Peer-to-peer (P2P) trading is the direct buying and selling of cryptocurrencies among users without intermediaries. P2P exchanges connect buyers and sellers and provide a layer of protection through escrow services, feedback/rating systems, and dispute resolution.
P2P cryptocurrency trading is a method of buying and selling cryptocurrencies directly between users without the need for a central intermediary. Users can use a P2P exchange to access a global marketplace, multiple payment options, and personalized offers. However, P2P trading also has its drawbacks, such as slower trading speeds and lower liquidity. In this article, we will discuss the pros and cons of P2P trading and how people can benefit from it.
P2P crypto trading refers to the direct buying and selling of cryptocurrencies among users, without a third party or an intermediary. This is unlike buying and selling cryptocurrencies using a CEX, where you cannot transact directly with counterparties.
Think of a P2P exchange in the same way you might Facebook Marketplace — they are similar in that they both connect buyers and sellers. However, buying or selling something on Facebook Marketplace can be tricky as the counterparties are strangers and it’s difficult to establish trust.
P2P exchanges aim to not only connect buyers and sellers, but also provide them with a layer of protection by securing transactions and reducing the risk of fraud. Buyers and sellers can browse crypto ads and post their own ads while enjoying this protection, made possible by feedback and rating systems.
In addition, the P2P exchange uses escrow to secure the crypto being bought and sold until both parties have confirmed the transaction. For example, if you are selling bitcoins for fiat money, FastGain will escrow your BTC. Once you receive the fiat money, you can confirm the transaction and the BTC will be released to the buyer's wallet.
If either party is dissatisfied with the transaction, they can file an appeal to resolve the issue with the counterparty, or have FastGain Customer Support step in. Do note, however, that the appeal must be filed during the order process, while the order is still pending.
P2P trading is a convenient way to invest in cryptocurrency. Not only does it allow you to buy or sell cryptocurrency directly with others, it also lets you avoid some of the transaction fees associated with traditional exchanges.
P2P trading provides arbitrage opportunities with fiat money. With over 100 fiat currencies to choose from on FastGain, for instance, you have the opportunity to benefit from the price differences between these fiat currencies.
P2P trading provides plenty of opportunities for arbitrageurs, because there are often significant price differences between exchanges. Many people use P2P trading to buy and sell crypto assets in order to benefit from these differences.
This method allows you to post an ad on a P2P trading platform, featuring the asset you are interested in buying or selling and the price at which you’re willing to transact. Once your ad is posted, other platform users who see it will then decide if they want to trade with you.
While arbitrage can be beneficial to a trader, it comes with its own risks and costs. For instance, shifts in exchange rates may drive the value of a currency or asset down. In this case, a trader may experience financial loss if their asset's value decreases before they manage to sell it on another market.
In addition, there are banking fees associated with transferring assets between markets, which can eat into profits. There may also be other indirect costs, such as the cost of financing transactions and the opportunity cost of not investing funds elsewhere.
P2P trading is generally safe but this usually also depends on the exchange and the safety measures it has in place. While older P2P exchanges came with higher risk of theft and scams, many newer P2P trading platforms have greatly improved their security measures.
A leading P2P exchange today will have an escrow service, regular security updates, and a stringent identity verification process (among other measures) to keep users safe. However, even with robust safeguards in place, all trading activity comes with risks — and P2P trading is no exception.
P2P cryptocurrency trading is a way to buy and sell cryptocurrencies without involving intermediaries. With P2P trading, you control the prices, counterparties, and timing of your transactions. It can be likened to Facebook Marketplace but with an added layer of security through feedback systems, ratings, and escrow services.
This global marketplace provides access to a variety of payment options, including in-person cash transactions. While P2P transactions can be slower and less liquid than those on CEXs, those willing to wait and who want personalization in their trades can benefit from the arbitrage and other opportunities P2P trading offers.