P2P on Binance (Binance P2P) is a peer-to-peer trading market for buying and selling digital currencies directly between Binance users, without the need for a traditional intermediary like banks or brokerage firms.
Here is a detailed explanation:-
What is P2P (Peer-to-Peer) in general?
The term P2P means 'Peer-to-Peer'. In the context of technology, this term refers to a system that allows users to connect and interact directly with each other without needing a central intermediary. In the world of digital currencies, this means you buy or sell cryptocurrencies directly from or to another user.
How does P2P work on Binance?
* Market: Binance provides a platform (market) where buyers and sellers can post advertisements (offers) to buy or sell digital currencies. These advertisements specify:
* Digital currency (like USDT, BTC, ETH).
* The local currency they want to use (like the US dollar, euro, Egyptian pound, Saudi riyal).
* The price at which they wish to sell or buy.
* Preferred payment methods (such as bank transfer, e-wallets, cash payment).
* Direct communication: When the buyer finds an offer that suits them, they initiate the purchase process. Communication between the buyer and seller occurs directly (via the chat system on the platform).
* Escrow Service: This is the main security feature in Binance P2P. When a buy order is created, Binance holds the digital currencies from the seller's account. These currencies are only released to the buyer after the seller confirms receipt of the cash payment from the buyer. This ensures that neither party can commit fraud.
* Completing the transaction:
* The buyer: sends the agreed amount in local currency to the seller's account using the agreed payment method.
* The seller: after confirming receipt of the amount, releases the reserved digital currencies from Binance, which are transferred to the buyer's wallet on Binance.
* Dispute resolution: If any disagreement occurs between the buyer and seller (such as not receiving the currency or not receiving payment), either party can submit an 'Appeal', and Binance will intervene to resolve the dispute based on the evidence presented.
Advantages of Binance P2P:-
* Payment flexibility: Binance P2P supports hundreds of payment methods and over 100 local currencies, making it accessible to a large number of users worldwide.
* Low or no fees: Trading fees on Binance P2P are often very low or sometimes non-existent.
* Negotiable prices: Users can set their own prices (whether as sellers or buyers), providing greater flexibility than spot trading at market prices.
* High security: The escrow service provides protection for buyers and sellers, reducing the risk of fraud.
* Accessibility: It allows users in areas where traditional channels for purchasing digital currencies may be limited to access the cryptocurrency market using their local currencies.
Important points:-
* Identity verification (KYC): To use Binance P2P, you must complete the identity verification process (Know Your Customer) on Binance.
* Communication outside the platform: You should avoid communicating or conducting any part of the transaction outside the Binance P2P platform to ensure the protection provided by the escrow system and dispute resolution.
* Verification of seller/buyer data: You can see ratings from other traders and their transaction completion rates, helping you choose a reliable trading partner.
In summary, Binance P2P is a secure and flexible way to buy and sell digital currencies directly with other users using your local currency and preferred payment methods, with protection guaranteed by Binance.
