There are many ways to trade cryptocurrencies, one of which is peer-to-peer (P2P) trading. This is a method of crypto trading that allows direct buying and selling of crypto assets from one person to another, without passing through a crypto exchange.
This method of trading is becoming increasingly popular for several reasons, including the convenience of getting paid in your local currency directly. Most centralized crypto exchanges like Binance also offer P2P trading platforms.
Such platforms offered by centralized exchanges do not charge any fees for such trades. There are also independent decentralized P2P trading platforms that only facilitate P2P trading. They, too, do not charge fees for buying or selling crypto assets. They only charge fees for transfers off the platform to other wallets.
In this guide, we discuss what P2P trading is, why it is important, and how you can engage in it safely.
What is P2P trading?
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Traditionally, crypto trading is done through a crypto exchange. For example, to complete a spot market trade, you need to place an order that gets a filled from the exchange’s order book. However in P2P trading, the trade is carried out directly between the seller and the buyer who are able to communicate concerning the trade.
In most cases, the two parties in a P2P trade are in close proximity geographically, say in the same country. This is because P2P trades are done so the seller can get paid in the local currency, which is usually what the buyer has.
As stated earlier, there are no fees charged for P2P trades, and they are near instant, depending on the time it takes for the seller to receive payment and release the sold assets.
To ensure that there’s no fraud in the process, the platform has an escrow account where assets marked to be sold are kept. Once you place a sell order, you cannot access the assets anymore, unless the buyer decides to cancel.
This prevents cases of fraud in which the seller receives payment for the assets, but then refuses to release them. You can also appeal a trade if it doesn’t go the way you wanted it, and it can be easily resolved.
Carrying out a P2P trade
Lets assume you wish to sell your USDT for USD on Binance P2P. You’ll need to go to the Binance P2P platform under Trade and look for those listed as buyers. Compare the rates and then choose one with a reasonable offer and acceptable terms.
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After identifying a suitable buyer, you’ll click the Sell button against their profile and they will be notified of your order. If they wish to proceed with it and they usually do, they will send you the payment for the amount of USDT in USD based on the exchange rate which you agreed to.
After you confirm that you have received payment into your bank account or wallet, you can then release the USDT to the buyer’s wallet. You should however ensure you have received the correct amount of payment for the assets before releasing.
There are ways scammers can falsely claim to have made payment to get you to release the asset. Once this is done, even the platform cannot help you because it is assumed that you actually received payment before you released the assets.
There are also various payment methods you can use to trade on P2P platforms. These include bank transfer, Payoneer, PayPal, and many other options. Choose the one that is most convenient for you in order to make your trades as seamless as possible.
Now you can do P2P trading
If you were looking for a convenient way to trade crypto assets in your local currency, P2P trading is the way to go. It is easy to set up once you register and get verified, and you can start trading today. Just ensure you exercise caution so that nothing goes wrong.
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