amount of Bitcoin you’re looking for, the system will match you up with a lender who meets your criteria.

You send the lender your collateral payment plus fees. Bitcoins are then released into your wallet, and you’re done.

Exchange Rates

XCoins allows lenders to set their own interest rates. As mentioned earlier, they recommend starting at 15% and going up or down from there based on the market.

This is a startlingly massive fee.

Most cryptocurrency exchanges charge somewhere between 0.2% and 1%. This is literally 1,500 times more expensive than even its most expensive competitor.

But that’s not all. On top of the lender fee, buyers also have to pay a loan origination fee (additional 5% of the loan or higher), a payment processing fee (another 2.9%) plus a mining transfer fee of .0002 BTC.

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That’s over 20% in fees. While this is amazing news for lenders, it really hurts the borrowers, who are sacrificing an awful lot of money for the ability to use PayPal.

Reputation of the Exchange

There’s a lot of negative XCoins reviews circulating out there. Many, understandably, have to do with their outrageously high fees.

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Some Reddit users have taken to calling it a scam, because PayPal rejected their transaction and they were cheated out of coins.

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It seems as though XCoins’ customer service department bears the brunt of most customer complaints. Many users have publicly claimed that the much maligned department has taken days to respond.

What Payment Methods Can You Use?

XCoins accepts a number of major payment methods. They do not allow users to trade other altcoins such as Litecoin or Ethereum. This is strictly a fiat currency to Bitcoin exchange.

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They accept all major credit cards, including Visa, Mastercard, American Express, and Discover. They take both PayPal balance and PayPal credit transactions. Borrowers can also pay using ACH bank transfers, and eChecks.

All payments are processed through PayPal, but buyers do not need to have a PayPal account to do this. They can pay with any of these methods through the PayPal website without an account.

Lenders have to have PayPal, as it is the only platform used to receive funds.

Wallet availability

XCoins provides digital cryptocurrency wallets to borrowers and lenders alike.

A cryptocurrency wallet is an online repository where traders can keep their coins in a secured location.

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This lets them keep their Bitcoin on the site for trading purposes. When a trade goes through, Bitcoins are transferred from the lender’s wallet directly to that of the borrower.

Because of XCoins’ history of being victimized by hackers, it’s probably a good idea to keep any coins not actively involved in trading offsite in a personal cryptocurrency wallet.

Identity Verification Requirements

XCoins doesn’t need a lot of information on you. They only require your verified email address, first name, last name, and a mobile phone number. While this is more than most cryptocurrency exchanges, which usually only require an email address, it’s still not a ton of identifying information.


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Just remember that all fiat transactions have to go through PayPal, which is a service that verifies a lot of info. They take your drivers license, proof of residency, and proof of social security number when you sign up. That’s a lot of data, but it’s important to remember that PayPal was not created with cryptocurrency trading in mind and can’t be held to the industry’s privacy standards.

Countries Availability

When you first sign up for XCoins, you are given a list of countries to choose from. This list is not found anywhere else on their site, but it contains over 350 nations from around the world.

This is clearly a very widespread service, but it only trades in US dollars.

What Coins Can You Buy?

XCoins doesn’t have a huge selection. You can only buy one coin, and that is Bitcoin.

This is not uncommon in a cryptocurrency exchange. Because Bitcoin is the largest and most well-known cryptocurrency, it is the most widely traded.

XCoins tries to reinvent the cryptocurrency wheel by operating the same as a normal exchange but by calling it something else. Whether the ability to use card transactions and PayPal is worth the additional fees is up for debate, but it has not stopped XCoins from continuing to grow over the years.