Why P2P exchanges suck just as much as Centralised exchanges!

Cryptocurrency trading has revolutionized the financial industry, and peer-to-peer (P2P) exchanges have emerged as a promising alternative to centralized exchanges. However, many traders fail to realize that P2P exchanges can also come with their own set of challenges, including user experience issues, security, fees, and reliability.

In my previous article, I shared my personal experience of an incident where money was stuck on two popular exchanges, Kucoin (centralized) and Paxful (P2P). While that article was aimed to share my personal experiences, in this article I will try to shed light on some of the common issues faced by users of P2P exchanges and explore why P2P exchanges suck just as much as their centralized counterparts and discuss possible ways to make them better.

A P2P exchange is a type of cryptocurrency exchange that allows users to trade directly with each other, without the need for a centralized third party. This means that there is no need for a middleman to match buyers and sellers, or to hold or manage funds. Instead, users can simply connect with each other and trade directly.

However, this also comes with some risks. Without a centralized entity to protect users’ funds or mediate trades, it is important that users take care when choosing who to trade with. There is also the potential for scams or fraud, as well as for prices to be manipulated by large traders. Overall, P2P exchanges can be a great way to trade cryptocurrencies, but it is important to be aware of the risks involved.

P2P exchanges despite having cornered a significant amount of the market share have a number of drawbacks that make them inferior to centralized exchanges if not just as worse. For one, P2P exchanges are often slow and cumbersome to use. This is because they rely on users to match up with each other in order to trade, which can take a long time. Additionally, P2P exchanges typically have lower liquidity than centralized exchanges, meaning that there are often fewer buyers and sellers available to trade. This can lead to higher prices and more difficulty in finding trades. Finally, P2P exchanges are often less secure than centralized exchanges, as they typically do not have the same levels of security and protection against hacks and fraud.

P2P exchanges have a number of problems that make them far less desirable than centralized exchanges. Here are some of the biggest issues:

This is a topic that would perhaps require a new article of its own, but I’ll try to keep the pointers brief. The world of P2P exchanges is fraught with dangers. From scams and fraud to simply getting ripped off, there are many ways that users can lose their hard-earned money.

Here are a few tips on how to avoid getting scammed on a P2P exchange:

Do your research: Not all P2P exchanges are created equal. Some have been around for longer and have built up a good reputation, while others are new and untested. Do your due diligence and research any exchange before you use it.

Check the terms and conditions: Make sure you understand the terms and conditions of any exchange before you start using it. Familiarise yourself with the fees, limits, and risks involved.

Be careful who you trade with: When trading on a P2P exchange, be careful who you trade with. If possible, only trade with people who have a good reputation on the exchange. And always remember, if something sounds too good to be true, it probably is!

Keep your private keys safe: One of the most important things to remember when using any cryptocurrency exchange is to keep your private keys safe. If you lose your private keys, you could lose access to your funds forever. So make sure you keep them stored securely offline in a safe place.

These are just a few tips to help you avoid getting scammed on a P2P exchange. Stay safe out there!

All in all, P2P exchanges and centralized exchanges both have their own pros and cons. However, both kinds of exchanges including other DeFi applications are just laying the groundwork and infrastructure that’ll be used by the world for their finances. And just like this image above, we — the early adopters and pioneers would have to constantly review and update what works and what doesn’t. Figure out and add safety measures that are also not counterproductive it’s almost like a large-scale home improvement project!

We have to remember that while a P2P exchange might seem more secure due to the lack of a middleman, it still has its own set of risks that can end up costing you money or time if not managed properly. On the other hand, centralized exchanges are usually highly regulated but may be prone to hacks or outages due to single points of failure. Ultimately, it is up to each individual user to decide which type of exchange works best for them based on their particular needs and risk tolerance.

In my personal opinion though there’s a lot of space for improvements, and here’s a small list of things that I would suggest.

Related posts:

Steve Jobs was an entrepreneur, a dreamer and an artist among many things. He had the rare combination of an engineering mind, an artist’s vision and the instincts of a behavioural scientist. Put it…