Peer-to-peer (P2P) trading is something a lot of people have heard of, but far fewer people realize the potential benefits of doing. One of the ways to make money with P2P trading is to enhance your mining profitability. Using the flexibility this form of trading provides, you can use it to increase your potential opportunities to boost your mining profits and add an additional revenue stream to your business or hobby.
Read on to find out how traders make money from P2P trading and how you can use it to make more money yourself if you mine cryptocurrency for fun or profit.
What is P2P Trading?
P2P trading is a form of trading where two parties interact to exchange cryptocurrency, whether you are looking to buy or sell bitcoin, ethereum, or other cryptocurrencies, P2P trading can help. The main difference when you trade cryptocurrencies this way is that you don’t generally interact with an order book or buy from a service directly. Instead, you use a P2P exchange to match with other traders. Similar to marketplaces P2P exchanges help you trade by providing escrow services to ensure you can trade safely, as well as the functionality to make or respond to trade offers with distinct terms and accept different payment methods.
This type of trading is somewhat reminiscent of the style of exchange used by online marketplaces like eBay or Amazon, just with a focus on cryptocurrencies rather than goods and services. One example of a P2P marketplace is LocalCoinSwap.
The Benefits of Peer-to-Peer Trading
First and foremost, P2P trading is flexible, and it allows you to set your terms for how you would like to trade in a variety of ways. One of the most useful is you can select from far more payment methods than you can on an order book style exchange that typically only accepts one or two methods of payment, often a bank or wire transfer. With P2P trading you can accept a wide range of payment types, everything from cash-in-person to Paypal or even gift cards can be exchanged for cryptocurrencies.
One of the other significant benefits of P2P trading is that you can have a far wider reach. You can exchange with people anywhere in the world, provided you can find a suitable payment method to exchange with and another trader that accepts the terms of your trade. The benefit of this additional reach is that you can take advantage of the price differences in other parts of the world and while helping to provide better access to these regions make some profit for yourself as well.
How Does Trading Peer-to-Peer Help Miners?
Cryptocurrency miners, especially those that run a mining rig at home often have quite tight profit margins. Anything you can do to increase your mining profitability as a miner can be a significant benefit to your operation and at the end of the day, your bottom line. While you can’t often do much to deal with the expenses associated with your mining beyond a certain point, you can increase your margins with P2P trading.
Payment Type Arbitrage:
Many payment types commonly sought by P2P traders have an average market price that is quite a bit higher than more widely accepted payment methods. If you can find any of these higher demand payment types that you can accept with your trades, you can increase your earnings and sometimes by a significant amount of 20% or more. Some common examples of more profitable payment methods are PayPal or gift cards. While these do take some risk management to trade successfully and make a consistent profit, many make a steady stream of profit exchanging crypto with them. Even accepting more commonly accepted payment methods like local bank transfer is likely to net you a few percent extra profit on each trade. If making an additional few percent over what you would usually make selling your crypto to an exchange sounds like a great idea, exploring payment type arbitrage with P2P trading might be an excellent option for you to consider.
Many parts of the world struggle with access to cryptocurrencies, and as a result, demand is higher along with the price. Suppose you are in a region that has high cryptocurrency prices locally. In that case, you can take advantage of this price difference by selling to other traders in your area using local bank transfer, cash-in-person, or many different payment types that may be compatible with the needs of local crypto traders. If you are in a region where the price of cryptocurrency is relatively moderate in terms of the average market price you can do things a little differently and look at what payment methods are needed in regions with high demand and exploring the potential of accepting those yourself. Perhaps you have a family member overseas who could provide access to local banking for you, or some of the payment methods used are also available to you. The power of being able to trade with others just about anywhere in the world is not only convenient but quite profitable as well if you find the right circumstances and offer the right types of trades.
While this is more general and not targeted at miners specifically, it can be used alongside selling mined cryptocurrency to increase secondary profitability from your P2P trading. If you are a small-time miner, or just want to increase your income, you can help meet the needs of your trading partners by purchasing cryptocurrency for the best price you can find and arbitraging that to the P2P market. P2P trading tends always to have slightly higher pricing allowing for exchange arbitrage to be a practical and straightforward way to make money trading crypto.
Why is Peer-to-Peer Trading More Profitable?
There is a range of reasons that trading bitcoin and other cryptocurrencies P2P can be more profitable; one of those is convenience. Often people want to use a payment type they have at their disposal already and would just like to buy crypto fast without any hassle. The other is access, as mentioned previously, not everyone has access to specific payment types (or even banking potentially), so this can restrict what avenues they can use to trade crypto. In all these situations though, there are plenty of opportunities for crypto miners to increase their profit margins and even broaden their horizons with a secondary venture that can be profitable even when purchasing crypto from other sources instead of just mining it all themselves.
The Best Place to Trade Peer-to-Peer
While there are a number of platforms that allow for P2P trading, there is one that has several additional benefits that many others don’t provide at all or only partially provide. LocalCoinSwap enables you to trade without forcing harsh and cumbersome KYC requirements merely to use the platform. Excessive KYC is something that is becoming an issue with many other platforms in the space, especially for traders without available documentation to pass these requirements in areas that are struggling economically or with access to the services many of us take for granted. Also, you don’t need to pre-fund trade offers on LocalCoinSwap, this allows you to be reactive when you have a trade offer you would like to accept, stopping you from having your crypto locked up on a platform and waiting for a trade.
Even if you trade on other P2P exchanges as well, nothing is stopping you from adding LocalCoinSwap to your list so you can be exposed to more traders and more trading potential. The platform is also multi-custodial allowing either custodial or non-custodial trading depending on your preferences and what suits your needs. If you are trading ethereum, you can even trade directly from Metamask removing unnecessary extra transfers and keeping trading fees low.
Get started trading P2P today and look at how you could increase your crypto mining margins without having to spend more on hardware. With just a little bit of effort, you could increase the returns from your mining investment and diversify the ways you make money from cryptocurrency.