How does P2P work?
How many times have you heard of P2P in the world of trading and selling cryptocurrencies?
Probably an infinite number of times. But are you sure you actually know what it is?
Here is everything you need to know before starting your P2P operations.
P2P is effectively a method of buying and selling cryptocurrencies directly between users without using intermediaries or third parties within the process.
This is very convenient compared to the traditional cryptocurrency exchange: in the latter case, in fact, you do not have the ability to directly transact with another user.
P2P trading allows you to have more control over:
- Users who buy your cryptocurrencies
- The users you buy cryptocurrencies from
- The sale and purchase price
Settlement times
In contrast, traditional trading methods make use of specific market graphs and aggregators to determine the best time to sell, buy or hold cryptocurrencies.
What are the Benefits of P2P?
Access to a global market
P2P gives you the possibility to get in touch with a global market without any limits. In seconds you have the ability to buy and sell cryptocurrencies with users from anywhere in the world.
Various types of payment available
With P2P, you have over 150 payment methods available. You even have the option of physically paying in cash by meeting the user with whom you want to make the purchase. This is an ideal method for those who prefer face-to-face transactions or those who don’t have access to a bank account.
Zero trading fees
While traditional cryptocurrency exchanges charge a flat fee or percentage for each individual trade, P2P allows traders to connect and trade with zero fees.
Not all P2P exchanges offer this feature, so be sure to check the terms and conditions before completing the operation.
What Are The Disadvantages Of P2P?
Transaction delays can occur
Although P2P transactions can be considered instant once both parties have confirmed the transaction, you must also take into account that it may happen that one party delays the transaction for a variety of reasons.
With traditional trading, there is no need to wait for buyer’s or seller’s confirmation before the transaction can move forward.
With P2P, on the other hand, the buyer or seller can change their mind during the transaction and decide to cease the operation in progress.
Low liquidity
P2P exchanges are still relatively new and have lower liquidity than centralized exchanges.
For this reason, large traders who need to complete large transactions may prefer to use OTC (over-the-counter) trading or buy / sell using standard exchange.