Even novice traders know that fees applied by an exchange platform can cordially impact the final gain and minimize the profit from the deal. To avoid the commissions, many users turn to a beneficial alternative – P2P trading, executed on a P2P trading platform or peer-to-peer platform, where all the transactions are carried out without intermediaries, straightforwardly between two interested parties. P2P trading allows the users to minimize expenses, making the trading process more profitable when compared to trading on traditional exchanges. Let us explore the advantages of a P2P trading platform a bit more and look at how these platforms can help you avoid large commissions.
Why do traditional exchanges tend to have high transaction commissions?
Crypto exchange platforms perform several functions at once: starting from providing liquidity and ending with ensuring the safety of transactions. Nevertheless, all these services require extensive resources, and this has a negative impact on the amount of commissions. Each exchange platform has its fee structure, yet the most common types of the charges include following:
- Trading fee: typically, this fee is applied to both the seller and the buyer when the transaction is initiated.
- Deposit/withdrawal fees: many platforms have set commissions for depositing or withdrawing funds.
- Hidden fees: some exchanges incorporate extra costs into the exchange rate, making deals less appealing.
Combined all the charges make the trading process far less profitable, especially for active traders or larger transactions.
How does a P2P trading platform manage to reduce the expenses?
As was already explained, the P2P trading method involves a transaction executed directly between two users, eliminating the participation of a third party such as an exchange. Users can individually establish the terms of the deal, including the preferred payment type and the desired price of the asset, contributing to transaction flexibility. Moreover, this approach reduces the fees charged by the platform for the set of services and provides users with more control over the transaction and digital assets.
1. Lower Commissions
The lack of intermediaries results in lower or even no fees for transaction execution. Main costs are usually related to platform service fees or linked to the chosen payment method. Yet, as a rule, they are much lower than fees on traditional exchanges.
2. More Flexibility
The users are able to independently set the price for the asset they are interested in and choose the most convenient payment method, including cash. This is particularly important when there is a necessity to use local payment methods, which are often not available on large exchange platforms.
3. Transparent policies and no hidden markups
The exchange rates on a P2P trading platform are determined by the users directly, therefore eliminating any hidden fees that often appear on traditional exchanges and guaranteeing transaction transparency. All participants are free to select the offers which fit their requirements and price range.
4. A range of payment methods
A P2P trading platform offers clients a selection of various payment methods that make the trading experience extra convenient for users even in remote regions. Payment options typically include all types of traditional money transfers via banks, e-wallets and debit/credit cards, while also offering cash deals, especially efficient for traders from regions with limited banking services.
5. Accessibility and advanced security standards
P2P platforms are accessible to users worldwide even in secluded regions and countries with stricter crypto regulatory restrictions. The majority of platforms incorporate sophisticated security measures to ensure the safety of the assets, thus making a P2P trading platform an excellent alternative to traditional platforms, sometimes lacking enhanced safety protocols.
What has to be considered when selecting a P2P trading platform?
Despite P2P trading having numerous obvious advantages when compared to traditional exchanges, selecting a proper service provider requires consideration and a detailed approach. Below are several suggestions for new traders to pay attention to when choosing a reliable trading partner:
- Review the reputation of the counterparty to avoid fraudulent actions.
- Use escrow services offered by many P2P platforms to ensure the safety of the funds before the transaction is finalised.
- Study the fee structure on the platform of your choice before initiating a transaction.
- Examine the rates and choose the offer with the best terms. However, keep in mind that an offer that seems too appealing may result in scamming.
- Follow all security measures and do not engage in deals outside of the P2P trading platform.
P2P platforms have rapidly become an excellent alternative to traditional exchange platforms, especially for those users who want to save money on high commissions. Transaction transparency, more flexibility and minimal expenses make P2P trading an ideal choice even for novice traders. Nevertheless, it is vital to follow strict security measures and to be careful when choosing trading partners and transaction terms. By following our expert recommendations, you will utilize a P2P trading platform for profitable crypto exchange, preserving your funds and avoiding unnecessary extra costs.