Did you know that there are many ways to get fractions of Bitcoin (BTC) and other cryptocurrencies?
Among the most popular options are traditional platforms and peer-to-peer (P2P) exchanges.
These two vary significantly in terms of many aspects, but most crypto traders, investors, and enthusiasts often prefer to buy BTC on P2P marketplaces-especially when using fiat money for many reasons.
But before we go any further, let’s have a quick comparison of traditional and P2P exchanges.
Traditional vs. P2P Platforms
Let’s begin with traditional trading platforms. As the name suggests, traditional exchanges allow you to take the conventional way of buying and selling cryptocurrencies. It’s also been around for almost as long as the first few cryptos in the market, making it more popular for early investors and traders.
This platform is centralized, meaning it is controlled and managed by a central authority-like a corporation, or a private group, for example. When you trade on traditional exchanges, you’ll be transacting with the help of a middleman. This means that you aren’t directly dealing with a buyer or a seller and you’ll be required to trust the third party involved in the transaction.
Traditional exchanges often have a limited number of supported local currencies, which is essential to consider when buying or selling BTC using fiat money. This makes the platform a little more limited in terms of payment methods.
Peer-to-peer marketplaces, on the other hand, are much newer compared to traditional ones. Many P2P platforms have started to emerge over the years after the adoption of Bitcoin and other digital currencies began to increase.
When you buy BTC on P2P platforms, your transaction won’t be fully controlled by an intermediary. Here, you will be directly connected to a buyer and seller and complete the trade with them on your own. Simply put, the trade is conducted person-to-person. Now, you might be wondering how the entire process goes and how secure the trade will be.
Like traditional platforms, P2P exchanges also have intermediaries. However, they only join the transaction when there’s a problem with your trade or when either party raises a dispute. Apart from that, P2P marketplaces also use escrow where they keep the coins until the trade is complete.
The escrow works like a safe place where BTC is kept until the buyer and seller agree and complete the transaction. When it comes to payment options, P2P platforms often offer much more than traditional ones. Paxful, for example, allows you to quickly convert your credits in PayPal to Bitcoin and buy and sell cryptocurrencies using any of the nearly 400 payment methods it supports.
Additionally, creating an account on Paxful gets you a free BTC wallet, where you can keep and manage all your funds and transactions easily. It also makes it more convenient to jump into the crypto market right away.
Buying Bitcoin using Local Currencies on P2P Platforms
From our earlier discussions, you can see the key differences when buying Bitcoin on traditional exchanges and P2P platforms. But to help you better understand how a P2P platform works, here are some of its distinct features you should know about:
1. Safe and secure
P2P marketplaces offer various security features. Paxful, for example, supports two-factor authentication (2FA) that allows users to proceed with transactions safely. It also follows KYC protocols to ensure the safety of all traders on the platform and their hard-earned funds.
2. Fast Transactions
Since you’ll be directly transacting with another user, the waiting times will be a little shorter than trades with a third parties-especially when your trade partner is ready from the start. Apart from that, Bitcoin transactions can be done in just a few minutes, if not in an instant.
3. Multiple Payment Options
This is probably what makes most P2P platforms suitable for trading. Paxful alone offers nearly 400 ways to help you buy and sell Bitcoin and other cryptocurrencies quickly and seamlessly. You can even find the most popular payment options in your country and start from there.
4. Supports Hundreds of Local Currencies
Many traditional crypto platforms often support only a few local currencies. This makes it challenging for those traders and crypto users who plan to transact using fiat money. On Paxful, you have over a hundred options to choose from.
5. Low Minimum Trade Amount
The minimum trade amount varies depending on the crypto exchange you plan to go to. But on P2P exchanges like Paxful, you can start with as little as 10 USD. If you’re just starting out, this means affordability wouldn’t be an issue.
6. Global Reach
Marketplaces like Paxful also allow you to connect with millions of crypto users worldwide with just a few clicks.
Ready to get started with P2P Platforms?
Trying out something new is always exciting. Before you finally proceed with your first trade on a P2P platform, make sure that you’re choosing the one that will best fit your trading needs, offer you a different level of security, allow you to complete trades seamlessly and effortlessly, and bring you the kind of trading experience you deserve. Good luck!
The content of this article is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice. Paxful has no relation to PayPal or any other payment method. Paxful makes no claims about being supported by or supporting these services. Their respective wordmarks and trademarks belong to them alone