The popularity of crypto assets has grown recently, with many people recognizing its value as a hedge against inflation. This influx in buyers and sellers of these digital assets led to the birth of peer-to-peer (P2P) trading platforms. Over time, there has been an increase in the number of P2P trading platforms in the crypto industry. Virtually all P2P trading platforms share the common goal of facilitating fast, cost-effective, decentralized crypto trading transactions.
What is a P2P (Peer-to-Peer) Crypto Platform?
A peer-to-peer (P2P) crypto trading platform is an online marketplace that connects buyers and sellers of cryptocurrencies. In the purest sense, peer-to-peer trading involves two users transacting without an intermediary. This implies that financial transactions can occur between two parties without involving a financial institution.
However, this ideal situation for P2P transactions is hardly feasible. While it retains privacy, it involves the two parties to trust each other. To solve the trust problem, several crypto platforms have created a modified version of a P2P marketplace.
Most P2P marketplaces utilize an escrow to solve the “trust problem.” Thus, typical crypto transactions involve placing an order for a crypto asset, making a payment, and receiving the cryptocurrency once payment has been verified. Therefore, P2P platforms like Gate.io reduce the risk of loss of funds due to fraud, utilizing an escrow for both the fund and the token until buyers and sellers play their part.
How Do P2P Platforms Work?
While all P2P platforms work similarly, there may be a slight variation in different exchange steps. Here are a few general steps on how the P2P platforms operate.
Create an Account and Fund the Wallet
To use the services of almost all P2P platforms, users first need to create an account and set up a digital wallet. This wallet will hold the funds they will use to purchase the cryptocurrencies.
Create or Browse Listings
Once a user has set up an account, the next thing is to go through the platform listings to either buy cryptocurrency or offer up their asset for sale. As a buyer, you can go through these listings and find a seller whose terms are most suitable for you. As a seller, you can set your preferred terms if they do not conflict with the exchange rules and regulations.
Start a Trade
After browsing through the listings, you can initiate a trade with a buyer or seller. Usually, the terms of buyers and sellers are highlighted on the platform. Also, both parties can communicate and negotiate before proceeding with the transaction.
Escrows and Disputes
An escrow in a P2P marketplace holds funds temporarily until the conditions of the transactions are met. If one or both parties fail to honor the agreement and renege on the terms, the transaction is terminated.
However, in some instances, the escrow may be required to intervene. For example, suppose a buyer creates an order for $100 but ends up paying only $90, the seller may choose not to release the cryptocurrency. If the buyer clicks the “paid” button, the seller may decide to involve the platform’s escrow to settle the dispute.
Proofs from both the buyer and the seller will be required to defend their claims. Hence, the escrow from the trading platform serves as a judge in dispute resolutions. In a scenario like that mentioned above, the buyer would be urged to make an extra $10 payment to complete the transaction, or the seller may be encouraged to refund the $90 and cancel the transaction.
Payment Confirmation
Once the buyer has made payment, the seller would need to confirm the arrival of the accurate amount of funds in their account. When the seller receives the payment, they need to verify the transaction on the P2P platform.
Cryptocurrency Release
After the seller confirms the transaction on the P2P platform, the platform automatically executes the transaction by sending the escrowed crypto token to the buyer’s wallet, thus concluding the trade.
Top 10 Peer-to-peer (P2P) Platforms in 2024
There is a variety of P2P trading platforms in the crypto industry, but some have been selected for their exceptional quality of service. These platforms comprise the industry’s top 10 P2P trading exchanges: Gate.io, Binance exchange, OKX, Paxful, Hodl Hodl, Bisq, Kucoin, Bybit, WazirX, and Remitano.
Gate.io
Source: Gate.io
Gate.io is an advanced crypto exchange that offers numerous services, including swapping, liquidity mining, asset lending, slot auctions, cloud mining, and buying and selling digital assets. The platform interface was built to fully accommodate experts and crypto newbies with little or no prior knowledge of cryptocurrencies.
Gate.io’s P2P trading system is secure, customer-friendly, and cost-effective. To protect the interests of their customers, Gate.io utilizes a blue badge verification tag for P2P merchants. Merchants with this badge have a good trading history and have earned a good reputation for providing quality service to users.
The platform currently enables P2P buyers and sellers to make or receive payments in 36 fiat currencies. Users can also send and receive money via popular payment providers like PayPal, TransferWise, and ADVCash. Also, the Gate.io P2P trading platform is active all around the clock.
One major advantage of Gate.io’s peer-to-peer platform is that the exchange enables merchants to enjoy exclusive traffic support. Premium merchants can gain more visibility for their ads on the marketplace.
Paxful
Source: Paxful.com
Paxful is a peer-to-peer exchange that enables users to trade cryptocurrencies like Tether, Bitcoin, and Ethereum easily. The platform currently boasts 12 million users across various countries.
It also features a user-friendly interface and a wide range of payment methods. This P2P trading platform also protects buyers and sellers by leveraging the smart contract escrow system. This way, the risk of fraud and loss of funds is reduced to the lowest minimum levels.
Notably, Paxful initially shut down in April 2023 after facing some safety concerns that sprang up due to a lawsuit by its co-founder. However, a month later, the platform announced that it had resumed operations, and the P2P trading platform was back on track.
Hodl Hodl
Source: Hodl Hodl.com
Hodl Hodl is a decentralized Bitcoin trading and lending exchange with over 100,000 users worldwide. The P2P on this platform employs a state-of-the-art multi-signature escrow system, which enables it to secure funds without holding them on the platform. In addition, Hodl Hodl has one of the lowest transaction fees in the industry, charging only 0.3% fees per transaction.
Further, they also offer a P2P lending service through Lend, a global P2P lending platform on Hodl Hodl.
Bisq
Source: Bisq.network
Bisq is a decentralized peer-to-peer Bitcoin exchange that takes pride in protecting users’ identities by not mandating user registration as a requirement for using their service. Therefore, this anonymity protects users from cyber hacks common on centralized exchanges, which store users’ personal information on their servers.
However, Bisq, compared to other exchanges, uses arbitrators, and the trade is executed only when the three parties involved, namely the arbitrator, buyer, and seller, sign off on the transaction. One obvious demerit of Bisq is that the platform is not mobile-friendly. The interface was primarily built for PC users, and while Bisq has a mobile app, the app has limited functionalities.
Kucoin
Source: Kucoin.com
Kucoin is a cryptocurrency exchange that facilitates the trade of over 700 cryptocurrencies, including Bitcoin and Ethereum. The platform also helps traders maximize profits through spot trading, trading bots, and leveraged tokens. Kucoin has also taken strict measures to protect its users’ accounts and funds by employing an industry-leading encryption storage system.
The Kucoin P2P trading platform enables users to purchase crypto assets like Ethereum with over 30 fiat currencies, which include USD, NGN, and MYR. Also, it is compatible with various payment methods, allowing users to choose the method that suits them best.
Bybit Exchange
Source: Bybit.com
Bybit is a cryptocurrency exchange founded by Ben Zhou and launched in 2018. They provide many services, including leverage trading, crypto loans, fiat withdrawals, and NFT marketplaces. The P2P trading platform on the exchange supports over 20 fiat currencies, like USD and GBP. The platform is also user-friendly, secure, and cost-effective for transactions.
Binance Exchange
Source: Binance.com
Binance, founded by Changpeng Zhao in 2017, is currently the largest crypto exchange in the industry in terms of trading volume. They offer various services, including lending, buying, and selling crypto assets at relatively low trading fees.
Binance also has a large selection of cryptocurrencies for trading, with over 400 assets. Though Binance has limited trading options in some parts of the world, like Singapore and the United States, its P2P service is pretty good. Its ease of usage and low spread have made it one of the most used P2P platforms in the crypto industry.
OKX
Source: OKX.com
OKX exchange offers excellent trading services, enabling all with an account to buy and sell crypto assets at relatively low fees. In addition, users can earn massive yields by putting their tokens to work through the staking and saving option on the platform. OKX’s P2P system utilizes smart contracts and advanced AI to enhance security.
The OKX peer-to-peer marketplace also has a relatively high transaction volume. While OKX is available for users in several countries, it is not available for United States users.
WazirX
Source: Wazirx.com
WazirX is regarded as one of the best crypto exchanges for crypto newbies with little or no prior knowledge about the crypto industry. It features a user-friendly interface and 24/7 live chat support for all users who want to give feedback or ask questions.
The WazirX P2P platform also seamlessly connects buyers and sellers to transact without intermediaries. In addition, trading services on the platform are always accessible because of their around-the-clock merchants, who are readily available to render their services.
Remitano
Source: Remitano.com
Remintano is a crypto exchange that started as a Bitcoin peer-to-peer marketplace that connects buyers and sellers to easily trade directly with each other through the help of an escrow system. However, they eventually added other forms of services and started to allow the trade of other cryptocurrencies.
Currently, the platform supports over 20 crypto assets and is available in 58 countries, including India and the United States. Remitano also has 24/7 customer support live chat, where they attend to the needs of customers who need help trading or using other forms of service on their platform.
Conclusion
Peer-to-peer trading platforms are essential in the crypto industry because they eliminate the stress of buying and selling assets common in traditional marketplaces. While there are many P2P platforms in the industry, some have stood out due to their exceptional service, user-friendliness, and relatively low trading fees. Among them are Gate.io, Paxful, and WazirX.
