edited using canva
It's no news that the P2P function has been banned on binance but available in other exchanges because of some prompt. Do you think P2p is safe? P2P also known as peer-to-peer trading is one of the most commonly used form of trading in an Exchange. It has become increasingly popular among Traders and investors to be the safest form of trading without scams but like every other type of trading there are some potential risks involved.
Being aware of these potential risks allows crypto investors to protect themselves from losses of any form. Let us understand what the concept P2P is all about and how it started from exchanges that are both centralized and decentralized.
P2P trading involves buying and selling of digital currencies which can be stable coins, crypto coins or even fiat currencies. This process of trading these cryptos for fiat, fiat for cryptos, or crypto for crypto is done without the intervention of an intermediary which acts as a third party. This P2P form of trading enables buyer and sellers set their prices on how much they want to buy or sell a particular crypto asset.
 |  |
|---|---|
| This P2P also allow these buyers and seller select their trading partners and also make a decision on when to do the transactions. It gives room for experienced Traders to take full advantage of favorable trading conditions which suit their needs. The P2P marketplaces allows direct exchange of cryptocurrencies between persons. |
There is no central authority that have full control or have authority over the funds of a person. Users have more control over their funds and this speed to be allows them protect their identity during crypto transactions.
You can't be scammed their P2P except you deviate from the rules. Gone are those days you will send money to a seller and expect him to release the crypto but the person in question may wave after receiving the money, keeping you on the loosing end. This practice was done for some years and a lot of people saw crypto as a scam not until a safer means was introduced where both parties won't lose or one gains and the other losses.
 |  |
|---|---|
| Your funds will be frozen until you have paid the seller and received confirmation from him. Despite these benefits this P2P has brought up, there are some risks associated which we should all be aware of before transacting. Some of these risks includes phishing, middleman attacks, fake proof of payments, wrong transfer etc. this may cause many to ask is P2P still safe? |
P2P trading risks are sometimes associated with the kind of exchange involved and the exchange safety measures. A leading P2P exchange has an escrow service, stringent identification process to keep users safe during transaction and regular security updates to avoid scams.
On binance for example, the P2P trading was very tight before the band this beat to pee in Nigeria and removed ngn. Barely would anyone tell you he or she got scammed via P2P because the funds of all sellers are frozen until the buyer makes payment and confirms. Then binance automatically deduct the crypto after confirmation to avoid scams. Let's take a look at some of the scams involved in P2P trading.
If you don't confirm the transaction you may end up falling for the scam. As a seller, binance will tell you to only a proof the transaction after checking if the payment by the buyer has entered your bank account or wallet.
In conclusion, I've discussed one aspect of the potential risks involved in P2P. In my next post, I'll discuss 4 others that you may not have been aware of.
Disclaimer :Any financial and crypto market information provided in this post was written for informational purposes only and does not constitute 100% investment advice. It's just basic knowledge every crypto trader or investor should have
All screenshots are from my binance