According to the current scenario of crypto in India, where everyone is confused about the future of crypto, the government is not able to regulate this Innovation and banks are not able to co-operate directly with the exchanges. Markets are crashing and people are doing panic sells but at the same time, the ones who are true believers are stacking sats and holding it.

The collaboration between banks and crypto exchanges nowadays is a lot messed up UPI, IMPS & Direct bank transfers all are restricted. Users are facing problems depositing money on their respective exchanges and had to face losses as they are not able to buy the dips. In a situation like this Peer to Peer crypto marketplaces are not less than blessings.

What is Peer to Peer exchange?

Peer to Peer [ P2P] refers to an exchange of information, asset, or any idea between two individuals without the help of any centralized authority. When only two individuals play the role to perform any exchange that particular exchange will be termed as Peer to Peer.

For example: If I want to buy a house, generally I will look for a broker who will act as a medium between me and the buyer and will take a fixed commission from both sides, the broker will act as the authority without whom this trade will not be executed. Now, suppose if the buyer comes directly to me and transfers the amount required to purchase the house then there will be no role of broker, only exchange will occur between two people, buyer & seller, then this exchange of asset will be termed as a Peer to Peer exchange.

I hope the above example has cleared your doubts regarding the definition of Peer to Peer.

Peer to Peer is the basic backbone of decentralization, where everyone can interact with each other without the need for any centralized authority.

What is Peer to Peer marketplaces?

Here Peer to Peer marketplace refers to crypto marketplaces or P2P crypto exchanges. P2P crypto exchanges have marketplaces where individuals like us can put offers for selling the cryptocurrencies we have. People who want to buy cryptocurrencies can choose from the multiple offers present in a marketplace and can directly contact the seller to purchase the crypto.

Working of a P2P crypto exchange

• Buyers and seller list their offers on the marketplace.
• Individuals who want to purchase crypto can choose from the multiple offers present in the marketplace.
• As soon as the user selects an offer the particular amount of crypto is held by the exchange in an escrow account for safety purposes.
• After that within 10 to 15 minutes, the buyer has to send the exact amount of fiat money to the account of the seller.
• The account details are mentioned in the marketplace.
• As soon as the seller receives the payment and notifies the exchange the crypto will be released from the escrow account to the buyer account.
• This is the working of the P2P crypto exchanges.

How P2P crypto exchanges are helping people in this tough time?

P2P crypto exchanges are filling the gaps and helping the traders so that efficiency will be maintained for a longer time. Centralized exchanges are good for trading multiple cryptocurrencies but all good things have some faults. 

Suppose you want to buy Bitcoin and as you clicked on the buy order button the price of bitcoin increased or decreased and this will make your order be turned into a limit order or if you placed a market order even then price slippages occur but these are very minor problems compared to problems we face every day, the bigger problem is that when exchanges crash.

If you are a crypto trader or any stock market trader for a long time, I can bet that in your journey you may have faced such crashes and these types of crashes generally occur when the market volatility is at a peak, for instance, this problem is also not that big because engineers sitting at the backend always find a way to restart things.

The biggest problem

In every financial sector, the collaboration of banks is a must thing as no financial company can operate if banks do not collaborate with them efficiently and this is the biggest problem of the current scenario and one of the worst cases of centralization. Banks hold the monopoly of the financial sector and that’s why their collaboration is a must for any FIntech company to run smoothly.

In situations like this Peer to Peer marketplaces are no less than a blessing where every individual can buy & sell crypto from each other without the involvement of any central authority.

Things to avoid while doing a P2P crypto trade in INDIA

As we all know that crypto is still not a legal tender in INDIA so to avoid any problem users must not include terms like crypto, ethereum, bitcoin, etc. while making any P2P trade.

• Always check the completion rate of traders on the P2P marketplace and trade with people having at least a 90% completion rate.
• Never round off the total amount to be paid, for example: if you are buying 10 USDT at the price of 79.82 and your total comes to be 798.2 INR, always pay 798.2, don’t round off this amount to 798 or 799.
• Never cancel a trade after transferring the money to the trader.
• Do not transfer the money from any third-party account, for example, if you are using the WazirX P2P marketplace, always use your WazirX linked account to transfer the money to the matched trader.

5 Best P2P Crypto Exchanges

This top 5 list is according to my research, opinions may vary and that;s why it is always advised to do your own research before performing any trade or making an investment.

• Binance P2P
• WazirX P2P
• Paxful 
• Local Bitcoins 
• HODL HODL