If you're new to P2P trading, and because there's always a first time for anything, you definitely have some questions. Here we'll go into the realm of P2P trading to see what makes it so unique and why it's still one of the most popular ways to buy bitcoin and other cryptocurrencies.
What Exactly Does "Peer to Peer" Mean?
P2P might signify several things depending on the context, but in the context of bitcoin trading, it's very easy to understand. With P2P commerce, you may conduct business with another individual on a more personal level, with less mediation from third parties. P2P trading offers a great lot more freedom and anonymity than traditional methods of trading, such as using order books. As an analogy, consider the transaction to be a peer-to-peer exchange between you and another individual.
To start, let's define a peer-to-peer trading platform.
Since P2P trading involves more than just you, one of the main goals of a P2P trading platform is to let you connect with other traders. We have our own P2P trading platform called LocalCoinSwap that is a wonderful example of this type of service. There are thousands of trade offers available from the best cryptocurrency traders in the world, and you may browse them all quickly and conveniently. When you do, you may finalise the deal without ever leaving the platform. Practical and well-organized deals may be conducted entirely within the platform, with the exception of monetary payment. P2P trading systems are sometimes referred to as marketplaces because they mimic this structure so closely; unlike an isolated order-book style exchange full of statistics, complicated order types, and candlestick charts, P2P marketplaces are full of actual people to trade with in whatever way you see fit.
One could wonder why P2P trading has become so common.
Those unfamiliar with P2P trading may be shocked to learn of the enormous community that supports it; yet, if one learns more about the concept, it is easy to see why this type of trade is thriving.
Centralized markets are missing in a crucial area, and that is adaptability. It's easy to see that standard platforms can't accommodate more than a limited number of payment methods when you go to acquire cryptocurrency or cash out part of your winnings. The danger of these services' dependency on banks and wire transfers is often overlooked until it actually presents itself to the user. Because of the banking industry's bias against cryptocurrency trading, traders throughout the world have had their transactions flagged, halted, or even their accounts terminated for no apparent reason. P2P trading, however, makes exchanging bitcoin using a bank account look no different from any other personal transaction you may make, so you can still safely trade while keeping the bank out of your company.
It's possible you'll also wish to utilise a payment method that isn't supported by standard bitcoin exchanges, and this might be a problem. Again, this is something that peer-to-peer trading may help with. It doesn't matter what kind of payment methods you like or have access to, because a P2P marketplace like LocalCoinSwap gives you access to roughly 300 different options. P2P trading makes it easy to quickly discover a payment option to utilise for buying and selling bitcoins, requiring little time and effort on your part.
How does security for P2P trading occur?
You're probably reading this because you're worried about the security of conducting business with complete strangers online, and that's a perfectly reasonable concern to have. The risk of being scammed is quite great if you simply go online and begin messaging strangers on social media requesting to trade. However, the built-in escrow system on P2P marketplaces like LocalCoinSwap may help you feel secure when making transactions.
Despite the dramatic name, the escrow process is actually rather straightforward. The coin must be placed in escrow before the exchange can begin. Once the cryptocurrency is stored in an escrow account, you may be assured that your business partner will treat you properly. In the event of a disagreement over the conditions of a transaction or any other aspect of the exchange, a dispute may be filed and the support staff will step in to help mediate the situation and ensure that the issue is addressed in a fair and equitable manner. If you are buying bitcoin and find yourself in a dispute, don't worry; you may only need to show some simple verification that you submitted the cash before the cryptocurrency is handed to you. If you are a seller of cryptocurrency and find yourself in a dispute, you may generally do the same by providing evidence that you have not been paid.
Finding an experienced trader is the greatest approach to assure a smooth trading experience, especially if it is your first time (completed trades on their profile). Investors who have been around for a while and have a solid reputation are less likely to want to squander their time or put their status at danger. Don't ever try to sell something before escrow has been funded, and don't ever pay before escrow has been funded. You may feel comfortable with LocalCoinSwap since the originator of the trade offer is only charged a 1% fee on successful exchanges. If you decide to trade outside of an escrow service, you may as well be placing your money on the line with a complete stranger you met on Instagram who is giving you the "bargain of a lifetime."
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This awesome article was inspired by gingerbreadfork on the LocalCoinSwap Academy