Peer-to-peer Crypto Exchange Essentials
Cryptocurrency trading in peer-to-peer (P2P) format is very popular among crypto exchange users. However, what is P2P trading, and what are its main features? In simple words and in one sentence, P2P is the process of buying and selling any cryptocurrency between two traders on a crypto exchange. The main feature of this format is that no one regulates the actions of traders; there is no intermediary in this operation.
However, this is not the only distinguishing feature of this trading format. So, on the P2P exchange, the final word is always with the trader. Only the trader determines whether or not to trust the other participant in the transaction. In addition, due to the function of the escrow service and the study of the profile, a trader can not finish a transaction without the consent of the two parties. Which means that the risk of fraud tends to be near zero.
Let's consider each exchange separately!
Binance Crypto Exchange
Binance is one of the leading crypto exchanges that has built its reputation thanks to three X factors: excellent security, wide trading functionality, and a rich selection of currencies for P2P transactions, as well as trading pairs (1200+).
Since its formation in 2017, Binance has gained the trust of millions of customers around the world. Therefore, today, this platform is the absolute leader in terms of the Trading Volume Index and has a regularly growing share of active traders, which is a key aspect in determining the crypto exchange performance.
Nevertheless, the following facts will tell you more eloquently about the advantages of Binance:
- Stable low trading commissions for transactions, the threshold of which does not exceed 0.1%, and for P2P trading fees are equal to zero.
- Super-security of customer funds, which Binance achieves through the implementation of more than five security measures in parallel. In particular, linking an account to a personal email/phone, two-step authentication, a private access key, setting limits on financial operations, or a personal anti-phishing code.
- Plenty of auxiliary tools, both for beginners and experienced traders. For example, smart bots, copy trading services, or a payment system from Binance.
- The presence of a confirmed reserve is one of the guarantees of customer funds. This fact increases traders' confidence that the platform will fulfill the established obligations within the framework of crypto trading.
However, all good things have a dark side; in Binance's case, these are regular technical problems. Some traders note that errors and misunderstandings occur when translating the interface into other languages. Also, some Binance tools have complex functionality.
Bitget Crypto Exchange
What factors in the description of any company in any business sphere will instantly form a customer's trust? This is not a set of tools or a choice of cryptocurrencies for trading but resistance to crisis periods. Bitget is a crypto exchange that is part of the great cohort, as it has resisted and has not lost customers in any of the "crypto winters."
This one fact is enough to talk about the reliability of this crypto exchange. However, Bitget has a number of other strengths:
- 100% security, and the number "100" is not an exaggeration, as in its entire history, not a single hacker and not a single group of scammers has been able to hack the exchange and gain access to trader data.
- A wide analytical functionality that traders can use to study the market in detail, monitor changes, and catch new trends.
- The possibility of passive earnings in the “Earn” section with high interest rates. You can only find low rates on the Bitget platform in the trading charges section.
- There are more than 800 trading pairs for P2P trading, and this number tends to be 900, which will surely reach it before the beginning of 2025.
- A simple and intuitive interface that any trader with any level of training can master in one hour.
Perhaps the only weakness of the Bitget crypto exchange is poor technical support and a long waiting time for customers' answers; however, a wide range of tools practically negates this drawback.
OKX Crypto Exchange
Three facts about OKX that will instantly encourage you to put it on your shortlist, namely, a centralized trading system, a permanent place in the top-5 in terms of Trading Volume Index, and the best investment tools.
With this, we could conclude our review of the OKX platform, however, it has other strengths:
- Exclusive trading tools. Traders can find more than ten basic investment tools on the OKX platform. However, they can also modify them to suit their needs.
- Guarantee the security of digital assets. A centralized system means that no one can start trading without confirming their identity and providing a number of documents. Such a policy calms traders' lives, since no one can steal their funds.
- No commissions for P2P trading. OKX does not charge fees for P2P transactions and, on the contrary, regularly updates this trading system, as evidenced by more than 600 trading pairs and more than 100 payment methods.
OKX has an excellent reputation, a large set of tools, and a perfect technical component, so the disadvantages of this platform are almost invisible. The only thing that may confuse customers is that OKX is not available in a number of countries.
Bybit Crypto Exchange
The vast majority of crypto exchanges have a standard trading tools structure. Bybit is an exception. Dozens of crypto-apps from the NFT marketplace and Bybit wallet to Bybit Earn and Launchpad form a single ecosystem, where each element is a cog in the harmonious operation of the entire mechanism.
This concept contributes to the emergence of unique parameters:
- Specialization in cold storage of funds — such a policy ensures increased security of clients' assets.
- Lightning-fast data updating — Bybit updates trading data more than three times per second.
- Advanced technical content — the technical base of Bybit consists of new-generation engines, so the platform works faster than other exchanges.
- Protection of customer transactions — on the Bybit exchange, no one can just delete a trader's position; the liquidation of a position always goes through two stages of verification.
- Personalized commission strategy — Bybit sets low trading charges; however, depending on your activity and status, you can lower them even further.
Against this background, it is surprising that Bybit offers a fairly modest number of trading pairs (in particular, just over 600) and also does not have a large arsenal of fiat currencies.
Gemini Crypto Exchange
The desire for individualization always attracts the attention of traders, primarily because they want to find out which aspect the platform will focus on. In the Gemini crypto exchange scenario, this is an achievement of absolute security. You may ask, how can Gemini reach this peak? The answer will surprise you, as according to the creators, the New York State Department of Financial Services controls the activities of the exchange.
This fact leads to the appearance of some exceptional qualities:
- Lack of concern for the safety of assets. Modern data encryption protocols, control over operations by the State Department, and constant security checks make trading on the Gemini exchange as stress-free as possible from any concerns about the reliability of assets.
- Top-end service. Gemini strives to ensure the convenience of traders in everything, so the platform has the best technical support, wide functionality in terms of market analytics, and various additional perks that make trading easier and more effective.
- The most user-friendly interface. Gemini has the best user-friendly interface that combines minimalism with visual appeal. Everyone can understand its features, even if you only heard the word "cryptocurrency" yesterday.
On par with this, Gemini's characteristics in the context of trading capabilities are also impressive. A variety of tools, almost 100 trading pairs, and auxiliary functions to suit every trader. The most problematic issue is the confusing policy of setting crypto fees, which is very difficult to parse and analyze.
Kucoin Crypto Exchange
We have provided several distinctive features that instantly indicate the reliability of the crypto exchange, and here is another sign for you. The Kucoin platform has received recognition in more than 200 countries, which means that almost no state has any questions about the legality of this platform, which automatically elevates it to the pantheon of the greatest.
In addition, Kucoin provides some of the best opportunities for additional crypto earnings, more than 1,100 trading pairs, and eight modern ways to protect your account. It does not charge a commission for P2P trading and creates the best conditions for this particular form of trading activity.
We can attribute two factors to the obvious disadvantages of Kucoin, namely the limited choice of cryptocurrencies and difficulties in understanding the site interface, some sections of which are very confusing.
MEXC Crypto Exchange
MEXC = stability. This platform has few unique characteristics but offers the necessary functionality and opportunities for successful investments, transactions, and trader development.
The MEXC platform has incorporated the best features of the leading exchanges into its functionality, and now you will see this:
- More than 2000 trading pairs and no commissions on the P2P market.
- There are hundreds of tools, from MEXC Launchpad to MEXC Ventures.
- Complete security, thanks to the principle of centralization.
- The crypto exchange functions in almost two dozen languages.
- There are plenty of payment methods and quick and easy withdrawal of digital assets after completion of P2P trading.
Against the background of such stability, the main disadvantage of the MEXC platform is of interest, and we can not call it regular. Its extraordinary feature is that only those users who have completed the KYC procedure can engage in P2P trading, and this option is available for traders only from three specific countries (Vietnam, South Korea, or Russia).
Bitfinex Crypto Exchange
To some extent, experts have reason to call Bitfinex an "old-school" crypto exchange because the year of its foundation is 2012, while most other platforms appeared on the market after 2016. However, this does not prevent Bitfinex from remaining at the top and taking a leading position in a number of key indicators.
In particular, Bitfinex has one of the most technologically advanced and perfectly functioning P2P platforms, does not charge a commission for this type of crypto trading, offers more than 350 trading pairs, and also has a user-friendly interface. Experts pay particular attention to the issue of security and, in more detail, to the availability of the "SOC 2 Type 1" certificate, which hints that Bitfinex has an extremely strict policy on confirming a trader's identity.
The latter fact guarantees the safety of assets and security during trading. However, along with this, excessive attention to the trader's personality scares away many users who seek anonymous trading.
BitMEX Crypto Exchange
The main tenet of the BitMEX crypto exchange is the constant pursuit of new technologies introduced. This policy of maintaining existing functions & tools, combined with the use of advanced IT industry inventions, makes BitMEX a priority choice for thousands of traders.
We can analyze the unusual approach of BitMEX using the following aspects:
- BitMEX applies advanced security measures; in particular, the platform installs several keys to gain access to the client's wallet. If an attacker tries to open the wallet, the multi-alarm system will warn about this, and the hacker will not have time to crack the remaining keys.
- BitMEX provides excellent starting opportunities for beginners in the trading world; in particular, everyone can use the Test Net Bitmex system. This is a special simulator that copies the functionality of the main platform and with which traders can hone their skills.
- BitMEX has a simple interface, so registration on this platform takes no more than half a minute, and mastering the main functions takes no more than one hour.
- BitMEX offers extensive trading opportunities, particularly in the P2P market, with zero commission and 17 trading pairs.
BitMEX has another unique parameter besides the fact that not a single trader has lost his Bitcoin as a result of an attack in the history of this crypto exchange. In particular, BitMEX supports operations only in cryptocurrency. In particular, the user can withdraw funds and replenish his account using cryptocurrency. This is the main drawback of BitMEX.
P2P Crypto Exchange & Unique Privileges
The relatively high level of security and the absence of a supervisory authority when making transactions are not the only reasons that tip the scales of traders in favor of P2P exchanges.
There are at least five other weighty arguments in favor of this trading format:
Unlimited number of payment methods
If there is an option in which a trader can get confused on a P2P exchange, then only in the payment methods section. The fact is that on such exchanges, transaction scenarios reach hundreds, e.g., on any top p2p crypto exchange such as Binance, more than 700 different methods are available to users. The main advantage of this is that you do not have to change your local currency to the one that the exchange accepts (e.g., dollar or euro); most likely, you can close the transaction using any method and in any currency.
The price regulator on the P2P exchange
Besides choosing the preferred payment method, traders can also control the price, the exchange rate, and the amount of assets to exchange. This approach has a special name - "personalization," as a trader can customize every detail of the transaction. Moreover, this method allows both the seller and the buyer to find the most profitable offers in their personal trading interests.
Fast transactions
When buying currency on a P2P exchange, the speed of the transaction depends entirely on the seller and not on the platform and its mechanisms. If the buyer sees that the seller is online most of the time, he has established good contact with him, and all the nuances of the transaction have been settled, then nothing will prevent its completion. Therefore, transactions in the P2P markets are instantaneous. However, there is a downside: if one of the parties delays the transaction, the other can not influence its acceleration.
No trading charges
A simple law is “no intermediary — no need to pay trading fees.” Of course, there are a number of crypto exchanges that set charges for P2P transactions, however, they form a clear minority. In the vast majority of cases, commissions in P2P trading tend to zero.
Networking
The hidden but most crucial advantage of P2P trading is the formation of trader interaction networks. During the negotiations on the deal, traders can find common ground, including those that have a direct connection to investing or doing business on crypto exchanges. Often, the interaction between the seller and the buyer does not end with a single transaction. It can develop into a partnership or mentoring for an extended period.
On the whole, understanding the importance and relevance of P2P markets, almost every creator of the crypto exchange includes this form of cryptocurrency trading in the functionality of their platform. However, even despite the similar principles of operation, there are no two identical P2P exchanges, so how can you select the best one?
Best P2P Crypto Exchange: Factor for the Right Pick
Every trader understands that the success of his digital asset management campaign depends on the choice of a P2P exchange. The P2P service includes many components, each of which you should take into account and carefully analyze. We have focused on seven key characteristics that will help you make the right choice.
Security
Without a proper level of security, all the following criteria will be insignificant. Before a trader completes his first transaction on a P2P exchange, he should be 100% sure of the safety and inviolability of his digital assets. Only the platform can ensure this confidence; therefore, as the very first and main stage of the analysis, examine which security protocols the exchange uses, how many times hackers have hacked it, and how often the developer scans the security system.
Coins range
Someone may say that to be successful in the P2P market, it is enough to use one currency, and this makes sense. However, the wide range of cryptocurrencies and fiat currencies provides the necessary level of flexibility in trading decisions. Compare your trading ideas and interests with the pool of currencies, as this will help plan a strategy and determine the exchange choice.
Trading volume index
An index is always a combination of certain factors, so studying this indicator gives an extensive picture of the reliability and quality of a crypto exchange. In our case, the trading volume index includes such characteristics as the number of active users, the degree of trust in the platform security, and the number of financial flows that circulate on the exchange. If a P2P exchange has a high trading volume index, it means that all three components are also at a high level.
Trading fees
A detailed analysis of trading charges is relevant regardless of the type of trading activity. However, in the case of P2P exchanges, there is no need for a comprehensive study of fees policy; it is enough to know one fact. The best peer-to-peer crypto exchange platforms most often do not charge a fee for P2P transactions. Other exchanges can set fees in the range from 0.1% to 3%.
Payment opportunities
The choice of payment methods on the P2P exchange can be crucial during the selection process. Firstly, wide payment opportunities indicate numerous traders, which means the growth of potentially profitable transactions. Secondly, the variety of payment options eliminates headaches and complex schemes for exchanging one currency for another. Thirdly, there are sellers on P2P exchanges with very profitable offers, but in a very rare currency. If the platform offers a wide range of payment methods, then this will not be an issue, and you will be able to make a successful transaction.
Customer support service
The speed and quality of processes in the P2P exchange play an equally crucial role. On the P2P marker, it is critically important to make transactions on time since the slightest delay can cause the loss of some assets. If a trader encounters technical problems and, worse, does not receive help from the customer support department, then this will destroy his desire to cooperate with this crypto exchange. An exceptional customer support service, on the contrary, can provide invaluable support in trading activity.
Reputation
A P2P exchange can colorfully present its best sides for a long time, however, its reputation speaks best about the platform quality. Unlike the index, reputation is an ephemeral concept, but even it has ways of measuring. You can visit the thematic forums, discover video reviews, read comments on them, and explore the sites where traders gather. If, during the analysis of their conversations or when conducting a dialogue about a particular P2P exchange, you have no doubts about the honesty and reliability of the platform, then this is your choice.
P2P Crypto Exchange Trading Algorithm
Our readers already know a lot about the features and benefits of P2P exchanges, as well as understand in detail the process of choosing the best peer-to-peer crypto exchange. However, we have not covered the third most essential component, namely, the algorithm of actions that a trader should perform to gain success in this business.
Thanks to the user-friendly and intuitive interface of most crypto exchanges, this part of the study of the P2P market is the most accessible for full understanding:
- Publication of information about the transaction. The first step in the game on the P2P exchange remains for the seller. A trader who wants to sell an asset places an offer on the market that includes all the detailed information, particularly the price tag and payment method.
- Exploring alternatives. Next, traders-buyers come on the scene, looking for the most profitable among thousands of offers. In response to two parameters from the trader-seller, the trader-buyer also sets the desired price and payment method, as in filters on a regular marketplace. After sending the request, the platform begins to select relevant offers, and the buyer studies them.
- Agreement establishment. When the buyer selects an option suitable for the parameters, the platform will connect him with the seller. To discuss the transaction, it is not necessary to make direct contact; it is enough to come to an agreement on the price and payment method and receive requisites from the seller.
- Transaction completion. The final chord is an exchange, the same as in the usual market of things. The seller-trader sends crypto tokens to the buyer's account, and the buyer, in turn, transfers funds to the seller's account.
Depending on the platform, the specifics of the P2P process may change, so we recommend you study all the steps of action in advance. However, all leading crypto exchanges help freshmen in this matter by providing the necessary data.
P2P Trading Taxation System
Divestitures from P2P trading are a legal form of earnings, which means that according to the law, every trader has an obligation to pay tax on these incomes. In the context of P2P taxation, it is crucial to know three fundamental things. Firstly, the difference between the amount of cryptocurrency purchased and sold forms the basis for the calculation of the tax amount.
Secondly, the amount of tax has a different meaning for an individual and a legal entity. Thirdly, the authorities can calculate the tax based on the percentage that the government of this country sets or based on the percentage that the government of the P2P exchange registration sets.
P2P Crypto Exchanges: Final Takeaways
The crypto world is famous for its diversity. We can find various proofs in all aspects, and the variety of P2P exchanges clearly proves this thesis. Compared to other alternatives, P2P exchanges have a number of unique advantages that ensure the simplicity and efficiency of trading.
However, to earn money from this form of crypto trading from a long-term perspective, it is important to approach the choice of a P2P platform with full responsibility. A comprehensive analysis of the factors will help you make the right choice. After this, you will open the doors to the limitless opportunities that are available in the P2P markets.