Introduction to P2P Trading: What is P2P Trading and How Do Local Bitcoin Trading Platforms Work?
Users who prefer a decentralized approach to buying and selling cryptocurrencies often resort to person-to-person trading . Person-to-person trading, or P2P trading as it is often called, allows direct contact between sellers and buyers without a middleman or broker. Learn with us how the person-to-person trading platforms work, in addition to the advantages and disadvantages of person-to-person trading.
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| What is P2P Trading and How Do Local Bitcoin Trading Platforms Work? |
What is person-to-person trading ?
Person-to-person trading is the direct buying and selling of digital currencies without a third party or intermediary. When you buy or sell cryptocurrencies using a traditional trading platform, you are not able to transact with the counterparty directly, but rather use charts and other market aggregates to determine the best time to buy, sell or hold cryptocurrencies. The trading platform arranges the transaction for you, and the market price determines the final price when the transaction takes place.
Person-to-person trading gives you greater control over who buys your cryptocurrencies and who you buy cryptocurrencies from, as well as over pricing and settlement duration. While P2P trading gives users finer control over the process, P2P transactions involve some risks when a third party is not mediating the transaction. This is where the role of trading platforms such as Binance P2P is vital for risk-aware users.
How does the person-to-person trading platform work?
Some people compare P2P to marketplaces like Craigslist or Facebook Marketplace, because P2P platforms connect buyers and sellers of cryptocurrencies. Buyers and sellers can browse cryptocurrency ads or post their ads. The person-to-person trading platforms also provide a layer of protection for all parties to the transaction by applying the evaluation or feedback system. Imagine that you meet on Twitter someone who is interested in buying bitcoin and they happen to have some bitcoins that you want to sell. But Twitter is not a person-to-person trading platform, so it is difficult to establish trust through it, so what happens when the buyer gets the bitcoin but does not send the amount? What happens when a buyer sends less than expected? Fraud is the biggest risk of conducting person-to-person trades without a trading platform.
The Binance P2P platform can protect buyers and sellers to secure transactions and reduce the risk of fraud. In addition to the public rating system, the Binance P2P platform uses escrow services to secure certified cryptocurrencies or local currencies until both parties confirm the transaction. If you are selling bitcoins in exchange for a certified local currency for example, the buyer will send the money to a Binance escrow account, and once you send them the bitcoins and the transaction is confirmed, Binance will then add the coins to your account and the buyer's account, ensuring a safe and secure transaction. If one of the parties is not satisfied with the transaction, he can request arbitration to resolve the issue between the two parties, or request the intervention of Binance customer service .
Advantages of person-to-person trading platforms
1. Global market
A local, person-to-person bitcoin trading platform, Binance P2P
One of the advantages of using it is that it gives you access to a global market of cryptocurrency sellers and buyers. You can access the platform from more than 180 countries. You can make cryptocurrency buying and selling transactions with people around the world in a few seconds.
2. Multiple payment methods
When you trade on traditional exchanges, you may not have as many payment methods available compared to P2P platforms like Binance. Binance has more than 150 payment methods available, including in-person cash which may be beneficial for those who prefer face-to-face transactions or those who do not have a bank account.
3. Without any trading fees
While traditional cryptocurrency exchanges charge a flat or percentage fee per trade, the Binance P2P platform allows traders to connect and transact without any fees. Not all P2P platforms offer this feature, so be sure to check the terms and conditions when choosing a P2P platform.
4. Secure transactions using Escrow service
Binance, as mentioned earlier, has an escrow service to protect the buyer and seller. When choosing to secure a transaction with an escrow service, Binance holds the funds and only releases them when both parties to the transaction fulfill its terms. Transactions on the Binance P2P platform must be completed within a specified time frame: if either party fails to fulfill the terms of the transaction, the approved cryptocurrencies or local currencies will be returned to your wallet.
Disadvantages of person-to-person trading platforms
1. Slower trading
While P2P transactions can be conducted almost instantly once both parties confirm the transaction, one of the parties may cause delays in the transaction due to various reasons. In traditional trading, you do not need to wait for confirmation from the buyer or seller before moving on from the transaction, and in person-to-person trading, the seller or buyer may change his mind in the middle of the transaction and decide to end it.
2. Low liquidity
Person-to-person trading platforms are still relatively new and have less liquidity than centralized trading platforms. This is why large traders who need to complete major transactions may prefer to use off-platform trades or buy/sell using the standard trading platform.
How do I protect myself from fraud when trading from person to person?
The first step to protecting yourself from fraud is to use a reliable P2B trading platform like Binance. But you have to be careful when selling Bitcoin or other cryptocurrencies on the Binance P2P platform. Learn how you can *avoid common scams* and trade safely.
Could one-to-one trading be more profitable?
Binance P2P users can browse cryptocurrency ads to buy bitcoins at the cheapest available rate or post an ad to sell cryptocurrencies at the desired price.
Make money trading bitcoin with convenience
Person-to-person trading platforms have more flexible payment options than regular centralized trading platforms. To take advantage of this, post buyer-friendly ads and accept more flexible payment options for your coins. The smoother you are with the payment methods you accept, the faster the sale of your coins will often be completed.
Do you have to understand technical analysis to win?
Traditional trading platforms display interfaces with advanced charts and complex order lists, while person-to-person trading platforms are relatively simple. Users only have to understand basic concepts such as profit and loss, supply and demand. If you buy for example 1 Bitcoin for 40,000 USD and sell it for 40,500 USD on a P2B trading platform, your profit will be 500 USD. It's easy, isn't it?
Can you profit from bitcoin in a bear market?
Advanced one-to-one bitcoin traders know that they can profit from bitcoin in a bear market as much as they can in a bull market. Traders make their money by selling bitcoin through person-to-person exchanges at a price higher than the purchase price. You can make the decision to buy, hold or sell once the bull market comes back up again.
Can you make passive income from bitcoin trading?
In short: yes, you can. One of the best ways to generate passive income is to use products like Binance savings and wait for interest to be generated. Binance Savings offers a flexible and reserved savings service of Bitcoin and other cryptocurrencies at attractive interest rates.
Tips for making as many trades as possible on the Binance P2P platform
Many people on P2B exchanges want to quickly sell their digital assets. Here are a few tips to help you complete more trades with the Binance P2P platform .
- Stay informed of the market prices of cryptocurrencies and set realistic prices
- Do not make a habit of canceling transactions before they are completed
- Monitor your ads regularly and check the newly posted ads
- Accept more payment methods to motivate buyers
- Communicate quickly and clearly with counterparties
- Share feedback to build your ratings base
These are the basic aspects of one-to-one trading on Binance. Traders around the world are using the Binance P2P platform to make money trading popular cryptocurrencies such as BNB, Bitcoin (BTC) and Ethereum (ETH), as well as stablecoins such as Tether (USDT), Binance USD (BUSD) and more.
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