P2P platforms Vs Exchanges: Which one is better?

P2P platforms Vs Exchanges: Which one is better?

By jordanjnr | Crypto Digest | 3 Dec 2019


Guys this post took a lot to put together. It'd be really nice if you could leave a tip to support my work. Thanks,and to the moon!

Ahhh,the oldest argument in the book.

The one that every crypto investor has to go through.

The argument that basically has no end.

Should you use a P2P crypto buying website or an exchange?

Well, let's answer that question.

But before hand,I'd like to state some arguments that used to work in P2P website's favour,but have been removed solely by the existence of Binance.

1. P2P platforms have lower fees

As a platform,Binance charges next to nothing on your trades such that even if you were trading $5 of bitcoin,you'd still make a seeable profit.

2. P2P platforms are safer

Binance has 2FA and all the features that make a P2P service safe(excluding the escrow service which basically isn't needed in an exchange)

Now, let's compare points.

For P2P:

  • It's easier to obtain bitcoin or other cryptocurrencies in your local currency: This is very very true. Most exchanges do not offer fiat deposits of any kind,for reasons I'm still not sure about. On a P2P site like Paxful, you can buy crypto in your currency,or even with gift cards. You could also find a seller who wants a cryptocurrency you own and wants to exchange it for a cryptocurrency you want.
  • Support is better: Since these platforms don't have millions of customers like exchanges do, it's support services are miles ahead of what exchanges offer. If something goes wrong,you can definitely find a way out of it.
  • They are more down to earth:The process of buying crypto on an exchange is really a lot more simplified than buying from some exchanges. You simply contact the person and make a trade,rather than set orders which might actually be too complicated for some people.
  • They can't be hacked: Because why would anyone hack them? They don't hold any bitcoin themselves. Only the users do,and those bitcoin are never really in any online wallets of the platform's,except the user chooses the option which is available on some websites, such as Paxful.

Now,the disadvantages of using a P2P platform:

  • The process is slow: If you want to quickly capitalize on a price increase on a P2P platform,you have to get in contact with the person who owns the coins you want to buy. Add that to the fact that sending these cryptocurrencies to you will take some time,and the fact that you have to find a buyer who will accept your own price,given that there will be lower prices than yours all over the place.
  • You could get cheated,believe it or not: This especially happens when gift cards are used to pay for crypto. All the payee has to do is confirm that he has sent the gift card details over,and once the user receives those details,the bitcoin is sent over to the buyer, irrespective of the validity of the gift card values. Yup,that sucks.

Now,for the advantages of using an exchange like Binance

  • You can capitalize on tiny crypto price changes: If you're a day trader or you want to become one, this is only possible on an exchange because of the sheer number of users using it. The trading volumes ar usually massive,more massive than an average P2P platform,which makes it possible to find buyers at almost any price you set.
  • Lower fees than some P2P platforms: Yup. It's true. Binance charges only 0.1% of any trade you make,which allows you to make profits even with small trading amounts. Paxful,for instance charges 0.5%, 5x what Binance charges!
  • 100% uptime: You may not have noticed,but all exchanges have a 100% uptime because of the number of trades made on them per day. The same can't be said for Paxful,which might not be available for several minutes in a day.
  • Faster transactions: Since you don't need to call anyone or get in touch with anyone before transactions take place,it leads to faster transaction times. You just need to find a nice price you're willing to pay and set a buy order and....done!
  • It prevents the dreaded thing called human interaction. Do I really need to explain this?🙃

Disadvantages of using an exchange

  • They can be hacked: Many exchanges have been hacked in the past,and hackers have walked away with hundreds,in some cases thousands of bitcoin worth millions of dollars. This can't happen on a P2P platform since bitcoin is never really held on the platform.
  • Some of them have hidden fees: Exchanges like Luno are not completely transparent about their fees. They charge fees on deposits,withdrawals,and even cancelled orders. It really sucks if you have to find this out for yourself.

There you have it! Who won the comparison? Did I miss anything? Tell me in the comments down below.

A bitcoin or ethereum donation would make my day, no matter how small.

Bitcoin address:3JdKzLDTYa4zF3QaBa8VxDWwsYVtVBdVte

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Guys this post took a lot to put together. It'd be really nice if you could leave a tip to support my work. Thanks,and to the moon!


jordanjnr
jordanjnr

Hello! I am a Blockchain enthusiast,bitcoin investor,CEO of BigTycoon group and I love crypto! Hit me up @TycoontechBlog on twitter!


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