No choice but to use the unavoidable middle man, the exchange companies.

[Tony116]

Before, people dreamed of a financial system free from government and commercial grips. Now that bitcoin and crypto exist, these middlemen still exist. Because it is always easier said than done. I don't mind paying fees from these middlemen as long as my transactions are guaranteed secure.

Binance is becoming a giant company worth billions nowadays. I know there are a lot of haters on Binance but on the positive side, I am thankful for its peer-to-peer feature which is actually free. I can say that I saved thousands of dollars already otherwise me and my countrymen that are into crypto continued to pay 3% to 5% fees during cash-ins and cashouts.

I still don't understand your problem, why do you pay a fee of 3% to 5% every time you convert your bitcoins to cash? In addition to using P2P on binance, you can also trade P2P with trusted sellers you know. Or you can also use middleman and escrow, I don't think it will cost as much transaction fee as you are mentioning. I don't know if the transaction fee varies from region to region, but in my place, the transaction fee for the middleman is quite cheap. But using Binance is not bad, people hate it because they feel their privacy is violated.

3% to 5% is the usual gap in our local exchanges here compared to the real bitcoin price in the open market. Prior to Binance and other exchanges' p2p, we do not have many options to buy bitcoin and to cashout it out to our local currency. Meets-ups are a little popular as well to save some bucks but that didn't interest me. Huge trades are also happening in our biggest hotel casinos in the capital city but that's a plane away from me and even if it saves me a few thousand dollars I am also not interested in revealing myself.

At present, I do not have many updates as I am mostly on Binance. There are already trading exchanges but I heard the spreads are still around 1% to 3% which is still big if you're buying or selling significant amounts.

Many are also not fond of Binance due to its KYC but that's also far from our local exchanges here that keep on asking for documents like 2 to 3 times a year.

If what you say is true, for small investors like us, the fee from 3% to 5% is really quite a high fee and if in your situation, I will do the same as you. Making money these days is not easy and we cannot afford to lose that hard earned money, although many will criticize you and me for using Binance to avoid those high fees. But if they were in your situation, I believe they would do the same.
But in the future, you may find a better solution with cheaper fees than centralized exchanges and it's safe for you, I think you should also try with it to protect your privacy as well as your property.

[d5000]

4. no middleman at all - P2P exchanges without human escrow, e.g. atomic swaps or Ethereum token exchanges, person-to-person exchange, and some exotic ways like the exchange of hard disk space to crypto (via platforms like Sia), and of course the exchange of goods/services for crypto directly.

I think you are confusing here between a middleman and trust in a third party. All transfers that take place here are P2P, but there is trust in a third party.

I honestly don't see any difference between a "middleman" and a "trusted third party". The trusted third party in the different exchange models has control over some processes, the further "down" in my list, the less processes they manage. So they're a "middleman" in some part of the process. However, in the P2P/multisig escrow model, the middleman only has control if one of the parties involved in the trade isn't satisfied with the result, so if both parties are satisfied, the middleman isn't necessary and doesn't have any control. That's because often the "P2P exchange with human intervention" is a quite good compromise between "no middleman at all" and "a middleman managing too many processes".

So far, there is no real decentralized exchange between different blockchains, so we need to trust a third party.

That's not true imo. Atomic swaps are trustless. The only way to break them is malware or 51% attacks. The problem is that they have some optionality, so they can lead to situations where one party has to pay a fee and loses control over their coins for a short period without the exchange taking place. Atomic Swap options are a way to deal with that, with one party paying a fee.

[Gyfts]

Bitcoin isn't supposed to eliminate a middle man entirely. It seems as if you're obfuscating centralization and the idea of a middle man. There's some overlap, but they aren't the same. Centralization forces there to be an intermediary between a sender and receiver. If you're dealing with fiat, that intermediary is technically the government even though you don't really think about them being involved in P2P transactions. When you pay someone with fiat, the government is endorsing the value of the funds, therefore they are integral to the transaction. Using payment processors or exchanges are just adding additional factors. Bitcoin eliminates the centralization portion entirely, and it becomes the buyer and sellers discretion to add safeguarding factors to their transactions (exchanges, escrows, middle man, etc.)

I'd note that an exchange isn't a safeguard but to someone who believes they can't hold their own private keys for whatever reason, that avenue exists.

[bayu7adi]

I've come to realize that third-party dominance in the realm of finance is remarkably pronounced. Even up to the present moment, many folks continue to engage with third-party services due to their stellar reputation, a factor that significantly impacts trust.

Executing true peer-to-peer transactions faces challenges, given the persistent presence of prominent companies with high repute and a large user base. Modern individuals consistently seek seamless service, and this very desire propels companies to emerge as centralized platforms catering to the masses. It's an inevitability we can't escape.

[Wimex]

I believe that most business owners will prefer to transact money transfers with their customers directly without using an exchange, that will be a third party, and you'll have to pay this third party or middle man money for his services, whether you like it or not.

In cryptocurrency, we have many ways to safely resist ay third party influence in what we do as long as we have the knowledge on how to go about it, bitcoin is not what we can just assume to be thesame as the way we treat other cryptocurrencies which are centralized, using bitcoin privately begin with the kind of wallet we use, many people will create a crypto account and take that as wallet from the exchanges they use, while some will rely on other people in helping them through what they would have learnt to know by themselves.

I think that for a person who uses bitcoin the best thing to do is to make these exchanges by himself, without the need for help from a third party, because I consider that this would be a bit counterproductive for said individual. It is true that these platforms provide very striking features, but there is no way to avoid this type of method, for the simple fact that it might not be as safe as you think, although I am also clear that if you are not knowledgeable or skilled in doing it on your own, You could choose this other option yourself, that is, it could be taken as plan B. In any case, they are not bad, and as all services of this type have their risk, so it is best to use something with which you feel comfortable, and Of course, they have a decent reputation to avoid bad times, without lowering their guard, since a failure can exist at any moment... so, in conclusion, the use of an intermediary is based on choice and how the person feels with said platform.

[panganib999]

 The point of crypto is to cut the middle man and make it so you have full agency over your finances. Although I get where you're coming from especially with the ever-growing number of scammers in the industry. At the end of the day it's not as if it's compulsory, but you gotta understand that the choice of exercising your power over your money comes with its caveats, which these intermediaries solve by making sure that when push comes to shove, the ones truly at fault will receive the sanction. This happens in regular P2P, I've had experiences where some people refrained from sending me my money, or have gone so far as to scam me by sending fake receipts. Binance catches wind of this and immediately resolves the transaction without me getting scammed. It's all about what matters the most to you really when you're transacting. Are you more worried about your identity? If so then go off grid and find a non-custodial conversion method. But if you're like 99% of the industry and you want to stay safe when you're transacting, then a little compromise in the name of security wouldn't be that much.

[mv1986]

The point of crypto is to cut the middle man and make it so you have full agency over your finances. Although I get where you're coming from especially with the ever-growing number of scammers in the industry. At the end of the day it's not as if it's compulsory, but you gotta understand that the choice of exercising your power over your money comes with its caveats, which these intermediaries solve by making sure that when push comes to shove, the ones truly at fault will receive the sanction. This happens in regular P2P, I've had experiences where some people refrained from sending me my money, or have gone so far as to scam me by sending fake receipts. Binance catches wind of this and immediately resolves the transaction without me getting scammed. It's all about what matters the most to you really when you're transacting. Are you more worried about your identity? If so then go off grid and find a non-custodial conversion method. But if you're like 99% of the industry and you want to stay safe when you're transacting, then a little compromise in the name of security wouldn't be that much.

Not really much to add to that, well summed up. The only thing I would add is that I think it is more a question of "when" than "if" we are approaching perfection when it comes to p2p transactions where any implied middleman role approaches zero importance. If you take a service like Bisq.network, it is pretty good already, but the question is how scalable these applications are when you are running a business with a thousand clients and are sometimes dependent on arbitration regardless of the incentives that should make both parties stick to the agreement. There is still some friction here and there, but I am optimistic that the friction will be so negligible very soon that third party roles can be decentralized and automated.

But as soon as there are transactions in and out of crypto involved, like exchanging Bitcoin for fiat, foul play is still possible if the party that wants to play foul is willing to take a penalty while achieving nothing else but both parties losing when both parties would be better off if the contract is adhered to. Those problems, as far as I know, are still not fully solved.

[Yamane_Keto]

I watched an educational video about how the current payment system works, whether it was Visa or transfers between different banks and different countries. The reality of the current financial system is very complex, and if payments are made directly, what happens in the background is that your banking data is shared between many banking entities or even Google Play and Apple Pay.



Bitcoin transactions provide the user with smooth and speedy transfers with some privacy if he knows how to hide his data well. Users resort to third parties, either because of the support of sufficient adoption, such as using Visa cards that can be loaded with Bitcoin and pay anywhere Visa is accepted, or because of the delay in transactions by an amount Average over 10 minutes.
Both of them, with time and development, will be considered causes of the past.

image sources

https://www.fintechtris.com/blog/infusing-blockchain-into-banking
https://twitter.com/RR2Capital/status/1672869233125105665

[Kelward]

 

Exactly  mate I agree absolutely  with you and no matter how we paint it, the middle men which are the exchanges are in one way or the other inevitable and I've always seen several threads preaching against exchanges and after closer observations, I noticed that what they reay preach against is storing on those exchanges and not trading on them.
Over the years, exchanges have made transacting with bitcoin and cryptocurrencies in general much more easier and even more secure through their escrow services and at the end, crypto is traded for fiat in cases where bitcoin  isn't accepted and one of the safest way to do this is through P2P on exchanges.

[/quote]

The concept of the middle man is an interesting topic in the study of economics, because of the argument about their relevance in business transactions. Some sees them as blessings, important intermediaries that makes transactions easy and convenient, while others sees than as an unavoidable evil, that you call to interferer, they reap and grow fat from other people's business dealings. Anyhow you look at it, whether you like them or not, they perform the important tasks of exchanges.

Because bitcoin P2P transactions are not one hundred percent reliable, especially when you're transacting with people that you don't know, using trusted exchanges becomes important because they guarantee peace of mind that most probably you won't be scammed.

[Solosanz]

The concept of the middle man is an interesting topic in the study of economics, because of the argument about their relevance in business transactions. Some sees them as blessings, important intermediaries that makes transactions easy and convenient, while others sees than as an unavoidable evil, that you call to interferer, they reap and grow fat from other people's business dealings. Anyhow you look at it, whether you like them or not, they perform the important tasks of exchanges.

Because bitcoin P2P transactions are not one hundred percent reliable, especially when you're transacting with people that you don't know, using trusted exchanges becomes important because they guarantee peace of mind that most probably you won't be scammed.

It doesn't mean when you're use third party, you will be safe.

Middleman is always be a trusted, reputable and experienced, but if the middleman act unfair because the scammer bribed him, then what you can do? or maybe you have an evidence where you can prove if you're legit, but the scammer create a fake evidence in order to convince the middleman, if the middleman make a mistake by trusting the scammer, what you can do?

[Litzki1990]

P2P transactions are usually completed without any third party intervention. Third party transactions are somewhat risky and expensive. Only the middleman has to pay us without any reason. To solve this problem, the top exchanges have now introduced P2P systems where buying and selling activities can be conducted very easily without any third party intervention. P2P trading system is not risk free but of course there are risks but if you are careful then there is no chance of losing your money through such method. So before making such transactions, you must take utmost care and then proceed with the transaction.

[Kelward]

It doesn't mean when you're use third party, you will be safe.

Middleman is always be a trusted, reputable and experienced, but if the middleman act unfair because the scammer bribed him, then what you can do? or maybe you have an evidence where you can prove if you're legit, but the scammer create a fake evidence in order to convince the middleman, if the middleman make a mistake by trusting the scammer, what you can do?

You made a valid point, because if the middleman is compromised then it becomes a double scam, where  the victim becomes the overall loser. Therefore, one should not loose guard but be very cautious, in any financial dealings whether directly or using a middleman. This is why if someone must use middleman or exchanges as the case may be in bitcoin, to do any transaction, it is better to use the ones that have good track record. That is why reputable and trusted exchanges like Binance, who are very innovative, will stand the test of time, because trust is the key word in any financial matters.

[hatshepsut93]

Some businesses don't want to hold Bitcoin so they use intermediaries that receive Bitcoin for them and convert it to fiat. But not all businesses are like that, some don't mind keeping BTC, so they get they full decentralized experience.

The bigger problem that if you want to use Bitcoin, often you just can't, because you can't pay with it, so you have to sell it for fiat. In the past there was a lot of hope that soon mass adoption will come and it will change, but that "soon" never came so far.

[Lanatsa]

I believe that most business owners will prefer to transact money transfers with their customers directly without using an exchange, that will be a third party, and you'll have to pay this third party or middle man money for his services, whether you like it or not.

In cryptocurrency, we have many ways to safely resist ay third party influence in what we do as long as we have the knowledge on how to go about it, bitcoin is not what we can just assume to be thesame as the way we treat other cryptocurrencies which are centralized, using bitcoin privately begin with the kind of wallet we use, many people will create a crypto account and take that as wallet from the exchanges they use, while some will rely on other people in helping them through what they would have learnt to know by themselves.

I think that for a person who uses bitcoin the best thing to do is to make these exchanges by himself, without the need for help from a third party, because I consider that this would be a bit counterproductive for said individual. It is true that these platforms provide very striking features, but there is no way to avoid this type of method, for the simple fact that it might not be as safe as you think, although I am also clear that if you are not knowledgeable or skilled in doing it on your own, You could choose this other option yourself, that is, it could be taken as plan B. In any case, they are not bad, and as all services of this type have their risk, so it is best to use something with which you feel comfortable, and Of course, they have a decent reputation to avoid bad times, without lowering their guard, since a failure can exist at any moment... so, in conclusion, the use of an intermediary is based on choice and how the person feels with said platform.

We do prefer this way but are you that willing on making that p2p transactions with other people personally or would be going direct exchange online with other people? You are really that prone on getting scammed

plus we know that in speaking about convenience then these platforms or 3rd party do really give out that kind of services which gives out that good user experience which is something that less hassle.
Plus, not all platforms does require KYC (for now) on making out these kind of transactions which is related to fiat specially on having that conversion of your crypto to fiat, for some which before you could be
able to make out some p2p transactions which it would really be that requiring that kind of verification first before you can proceed.

Regulation and centralization is something that would really be inevitable in speaking about services that being offered and as long it is really that attached into some other centralized services
then it would be no shocking that they would really be touching up that regulation aspect.

[slapper]

~snip~

We do prefer this way but are you that willing on making that p2p transactions with other people personally or would be going direct exchange online with other people? You are really that prone on getting scammed

plus we know that in speaking about convenience then these platforms or 3rd party do really give out that kind of services which gives out that good user experience which is something that less hassle.
Plus, not all platforms does require KYC (for now) on making out these kind of transactions which is related to fiat specially on having that conversion of your crypto to fiat, for some which before you could be
able to make out some p2p transactions which it would really be that requiring that kind of verification first before you can proceed.

Regulation and centralization is something that would really be inevitable in speaking about services that being offered and as long it is really that attached into some other centralized services
then it would be no shocking that they would really be touching up that regulation aspect.

So, you think using these sites gives users a "good user experience" and gives them "less hassle?" Many people are drawn to ease, but it dulls the senses. By voluntarily using these third-party platforms, you're basically giving up your control and security in exchange for a little bit of ease. Even though not all sites require KYC right now, there's no reason to think that won't change soon

Will you look at the past? People who promise ease and comfort have often led their followers astray in every society and every step of technology progress. How about regulation? The same thing? They're not just "inevitable"; they're part of a plan to trap and control people. After all the betrayals and broken vows in human history, one would hope that our minds would change. We still fall for the same tricks, though, don't we?

[South Park]

Some businesses don't want to hold Bitcoin so they use intermediaries that receive Bitcoin for them and convert it to fiat. But not all businesses are like that, some don't mind keeping BTC, so they get they full decentralized experience.

The bigger problem that if you want to use Bitcoin, often you just can't, because you can't pay with it, so you have to sell it for fiat. In the past there was a lot of hope that soon mass adoption will come and it will change, but that "soon" never came so far.

During the 2017 bull run people were incredibly positive about the idea that mass adoption was around the corner, which is one of the reasons the price went so high so fast, however since then we have learned that mass adoption is going to take a long time, however even if it is slow bitcoin is making some progress, it is just that people are too comfortable with fiat and they still do not understand why they need bitcoin, but someday they will understand and the adoption of bitcoin will finally reach levels in which we will be able to use bitcoin almost everywhere.

[qwertyup23]

This is the reason on why cryptocurrencies exist- they focus on eliminating the need to resort to any middlemen with regard with all the transactions. If they have utilized this feature, then the blockchain made it all possible due to this creation.

Companies would therefore use cryptocurrencies (or BTC) as their main medium channel and transact with anyone who is willing and everything would be posted on a public ledger. This totally eliminates the need for any middlemen or any third-party consensus as the public ledger is being checked and corrected via miners.

[tjtonmoy]

As they say, your privacy is how you keep it safe. It's a personal choice on how you are going to do those transactions and what you are going to use. There are many more options than centralized exchanges. It is not necessary to use centralized exchanges as a middleman for every transaction. P2P is a great way to do it and this cuts off every tie with CEX.
Every transaction in the Bitcoin blockchain is irreversible. Once it's done, it's done. So I don't know how people are going to scam with this. If you know how it works, you can easily understand what is a scam and what is not. But if you choose other assets or cryptocurrencies, I have no idea about them. Transactions can be canceled or not who knows? And why should you do trades if the transaction in not completed? Confirm it first then do business with that client.

There's no need for centralized exchanges if you know how to manage your assets and make safe transactions with them.

[Casdinyard]

I believe that most business owners will prefer to transact money transfers with their customers directly without using an exchange, that will be a third party, and you'll have to pay this third party or middle man money for his services, whether you like it or not. I also believe that nothing beats transacting money directly with your clients or customers, no third party whatsoever. One of the reasons why I like bitcoin is that it's decentralized, and you can do a P2P transaction with another bitcoin holder without any exchange being involved. But for convenience, transparency and scams that are associated with P2P, you don't have much choice but to patronize the services of these exchanges.

You can not eliminate the middle man in businesses, especially in this digital age, be it fiat or cryptocurrencies, because they have come to stay. Big exchanges like Binance, are cashing in on being the middle man in businesses, an unavoidable indirect business associates, in your face, waiting for you to go through them.

It's the tradeoff really. It's either you push for decentralization and risk getting scammed or losing your money, or you submit to exchanges and do your business with them, decentralized exchanges seem to solve this but they are just not that massive in the industry just yet. So people are really stuck between these two things without any choice.

Although this could change in the future. New forms of exchanges and ways for people to transact could be formulated in such a way that it would be as secure as doing your businesses with exchanges, with the added benefit of being able to use your money however you like. Till then, we can only hope.

[BIT-BENDER]

Have you thought about a world were Bitcoin adoption is massive and people now accept transaction using Bitcoin for goods and services, that's the world we are heading towards and yes it's very possible, this would be a world without any middle man. But till then you have to use the opinion that is safest to you, there are people who have been using peer to peer and has never had any issues with it and there are those that uses exchanges. The priority is security and I believe that is what everyone is looking for