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Paxful, like LocalBitcoins, is an online peer to peer (P2P) over the counter (OTC) exchange where peers interface with the advertisements of other peers offering to trade for Bitcoin using online wallets like Paypal, gift cards, domestic bank transfers, and others.

Prepaid cards were being used as shadow currency long before bitcoin was invented. Their current and continuing popularity in crypto (and other communities) is because prepaid offers many advantages over on-chain tokens. Unlike crypto, an electronic retail voucher can be redeemed near-anonymously, instantly, at face value. Use will usually fall below the purview of financial regulators. Purchases and transfers are largely untraceable. Trust rests in a central counterparty, with a multinational corporation acting both as the custodian and the clearing house. Sales are VAT-exempt and the reporting of capital gains is a matter of personal conscience.