What is a P2P exchange?

[_act_]

See this:

https://cointelegraph.com/news/binance-recommends-p2p-as-ukraine-suspends-hryvnia-use-on-crypto-exchanges

Binance acknowledged the problem as regulators suspended the use of hryvnia on crypto exchanges. However, Binance had an alternative solution:

“We suggest using the P2P service so that you can continue to use Binance comfortably.”

The crypto exchange utilized the occasion to inform users that P2P services allow users to exchange crypto and fiat currencies directly with other users without needing a middle-person like banks.

The definition for P2P service is correct, but is Binance not a middle-person as used in the their definition?

If the definition is correct, that means all centralized exchanges are not P2P exchanges because if no middle man is involved, P2P should be decentralized or directly between two people.

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[dbshck]

I agree with your point. P2P by definition usually refers to a decentralized platform. In Binance's "P2P" service, Binance is acting as a middleman because the cryptocurrency is transferred within their platform - from the seller's Binance wallet to the buyer's Binance wallet. Binance's team also acts as the intermediary in case of a dispute.

A true P2P platform would be something like the Bisq network.

[o_e_l_e_o]

As with every statement from Binance or CZ, this is pure marketing aimed at increasing their own profits and nothing else. It is also a lie, but Binance are well known to outright lie and scam their users in order to make more profits, so no real surprises there.

Binance P2P is not peer to peer. It is peer to Binance and Binance to peer. Binance is a (un)trusted middle man, who has complete control over your trade, can spy on everything you do, takes custody of your coins, and can censor your transactions. You have zero security, zero privacy, and zero sovereignty. Literally the only thing that is different to regular Binance is the way in which your buy or sell order is matched up. If some regulator decides that they want Binance to shut down their P2P platform, they will do it in a heartbeat, and good luck getting back any coins you have on the platform at the time.

If you actually want to trade peer to peer and stop middlemen from arbitrarily preventing your trades or seizing your coins, then use an actually peer to peer exchange like Bisq or AgoraDesk. Binance P2P is a scam.

[Darker45]

In the first place, you need to create an account with Binance. You also need to submit and pass KYC. After that, you need to send your money to Binance. With this, how is Binance's peer-to-peer transaction a real peer-to-peer transaction?

Secondly, a peer-to-peer transaction doesn't simply mean there isn't a middleman; it more importantly means there is no third party that is powerful enough to censor and approve transactions. It means anybody could transact with anybody. With Binance, however, not only do transactions pass through a middleman, the middleman also screens P2P users themselves. Censorship is rather worse, therefore; it's on a different level. They not only get to decide whether a transaction should proceed or not, they also get to decide whether a current Binance user itself could transact peer-to-peer or not.

[Upgrade00]

To understand how P2P can work in the proper manner;
• The one selling bitcoins has their personal, non custodian wallets linked up to their account (which was opened without the need for KYC).
• They are matched up to a seller or chose a pair from the available sell orders,
• Buyer and seller discuss payment option to go with and decide on the most convenient,
• Seller creates a smart contact transaction which releases the funds to the buyer's wallet once seller receives the fiat payment.

Some exchanges could tweak some actions, but that's the general idea. What binance does is just another form of regular centralized transaction with Binance mediating between buyer and seller and holding the funds at every point during the trade.

It's all a marketing prop, just like coinbase custodian wallet imitation.

[CryptopreneurBrainboss]

Anything that has to do with Binance is completely centralized, it doesn't matter if they developed it themselves or acquired it, the moment it's under the control of Cz it becomes centralized. That man Cz is one of the problems of this industry, people think he's some savior (second Satoshi) and wants the best interest of the industry but that's a complete lie. I won't be surprised if it turns out CZ was a Chinese undercover agent sent by the Chinese government to conquer the cryptocurrency industry and what better way to do that then through an exchange that can detect what people sees and invest in.

Trust wallet was open source before it got acquired by Binance even their P2P isn't decentralized. P2P has to do with decentralization and Binance is centralized therefore Binance can't be offering a P2P exchange. There's nothing wrong with using Binance to only trade but do note, whenever you're doing that you're selling your private information to them (this happens with all centralized platforms like Facebook etc) as they monitor some other activities that's beyond just trading on their exchange which can be sold to third parties (advertisement parties) which target ads at you when you use other platforms.

[KiaKia]

Binance exchange is a complete centralized crypto trading exchange.
They offer peer 2peer service,  and that doesn't make them decentralized in any way, to me,  it's still centralized.

But if I have to use any p2p exchange  I will still choose Binance because they play the middleman role very well, I have used a few p2p exchange years ago and I lost money because no middleman to clarify if truly a transaction happens or someone is trying to cheat the other,

If you have used Paxful in the past you will understand what I am talking about, I don't think I can get used to a P2P exchange without the Middleman, no I won't do it, this middleman of a thing is why justice is been served on Binance exchange.  You can't cheat someone and get away with it unless you break the rules.

On Paxful, I provided some proof of the transaction and they still release funds to the scammer, this was just one out of many stories I had with p2p platforms out there,  there are more.

[Bitcoin_Arena]

Any platform where the wallet assigned to you is custodial is not P2P. It's a big fuckin lie! And this included Binance, Kucoin and all those other platforms claim to have "p2p" trading in them

Binance exchange is a complete centralized crypto trading exchange.
They offer peer 2peer service,  and that doesn't make them decentralized in any way, to me,  it's still centralized.

it's not a p2p service 

If you have used Paxful in the past you will understand what I am talking about, I don't think I can get used to a P2P exchange without the Middleman, no I won't do it, this middleman of a thing is why justice is been served on Binance exchange.  You can't cheat someone and get away with it unless you break the rules.

On Paxful, I provided some proof of the transaction and they still release funds to the scammer, this was just one out of many stories I had with p2p platforms out there,  there are more.

I don't think you have understood any message in this post. Please, read through the thread, again. paxful is not a p2p exchange!

[sheenshane]

AFAIK, The term "middleman" refers to any intermediary that sits between two parties in a transaction.  In a P2P network, there is typically no middleman involved, as the nodes communicate directly with one another and this can provide a number of benefits, such as increased privacy and security, as well as reduced costs and greater scalability.

In my own understanding, the centralized exchange that offers p2p and the decentralized p2p exchange is totally different.
In a centralized P2P network, there is typically a central server or authority that controls the network and facilitates communication between nodes. Nodes in the network communicate with each other through this central server or authority, which acts as a middleman.
While on the decentralized p2p, there's no central authority or server that controls the network but instead, nodes in the network communicate directly with each other, without the need for a middleman.  Each node in the network is equal and has the same level of control and authority as all other nodes.

I think not all p2p exchanges are created equal, there are always pros and cons to each of them, and about CZ, there's a hidden agenda for all of these and one of our suspects could be the marketing which possibly gains benefits from his exchange which is very obvious.

[Woodie]

However Binance has defined it, they still operate the p2p exchange like any other.. for reference we could use the just closed localbitcoin, though I think Binance has added a few extra security features to protect both parties from any accidental release of funds or any unauthorized use of an account that doesn't belong to you. Without any bias this is a game changer which brings crypto closer to our communities...

[Macadonian]

You do not need to use exchange software to do p2p exchanges you can use this forum on the currency exchange and you can be sure that no one is saving your data or bank details. The person you trade with could be but that is why you only trade with trustworthy people. When you use p2p exchanges they could be collecting data on you and the person that you are trading with.

[drwhobox]

Yes, Binance is not a decentralized exchange, and you can't tell P2P exchange from Binance is a pure p2p exchange. P2P means it will deal with 2 persons, and  Is.

Binance is acting like a middleman or screw in the p2p exchange of Binance. I don't know if it is possible for the clients to make p transactions without a middleman, so we need to keep our faith on binance while making p2p trades.

[Macadonian]

Yes, Binance is not a decentralized exchange, and you can't tell P2P exchange from Binance is a pure p2p exchange. P2P means it will deal with 2 persons, and  Is.

Binance is acting like a middleman or screw in the p2p exchange of Binance. I don't know if it is possible for the clients to make p transactions without a middleman, so we need to keep our faith on binance while making p2p trades.

You can make p2p exchanges without a middle man but you cannot on Binance. I think it is time people look for alternatives to Binance they have the monopoly and a lot of people could lose Bitcoin if they ever get hacked or go bankrupt. They are diversifying in everything and they are collecting the most data on people because most the Bitcoin community use them.

[joniboini]

However Binance has defined it, they still operate the p2p exchange like any other.. for reference we could use the just closed localbitcoin, though I think Binance has added a few extra security features to protect both parties from any accidental release of funds or any unauthorized use of an account that doesn't belong to you. Without any bias this is a game changer which brings crypto closer to our communities...

I think the key issue is the definition of P2P being unclear, especially after more and more "escrow" service start their own exchange service. You can argue that the way they work is very different from what we usually refer to as P2P on this forum, even if they use multi-sig as a means to protect user funds. KYC is one of the clear differences. Whether you agree that their business model is still P2P or not is the key debate here.

The person you trade with could be but that is why you only trade with trustworthy people. When you use p2p exchanges they could be collecting data on you and the person that you are trading with.

IMO It is better to never use personal data especially if you can avoid it. Trading with a 'trustworthy' person is still risky, not necessarily because they will scam you, but because they might sell your info behind your back. No one can prove this, so it is better to be paranoid. Still better than using a third party that clearly collects both of your data though. CMIIW.

[GreatArkansas]

(....)
I think not all p2p exchanges are created equal, there are always pros and cons to each of them, and about CZ, there's a hidden agenda for all of these and one of our suspects could be the marketing which possibly gains benefits from his exchange which is very obvious.

In short, on the current what we have in peer-to-peer exchanges right now on several centralized somehow modified peer-to-peer exchanges because they are centralized and these centralized exchanges act as middlemen.
But these centralized exchange got pros and cons, some can be beneficial for both buyers and sellers. At the end of the day, still centralized, your cryptocurrencies are still in their hands.

[summonerrk]

The situation is twofold: on the one hand, the Binance exchange provides users with the opportunity to find each other on its platform, organizes a meeting and provides conditions. Therefore, we can say that it is involved in the transaction 2p2. But on the other hand, only two people exchange money. The exchange is not involved, so you can decide that it is not tied to the transaction economically.

[Jatiluhung]

is it possible that Binance has acted as Escrow in the P2P transactions on their platform. This action is indeed taken to ensure that each party has done what must be done in the transaction. But this seems to make P2P platform exchanges and the like not really P2P. because it still involves intermediaries or third parties.

whereas p2p trading should indeed be trade carried out by two individuals (seller and buyer) directly without involving intermediaries or third parties.
and it seems p2p on all exchange platforms do the same thing. (sourch)

but maybe i'm wrong. because I don't fully understand it yet. with what methods are used by these exchange platforms. are they just in charge of locking and releasing only. or did they accommodate first. but what is clear is that our assets will be temporarily locked in the funding wallet before the transaction is completed. and the lock will be released by binance and we will release our assets when the transaction is considered complete.

Edited: Or Binance may just provide the tables and serve as an umpire. it seems that Binance has indeed been the middle man in the p2p deal. and they provide Escrow too. as written on their site. (sourch)

[UserU]

Yes, P2P on these platforms are commercialized but without them, who's gonna secure the funds and the crypto?

It's gonna be the same as the Lending section. Between trusted parties, hardly a problem (still there's a chance of running away albeit highly unlikely) but what about newbies or lesser-known ones? That's why we need Binance and the likes to intervene into any sort of hanky-panky.

There was a time when a platform (Remitano) saved my ass because some scammer-wannabe tried to trick me into releasing the BTC.

[Macadonian]

Yes, P2P on these platforms are commercialized but without them, who's gonna secure the funds and the crypto?

It's gonna be the same as the Lending section. Between trusted parties, hardly a problem (still there's a chance of running away albeit highly unlikely) but what about newbies or lesser-known ones? That's why we need Binance and the likes to intervene into any sort of hanky-panky.

There was a time when a platform (Remitano) saved my ass because some scammer-wannabe tried to trick me into releasing the BTC.

Open source escrow platforms need to be developed so you can trust that they are not stealing your data. When they are available I think p2p exchanges will become less popular because if you are using a platform to do p2p trades you are still using a 3rd party platform which probably collects your data.

[o_e_l_e_o]

But if I have to use any p2p exchange  I will still choose Binance because they play the middleman role very well

The terms P2P and middleman are mutually exclusive. You cannot trade peer to peer if there is a middleman. By definition, you are no longer trading peer to peer, but peer to middleman and vice versa.

Binance P2P is not peer to peer. It is a centralized exchangile lying to you to make profit.

for reference we could use the just closed localbitcoin

Another centralized exchange which is not peer to peer. Centralized servers, centralized wallets, centralized KYC collection.

I think the key issue is the definition of P2P being unclear

I don't think it is unclear at all. Peer to peer. Easy. If there is a middleman, then it isn't peer to peer. The issue here is people believe the lies of centralized exchanges, who only care about lining their own pockets at your expense.

Yes, P2P on these platforms are commercialized but without them, who's gonna secure the funds and the crypto?

The users. There is no need for someone else to secure the funds if the funds never leave the custody of the individuals involved in the trade.

Open source escrow platforms need to be developed so you can trust that they are not stealing your data.

So... Bisq?