Peer-to-peer (P2P) crypto trading offers a unique way for users to buy and sell their assets directly. Here, these users leverage on the platform availed by crypto exchanges to connect and trade their cryptocurrencies. Apart from providing this enablement, crypto exchanges also serve as the regulator between the parties to ensure hitch-free process.
The moment a buyer finds a seller and they both agree to trade, the crypto exchange activates an escrow to keep the assets to be purchased. This Escrow functions as a smart contract that helps to keep the crypto until both parties meet the conditions for the trading to happen.
For instance, the buyer is expected to send the agreed payment for the asset to the seller. When this payment is confirmed to have been received, the smart contract automatically sends the asset to the buyer’s wallet. Therefore, it is correct to affirm that the usage of Escrow in P2P trading allows both parties to fulfill their obligations in the trading process, thereby reducing risks.
Apart from mitigating risks, P2P crypto trading also offers other advantages. It enables buyers to reach as many sellers as possible. Likewise, it also provides sellers with a long list of serious buyers. This gives them the opportunity to choose the best trading deals in terms of rates and payment methods. Notably, buyers have nothing to worry about because P2P crypto exchanges allow multiple payment options. These options, including wallets, and several others are fast and very reliable.
Similarly, with P2P trading on crypto exchanges, users are able to trade fast and easily with others from different parts of the world. This simply means a buyer in France can easily reach a seller in Dubai to trade assets within minutes without fears of falling into the hands of fraudulent persons.
Selecting p2p platform
There are various pointers that can help a trader stay safe during P2P trading. First, a p2p trader must select a trading platform based on reputation and safety measures. Well-established platforms with good reputations, without a doubt, offer higher chances of protecting traders. Also, an outlet with a host of security measures will as well protect traders against malicious actors.
While selecting a platform that’ll help you stay safe during p2p trading, it’s essential to watch out for their Know Your Customer (KYC) protocols. Platforms with this mechanism will help users find trustworthy trading partners by enforcing user identity verification. Consequently, providing traders with verified merchants. Features to consider before using a platform include Escrow, automated payment, customer support, and block feature. Platforms like Binance, KuCoin, WazirX, and Paxful offer these services.
Things to take note of during p2p transaction
While using a p2p platform, it is important to watch out for the profile of the other trader. The profile will carry information like number of trades, completion rate, and user feedback. These details are necessary to note because they will help serve as a window into the reputation of the other trader. More so, a trade with a low number of trades and poor completion rate is indeed a red flag that one must avoid in p2p trading. Likewise, bad reviews and feedback are worth taking note of as they matter too.
Additionally, to avoid falling victim to the snare of a malicious trader, a trader must stay alert during the transaction. Confirm payment before releasing the coin. At all costs, avoid a scenario where the buyer will compel you to release the coin before confirming payment. Further, to stay safe in a p2p transaction, ensure you don’t initiate a relationship or conversation outside of the initial purpose of the interaction. Avoid questions about your personal information, and request to communicate outside the platform.
Conclusion
It is worth establishing that p2p trading can be tricky at times, and to some extent require some expertise. However, in-built features of certain platforms can help protect new users with few trading experiences. Despite the risk and sensitivity of p2p trading, it is still labeled as one of the fastest ways of cashing in on your crypto assets.Â
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