What’s a P2P Crypto Exchange?
P2P exchanges can be a great way to pick up crypto if you’re finding it difficult to purchase coins using fiat currency. P2P exchanges are a peer to peer marketplace, where you purchase (or sell) directly with one other person. In many regions, banks have blocked crypto purchases with credit or debit cards, so P2P exchanges, like LocalBitcoins, where you can use cash transfers, bank transfers, or actually exchange cash in person, make fiat transactions easier.
How it works
Much like buyers and sellers on other P2P marketplaces, like eBay or even AirBnb, both sellers and buyers have reputation scores and history. That means that the more review scores, and better the rating, the more trustworthy you can assume the seller/buyer is.
While the terms and conditions of these marketplaces indicate that you must use your real details, some may not require identity checks. Sellers have advertisements on boards with the price they are selling at, the method of sale/s, and their reputation. Specific listings will contain detailed instructions on how to complete sales.
Trusting a person for a transaction
As mentioned, choose transactions with people with existing good reputations, preferably with verified accounts. This means the exchange can trace and investigate the person should there be a dispute. If you are a buyer purchasing for the first time, go with one of the bigger sellers. For sellers, use deposit methods that cannot be reversed for security against fraudulent first-time buyers.
Trusting a person for in-person transactions
From a buyer’s perspective, you should only do in-person trading over P2P exchanges with people with a very good reputation. Always meet in a highly visible, public place, with security such as security cameras. If possible, get a friend to come and sit to the side to make sure everything goes smoothly. Until you have done a few transactions in person, don’t show up with 10K in cash — it’s just too risky. The same physical security controls should go for if you are a seller.
This article is part of our Getting Started with Crypto Series; follow Academy’s medium page for more articles like this.
