Explained: Peer to Peer Crypto Exchanges

1 min read

A man and a woman exchanging bitcoin with ethereum crypto between each other in a peer to peer form

As digital currency maintains its strong rise since the turn of the year, users globally are constantly on the lookout for the best cryptocurrency to invest in, in 2021. But when it comes to buying cryptocurrency, it’s not quite the same as picking up a drink or grocery over the counter at your local store. Trading cryptocurrency requires highly specialized and technologically optimized processes. And one of them is through Peer to Peer crypto exchanges.

But before we get right into it, let us examine the various available methods to trade and exchange crypto. 

How to Trade Cryptocurrency P2P? 

People own crypto for different reasons, some aim to hold (or HODL) it for a longer period of time to make gains as its value rises over time. While others try to trade it for their local fiats or another cryptocurrency. Some own crypto to perform contactless transactions across borders in no time.  

All of these factors hugely influence the methods or channels that you can use to trade crypto. 

  • P2P crypto Exchanges
  • Centralized Exchanges

In this article we will be discussing mainly about Peer to Peer Exchanges. 

Peer-to-peer exchanges, otherwise called P2P exchanges, are virtual non-custodrial marketplaces where you buy and sell crypto assets directly with other people without any firm or organization standing in as an intermediary. 

The exchanges provide a platform or a meeting point for buyers and sellers to interact and settle trades on their own terms. 

Unlike Centralized exchanges, Peer-to-peer trading platforms don’t process fiat payments or hold users’ funds in custody. 

This light setup allows them to operate more efficiently in virtually any country. Peer to peer exchanges are subjected to much less regulation than CEXs. They can be linked to a crypto auction site.

Also read: Is P2P Crypto Trading Legal? A list of Each Region and Its Regulations.

How to buy bitcoin and other cryptocurrencies on a peer-to-peer exchange in 10 Easy Steps

  1. Sign-up for an account.
  2. Create a Crypto Wallet.
  3. Skim through the list of offers on an exchange offering escrow service (eg. Whalesheaven).
  4. Filter the available offers by your desired payment method, location etc.
  5. Find an offer that suits you best. 
  6. Choose the amount of crypto that you want to buy or sell.
  7. After the seller puts the crypto in the platform’s escrow, you have to transfer the crypto to the seller using the agreed payment method. 
  8. Once the seller confirms payment, crypto is released directly to you.
  9. In case of disagreements, you can open a dispute claim with the exchange support
  10. Repeat!

Advantages of Peer to Peer cryptocurrecny Exchanges

  1. Privacy
  2. Flexible payment methods
  3. Lesser exchange withdrawal fees
  4. Censorship resistance
  5. No KYC requirements
  6. Security of your Crypto

Conclusion

Peer to peer Exchanges are widely regarded as the safest and most secure cryptocurrency exchanges. Although its privacy features have been observed to provide ample avenues for criminal and dark web activities, the advantages of P2P exchanges definitely outweigh these potential downsides.

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