Decentralization means taking away the power from organized institutions usually operated by governments and giving this power to the individual. On paper, a blockchain cryptocurrency does exactly that by making every single transaction publicly visible and adding a layer of transparency to any commercial activity.
However, owning a Bitcoin, the biggest blockchain token in the world, and using it are two completely different things. While crypto enthusiasts dream of a world where people can freely use decentralized digital currencies, the reality is that many nations are still on the fence about using crypto without any oversight. At the same time, most businesses will have to swap their tokens for fiat if they want to operate legally.
This whole conundrum creates an environment where people with BTC and people with other assets seek places where they can safely exchange tokens and fiat. In 2010, the first Bitcoin Market appeared on the internet created by a prominent BTC enthusiast Dwdollar. It did not take off by today’s standards, but it was a huge step forward for the whole community.
Peer-to-peer transactions were the only option after the launch of the Bitcoin protocol in 2009. Many users were using Bitcointalk and traded coins there. Bitcoin Market became an early iteration of what contemporary P2P exchanges are.
What does Peer-to-peer mean?
A peer-to-peer exchange is an online platform organized in a way that allows users to interact with each other freely with minimal oversight. Early platforms lacked any advanced functionality and looked more like interactive lists with orders ranked by price.
A user would go to this website and check existing orders. If they liked a particular offer more than anything else, they would contact a person who opened an order and started a transaction. Needless to say that theft and scams were a huge concern. It became an even bigger issue when Bitcoin started taking off several years later.
Proper management and oversight systems had to be implemented. Peer-to-peer Bitcoin exchanges started changing and implementing new security features to ensure that users can trade safely. A typical interface now hid any contact information until a trade was initiated on the website. Parties would receive an option to make a security deposit (an escrow) to protect their interests.
This little insurance helped early P2P platforms attract new users and build confidence in the market. Transactions were now better monitored. People were finalizing deals quicker since they were not afraid to lose money thanks to escrow. The market started flourishing until CEX platforms started gaining ground.
What is a CEX platform?
A centralized crypto exchange is an over-the-counter exchange that takes your money into custody and allows users to trade in a secure online environment by acting as an insurer and mediator between traders. Just as any other broker or exchange, a CEX platform earns money by applying fees to transactions on a spot market which works similarly to a P2P marketplace but all transactions happen on the website meaning that buyers and sellers do not interact with other directly.
A CEX platform is a more convenient way to purchase tokens, but this convenience comes at a price. There are several issues that many crypto enthusiasts have with centralized organizations providing exchange services:
- A centralized entity controls the market and dictates the terms to buyers and sellers distorting the real situation in the crypto industry.
- A CEX platform is a custodian of your money and any irresponsibility may result in significant losses. It also makes them more susceptible to cyber-attacks.
- Centralization means that a group of people control assets belonging to clients and some misuse can easily occur.
- Some privacy concerns were also raised by many users after some CEX platforms announced that their databases were hacked.
These issues do not seem concerning to over 190 active users of CEX platforms like Binance, Kraken, KuCoin, and many others. Although, there was a significant shift to P2P exchanges after the FTX fiasco which highlighted all of the issues listed above.
Advantages of Bitcoin peer-to-peer platforms
The market share of P2P exchanges is hard to calculate since many websites do not disclose information. However, the interest in P2P money transfer, in general, is on the rise meaning that the general population is attracted by the idea of using peer-to-peer transactions to send money, make purchases, and receive payments.
The market of P2P payments grew by over 880% in 2021 alone strongly indicating that there is a lot more room for growth with projected numbers exceeding $2.5 trillion globally by 2024. After the FTX debacle, many people using cryptocurrencies started warming up to the idea of conceding the comfort of CEX platforms in favor of using P2P platforms with some services seeing a 200% growth in new user registrations.
In light of such developments across the industry, it is imperative to discuss the advantages of decentralized exchanges.
Financial affordability
If you have enough money for escrow payments, fees won’t be an issue. Since many decentralized exchanges take a hands-off approach to overseeing transactions, they take a very low commission which is something that can be quite attractive to conservative investors seeking any small advantage they can get.
Some people are small-time traders or people seeking quick exchanges to sell or buy BTC and other cryptos to make an online purchase elsewhere. It means that the barrier to entry is lower for people who are interested in cryptocurrencies but felt intimidated by huge numbers.
Privacy and security
You can easily find some peer-to-peer Bitcoin trading sites where you don’t need to disclose any information except the e-mail address used to establish communication between users. These old-school exchanges operate much like early P2P websites and offer an unmatched level of privacy.
Since many interactions happen between users directly, security is as high as you can make it. These exchanges do not take custody of your money meaning that users are responsible for the safety of their funds. It is something that many BTC enthusiasts enjoy and respect.
The last point on security is that you can choose a service that offers escrow to ensure that a transaction is insured. It eliminates any chance of scammers taking advantage of you.
Accessibility is higher
To start trading on a P2P platform, you don’t need to have a bank account or a credit card. You may use these payment methods to trade with other users, but other options are always on the table. Whether you prefer using PayPal, Venmo, Payoneer, or any other payment system, you will be able to complete a trade.
The fact that you don’t need to disclose your financial information to any party is a huge plus. Many crypto enthusiasts believe that privacy is one of the biggest appeals of cryptocurrencies in general.
Disadvantages of P2P crypto exchanges
Some people believe that even the best peer-to-peer crypto exchange is inferior to a contemporary centralized platform. There are some valid criticisms and concerns that proponents of CEX platforms have:
- The lack of integrations with other services. As of right now, many decentralized platforms don’t have any integrations with services like charting tools (like TradingView), analytical sites, or automation vendors like WunderTrading. It means that you cannot meaningfully use bots and other efficient trading tools even on the best P2P crypto exchange.
- Some believe that anonymity is insufficient. Despite not demanding a lot of information about you, many P2P platforms still collect data and even encourage their users to display some personal data to boost their trustworthiness. However, it is still a much better way to conceal your online activities than using a CEX platform.
- The user interface needs to be figured out. Creating a comprehensive menu for a P2P marketplace is a tall task. Some companies manage to do it better than others, but the sector standard must rise. Finding the right deal is tedious and starting a transaction can be quite complicated.
- The speed is quite infuriating. One of the reasons why so many CEX platforms took off is that a P2P marketplace does not facilitate quick transactions. Two parties may spend hours setting up a trade which can be annoying. Most small-time trades happen quickly, but significant amounts of BTC may take a long time to change hands.
The list of peer-to-peer cryptocurrency exchanges
Selecting a business partner in a complicated crypto market can be a challenge for people unfamiliar with blockchain projects in general. However, you don’t need to be a technology expert to distinguish reliable and trustworthy services from those that do not deserve your attention.
We take into account a multitude of different factors when determining whether a particular CEX or DEX platform can be used efficiently by all users. The ease of use, selection of financial products, availability of multiple payment options, and a plethora of other aspects are analyzed and ranked.
With the variety of offers in the industry, it is crucial to orient yourself correctly and select only those providers who can help you build a strong portfolio while removing the burden of learning the tiny minutia of using exchange services. Choosing the right platform can be a huge improvement to your investment endeavors while selecting something that won’t provide the necessary level of quality and reliability can ruin your finances.
We decided to put together a lengthy list of CEX and DEX platforms that many of our users will find quite satisfying in many ways. Using our multi-metric methodology, we determine which peer-to-peer Bitcoin trading sites are the best for all sorts of investment activities. These platforms are listed in no particular order and can be considered equals in a variety of aspects.
ByBit — a good destination for international retail traders
While it is not the biggest exchange on the planet, it is certainly a versatile one. You will find a solid lineup of exchange pairs. The interface is great for newcomers as it mimics many old-school spot market interfaces that people with prior investment experience will be familiar with.
One of the unique features of ByBit is that it focuses on ensuring that both sellers and buyers receive reach optimal prices and quickly agree on the number of assets exchanged. Since the company operates internationally, it offers a massive list of payment options to facilitate trade between people from different regions and nations.
The catalog of assets that can be used on the platform is also quite impressed with the list of cryptocurrencies listed on the site including BTC, ETH, BCH, LTC, XTZ, LINK, ADA, and Polkadot. These coins are still reliable and incredibly robust considering the current global financial situation and the volatility in the crypto market.
Advantages:
- ByBit offers a rich catalog of different exchange pairs
- The platform facilitates fair deals for everyone
- The list of payment options includes over 80 different choices
Disadvantages:
- Some people may find the website hard to navigate
Huobi P2P — trading without any overhead costs
If you are looking for a place where you can exchange tokens without much hassles and fees, Huobi is certainly a good destination. The service works like clockwork and delivers a satisfying user experience through a well-designed interface and quick exchange tools.
Huobi managed to attract hundreds of thousands of users thanks to its loyal policy regarding fees and commissions. Both sellers and buyers can exchange their tokens for free. It is a massive draw for those who are looking for a cheap and crowded marketplace.
The company is working on a global scale and offers its services to people from all corners of the world. It means that Huobi must have a wide range of payment options. Depending on your geographical location, you may access a long list of payment methods with inclusion of bank transfers, credit cards, Apple Pay, PayPal, and other payment systems.
Advantages:
- Easy to use and navigate
- Offers over 90 different payment options
- Has a solid selection of supported coins
Disadvantages:
- Users spend days going through the verification process
- Fiat currencies are not taken into custody
HODL HODL
This platform is a solid choice for people interested in Bitcoin P2P trading since it offers a wide range of exchange pairings. All mainstream coins are traded here in massive volumes. Bitcoin, Solana, Ethereum, Cardano, and a myriad of other coins can be listed as long as you don’t need to use fiat as USD is not in favour yet can be used depending on sellers and buyers.
If you are short on money and need some financial assistance to finalize a deal, you can use the lending service. Transaction fees are also quite low with the biggest commission coming down to just 0.6%.
The interface is user-friendly. You will never find yourself struggling to find a specific coin or a menu item. The name of the platform refers to a meme that proliferated through the BTC community. The brand tries to position itself as a good choice for early adopters and community members.
Advantages:
- Reasonable commissions on transactions
- A rich variety of coins to trade
- The interface is efficient and simple
Disadvantages:
- The liquidity on the platform is relatively low
- The selection of payment options is lacking
LocalCoinSwap — trade whatever you want
The biggest draw of this platform is the massive catalog of supported tokens with the inclusion of all mainstream coins and some less popular cryptocurrencies. If you are someone with the desire to invest in the crypto industry as a whole, this particular platform can be a great choice.
Fees will not be an issue for many retail traders or those who want to build a big portfolio. The platform takes only 1% in commission on all transactions.
You can use a variety of payment options to trade on LocalCoinSwap. However, the selection may not satisfy international users since the list of payment methods only includes bank transfers, PayPal, Skrill, and your cash deposit on the website.
Advantages:
- The selection of fiat currencies includes over 150 options
- The fee is just 1% (lower than the market average)
- You may use smart contracts to escrow
Disadvantages:
- There is no protection for users outside of escrow smart contracts
- Trading volume is often very low
KuCoin — a popular platform for everyone
Experienced traders and cryptocurrency experts consider this platform one of the best destinations for their investment activities. The list of supported coins is quite impressive and contains all popular assets as well as a variety of obscure selections that only active crypto community members know about.
You may trade ADA, BNB, USDT, ETH, BTC, and DOGE. There are many more coins to choose from. Whether you need to add more assets to your portfolio or make money on price discrepancies, this platform is a good destination for you.
KuCoin is also integrated with many third-party platforms including automation vendors like WunderTrading. The latter is a great provider of automation services that can be leveraged to dramatically increase your profits.
Advantages:
- Commissions are relatively low
- The selection of coins is massive
- The trading volume is impressive
Disadvantages:
- You won’t be able to use a wide range of payment methods
- Novices will find that working here is hard
Binance — the biggest shark in the ocean
This CEX platform has been around since 2018 and quickly gained popularity thanks to its massive lineup of financial products, efficient management, and advanced technology. Binance is considered by many the best crypto exchange in the world. One of the reasons so many retail traders flock to Binance is the accessibility and reliability of its web architecture.
The platform has a P2P section alongside margin and spot market sections. This versatility allows investors to diversify their portfolios and use a myriad of investment options without switching platforms and looking for places to trade specific assets.
The mobile application offered by this company is also a very interesting piece of software that seems bloated with features but offers a wide range of tools to both novices and experts. All in all, this platform is great for all sorts of investment activities. Whether you need to start trading derivatives or consider the slow pace of P2P trading a superior investment strategy, you will find appropriate tools on Binance.
It is also integrated with automation vendors. For example, WunderTrading offers a special bot that follows the triangular arbitrage strategy and makes money on the spot marketplace or in the P2P section.
Advantages:
- The biggest trading volume in both P2P and CEX sectors
- The variety of payment options is quite impressive
- You can trade all sorts of assets including BTC, BNB, ETH, and DOGE
Disadvantages:
- The main platform is still heavily centralized
- You may find the mobile app confusing
Paxful — one of the best P2P Bitcoin exchanges
While the catalog of supported coins is limited to only stable coins and popular tokens, it is still a very powerful platform that offers P2P exchanges with no fees and additional payments. If you are interested in working with Bitcoin and Ethereum, you will find this platform more satisfying to use as it provides its users with a massive selection of payment options and protection tools.
Some users are criticizing Paxful for its lacking catalog of additional services that many other platforms provide to their clients. However, the reliability of the main product is the main draw of Paxful. It is strictly focused on making sure that traders feel secure and safe while working on the platform.
You can use the BitGo wallet tailored specifically for Paxful and a wide range of other interesting mini-instruments that make trading here easier for regulars. The wallet is considered one of the safest in the market.
Advantages:
- A proprietary BitGo-powered Bitcoin wallet
- High level of security and safety
- Focused on peer-to-peer USDT and Bitcoin trading
Disadvantages:
- The lack of additional crypto services
- You may find the interface somewhat confusing
OKX — a time-tested option for novices and experts
Millions of users from across the globe say that this specific DEX trading platform is the best in the best P2P cryptocurrency exchange in the world. The company also has a nice mobile app with rich functionality, diverse analytical tools, and access to a long list of various investment products.
OKX is a centralized entity and takes users’ money into custody, but it also has a full-featured P2P marketplace where traders can interact directly without any interference on OKX’s part. It is something that attracts early adopters and BTC enthusiasts.
However, access to a variety of other financial products is a great addition to the overall list of benefits enjoyed by users of OKX. If you want to securely swap one token for another, you can visit the P2P marketplace and look for a good deal. If you want to focus on retail trading and working with financial instruments, you can use a margin account.
Advantages:
- A wide list of financial instruments and tools
- Access to both P2P and centralized trading
- You may use different payment methods
Disadvantages:
- The centralization of the main platform may be an issue for some users
- OKX had some security issues previously
WazirX — hello from India
The Indian cryptocurrency market is quickly gaining ground and propels trading volumes in Asia to impressive heights. With millions of users joining the market, it is no wonder that WazirX is becoming one of the biggest destinations for P2P traders from across the globe.
The list of available payment options may feel limiting, but the variety of cryptocurrencies that can be traded and the availability of exotic supported fiat currencies like the Turkish Lira and Indian Rupee make WazirX a preferred choice for millions of OTC traders who want to explore the crypto industry.
The only supported stable coin here is Tether which is strange because WazirX is a subsidiary of Binance. Nevertheless, it is still an independent P2P platform that operates primarily in the Asia-Pacific region.
Advantages:
- The company is a reliable provider of exchange services
- You may trade using a variety of fiat currencies
- The trading volume is increasing every month
Disadvantages:
- The interface may seem clunky
- Setting up international trade can be a challenge
Gemini — is probably, the best choice for beginners
Gemini is a well-known brand in the crypto industry. It is a casual exchange that was designed to cater to novices who do not know much about the world of cryptocurrencies. It is a good place where you can find trade and quickly finalize a deal without spending too much time.
The list of supported coins includes over 50 different names and will satisfy both novices and experts. The lack of a minimum order size is a great plus for many newcomers who would like to join the market with as little money as possible. If you want to do it as an experiment or try to build a small portfolio bit by bit, you will certainly enjoy working with Gemini.
The focus on newcomers to the crypto domain does not mean that the exchange is only for beginners. It is a powerful P2P platform with a wide range of tools available to all retail traders. While it is not the best P2P crypto exchange in the world, it is a good place to start for people without any prior exposure to cryptocurrencies.
Advantages:
- Offers an easy entry point for newcomers
- Features over 50 different coins
Disadvantages:
- Trading volume is relatively low
- You may struggle to find a high-volume trade
Should you trade on a P2P Bitcoin platform?
Peer-to-peer exchanges are perfect for people who want to slowly accumulate a portfolio that appreciates over time. One of the biggest weaknesses of P2P retail trading is that it dramatically slows down not only the process of building a portfolio but every single aspect of trading since each operation requires a trader to make several steps:
- Go to the marketplace and look for a suitable order.
- Contact the buyer and set up a trade.
- Use a payment method offered by a seller.
- Wait for the finalization of the deal.
- Move assets to secure cold storage.
These steps have to be replicated for each instance of trading making the whole process tedious and nerve-wracking. The reason why the majority of retail traders use centralized services is the convenience of such platforms compared to P2P sites.
Another important aspect requiring consideration is the integration of contemporary trading platforms with specialized services. Some experts believe that a modern crypto investor cannot expect to reliably generate profits without using analytical instruments and automation.
Bots became so prevalent in the industry that people who do not use them often fall behind those who do. While automation does not guarantee a steady return, it makes everything run smoother and provides a good way to utilize any strategy without a human factor.
Peer-to-peer exchanges often do not have any integration with charting tools and automation vendors like TradingView or WunderTrading. It means that users must do everything manually and hope that sellers or buyers are decent people who won’t use every trick in their books to steal your resources.
The main takeaway
P2P is still used by early adopters and crypto enthusiasts. Our list of the 10 best platforms for P2P trading contains good brands that make trading safer but choosing the right one is a matter of personal preference and individual experience. Try using all of them to pick the best.