All people who invest in cryptocurrencies are constantly on the alert to see when the price of the ones they are interested in (Bitcoin, Ethereum, Cardano, Dogecoin, Polygon, Ripple, Solana, Polkadot, Litecoin, TRON,…) drops and thus be able to buy before it rises again.
There are many platforms that allow you to trade cryptocurrencies for local currencies or other cryptocurrencies. This combines supply and demand.
Online platforms called P2P exchanges (peer to peer) allow users to directly exchange cryptocurrency with one another.
The two categories of P2P cryptocurrency platforms that can be classified into are custodial exchanges and non-custodial exchanges.
Non-custodial P2P Exchanges do not store the assets of their customers. Custodial cryptocurrency trading exchanges are vulnerable to cyber-attacks, thefts, and security vulnerabilities. In most cases, they collect user data to comply with local regulations.
When you trade on a non-custodial platform, you do so directly with the other users. These platforms allow users to deal directly with counterparties and indicate the number of Bitcoins, or other cryptocurrencies that they wish to sell and their price. The user can carry out the exchange and transaction through this publication. The transaction is confirmed once it has been received.
Note that P2P non-custodial cryptocurrency exchanges typically hold the seller’s cryptocurrency until the seller confirms that the payment was made. The payment is released at this point and the buyer receives the cryptocurrencies.
Crypto exchanges P2P: Benefits
You can easily buy and sell using this method, and no one will interfere.
You can also use different payment methods, depending on the platform that you select: from bank transfers, to eWallets.
Additional benefits include:
- The transaction is not involving any third parties. Both parties (cryptocurrency seller and buyer) must reach an agreement.
- No one is allowed to exploit transactions, and no one has the right to freeze withdrawals.
- Trading is much faster as both parties reach a quick deal.
- Cheaper trades.
- Some times, you can get better deals than those on the market.
- The platform selected will allow each party to view the specifics of the trade.
The disadvantages of P2P Exchanges
As with everything, there are some downsides.
We’ll show you some of them:
- As they are relatively young, and have only been on the market a few years, they are not as advanced as other products.
- These P2P platforms have an interface that is not intuitive for new users. They are more intuitive for experienced users.
- There are fewer traders, which is why there are lower trading volumes. The order will take longer to be filled.
- Professional traders prefer platforms with more liquidity. They are concerned with speed, and these exchanges do not meet their needs.