There's a first time for everything, and if it's your first time trading peer-to-peer (P2P), you probably have a few questions.
There's a first time for everything, and if it's your first time trading peer-to-peer (P2P), you probably have a few questions. So let’s explore the world of P2P trading and find out why it's still one of the most popular ways to trade bitcoin and other cryptocurrencies and how it differs from some alternatives.
What Does Peer-to-Peer Mean Anyway?
While the meaning does vary depending on the form of P2P that we're talking about, it’s pretty straightforward when it comes to cryptocurrency trading. P2P trading allows you to trade with another person more directly, with minimal interference from external sources. While many ways to trade leave you dealing with faceless order-book exchanges and a lack of flexibility, trading P2P is very much the opposite. The easiest way to think of it is to trade from one peer (you) to another.
What is a P2P Trading Platform?
P2P trading requires more than just yourself, so finding trading partners is an essential part of the process and one of the primary purposes of a P2P trading platform. One great example of a P2P trading platform is our own LocalCoinSwap! You can easily search through thousands of trade offers from leading crypto traders from around the world. Once you find someone, you can complete your trading process from the platform. Essentially everything but actually sending payment can be performed on the platform keeping your trades practical and organized. P2P trading platforms are often called marketplaces as they better resemble this structure; instead of being a rather lonely order-book style exchange filled with numbers, confusing order types, and candlestick charts, P2P marketplaces are instead full of real people to trade with as you please.
Why is P2P Trading Popular?
While some people new to P2P trading may be surprised by the large community behind this form of trading, it's not hard to understand why P2P trading is booming once you dig a little deeper into the concept.
One of the critical things lacking from centralized exchanges is flexibility. When you aim to buy crypto or cash out some of your gains, you'll quickly find that more traditional platforms lack the flexibility to allow for more than a small selection of payment methods. Often there's a heavy reliance on banks and wire transfers when it comes to these platforms, and that has a risk that is often forgotten until it affects you, banks. Traders worldwide have felt the brunt of the banking industry’s dislike for cryptocurrency trading, frequently transactions are flagged, stopped, or in some cases, traders may even get tossed out with their accounts being closed for some arbitrary reason. However, it doesn't mean you can't trade safely using your bank account and still keep the bank out of your business; thanks to P2P trading, you can exchange bitcoin using your bank account with your transactions appearing no different from any other personal transaction you may make.
You may also find yourself wanting to use an alternative payment method, which isn't offered by any more generic cryptocurrency exchanges. Again this is a problem that P2P trading is well-geared to solve. Using a P2P marketplace like LocalCoinSwap exposes you to the ability to trade with around 300 payment methods, so it doesn't matter what your preferences are or what methods you have access to use. With minimal effort and the help of P2P trading, you can likely find a payment method to use to trade bitcoin fast.
How is P2P Trading Kept Safe?
If you're reading an article like this, odds are you are wondering how it could be safe to just trade with people online, and that's an extremely valid concern to have. If you were just to jump online and start messaging people asking to trade on social media, the odds are incredibly high that you could get scammed. Still, if you use a P2P marketplace like LocalCoinSwap, you can keep yourself safe using the power of the in-build escrow system.
The escrow process sounds dramatic, but the concept is simple enough to understand. Once you start a trade, the cryptocurrency should then be put into escrow. Once the crypto is locked in escrow, this helps ensure your trading partner is playing fairly. If there's a dispute over payment, terms, or anything else, a dispute can be raised, and the support team can step in to help moderate the trade and get it resolved correctly. If you are buying cryptocurrency and happen to get involved in a dispute, no problem, you may just need to provide some basic proof you sent the payment, and the crypto will be released to you. Likewise, if you are selling crypto and happen to be in dispute, you can do the same from your end as well in most cases by showing proof that you haven't received payment.
The best way to ensure you have an easy trading experience, especially if it's your first time, is to look for a trader with a good amount of experience (completed trades on their profile). Traders with an established account and good feedback are far less likely to want to waste time and put their good standing at any risk. However, during any trade, the key thing to remember is never to pay before escrow has been funded, or if you are selling to never try and trade outside of escrow. The trading fee on LocalCoinSwap is only 1% on completed trades for the creator of the trade offer, and this tiny amount helps keep you safe. The second you trade outside escrow, you may as well be gambling with a stranger you met on Telegram, offering you the "deal of a lifetime.”
Start trading your way by getting started on your P2P trading journey!