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As the world of digital currencies prevails, so are ways in which a trader can exchange crypto for their fiat money. A few years back, exchange platforms needed the association of any third party to find asset purchasers to fulfill a trade. However, presently, P2P crypto exchanges discard the requirement of central authorities in trading. Here, the trading parties enjoy direct trading. But how secure are they? This article will answer this question.
A report by Cointelegraph shows that in August’s first week of 2020, 95 million US dollars worth of BTC passed via Paxful and some local BTC platforms. Millions of altcoins pass via varied P2P crypto exchanges each year, resulting in increased growth.
These exchanges support varied digital currencies. For instance, Binance, which is a crypto service giant offers several services that include P2P exchanges. It supports various crypto assets like Bitcoin Cash, Bitcoin, BNB, Ethereum, and many more.
Safety Protocols in P2P Crypto Exchanges
Several technologies are instituted in the P2P platforms to assure that no money is lost and no hackers get through. These platforms depend on blockchain dependability, complete decentralization, and reliability. However, more technologies hide the identity of the user and safeguard their assets.
KYC and AML Requirements
KYC (Know your customer) protocols, which are initiatives applied in many blockchain businesses to identify and verify the identity of customers. Many governments denote this system as anti-money laundering protocols (AML).
The protocol introduction came about because of the increasing assertions of crypto use in criminal and money laundering activities. Using the KYC protocols, several blockchain businesses assemble a lot of personal data, that include ID numbers.
The Peer-to-Peer crypto exchanges do not comply with any AML-KYC government initiatives. These platforms only need data that are important for opening accounts, which is mainly an email address. However, most of these exchanges do not save the addresses after opening the accounts; hence, personal details will always stay private.
Moreover, these exchanges are free from any external monitoring. This implies that no one can get enough data to hack the account of an individual, resulting in an unhackable channel. Only two parties have rights over a transaction, i.e., the purchaser and the seller.
Leveraging Private Wallet
There are several wallets in the crypto world, divided into either exchange or private wallets. Most crypto platforms select to use the exchange wallets, implying the platform would own the private keys of the users. Exchange wallets offer a third party control over an individual’s funds and account. If a user is dishonest at any point, they will lose their wealth and they cannot recover it.
P2P crypto exchanges employ private wallets, where the account holder has complete control over the private keys. Private wallets help the user in storing their private keys for a long time without any uncertainty. Users can plan to hold the keys in a hardware device or a paper wallet to bolster the security of the asset.
Escrow Services
Escrow is basically a financial service where two parties trading on P2P plan to entrust their items to be held by a third party. This service tries to enable the purchaser to verify the authenticity of the goods and complete their payment before getting complete ownership.
P2P exchange platforms work as an Escrow service providers. The seller will insert their assets in an escrow account, and then the seller would check the authenticity and send payments as the purchaser releases the assets.
Having a service like this decreases the chances of dishonesty and the possibility of losing their assets to fraud. This technique assures the trading party complete honesty and security in transactions.
Top 3 P2P Crypto Exchanges Presently Operating
Many traders and investors are intrigued by the fluctuations of digital currencies as they have the ability to skyrocket in value, even though investment returns are by no means assured.
That same fluctuation makes the digital currency a considerably riskier investment in comparison to stocks, but there is a potential for vast rewards on peer-to-peer BTC exchanges. So, if you have the funds to spare in your portfolio, it is worth earmarking some of them for crypto investment once you choose the best P2P crypto exchange for your requirements. So let us start with the peer-to-peer cryptocurrency list along with the exchanges.
1. Binance
Many think Binance to be among the best P2P crypto exchanges as it enables users to buy nearly 60 types of digital currencies, that include Chainlink, Litecoin, and Dogecoin. Along with that, while trading P2P on Binance does not incur any taker fees, this P2P altcoin exchange does take a maker fee of up to 0.35 percent. That aside, it is largely used by P2P advocates across the globe who wish to purchase and sell a whole host of altcoins.
For Binance P2P exchange login, select Get Started in the upper right corner of the website. Fill out the form, and verify your identity and then unlock your free prize before making a deposit. Some data is difficult to find on the website, but their mobile application is an intuitive, streamlined experience that novices should be able to use. Binance accepts a wide array of currencies, and even supports instant transfers for an added 0.5% fee for traders in a hurry.
2. WazirX
WazirX is an automatic P2P crypto exchange India that enables the trading of all kinds of digital currencies. While many may know it as the most reliable and the best P2P crypto exchange in India, WazirX was actually taken by Binance in November 2019. This indicates that the P2P platform has ample liquidity so users can conveniently engage in transactions. Unlike other best P2P crypto exchanges, this exchange only enables purchasing and selling of USDT and no other stablecoins. Fiat on-ramp wise, it helps with eight varied fiat currencies that range from Indian Rupees to Turkish Liras and charge 0 percent marker and taker fees.
Click Sign Up on the official website to fulfill the registration form. After you validate your email, you can usually start with making a deposit in less than five minutes. Clicking on the Funds option takes you to an intuitive display where you can withdraw and deposit your assets. To purchase on this platform, click on P2P at the top of the screen and enter the amount you wish to purchase. Then, click on Place Buy Order to start the search for sellers.
3. Paxful
Paxful is among the best P2P crypto exchanges that are based in the United States. It promises to streamline all P2P transactions with as much security as possible. In fact, users offer biometric data as a part of the verification procedure, raising transaction security. Paxful charges a flat charge for various actions, but purchasing crypto is always free on this platform. Relying on the currency, sellers must pay a charge of between 0.5% and 5%.
Signing up for Paxful is very easy, but takes a bit of doing to complete. Traders must meet mandatory ID needs, and high-level traders will also have to submit video verification. Once your account is verified, then you can navigate the intuitive website for funding your wallet. After selecting a payment method, Paxful offers a list of verified sellers. You can filter this list down to users who have over 200 completed trades.
Wrapping Up
Financial technologies are increasing and advancing each day, and P2P crypto exchange platforms only prove this part. These exchanges boost the security of not only the crypto assets but also protect individuals from any criminal activities.
There is a P2P crypto exchange no KYC protocols to assemble data about the user, and neither do they keep the private addresses of the users; instead, users have complete control over their wallets and also their funds. The primary advantages of P2P networks include efficiency and speed. This is because there are no centralizing bodies. Both the seller and buyer benefit from transactions that require just a few minutes to complete. This form of exchange is highly safe and is filled with benefits for users.
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