P2P Crypto Exchange
As the name suggests, P2P crypto exchange platforms, or peer-to-peer exchanges, allow users to trade conveniently and securely. These are some of the most efficient trading solutions for cryptocurrency users. Currently, there are numerous P2P digital exchanges available, which can make choosing a perfect platform quite difficult. Here, we will cover some of the top peer-to-peer crypto providers and their benefits.
Best P2P Cryptocurrency Exchange Platforms
All P2P exchanges work in a similar way, but they have certain differences. There are different exchange rates, various selections of payment options, etc. Because of the abundance of peer-to-peer crypto exchange solutions on the market, it might not be easy to pick a suitable option. Here are some of the top picks when it comes to reliable and convenient crypto exchanges.
This is currently one of the most popular cryptocurrency exchanges, thanks to its great solutions. This provider accepts more than three hundred different payment options, including classic digital methods like PayPal or Venmo, fiat currencies, credit cards, various gift cards, and even such assets as cars. However, users need to keep in mind that every payment method should be accepted by another trader to complete the transaction. Almost five million traders are now using Paxful.
This is a Finnish platform for P2P crypto trading that first opened in 2012. This exchange is one of the oldest and continues to deliver top-quality solutions. A wide selection of banking methods is available, including PayPal. No fees are included when purchasing or selling tokens via Localbitcoins. The only fees involved are those charged when users want to advertise their offers.
Another great trading platform is HODL HODL. This is a global crypto solution that uses escrow for securing all transactions. This way, a trading period is reduced, and all assets are securely locked until all conditions are met by both parties. No elaborate verifications are required, which allows trading securely and anonymously. Every trade comes with a maximum fee of 0,6% for both parties, meaning that both seller and buyer will only need to pay a 0,3% fee at most.
Binance is one of the leading crypto platforms in the world, and it has its own best P2P cryptocurrency exchange called Binance P2P. More than thirty currencies are supported on this exchange, which allows traders to place offers globally and exchange with other users on favorable terms.
WazirX is one of the great newest P2P crypto platforms with amazing functionality. This exchange will be convenient for beginners and experienced traders alike. This platform is known as the first exchange with automatic P2P features. This means that when placing an offer to buy certain tokens, the system automatically pairs this offer with a seller and vice versa.
This convenient P2P cryptocurrency exchange delivers unique trading solutions for users. It is required for all sellers and buyers to create adverts for their offers on the site. Every customer can then choose the pricing to be fixed or dynamic. However, this provider offers only three payment options, which are banking transfer, local Remitano wallet, as well as Chipper Cash.
With this crypto exchange platform, users can trade safely and quickly using more than 300 payment options. It is possible to buy Ethereum, Bitcoin, Polkadot, and other tokens here. The security is ensured by using crypto wallets with strong keys and various smart contracts.
This is a trading platform for trading Bitcoin specifically. All BTC users can benefit from this useful P2P platform that allows purchasing coins within three hours at most. This platform was created in 2019 and is quickly growing now, with almost 100 thousand clients using it for trading BTC.
What Is Peer-to-Peer Crypto Exchange
Peer-to-peer cryptocurrency exchange is a decentralized digital money exchange. Other centralized platforms have intermediaries that help with making crypto transactions, which adds time and requires paying fees. P2P crypto websites are decentralized, which means people can trade directly with one another peer to peer or person to person. Eliminating middlemen from digital currency transactions enhances the security of every trade and makes them more efficient overall.
How P2P Works
After picking the best P2P crypto exchange for you, it is very simple to start using it. Even beginner traders can make transactions easily and efficiently.
Crypto users can purchase tokens in three simple steps using a P2P platform:
· Place an order – after making an order, escrow will be used to process it.
· Pay the trader – after you find a seller for your order, pay them via any suitable payment solution. Notify the seller after completing your transaction.
· Receive tokens – as soon as the seller confirms receiving funds, your coins will be delivered to your account.
Selling digital currency via a peer-to-peer exchange is as accessible as purchasing it. Here is what you need to do:
· Place your order – same as with buying crypto, place your selling order.
· Confirm receiving funds – after the buyer pays for the order, make sure that assets arrive in your account.
· Send crypto – after verifying receiving money from the buyer, release your tokens so they can be transferred to the buyer.
Choosing P2P Crypto Exchange
Picking a trusted and convenient P2P crypto exchange is similar to selecting any centralized digital currency exchange. Here are certain features to pay attention to when picking an exchange that will be perfect for you specifically.
This is a crucial feature of any crypto exchange, especially when it comes to P2P solutions. While every digital currency exchange accepts a certain set of payment solutions, such as only crypto, a single cryptocurrency, a mix of crypto and fiat currency methods, digital payment options, such as PayPal, etc., it is also important that your trading partner accepts these methods. As P2P cryptocurrency exchange platforms are made for trading between two users directly, it is up to the person you are trading with to select the most convenient payment option. This is why you should always check the payment options available on the site and make sure that at least a few of them are suitable for you.
The security factor in P2P trading depends heavily on users themselves. It is up to you to keep your private access keys safe so that nobody can get into your wallet. In addition, picking a person to trade with is also a responsibility. It is important to check their profile and decide whether they are a reliable trader or suspicious accounts. Various encryption protocols and escrow measures add to general security, but every user should also be mindful of their trades.
P2P trading platforms are not usually picked by advanced traders that work with big volumes of crypto. Because of this, trading on such exchanges might be slower for an average user. It is better to choose a bigger platform with a larger client base to have better trading opportunities. Otherwise, there is a possibility of waiting for a long time before your trade is accepted and then some period until the other trader completes their part.
Centralized crypto exchanges usually require signing up and providing an e-mail at the very least. Some trading platforms ask for passport information and other private data from their users. On the other hand, P2P crypto exchanges usually provide decent privacy. Some of these platforms do not require registering an e-mail or anything like that. There are exchanges that require signing up, but they still do not require any specific personal info.
Because P2P markets are non-custodial, users should have much lower fees by default because of eliminating intermediaries involved in centralized trading systems. The majority of P2P crypto websites do not have any trading fees whatsoever. They mostly require paying fees after advertising your offers, which is not the same as simply placing your offer on the website. All transactions are held between two users directly, which is why there is no third party to require additional payments. In case there are certain fees, they are incredibly small, ranging about 1% for both sides, which is 0,5% per person or even lower. Higher fees can be imposed in case some alternative payment options are used.
How to Trade
One of the advantages of using P2P platforms for trading cryptos is that they are very easy to use. Thanks to user-friendly design, such platforms are especially convenient for beginners. Here is a step-by-step guide on how to trade via P2P crypto solutions.
Create an Account
Complete registering on the P2P platform of your choice if necessary. Most crypto exchanges support signing up with a digital currency wallet, such as MetaMask and others. Create your account on the website by either signing up from scratch or using your electronic wallet.
See Who's Buying and Selling
Look through the offers available on the marketplace. Pick a buyer or seller, depending on your requirements. You can also place an ad for a trade yourself. All existing offers can be usually filtered by the crypto offered, available payment solutions, prices, etc.
Open a Trade
In case you discover a trade that suits you, it is time to open it. Select the amount of assets you want to sell or purchase and agree on an exchange rate for this trade. The trader that created this offer will receive a notice and contact you as soon as possible.
Make the Exchange
After agreeing on the trading conditions, the seller should lock the required assets using escrow solutions. Payment details should be discussed privately to select the most favorable conditions for both parties. Tokens remain protected in an escrow account until the buyer pays for them. This way, there is a guarantee that both parties complete their parts of the trade. As soon as the seller confirms receiving their payment, the assets are delivered to the buyer’s account.
Peer-to-Peer vs. Centralized Exchanges
The main difference between these two types of crypto exchanges is that P2P platforms are decentralized as opposed to centralized exchanges. Centralized crypto platforms work similarly to banks where managers oversee all activity and operate the platform. P2P solutions, on the other hand, allow users to trade with one another without receiving assistance from intermediaries that also require paying fees and without sharing personal info. Both options have their own benefits, which is why all crypto traders should select a platform based on their preferences.
The Good and the Bad
Just like any other crypto exchange solution, peer-to-peer trading platforms have their own pros and cons. Here are the key benefits and disadvantages of using P2P platforms for cryptocurrency trading.
· Flexibility of payments – with P2P trading, it depends on users to accept or decline payment solutions. While centralized exchanges only deal with certain crypto or popular fiat currencies, P2P traders can accept anything, from various currencies to gift cards and even physical objects like cars. If you want to sell a house appliance for tokens, there is a chance you will find someone to agree on such a trade.
· Security – because of decentralization, P2P websites themselves do not have access to user funds. All assets used in trading are protected by escrow systems until all trading conditions are met. This ensures maximum safety for both parties and the platform itself.
· Low fees – because P2P platforms do not involve middlemen that partake in trading as well, there are often no fees involved with every trade. However, there can be specific fees related to advertising offers. This is not obligatory as traders can place their offers for free without paying for an advert.
· Accessibility – P2P trading websites offer a wide selection of payment options, which means it is completely possible to pay for tokens without having to use a bank transfer. Not all people have access to such financial operations, and P2P platforms facilitate the process of buying crypto by only having to use a smartphone with an Internet connection.
· Transactions speed – decentralized P2P systems do not have intermediaries that help with streamlining trades. It takes time to find a person to trade with, agree on the terms for the trade, pay via a specific method, and then receive your assets.
· Simplicity – while such platforms are user-friendly, it might require some time for the users to adjust after using centralized exchanges where middlemen do all the work. Some time on figuring out how to deal with other traders directly might be needed.
· Lower liquidity – decentralized exchanges have lower trading volumes, which affects liquidity. Lower liquidity results in difficulties with finding other traders.
Overall, P2P cryptocurrency trading platforms are great for beginner users and those who want to trade smaller volumes of tokens. While experienced traders prefer centralized exchanges to deal with large quantities of crypto, P2P solutions are more suitable for people that look forward to buying fewer tokens with the help of various payment methods. Thanks to escrow solutions, P2P trading is very secure for both parties as the money is not held by the platform or any intermediaries. There is also more flexibility for people that cannot use regular banking transfers and prefer alternative payment methods.
Frequently Asked Questions
What Are the Main Peer-to-Peer Crypto Exchange Features?
The key feature and one of the main advantages of P2P crypto exchanges is the absence of intermediaries, which is the idea behind peer-to-peer trading. This allows trading directly with another crypto user, which is considerably faster and more secure. In addition, P2P platforms are non-custodial, which means that users are full owners of their own crypto, and nobody else has access to their private keys.
Why Use P2P Exchange for Cryptocurrency?
Using the P2P method for cryptocurrency trading is preferable because of its high security. Thanks to Escrow solutions, all transactions are extremely safe. With P2P trading, two users can exchange crypto directly and use their preferred payment options. As there are no intermediaries, such transactions also involve zero fees.
Is P2P Exchange Safe to Use?
Yes, P2P solutions are some of the safest when it comes to crypto trading. This is because the platform does not have access to any personal information or transaction data, and only traders have full control over their funds. There are also no reserves of digital assets on such platforms, which means hackers will not be too interested in hacking them.