P2P (Peer-to-Peer)

P2P exchange takes place between two users for the purpose of buying and selling cryptocurrency without the presence of a third party. In this type of trading, individuals can communicate through a website or directly through social platforms. For example, you can meet a trader through social media advertising.

P2P trading gives you more control over the sale of your cryptocurrencies, buying at a certain price and speed of execution. While P2P trading gives users more control over the process, it’s important to remember that P2P transactions carry certain risks.

Peer-to-Peer and Centralized Exchanges

P2P cryptocurrency transactions generally do not require KYC from the parties involved, thus protecting the privacy of each user. Most P2P exchanges allow the purchase of cryptocurrencies for cash or other forms of exchange that promote privacy.

However, not all cryptocurrency exchanges are truly P2P. Many are centralized exchanges (CEXs), subject to the regulations of the countries in which participants live. This means that governments sometimes require exchanges to collect KYC and transaction information from users, resulting in the privacy breaches that gave rise to cryptocurrencies.

P2P exchanges

• Bybit
• Binance
• Huobi
• Paxful
• OKX

On the other hand, privacy advocates appreciate how P2P allows individuals to exchange without government regulation. P2P provides an easy way to access cryptocurrencies. But if not done correctly, it can pose significant risks that can lead to the loss of your asset. It is therefore important to do your own research (DYOR) and exercise caution when searching for a P2P exchange.

PROs

• No third party required
• Does not require KYC
• Speed of execution
• No fees

CONs

• Risk of fraud
• Long search for the other party
• Low liquidity