When one stumbles upon this term for the first time, one is usually confused as it may be really hard to guess its meaning. However, in case you plan to deal with cryptocurrencies in any way, it is highly recommended to find out how such platforms work and whether they suit your needs.
So, let us start with a short description. A P2P exchange is a kind of exchange, which is decentralized and supports direct transactions from one user to another without involving any regulators or intermediaries. As a result, buy/sell operations are executed at a much lower fee.
The process looks as follows: a user is supposed to scrutinize the list of offers and find the one, which suits him in terms of the exchange rate, payment method, and minimum purchase limit — every seller has the right to set the terms at his sole disposal. When a user agrees to the conditions imposed, he must press “Buy”, execute the transaction with the method specified, and, then, confirm that action.
Here are the key pros you must consider:
· no ID verification is required;
· a huge selection of offers that vary in rates, minimum limits, payment options;
· operations are backed with collaterals;
· commissions are much cheaper — only escrow fees are charged;
· users do not have to store their coins on the platform, thus, there is no risk that they may get stolen;
· no bank account is demanded.
Speaking about weaknesses, most traders are concerned about safety aspects. Yet, in practice, due to an escrow system, a P2P crypto exchange is even safer than a centralized exchange. Nevertheless, one must note that such decentralized platforms are less intuitive and are harder to navigate. Also, the transaction speed is much lower there. Besides, they are not as anonymous as they may seem at first glance.
Still, as for most users, the pros of such services outweigh their drawbacks, let us mention a few proven sources that are worth your trust. So, the most versatile choice is a specialized P2P platform from Binance. To those who are searching for the most secure source, we would recommend Paxful for its biometric verification. Meanwhile, if you are focused on the cheapest commissions, choose Huobi — there are no transaction fees at all.
To sum up, we must admit that P2P crypto exchanges are not as user-friendly as conventional ones, so it will take you some time to adjust to such a service. Furthermore, a transaction procedure is more complicated and time-consuming. However, due to much lower fees, enhanced security, and often more profitable rates, such platforms appeal to many traders.