The process of selling and buying cryptocurrrencies between users directly, without the intervention of a third party is what is known as P2P trading. In order to avoid the use of charts and other aggregators of the market to identify the time to hold, buy or sell cryptocurrencies and also to avoid the issues associated with traditional exchange, in which the buyer or seller doesn’t have direct contact with the counter party, Binance P2P was created.
It is important to mention that with Binance P2P, the exchange is organized on-behalf of the person transacting and the final prices are determined by the market.
There is control over the transaction by the parties, by determining the parties to the transaction. It is important to mention that it is apt that control is given to the parties, in peer-peer transaction, to take charge of the transaction, but it is not devoid of attendant risk. The aforementioned risk is coherent because there is no third party to broker the deal, and this where Binance P2P becomes an interventionist for users that are conscious of the risk.
How Binance P2P Exchange Work
That P2P exchanges connect crypto users, sellers and buyers, doesn’t make it a marketplace like Facebook or Craigslist. Crypto ads or post ads can be browsed by buyers and sellers and in which some vestige of protection is provided for every participant and which it does by providing a rating system or feedback.
Flowing from the preceding paragraph, You meet someone on Twitter who is interested in buying Bitcoin—and you happen to have some Bitcoin to sell. Twitter is not a P2P platform, so it is difficult to establish trust. What happens when the buyer gets the Bitcoin but doesn’t send the payment? What happens when the buyer sends a lower payment amount than expected? Fraud is the biggest risk of conducting P2P trades without an exchange.
Binance P2P can protect both buyers and sellers to safeguard transactions and reduce the risk of fraud. In addition to a public rating system, Binance P2P uses escrow to secure the cryptocurrencies until both parties have confirmed the transaction. For example, if you are selling Bitcoin for fiat money, Binance will escrow your Bitcoin. Once you send the Bitcoin and the transaction is confirmed, Binance will subsequently credit you and the buyer, ensuring a safe and secure transaction. If either party is unhappy with the transaction, they can file an appeal to resolve the issue between counterparties, or have Binance Customer Support step in.