In the decentralized world, both newbies and pros focus on all types of trading means except P2P. P2P is a simpler and easy-to-use method of trading cryptocurrency.
In this article, we will discuss P2P trading in detail — be sure to follow the guide right to the end.
What Is P2P Trading?
P2P, a shorter version of writing peer-to-peer, is a popular word among crypto enthusiasts and users. It is a decentralized exchange platform. P2P is a direct exchange of any digital assets between two individuals without any third-party involvement.
In the absence of P2P trading, a cryptocurrency buyer or seller using a traditional exchange does not have personal contact with the counterpart. All you’ll be dependent on are charts and other market aggregators. It is intermediaries or centralized platforms that help to make trading decisions.
P2P was one of the main purposes of the creation of decentralized finance. Satoshi Nakamoto created Defi to increase the speed, security, and scalability involved in the transaction. In addition, it likewise reduces the involvement of authorities such as banking or financial institutions.
Some exchanges support P2P trading for risk-conscious users. Examples include Binance P2P, localCoinSwap, BitZlato, etc.
P2P Trading on Binance P2P (Global)
Binance has arguably been the largest crypto exchange in the world since its creation in 2017. It originated from China, but it spread and gained root in Malta, EU, with time. It provides P2P exchange services, and its other services include cryptocurrency spot exchange, decentralized exchange, future exchange, staking platform, launchpad for projects saving and debit cards, etc.
This P2P exchange permits several transaction options such as varying withdrawal options, payment methods, and transaction execution times.
Step-By-Step Process For Trading P2P On Binance For Beginners
Like every other P2P exchange, you have to create an account on Binance exchange. It has both web page, mobile and desktop app options. So, either open the website on a web page or through the mobile app.
Once you have opened the website, click on register and input the necessary details. You might need to complete email and phone number verification.
To have access to most of the Binance services, you will need to complete the Know Your Customer (KYC) process. It is to ensure the maximum security of your account. On a side note, without the KYC, you can still deposit tokens of any digital currency and amount to your account until you are ready to undergo the process.
To complete your KYC verification, log in to your Binance account and click on your profile icon at the top right side of the page, click on “security” and enable the various security settings in the page.
Buying Cryptocurrencies on Binance P2P Exchange (using the web)
After you have undergone the steps above, the next step is to start your P2P trading,
- Select the options that can be located in the menu bar; “Buy Crypto,” then “P2P Trading,’’ situated in the menu bar.
- You will see the buy and sell icon on the page, as well as stablecoins and cryptocurrencies. You can buy any of them. But for this post, we are buying BUSD which is Binance stablecoin. Later we will trade the BUSD for any coin that we want.
- The next step is to click the ‘Buy BUSD’ option right next to the preferred seller you want to purchase the coin from. There are so many P2P traders but one of the crucial things to consider before dealing with a seller is the rating and order completion. Once you click on “Buy BUSD”, you will see something like this below
- You can proceed to select your preferred fiat payment currency and the total quantity. Here, we are using USD as our fiat currency. After, click “Buy BUSD”. You will see something like this below.
- The next step is for you to verify the payment method and total price for the purchase. Ensure you make payment before the time frame given by the exchange elapses. After making the payment, click on “Transferred.” Then, select “Confirm.”
- The seller will release the crypto asset when the transaction is concluded. You can see the purchase when you click on “Check my account.”
- If you experience complications during transactions or you haven’t received your crypto asset within 15 minutes of completing a transaction, click “Appeal”, and a customer care service will come to your assistance.
Selling Cryptocurrency on Binance P2P Exchange (using the web)
Before you start selling on Binance P2P exchange, ensure that you have set up your payment method. If you have not, go to your payment page and set up your payment details.
- After you have registered your account and completed your KYC verification, the next step is to click on “Buy Crypto,” then “P2P Trading.” At the top of the page. Just like the previous process, you will see something like this below
- Next, choose your preferred seller and click “sell BUSD”. However, ensure that you are dealing with a verified seller with over a 90% order completion rating. Also, check the sellers preferred payment method.
- You can choose to sell in fiat currency or cryptocurrency. After selecting the currency option, click the ‘’Sell’’ button.
- There will be a countdown for the transaction. It will have a notification that “Payment to be made by buyer,” which will change to “To be released.”
- Once you have confirmed that the buyer has paid, press “Confirm release” to send the crypto to the buyer. Be sure to double-check that you have received payment.
- You can now click on “Confirm” to send the crypto to the buyer’s account.
- Once the buyer receives the crypto, payment will reflect on your Fiat balance which you can check by clicking “Check my account”.
- In case of any error during the transaction, click “Appeal,” and the Binance customer care staff will provide the necessary assistance.
How To Know A Verified Trader On Binance P2P
You have to be cautious when trading on Binance. When you come across a trader, ensure there is a yellow badge. This yellow badge symbolizes that the person is a verified trader and has completed several transactions on the platform. It is safer to trade with strangers who have been verified or a peer you know personally.
Advantages of Using Binance P2P Exchange
Below are the advantages of using a P2P exchange like Binance for your cryptocurrency transaction:
Secured Transactions Using Escrow
Binance has an escrow service that withholds funds on the Binance platform until the terms and conditions of transactions are fulfilled by both parties. Binance put this method in place to protect both the buyers and sellers. The trade is usually time-bound, so If either party cannot meet the terms of the deal, there won’t be any account of loss as both parties would receive their refunds.
Global Marketplace Equals Enough Liquidity
Since the main P2P channel globally, it has the largest exchange by trading volume. Moreover, users can access it in over 180 countries. To prove its high liquidity rate, Binance has a record of processing over $7 billion in transactions.
Multiple Payment Methods
There are over 150 payment methods available on Binance P2P. It includes one spectacular option, which is in-person cash payment. This option is relevant if it is a face-to-face transaction and for people with no access to a bank.
Zero Trading Fees
Binance P2P, unlike other P2P, enables traders to connect and perform transactions with zero fees. It is a free platform and highly secured. The chances of a trader being scammed are limited.
Disadvantages of P2P Exchanges
Everything with a good side also has downsides. These are the disadvantages of using the P2P exchange for transactions:
Slower Trading Speeds
In some cases, P2P transactions are dependent on both the buyer and seller. Either can decide not to go through with the trades and end it. The time taken for both parties to verify payment can also cause slow trading speeds.
Since P2P exchanges have not become popular like centralized exchanges, it has fewer users.
From the points listed above, the advantages suppress the disadvantages. Moreover, most traders might not like the idea of doing KYC. The main purpose of this is to prevent fraudulent activities and create a safe environment for a transaction.
Types of Scams Associated with P2P Exchange Platforms
They will provide you with incorrect account details, which can lead to the loss of trading funds. They will claim they didn’t get the fund; hence, they cannot send the cryptocurrency.
In this type of fraud, the counterpart involved in this transaction makes a payment which you see and verify. After some time, the person will proceed to contact the bank to revert the amount paid. Always ask for a snapshot to confirm payment. With this, there won’t be a case of denial.
How to Avoid Scams on P2P Exchange Platforms?
- Contact the customer care unit
- Confirm the verification badge
- Verify the customer details to confirm the identity
- Always double-check transfer
- Always ask for proof of transactions.
In case of encountering suspicious traders, file a complaint to the customer care unit to seek help and protect other users from being victims.