Crypto trading is easy but what makes things difficult is the intermediary involved in centralized crypto exchanges. To eliminate the need for third-party involvement, P2P crypto exchanges came up. Peer-to-peer crypto exchanges help you transfer virtual assets directly between the buyer and seller without the need for any third-party involvement.
If you want to start crypto trading and investment, peer-to-peer crypto exchanges are the best way. Don’t worry if you are new in this field, this blog is meant to navigate you through P2P trading. Let’s first understand what is P2P?
What is P2P Process?
Peer-to-peer works by allowing individuals to buy or sell cryptocurrency directly with each other. This can be done without going through a traditional exchange or requiring a third-party mediator. The ‘peer-to-peer process’ is secure, fast, and low-cost. It also allows people to buy and sell cryptocurrency directly with each other without any fees or commissions.
What is Peer-to-Peer Trading?
P2P means ‘from one person to another.’ The ‘P2P network’ is a group of systems that act as both clients and servers. One of the most exciting applications of this type of network is peer-to-peer crypto trading.
So, is it like UPI? Not at all. When you use UPI payments, the funds get transferred only because a payment merchant and a bank are involved. That means UPIs still have centralized mediators.
Cryptocurrency peer-to-peer trading is different. There’s no centralized third party mediating the sale, so you can set your price and find someone willing to meet you there. However, there is a decentralized mediator called an exchange.
Here, you don’t have to pay anything. Also, there are no commissions since there are no centralized intermediaries. You don’t have to worry about someone else messing up your funds. A Peer-to-Peer transaction is when funds are transferred without a centralized intermediary.
Best P2P Crypto Exchanges in 2024
With the growing popularity of Cryptocurrency, many P2P crypto exchanges have emerged. The increased number of options in the P2P crypto exchange can keep you wondering which is the best one. Here are some of the best P2P exchanges that offer access to a wide range of payment methods and accept different currencies. Additionally, you can set custom prices and provide high liquidity.
Before you choose, do consider factors like
- Supported Cryptocurrencies,
- Supported Fiat Currencies
- Payment Methods
- Fees
- Security and Safety
Here, we’ll make your task of selecting the P2P platform very simple by giving details of the best P2P crypto exchanges in 2024.
1. OKX:
OKX is one of the best P2P crypto exchanges as it supports a wide range of cryptocurrencies, such as Bitcoin, Tether, Ethereum, and USD Coin. Moreover, this platform charges no P2P trade fees. This means you need to pay only the specified amount to the seller. You can choose to pay using various payment methods, and it is supported globally.
Supported Cryptocurrencies- Bitcoin, Ethereum, Tether, USD Coin, True USD, and Dai
P2P Fees- No fees charged
Pricing System- Set by sellers
Pros
- No intermediary fees.
- Offers safety with a secure escrow system
- Wide range of payment methods with 100+ fiat currencies
- KYC authentication ensures the authenticity of users.
Cons
- Only a few cryptocurrencies are accepted
2. OpenPeer:
OpenPeer is one of the top decentralized exchanges built on the P2P principle. This exchange charges just 0.3% CEXs, way lower than other exchanges. This fee also includes gas fees. OpenPeer is an exchange that is managed through a self-custody wallet. This offers greater Fund control and security to the users.
Supported Cryptocurrencies- USDT, ETH, USDC, OP, ARB, AVAX, BNB, BUSD, MATIC
P2P Fees- 0.3%
Pricing System- Fixed, no gas fees
Pros
- Uses self-custody wallet (Metamask or Trust Wallet)
- Best for traders in Nigeria and India
- Supports many fiat currencies and payment methods
- Great for small and large P2P trades
- Earn rewards
Cons
- Only a few cryptocurrencies are accepted- USDT on Ethereum, Binance Smart Chain, and other EVM networks
3. Binance:
Binance is the most popular and most significant exchange in the world. It supports many fiat currencies and seven cryptocurrencies such as BTC, BNB, BUSD, Shiba Inu, ETH, Tether and Cardano. Additionally, it accepts hundreds of payment methods. To add a cherry on top, there is no trading fee, and the exchange rates are set by the seller.
Supported Cryptocurrencies- Tether, Bitcoin, BUSD, BNB, Ethereum, Shiba Inu, and Cardano
P2P Fees- 0%
Pricing System- Set by sellers
Pros
- Higher liquidity than other exchanges
- Robust escrow system to keep traders safe
Cons
- A fee of up to 0.35% is charged on market makers posting a custom deal
4. KuCoin:
One of the most popular P2P crypto exchanges that supports cryptocurrencies such as Tether, Bitcoin, Ethereum, USD Coin, and KuCoin Token. While trading on these platforms involves no charges, the user experience of the marketplace is not very good. Additionally, there are only a few payment methods that are supported.
Supported Cryptocurrencies- Tether, Bitcoin, Ethereum, USD Coin, and KuCoin Token
P2P Fees- No fees charged
Pricing System- Set by sellers
Pros
- Accepts local payment methods in India, Vietnam, Nigeria, and more
- No P2P fees charged
- Suitable for both small and large P2P trades
Cons
- Only a few cryptocurrencies are supported
- The user interface is chunky, with limited filters
5. Huobi:
0 Commission fee and over 60 local payment methods make Huobi stand out from the other P2P exchanges. It supports the exchange of only six cryptocurrencies, including Tether, Bitcoin, Ethereum, Tron, USDD, and Huobi Token. It also has an anti-fraud practitioner that helps detect suspicious P2P trades.
Supported Cryptocurrencies- Tether, Bitcoin, USDD, Huobi Token, Tron, and Ethereum
P2P Fees- No fees charged
Pricing System- Set by sellers
Pros
- No fees are charged to buyers or sellers
- 24/7 customer support
- Rewards for people who discover vulnerability in this exchange
- Around 60 payment methods are accepted
Cons
- Has only limited filters
6. Paxful:
Paxful is a globally acclaimed P2P crypto exchange platform that was launched in 2015. It has great filters, and you can get an ideal seller by applying various filters. It changes 0% platform fees while buying and 1% while selling.
Supported Cryptocurrencies- Bitcoin, Tether, and USD Coin.
P2P Fees- 0% for buyers and 1% for sellers
Pricing System- Set by sellers
Pros
- Supports over 350+ payment methods – including gift cards
- 0% trading fee for buyers
Cons
- Only 3 cryptocurrencies are supported
- 1% fee charged by sellers
7. LocalCoinSwap:
LocalCoinSwap is a user-friendly P2P exchange that supports more than 300 local payment methods. Users can buy and sell more than 20 cryptocurrencies, including Bitcoin, Ethereum, USDC Coin, Tether, and DAI. This platform charges no trading fee, making it a cost-effective option.
Supported Cryptocurrencies- 20+ cryptocurrencies, including Bitcoin, Ethereum, Tether, USD Coin, DAI, BNB, BUSD, and Tron
P2P Fees- Standard P2P trades are fee-free. Trades executed from a posted ad cost up to 1%
Pricing System- Set by sellers
Pros
- User-friendly P2P exchange supporting over 20 cryptocurrencies
- More than 300 payment types are supported – including e-wallets and local bank transfers
- No fees are charged
Cons
- 1% fee charged to those completed deals from a posted ad
- Limited security tools
8. Uniswap:
Uniswap is one of the most popular decentralized P2P exchanges. The unique feature of automated market makers (AMM) enables you to trade via liquidity pools. While it does not support fiat currencies.
Supported Cryptocurrencies- Supports most tokens on the Ethereum network and a few other networks
P2P Fees- 0.3% to swap tokens.
Pricing System- Determined by AMM liquidity pools
Pros
- Known for liquidity farming
- Trade anonymously without the KYC process
- Use smart contracts instead of an escrow system
Cons
- Does not support fiat payment methods
- 3% trading fee
How do Peer-to-Peer Bitcoin Exchanges Work?
Like every coin, P2P exchanges have two sides. It comes with benefits, but it also has some risks you must be cautious about. Let’s discuss how P2P exchanges work.
Sellers List Their Offers
Firstly, the people who want to sell their cryptocurrencies list their cryptocurrencies on P2P exchanges. These sellers are free to set a price and payment method that they will get in exchange for their cryptocurrencies.
For Instance:
- Crypto Asset: ETH
- Price: $25, OO
- Accepted Currency: USD
- Amount: Up to $5,000
- Accepted Payment Types: PayPal, Skrill, ACH
Buyers Search for Their Preferences
On the other side, the buyers set their trade parameters, like which Cryptocurrency they want to buy and which payment method they want to use. Buyers can also set the price at which they want to make a purchase.
The exchange platform will apply these filters and show a list that matches these filters.
The Buyer Accepts a Deal and is Matched With the Seller
When the filters like price, payment method, and cryptocurrency match, the buyer and seller are connected. There is no conversation involved in the process, but the payment details provided by the seller should be shown to ensure that the transaction matches the specified offer.
Escrow and Payments
- After verifying the details, the seller has to deposit the Cryptocurrency into the escrow.
- Meanwhile, the buyer has to make the payment.
- After making the payment, the buyer will mark the payment process as complete.
- Now, the seller gets the notification, checks the payment, and marks the process as complete if they receive the payment.
- After this, the crypto is released from the escrow and sent to the buyer’s wallet.
How Long Do P2P Crypto Trades Take?
In most cases, the process does not take more than 5 minutes. But at times, some issues can arise, such as payment sent by the buyer may not be received by the seller, leading to delay in the release of Cryptocurrency. But this happens only in some cases, so worry not.
Smart Contracts and ‘P2P Trading’ on Crypto Exchanges
Smart contracts control everything in ‘peer-to-peer crypto trading.’ These contracts can only be managed if all the conditions are satisfied. When two parties with decentralized accounts enter an agreement on a crypto exchange, the smart contract ensures the money gets transferred on time. After all the boxes are checked, the ownership is transferred, and the transaction is done.
Additionally, Crypto Exchanges use peer-to-peer for Buying crypto with fiat directly, exchanging one crypto for another, and Sharing files.
‘Peer-to-peer Trading’ Strategies
We’ve got two ways to get started with peer-to-peer crypto trading. Here are the following:
1. High-Demand Setup
On peer-to-peer exchanges without cash payment options, you can set up a platform where individuals can buy crypto. You can either charge commissions or sell your crypto at a premium. Using this method at scale can make money either way.
2. Arbitrage Trading
‘Arbitrage trading’ allows you to profit from the price difference between crypto exchanges. Many things can cause short-term price differences between exchanges, including regulation differences, liquidity, and volatility problems.
‘P2P Cryptocurrency Trading’ Pros:
There are a lot of advantages to ‘peer-to-peer crypto trading’:
- ‘Peer-to-peer’ doesn’t charge commissions or fees.
- You can use ‘peer-to-peer’ globally, which means your location doesn’t matter. There are no restrictions on where or what currency you can trade.
- You can select the strategy with the least amount of expenses to increase your profit margins.
- In most cases, governments can’t stop this kind of trading. You can trade, sell, or buy crypto with anybody since there is no central authority to handle these things.
‘P2P Cryptocurrency Trading’ Cons:
Peer-to-peer crypto trading is the best in many ways. But there are some disadvantages too. Here are a few cons of P2P crypto trading:
- There’s always a chance of fraud with peer-to-peer. Without a centralized intermediary, guaranteeing transaction authenticity is not always possible.
- The pairing of buyers and sellers takes time, so trading takes time. Finding the best transactional pairs can be challenging without a third party.
Factors of the P2P Platform
Entrepreneurs now find crypto business ideas more profitable but need to know what they’re all about. To ensure your peer-to-peer Bitcoin exchange solution beats the competition, we’ll help you at every step. If you’ve got an idea and a plan, great. Otherwise, we’ll recommend features, functions, and designs that are distinctive and sophisticated. Here’s a list of features, you must consider before using any crypto exchange platform:
Automated KYC
Today, exchange platforms need KYC, ID, and AML verification. Using it, the administrator can find the right people quickly and effectively. Additionally, it eliminates hacker risks.
Easy to use
You should be able to process and manage your trades and find the cryptocurrencies you’re looking for quickly and easily with the platform.
Customer Support
Does the customer service respond quickly, and are they easy to reach? Check if they provide 24*7 support. If it’s not an option, find out when they’re active. Confirm their availability and support by testing their response time.
Escrow System
There are many intelligent contract development tools, but an Escrow account powered by smart contracts allows traders to trade with each other. This is a fundamental feature of a peer-to-peer exchange. Once a trade is complete, sellers’ assets are put in Escrow. When the buyer’s payment is verified, the assets are taken from Escrow and sent to their crypto wallets.
Multi-layer Security
Security is one of the most essential characteristics of a crypto exchange. Don’t forget to add security elements to your peer-to-peer exchange, like
- Integration of SSL
- HTTP Parameter pollution protection
- Anti-Denial of Service (DoS)
- Two-factor Authentication
- Email/Google Authenticator
Types of ‘P2P Network?’
A ‘Peer-to-peer network’ is a network that shares resources among other peers. It does not need a server or central controller. ‘Peer-to-peer networks’ are highly resistant to failure and self-organizing. There are three types of P2P networks. Here are the following networks:
1. Structured P2P networks:
It is well-structured or designed using software that creates a virtual layer so nodes are arranged in a specific order. They’re hard to set up, but they give users easy access to content—for example, P-Grid, Kademlia, etc.
2. Hybrid P2P networks:
A hybrid peer-to-peer network combines a Peer-to-Peer network with a client-server. For example, a network is finding a node using the server.
3. Unstructured P2P networks:
This type of P2P network allows devices to contribute equally. It is easy to build because devices can be connected randomly in this network. However, it’s hard to find stuff because it’s unstructured—for instance, Napster, Gnutella, etc.
Benefits of Peer-to-peer Network
- There are few nodes in these networks, usually less than 12. Data is stored on each computer but accessible by the group.
- In contrast to client-server networks, peer-to-peer uses and provides resources. As the number of nodes grows, more resources are needed. It needs special software. This allows the network to share resources.
- There is a constant threat of attacks since the nodes are clients and servers.
- Peer-to-peer networks are supported by almost all Operating Systems today.
Applications of P2P Network
These are some of the things you can do with a peer-to-peer network:
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File sharing-
P2P networks are convenient and cost-effective for businesses. This type of network doesn’t require third-party servers to transfer files.
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Blockchain-
Peer-to-peer architecture is based on a decentralization network, blockchain. A peer-to-peer network on a blockchain helps maintain a complete clone of the records, ensuring data accuracy simultaneously. At the same time, Peer-to-peer networks guarantee security.
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Direct messaging-
Peer-to-peer networks are fast, secure, and efficient. You can do this because we use encryption for both peers and have easy messaging tools.
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Collaboration-
The easy file sharing also helps to build collaboration among other peers in the network.
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File-sharing networks-
Peer-to-peer networks like G2 and eDonkey have popularized peer-to-peer technology.
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Distribution of content-
In a peer-to-peer network, unline the client-server system so clients can supply and consume content. With more users accessing the content, the P2P networks can serve more content.
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IP Telephony-
The Skype application is an excellent example of a Peer-to-Peer application.
Why You Should Choose ‘P2P (Peer-to-Peer) Trading’
Various Trade Offers
As a buyer, you can choose from many sellers with different payment methods and exchange rates. The more buyers you have, the more deals you can do. Shopping for trading deals online is like going to an online marketplace.
Trading Globally
Cryptocurrency can be traded between people in different parts of the world in a few minutes using P2P exchange services.
Provide Payment Choices
‘P2P trading’ provides benefits from multiple payment options. With ‘peer-to-peer trading,’ buyers can able to use different bank accounts, wallets, etc. Moreover, it makes it easier for traders to make money online or trade without stressing how to pay.
Escrow to Secure Transactions
Peer-to-peer exchanges need an Escrow account powered by smart contracts that allow traders to trade with each other. When a trade is complete, the assets of sellers go into escrow. As soon as the payment of the buyer is verified, the assets are taken out of Escrow and sent to their crypto wallets.
Conclusion
‘Peer-to-peer technology’ is used for more than just crypto trading. As well as internet-based services, P2P is used for everything from building open-source software to file sharing. It also allows people to buy and sell cryptocurrency directly with each other without any fees or commissions.
Also Read About: Top 10 Cryptocurrency You Should Buy 2024