P2P exchanges provide the most effective method for buying and selling cryptocurrencies such as Bitcoin and Ethereum using your preferred payment method. They also give users more security and privacy with each transaction.
There are numerous P2P exchange systems on the market that allow you to seamlessly trade your crypto assets for cash and vice versa. Furthermore, they are far less expensive than centralized exchange systems.
I’ll explain what the best P2P Bitcoin exchanges are, how they function, and what to look for, and then recommend our favorites.
Best P2P Crypto Exchanges In 2022
What exactly is a peer-to-peer cryptocurrency exchange?
A peer-to-peer Crypto exchange is exactly what it sounds like: an exchange where you may directly exchange Bitcoin with another peer.
While every crypto trade you do is from one person to another, you rarely get to choose who you trade with, must transmit your funds or digital assets to an exchange platform, pay fees in different ways, and have restricted payment options.
Furthermore, if you use a centralized exchange, such as Binance or Coinbase, you will be required to fulfill Know Your Customer (KYC) requirements in order to trade on the platform.
Peer-to-peer exchanges do not require identity verification, let you browse merchants and see fees for each acceptable payment option, and do not ask you to give up custody of your funds.
One BIG advantage of a P2P crypto exchange
One of the primary benefits of using a peer-to-peer exchange is that there is no single point of failure, as there is with a centralized exchange because no funds are stored on the exchange; instead, the exchange acts as a place that allows you to find someone looking to buy or sell Bitcoin and start the process of making a transaction with them.
How do peer-to-peer exchanges work properly?
Most P2P exchanges operate in the same way. You sign up for the site, which only takes an email address and a password; no identification verification (no KYC) is required.
Others wanting to sell or add to their Bitcoin and other altcoins have posted buy-and-sell offers on several exchanges.
Each deal has a distinct rate/accepted payment method, as well as a minimum or maximum purchase or sale amount.
In general, if a transaction is launched on a peer-to-peer exchange, the transaction can be completed in one of two ways. Some sites require both the buyer and seller to pay Bitcoins or other collateral to an escrow contract, which is then released to the owners upon successful completion of the transaction.
In the event of a dispute, the escrow is used to compensate the harmed party. Other sites require the seller to send the Bitcoin to an escrow account, where it is held until the seller confirms receipt of payment.
As a buyer, you can look through the numerous offers, choose one that fits your needs, and then contact the seller to finalize everything. And as a seller, you simply put what you have for sale, what payment methods you take, and any additional fees.
List of Peer-to-Peer Exchanges this 2022
Paxful, one of the most prominent peer-to-peer exchanges on the market today, claims to accept over 300 different payment methods. PayPal, Western Union, gift cards, reward points, and even actual assets such as a car are examples of these ways.
While all of these payment options are conceivable, they are not always available because a seller must be ready to accept these payment methods. Paxful is an excellent P2P solution that was founded in 2015 and today has over 4.8 million members, transactions safeguarded by escrow, and only 1% costs on the seller side of the transaction.
Paxful does not offer anonymous trading or Bitcoin exchange; crypto investors must go through many verification methods to expand their buying limitations, which are as follows:
- Level 1: The trade limit for cryptocurrency transactions is set at $1,500. Email and phone verification are required.
- Level 2: The trade limit has been set at $10,000. Level 1 + ID verification are required.
- Level 3: The trading limit has been set at $50,000. Level 2 plus address verification is required.
- Level 4: There is no limit and increased due diligence is required.
Buyers incur no transaction costs, while sellers pay a 0.5-5% transaction fee-based payment option. Paxful’s platform now includes the following capabilities to help safeguard trade operations:
- Escrow service: In a transaction, funds are held in an escrow account until all of the transaction’s components are confirmed. This protects both the buyer’s and seller’s interests while also facilitating the transaction’s trustless character.
- Two-factor authentication (2FA): This feature adds an extra layer of security and protects your wallet from illegal access.
- Rating of the seller’s reputation: The rating is based on the seller’s previous activity and trade history. A good rating aids in gaining the buyer’s trust for a seamless selling transaction.
Bybit, which was founded in 2018 and is headquartered in Singapore, is another excellent crypto trading platform for P2P trading. It is without a doubt one of the most recent and fastest-growing cryptocurrency exchanges.
When a buy order is performed, the stated amount of coins are reserved on the P2P platform. That is, if the seller does not release the coin within 10 minutes after receiving payment, the buyer’s customer support has the authority to release the coin from the reserved money after verification.
Bybit provides peer-to-peer trading in three cryptocurrencies:
The platform supports over 25 fiat currencies and 300 payment options, including debit cards, credit cards, in-person cash payments, and more.
In terms of charge structure, the cost of floating price ads on Bybit is changed based on market movements and is updated every three seconds. A fixed-price ad’s cost does not fluctuate with the market price. Furthermore, there are now no expenses for advertisers to place ads. This means that there are no trading costs on this platform.
Localbitcoins, founded in 2012 in Finland, is one of the most prominent peer-to-peer cryptocurrency exchanges on the market today. Because of their tenure in the sector, they have some of the highest volumes of any P2P exchange, and they accept a variety of payment options, including PayPal.
On Localbitcoins, there are no costs for buying or selling Bitcoin; you will only be paid a fee if you advertise that you are wanting to buy or sell, and even then, you will only be charged 1% of any transaction produced by the ad.
Users’ purchase restrictions are set by the platform based on their verification level. Your name, email address, and phone number are required at the T0 level. The annual trade maximum is €1,000.
LocalBitcoins’ customer service is promising; you must submit a ticket for any questions. They usually respond within 24 hours of receiving the ticket.
LocalBitcoins performs admirably in terms of the security and safety of its users’ funds. On the exchange, two-factor authentication is likewise enabled by default.
4. HODL HODL
Hodl Hodl is a global P2P Bitcoin exchange that allows users to trade directly with one another and does not keep user cash but instead locks them in multi-signature escrow called P2SH Bitcoin, which uses three keys and requires at least two to sign a transaction. They offer a payment password that can be used to encrypt the user’s escrow key pair.
This reduces the likelihood of Bitcoin asset theft and trading time. Hodl Hodl is not subject to rigorous identity verification methods (KYC) because it does not keep any money, digital or fiat.
This enables transactions to take place directly between users’ wallets, without the need to submit your identity to the trading site. A maximum fee of 0.6% is levied on a trade that is split evenly between the buyer and seller, resulting in a maximum fee of 0.3% levied on each member of a transaction.
The platform also includes a TestNet where you may become acquainted with the Hodl Hodl P2P procedure. Apart from that, it offers an OTC trading desk in collaboration with regulated European broker Tenbagger.
Bisq is more of a decentralized exchange than a peer-to-peer exchange.
You must first download and install their software before you can trade on the exchange.
It is peer-to-peer and requires security deposits for transactions to be conducted, which means you must submit funds that will only be returned to you if your trade is successful. They accept a variety of payment ways and charge 0.2-0.6% in fees.
One disadvantage of Bisq
The main disadvantage of Bisq is that you must run software to use their services. There are also significant transaction limits placed on new accounts, and the only way to increase these limits is to either have a trusted user verify that you are also trusted, or “age” your account, which means waiting for time to pass; the older your account, the more you can do per trade.
LocalCoinSwap is a fantastic peer-to-peer exchange where you can buy and sell a variety of crypto assets in a decentralized but secure environment. There are potentially 250 distinct payment methods accessible, and the exchange supports 25 cryptocurrencies.
There are no transaction fees while buying or selling on the exchange. LocalCoinSwap employs an escrow service to protect both parties during the transaction, ensuring that bitcoin trading is as quick, secure, and private as it should be.
There is no need for identification verification, although you may be requested to provide ID to select merchants when utilizing a bank transfer.
LocalCoinSwap provides excellent customer service. You can immediately create a ticketed request for any of your questions here. They also have an extensive FAQ section that answers frequently asked questions. They are also available on several social media networks, such as Reddit.
7. Binance P2P
Binance P2P, one of the most well-known names in controlled exchanges, has arrived. Aside from P2P, Binance is well-known for services such as Forex trading, stock market trading, purely trading Bitcoin, and so on.
Binance P2P was created in 2018 and allows you to transact on your terms in a secure and simple manner.
It supports ten digital assets, among them:
In fact, you can buy Bitcoin and other digital currencies with more than 70 fiat currencies, and you can pay with more than 300 different methods, including in-person cash payments, local bank transfers, PayPal, M-Pesa, and numerous e-wallets.
Takers are charged no fees for crypto trading, but makers are charged a modest portion of transaction fees for each successful order.
This peer-to-peer exchange has over 15,000 verified merchants and handles over 7.5 million transactions every year. You can not only buy or sell cryptocurrency on the Binance P2P crypto market, but you can also make your own trade advertising to set your own rates.
Binance P2P does not gather your personal information, and you do not need to utilize your bank account or online wallet to conduct a crypto-fiat transaction.
You now understand what Binance stands for in terms of accountability. Aside from that, all users must pass Identity verification in order to utilize Binance products and services with full access, which also applies to P2P.
Binance P2P allows you to exchange crypto and fiat balances on Binance.com and the Binance App, which is available for iOS and Android. Binance P2P levies a maker/taker cost for each completed order, whereas the earlier taker is completely free. The maker fluctuates from 0-0.35% based on the fiat trading pairs and has lower trading fees than its competitors.
What to Look for in a Peer-to-Peer Exchange
Security, trading costs, volume, and payment methods are the same things to look for in a peer-to-peer exchange as they are in a centralized exchange.
Because a P2P exchange is a direct person-to-person exchange, the onus of security is on you as the user.
Yes, there are safeguards in place, such as arbitrators and security deposits held in escrow, but it is your responsibility to examine a buyer’s or seller’s profile to determine whether they are trustworthy individuals to deal with.
2. Payment Options
This differs not only from exchange to exchange but also from the seller to seller.
Some sellers may only accept payments through centralized exchanges, such as bank transfers, credit or debit cards, or cryptocurrency. Other merchants may take a wide range of payment options, including PayPal, gift cards, reward points, and even products and services.
If you want to purchase or sell Bitcoin in an unusual fashion, you should consider each exchange’s available payment options.
3. Trading Fees
Because P2P crypto trades are not custodial, you are more likely to pay lesser costs than if you used a standard centralized exchange.
Most P2P exchanges do not charge fees for buying or selling Bitcoin; you only pay a fee if you advertise on the site, which is different from merely submitting a buy or sell offer. Because transactions are conducted directly between users, no central authority can take a portion.
When there are fees, they are usually 1% or less in total and are often just on the seller’s side. When utilizing an alternate payment method, the only time there are often greater fees.
Because of the direct nature of a P2P exchange, there are likely fewer users on the website, resulting in lower trade volume. If you want purchase or sell offer filled quickly on a P2P exchange, you should look into which ones create the most traffic and hence the greatest volume; otherwise, you may be waiting a long time to conduct a trade.
Conclusion: The Best P2P Bitcoin Exchange
P2P exchanges are the future of the crypto world because they enable a truly decentralized trading environment while still being incredibly efficient and secure. The P2P exchanges in the list above were picked based on the platform’s efficiency, trust, market depth, and security.
Furthermore, while dealing with a P2P exchange, always carefully read the vendor’s evaluation and never settle your trades outside of the platform, as the exchange secures all transactions.
What do you think? What’s the best P2P exchange for you? Let me know in the comments below.
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