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Cryptocurrency as we know it, is a digital currency that has come to stay and now it also enjoys the P2P business transaction model.
Although it is not yet supported and accepted by many governments, in fact many have banned it because they consider it to be a threat to the traditional baking and fiat system.
While in reality it is actually a good addition to the business world, as it has in a short period of time made more millionaires than any other sector in the world today.
Cryptocurrency trading like other forms of trading in the stock market is a very lucrative business opportunity for many crypto enthusiasts.
However, because some countries and governments have banned it, it has made it difficult for people living in those countries and territories to engage in trading of these assets. That is when the idea of p2p comes into play.
Peer to Peer (P2P) is simply a system of trading in this case crypto assets whereby people carryout the business of trading between themselves (two people) without the involvement of a third party other than the platform that is providing the service.
Also Read: Top 7 Platforms to Buy Cryptocurrency From Easily
So, in P2P you literarily just transfer your money to someone else and they in tur transfer crypto (BTC, USDT, eth SHIB etc.) back to you.
Note: the coin money transfer is usually done first before the coin is sent on most platforms. This because the money can easily be traced in the case of any fraud or misunderstanding but the crypto will be difficult.
Usually this transaction is done without a trace of transaction that can be traced by the government or any financial banking system.
In other words, there is will be no specific record to show that the payment was used for crypto transaction purposes.
This system has become very popular and important because of the situations where the government tends to track down anyone that deals in crypto and have their bank account frozen or even having the individual arrested i.e. in countries like Nigeria and china.
What is P2P?
The P2P system is a transactional system that involves only two parties and they alone know about the transaction. For this reason, the transaction will only happen when the two parties have agreed a said terms and conditions i.e. the amount of crypto to be transferred and at what rate.
However, to get started with trading P2P transactions in crypto you first need to get on a platform that supports trading crypto with this method.
Some popular platforms that supports this system includes Binance and Paxful. So, if you don’t have account yet, you need to visit Binance or Paxful to sign up for free now.
How to Trade Crypto on Binance P2P
After signing up on Binance, I will encourage you to make sure that your account is verified immediately before trying to trade.
*Making use of the phone app is easier and faster than the desktop (choose which one you like most, but I prefer the app)
After logging into the app, tap on your profile image and tap on identity verification and apply to be verified, there are different levels, but you only need to get the first level (Tier 1) for now.
Next thing you should do is to add a payment method, in this case a bank account number or a payment processor platform where you want to receive your payments wen ever you transfer your coin to someone on P2P exchange.
Also Read: How Do Money Orders Work And Are Money Orders Safe?
Note: this does not automatically mean that your account is used for crypto transaction, because it will only be made visible to the person you are transacting with, for them to be able to transfer funds to your account outside the Binance or Paxful crypto exchange.
How to buy crypto on Binance P2P
If Binance allows traders in your country to buy crypto with credit cards, then you can as well make use of it to trade, else you will need use the P2P method.
To make use of the P2P trading, go to the home screen
Tap on P2P Trading, then at the top menu tap on p2p
This will take you to the P2P section, when you are on the P2P section;
Tap on the currency symbol to change it to your preferred country currency so that you will be able to see traders from your country that can pay and receive payments in your local currency.
So, if you are looking to buy;
Tap on the BUY menu and if you want to sell Tap on the SELL menu respectively.
Once you tap on the preferred menu i.e. buy. Now you can proceed to also choose the particular coin that you want to trade for example BTC, USDT, ETH and many others
Upon tapping that, you see all the available open orders (trades) that have been listed by other sellers on the platform.
You can now scroll to down and pick any offer that interests you based on the offering price and quantity that you intend to buy.
When the dialogue box opens, input the exact amount you want to buy in your local currency i.e. 1000 in Naira, Yuan etc.
Tap on “Buy with 0 Fee” to be taken to a new page where you will see the sellers bank account details where you will be expected to make a payment to.
*Note: it is strongly advice to not include term or word that relates to crypto/bitcoin during your payment i.e. in narration, like when asked what the money is meant for. If is necessary that you have to write something, simply write gift.
After making the payment outside the Binance exchange you will see a button that says “I have made payment” Tap on it and wait.
Once the seller receives the money in their bank account, they will proceed to release the crypto to you.
Congratulations, you have juts successfully completed a trade using the P2P crypto exchange on Binance.
Also Read: Is Sweatcoin Legit? How Does Sweatcoin Work?
This process is also applicable when you want to sell your coin, only it is now in the reverse where by you will be the one that will receive payment in your local bank account before releasing the crypto to the buyer.
So, if you are looking to sell, all you have to do is to tap on the SELL menu at the top and choose the crypto you want to sell.
Pick a buyer whose offer price you like and needs a quantity that is within what you are willing to sell at the time.
Tap on offer and input the amount of coin you want to sell and select a payment method (the bank account where you want your payment to be made) and proceed.
Once the buyer receives your offer, they will go ahead and make payment to your bank account and after you must have confirmed the payment, you can now go ahead and release the coin to them.
What is Escrow system in P2P
Escrow is simply a system that is put in place to safeguard traders on the platform (this system is also used in various instances outside of the crypto trading)
How the escrow system works
In the escrow system once you put out coin that you want to sell and have initiated the sell process, the system (i.e. Binance) will automatically freeze that amount of coin that you have committed in the selling process from your wallet, just to make sure that the coin will always be available for the person that has indicated interest to buy it from you.
This will ensure that you cannot resell or relist the coin twice and sell it to someone else.
So, the coin will remain frozen until the initial transaction is completed or properly cancelled before you can have access to the coin again.
This is a fraud prevention mechanism to ensure that both parties the buyer and seller properly fulfills their transactional obligations.
In other words, if the buyer fails to send the money to the seller as required and the seller can prove that they didn’t receive any money, then the coin will not be released to the buyer but rather it will be returned back to the wallet of the seller and also;
If a seller claims that they have not received any payment from the buyer and without any tangible proof to back it up while the buyer has evidence/proof to backup their transfer of funds, then the coin will be released to the buyer regardless.
*of course, when issues arise, one will be required to raise an appeal on the app/platform immediately for it to be reviewed and resolved.