P2P Crypto Exchange – Definition
A peer-to-peer (P2P) crypto exchange is a platform that allows traders to securely exchange cryptocurrencies with each other without the involvement of a third party such as a bank.
P2P exchanges enable verified individuals to transfer assets without the involvement of a middleman. Instead of using a market order book to match purchase and sell orders and govern the platform’s assets, a P2P approach allows users to interact directly without needing a go-between to hold cash or execute transactions. It is made possible by the deployment of an escrow system.
Before you may buy or sell on a P2P exchange, you must first create a profile and verify your identity. You may be subjected to additional identity verification depending on your chosen service. After that, you’re only a few steps from trading with other users.
How an Escrow System Works
An escrow is simply an asset or money held in possession of a third party until a predetermined condition is met. If a problem emerges due to the transaction, both parties will provide proof of the exchange, and the crypto will be released to the legitimate owner.
Advantages of using a P2P exchange
- Convenient Payment Options: You can use whatever kind of payment the vendor accepts in a P2P crypto exchange. You may acquire Bitcoin using various methods, including digital payments, gift cards, and cheques. There are no restrictions on P2P payment possibilities. Traditional platforms, in many circumstances, only accept credit and debit cards.
- Security: Escrow system security has dramatically improved over the last few years. Because of their third-party status, the most exemplary P2P crypto platforms are more secure as trading platforms. Escrow systems safeguard all parties involved in a transaction, including the P2P altcoin trading system. Users can make trades without fear of losing their funds.
- Lower Costs: Although some P2P exchanges charge fees, they are typically far lower than regular exchange fees. These services usually charge an escrow fee.
- Accessibility: Buying crypto via a P2P exchange does not require a bank account, making it more accessible for people in unbanked areas.
Disadvantages of using P2P exchanges
- Speed: Trades may take longer to execute without an intermediary on a peer-to-peer system. Without a maker, payment method flexibility is less streamlined.
- Ease of Use: In the absence of third parties, even the best peer-to-peer crypto exchanges might be challenging to use. There is a challenge for new users.
- Anonymity: Since users deal directly with other traders, top peer-to-peer crypto exchanges sometimes offer less privacy than over-the-counter (OTC) platforms. Most peer-to-peer cryptocurrency exchanges include built-in reputation systems that show your trade history.
Best P2P exchanges in Nigeria
Binance is regarded as the most excellent P2P crypto exchange, enabling traders to buy nearly 60 digital assets, like Binance Coin, Ethereum, and Dogecoin. Furthermore, since there are no taker fees when trading P2P on Binance, maker fees range from 0.35 percent.
To register for Binance by email, go to the website’s upper right corner and select Get Started. The website has some complex access information, but the mobile app provides a straightforward, simplified experience that even beginners can navigate. Binance allows a variety of fiat and even offers immediate transactions for a 0.5 percent charge for dealers who need quick transactions.
Paxful, established in the United States, is one of the top peer-to-peer cryptocurrency exchanges. It offers to make all P2P trades easy while maintaining the highest level of security. Users’ biometric data submitted in the verification procedure make transactions secure. Paxful asks for fixed costs for various tasks, but purchasing cryptocurrency is uncharged. Depending on the crypto, merchants are charged a fee ranging from 0.5% to 5%.
Registration is simple, although it requires some effort to accomplish. Traders must show proof of identification, and advanced traders must provide video proof. After the user account has been authenticated, they can fund the wallet using a user-friendly interface.
The platform provides a simple and quick option for people to purchase and sell Bitcoin. One of its distinct advantages as a top peer-to-peer cryptocurrency exchange is that it aims to match local traders. The platform charges all sellers a uniform 1% on every sale but is exclusive to Bitcoin traders. Moving assets to the wallets of other members are free.
To open an account, sign up free and complete the form. You will be able to trade right away. The entire website is simple to use; whatever information you want is available. Purchasing crypto is not charged and allows various payment options, including fiat, PayPal, and wire transfers.
Remitano is a peer-to-peer cryptocurrency exchange that allows users to trade digital tokens, including its native coin, RENEC. For sophisticated transactions, traders can also use a margin account. Remitano, like other P2P platforms, incorporates KYC checks. It’s common to see sellers on Remitano who demand that purchasers have already confirmed their credentials.
Signing up for the peer-to-peer crypto exchange is simple, and there are multiple levels based on how well you prove your identity. Phone verification is a requirement at the most basic level, but higher levels require formal paperwork. After that, purchasing cryptocurrencies on Remitano is comparable to buying them on other exchanges.
Bisq is a safe and autonomous network that sells cryptocurrency without third-party infrastructure. On this user-friendly website, anyone may open an account, and users can conduct trades for a nominal fee. Traders must cover a 0.001 BTC plus a 0.003 BTC mining fee.
The first step in creating an account is to download the app. Once completed, users can include cryptocurrency wallets and decide whether to create a trade or add an offer. The simple user interface clearly explains how to complete your transaction and close your deal, making it a perfect peer-to-peer crypto exchange for newcomers.
CoinCola is a Hong Kong-based exchange that entered the Nigerian market in 2019. It accepts up to 14 payment methods and Bitcoin gift card exchanges. The exchange enables crypto-to-crypto pairs with Ethereum, Bitcoin Cash, and Litecoin, as well as BTC and USDT as base currencies.