Topic: What should you know about P2P (Read 360 times)

I like peer-to-peer (p2p) to a certain extent, but it has many drawbacks compared to decentralized exchanges because it does not protect your privacy and most people get scammed because they are centralized after the Nigerian government warned banks to stop working with crypto currencies p2p was the only option available,If you check Binance's p2p, you'll notice that there are many restricted accounts in p2p.

By referencing exchanges and Binance images of transactions, you rule out the idea of middle men or third parties. Essentially, the exchange is acting as an escrow agent between two parties in order to prevent scams.
Likewise, I do not believe that individuals involved can always decide how to make payments. It will require a safe form of transaction within a certain timeframe. It is possible for individuals to have a little deviation but not to go outside the rule; for instance, a request for a transaction fee, or a favorable bank.

To clear you more, before you're eligible to transact on Binance with their supposedly P2P option, you must first be a verified users on Binance with your real identity been exposed to them through there kyc procedures. Next although binance needs your approval before coins are been released to a merchant on the platform still that can be done without your approval if there was to be a valid appeal and it was confirmed that you have received the funds without approving for the coins to be sent to the merchant account by the Binance system.

To cut the story short, Binance ecosystem is built centralized which means, all other products that binance has to offer which includes their P2P products is also centralized. While you are actually trading with another users still you aren't receiving the full benefits of a P2P system which is meant to be total decentralized and there are better option out there if you want to enjoy total decentralization.

Simple:
P2P trading on Binance
- you go to Binance and select a trader
- you select the offer you send money via your bank
- you get your coins

Centralized trading on Binance
- you go to Binance and look at the markets
- you select the price you want to buy, and you deposit money via the bank
- you get your coins

In which case did you get rid of both the centralized platform and the third-party payment gateway?

I don't know on which basis you are saying it as fake P2P trading. I have done many transactions. And also called to the buyer or seller many time.

I found my own language person in call which live in different city.
Also found the local bank accounts and telecommunication numbers.

According to me the person are real who trades with each other. And they do trade in local currencies from crypto.

I think without interaction of third party it is more risky.
Let suppose you are talking with buyer or seller and you sent the payment and he don't send so what will you do.
If there will be a third party so it has the terms and conditions and they will take action if anyone do fraud.

Note: I am not a defense lawyer of Binance. I just explain which I saw and observed.

You explanations are correct but the example is wrong. Binance is not p2p. Binance is a third party that even have access to your fund in their app or site. You are not absolutely in control of your fund in binance. P2p is the direct transaction of fund without third party address or app/website. But it is the direct transfer of coin from you wallet to another wallet then the buyer pays the sell from his Fiat currency. Anything binance or any other app to buy and sell is a third part system.

Third party system
Third party system is when you send you coin to another platform and there you sell it off to another person through the app or site and it is not direct from the owner wallet.

Am not so sure that checking users profile helps very much as users can do create some really cool profiles but, there trade records and reviews might offer some insight on what to expect.
On the part of having a third party involved, being an escrow, the exchange is your escrow and that's why they've got a support team to ensure scam activities are minimised to its barest minimum especially with the fact that, orders placed out for a trades are often handled by the exchange and they serve as an escrow at that point and should things ever try to go wrong, it means you didn't follow up with the issues that arose with your transactions properly.

The full meaning of p2P is: peer-to-peer

When it comes to p2p, there is no third party involved. But transaction is not possible without any reference. So he can be called.

For example: Binance
Binance acts as a third party in any transaction.

For example
If someone does not release after receiving the payment. Then the seller can appeal against it, against which Binance takes a strict decision against him. And if he doesn't release, all his transactions are turned off.

An important thing is that to buy and sell through p2p on Binance, kyc must be verified. No one will cheat after kyc verified.

I personally can't generalize all FB users are scammers and I think there is no platform limit to reach more and more consistent customers. On my country, FB is still a popular platform for the lower middle class to transact anything in the same area and obviously it will be placed on p2p dealer personal web info pages.

Due to various reasons, social media like facebook was one of most popular medium for Bangladeshi crypto user to exchange their crypto into fiat. Some p2p used to ask for KYC which most of the people didn't like or avoided. I used to be a dealer back in the days when Binance didn't bring P2P. I had a lot of connections on facebook and telegram who used to buy/sell crypto to/from me on a regular basis. But now, people are using Binance though it's too asking KYC.

From my understanding of peer-to-peer systems, there are two types of such systems: those for transferring regular information (digital data) and those for transferring financial information (physical and digital transactions). In systems designed to exchange information between independent and equal rights peers, it is possible to conduct transfers without the involvement of any third-party servers, decision-makers, or gatekeepers. It is akin to mere communication between individuals who speak the same language (use the same protocol). On the other hand, when it comes to transactions that involve money transfers, things start to get more complicated. Unlike regular P2P systems in which transfers of information may or may not involve losses, financial transactions always involve losses (one of transacting parties gives away money risking not getting in return a desirable good or service). In other words, such transactions always involve trust that can potentially be breached by one of the counterparties. But people tend to trust only those they know well or those who have earned a good reputation. That is why, in most cases, they will use the services of third parties even if it is possible to send money directly. Pure P2P financial transfers are possible only in local communities where everyone knows each other, in other cases there will be a combination of centralized parties and decentralized systems.

Once centralization is involved, then it's no longer P2P. A third party entity is totally in control and in charge of whatever you do, which makes it more risking, because whatever or any suspicious activities on your account or profile, you're either blocked or banned, which might result to lost of account, so in all honest this isn't P2p, it's just a fake system of operation to enticed you into their exchange, beside your identity and privacy isn't safe, just keep that in mind too.

Always this myth that if you go to a platform that calls itself a p2p exchange you're getting rid of intermediaries and these 3rd parties.
It's not like that unless you use a completely decentralized platform, with no central server and you do your transactions face facing in cash, if no then you're still at one point relying on a third party.

Take for example this deal on Binance, if you went to binance p2p and you selected to buy coins and pay the guy via WU or Paxful or bank transfer then you have used:
- a middleman, the platform where you have met your buyer
- a third party, the bank, Paxful, WU, or whatever other payment services you used

True p2p means you gave the guy coins he gives you the money, there is nobody that can freeze that money, (like a  bank or Paxful) and there is nobody that facilitates that meeting so if that middleman is gone (in this case Binance's website) you can still deal with your buyer as nothing happened.

Who else thinks this sort of post has something to do with FTX, why all of a sudden the crypto-currency world seem to have been awaken to the Vices of exchanges.
Personally I wasn't affected by the FTX drama so I can't relate with all the issues currently in the Crypto-currency world.

I believe if we do are research rather than go with an unverified news we may probably no be affected too much by the FTX drama.

For me what you should know about peer to peer is not all that complicated. But if you lack some sort of knowledge you would definitely not understand it.

Personally peer to peer can be risky but if you use an escrow that is from a genuine source then you are good. Always understand that in peer to peer no one is to be trusted and everything about protect has to start with you.
Exchanges like Binance has made it easier by offering their own exchange services for peer to peer transactions so take it.

Based on the images that you provided it involves a third party which is not what a P2P should be. You are right about the disadvantage of P2P about risk of being scammed but there's a way to avoid getting scammed by the person you are trading that is with the help of an escrow or a midman if you don't know what escrow is but made sure that the escrow is to be trusted and there are some trusted escrow known in this forum and you need payment of course for the service of an escrow. In binance, I call it semi-P2P.

I agree with you on the fact that more details would have made this perfect. I have enjoyed using the features Binance has so far and its security verification is one that ensures your eyes and ears  give consent to your confirmation order, mostly when trading P2p.

You told about the features of Binance P2P trading which isn't decentralized. Thanks for sharing information about this p2p option. Your post should have more details to be a perfect learning article about p2p of Binance. I think it's really very cool feature for safe trading even it's centralized.

But if the exchange freezes your coin, saying it is tainted, who is going to interven?

I have a friend, I do not know what he did wrong on Paxful, but said to be manipulating bitcoin ad price and his account was banned, no option again to withdraw through lightning network and not able to withdraw because the remaining bitcoin on his account was only almost up to the minimum withdrawal fee which 0.0005 BTC at the time, but not up to that. Bitcoin was above $50000 at the time, which makes it to be almost $25, but unable to withdraw it on Paxful.

There are inconveniences you can still experience on centralized platforms.

People do not just want to learn in depth, they prefer the easy way that centralized platforms are offering them, because they know less, they think using centralized platform for p2p is better, but not. They also like the zero fee transaction that do attracts them. But people are also making use of decentralized exchanges successfully.

Try and learn how decentralized exchanges work, you were not scammed simply because you did not release the coin from escrow, if you did not receive any money but you released the coin from escrow, that means you have been scammed.

You do not have to depend on centralized platform before doing that. Many people even do not know what is multisig, using 2-of-2 or 2-of-3 multisig wallet for p2p, so how are they going to know how decentralized exchanges work.

Try and know more about decentralized exchanges, scam can also be completed avoided.

So true

But centralised platform have a part to take in every P2P transactions as the middle man that fight for your money if any goes wrong.

On Binance p2p service someone I was paired with claimed they'd made the payment but I got nothing for 24hrs and I was forced to use the appeal button, later I got my money but that's because of the exchange intervention.