P2P stands for peer-to-peer or person-to-person, which signifies a crypto exchange method. Unlike traditional transactions, a P2P transaction eliminates the need for a third party and allows the parties to transact directly with each other. Other traditional crypto exchanges require users to follow strict regulations and other verification processes before buying or selling crypto. A P2P system cuts through these processes and typically facilitates ease and speed in trading crypto. Following increased digital use, P2P services have become so popular. In addition, the use of digital currencies, with their cross-border feature, has also encouraged an increased adoption of P2P transactions.
How does a P2P transaction work?
Some crypto exchange platforms that provide P2P services include Binance, Remitano and Paxful. Crypto P2P trading platforms work by connecting a buyer to a seller. Unlike traditional systems, these crypto platforms only serve as a medium of connecting the parties to facilitate trade. Thus, they do not act as middlemen to make transactions possible. In addition, the platforms use a rating system for users to ascertain the credibility of another user they might want to trade with. Crypto P2P platforms run on smart contracts. When a user confirms the ratings of the other party and enters into an agreement, the smart contract executes its pre-determined agreement.
Also read : Types of P2P Network – A Guide
Guide to initiating your P2P transaction
To initiate a P2P transaction is not tricky. We will outline a step-by-step guide for you to follow in five short and accessible ways.
Step 1: Choose the P2P crypto exchange platform that suits your needs. We already listed a few P2P crypto platforms above. You can do further research to know other options that you have
Step 2: Create an account and deposit the cryptocurrency you desire to trade with into your wallet. Most digital currencies can be used for a P2P transaction. You can also elect to use the native token of the P2P crypto platform you use.
Step 3: Next, post your offer to buy or sell crypto. You can specify the amount of crypto you want to sell or purchase.
Step 4: You will get different offers, and it is up to you to confirm their ratings and reviews. Once you get a party whose bid works best for you, confirm your agreement.
Step 5: Set up your payment and transfer method, as the case may be. Voila! Your transaction is complete. The steps and requirements may vary depending on the P2P platform you decide to use. However, these steps form the essential guide to initiating your P2P transaction.
Also read : Using Binance P2P To Send Money Internationally
In summary
P2P transactions make an effective way of buying and selling cryptocurrencies. However, following this guide is still necessary to do your research. You should fact-check every essential detail about the platform you decide to use and the party with whom you will transact. Finally, making the most of the P2P platform you choose is up to you!
