Understanding peer-to-peer Bitcoin transaction

[osasshem]

What does it mean when a transaction or exchange is truely peer-to-peer? It should actually mean that an exchange happens while both transacting peers are in control of their funds or private keys. This could also be considered a decentralized peer-to-peer exchange, while cases where funds of one or two exchanging peers are controlled by centralized platforms are considered false p2p exchange. Again, p2p is false when one or two exchanging peers do not control their funds... the funds is/are controlled by a third party.  

This statement connotes why exchanges rendering P2P services will put it clearly for people carrying out such transactions to take note of the sender/receiver's details before executing the transaction, to prevent scam activities happening to any of the users. In other to manage the risk behind P2P, that's the reason for escrow services, which was a tool for local P2P exchanges years back, and anyone who uses a non-trusted platform will have his/her heart in hand when executing the transactions. Building TRUST when it comes to P2P is almost impossible without an escrow.

[snowpega]

Non-custodial platforms place the risk on the end user (involving only you, another user, and the blockchain), so how could a transaction reversal be carried out by the user themselves? Do you mean that this involves escrow, or are you perhaps misinterpreting the concepts of custodial and non-custodial? Honestly, I have never come across a non-custodial service that also offers recovery insurance.

Whoops! Haha, my bad. I meant to say that one should make sure to check insurance funds before using custodial platforms. But I said the opposite of that. Using a custodial platform is really like something you fear: you are standing on a mountain verge where you can slip at any time, suddenly. Thanks for mentioning this mistake of mine. That was a writing mistake.

In some cases, escrow is a different thing, which is offered only when a new project promotes its platform to boost the trust level in the community. And, in case any incident occurs or any users become victims of that platform, then they can claim their lost amount back.

[ZAINmalik75]

OP, although, Bitcoin isn't technically a peer-to-peer network. It's a broadcast network where the transactions go to the mempool, then the miners pull the transactions from the mempool to include in a block. It's not really going from one peer directly to another peer.

Miners don't control your funds or even the transactions in the mempool, they simply use their computational power to mine blocks and get rewarded for it, the system isn't controlled by a central authority, it's all decentralized and happens within the ecosystem, which is why you can't say that Bitcoin transactions aren't P2P, because they are, since you send the funds, and I receive them directly without them going to a third-party before reaching me where the third-party can possibly stop them from reaching me or make any changes in it, but that's not the case here.

To @OP, I think we can simply say that Bitcoin is a decentralized peer to peer payment system, and P2P systems where escrows or third-parties are involved, such as the ones we see within centralized exchanges, they are centralized P2P systems, could also be called pseudo P2P, but we can't say they are fake P2P, it's just that both have different working systems. In a decentralized P2P system, the funds go directly from one peer to the other, and in a centralized P2P system, the funds first go to the third-party, and then they are released to the receiving peer upon confirmation from the sending peer.

[ColdLava40]

Actual Peer to Peer trades are only between people, buyers and sellers, no middle men as Escrow, no middle platforms such as P2P market places. If there are such middle ones, it's pseudo Peer to Peer trades.

In theory, peer-to-peer transactions without an intermediary are possible. But then, if the transaction does not take place on a secure platform, how can we be sure that the other party will be honest and fulfil their part of the deal?

This creates doubt and distrust between both parties because neither wants to send their payment first for fear that the other person might not complete the transaction.

An intermediary helps provide a safer way for both parties to complete the transaction without worrying too much about the other party failing to fulfil their obligations.

[Floxynice]

Actual Peer to Peer trades are only between people, buyers and sellers, no middle men as Escrow, no middle platforms such as P2P market places. If there are such middle ones, it's pseudo Peer to Peer trades.

In theory, peer-to-peer transactions without an intermediary are possible. But then, if the transaction does not take place on a secure platform, how can we be sure that the other party will be honest and fulfil their part of the deal?

This creates doubt and distrust between both parties because neither wants to send their payment first for fear that the other person might not complete the transaction.

An intermediary helps provide a safer way for both parties to complete the transaction without worrying too much about the other party failing to fulfil their obligations.

Does the introduction of an intermediary really solve the problem? The issue of trust was not fully eliminated here after introducing an escrow. What happened is that, the trust was shifted from one party to the transaction, to another person being the escrow. Now both parties will have to trust the intermediary to be honest enough to release funds to the right person when needed.

Escrow or not, just do your findings well before transacting p2p with anyone. Be sure that you are not dealing with a scammer 

[lombok]

In theory, peer-to-peer transactions without an intermediary are possible. But then, if the transaction does not take place on a secure platform, how can we be sure that the other party will be honest and fulfil their part of the deal?

This creates doubt and distrust between both parties because neither wants to send their payment first for fear that the other person might not complete the transaction.

An intermediary helps provide a safer way for both parties to complete the transaction without worrying too much about the other party failing to fulfil their obligations.

Autonomous exchange of values between the parties in the absence of a mediator leads to a problem of honesty due to the unwillingness of each side to accept the first loss. Lack of a reliable guarantor results in deadlock in the process of transferring because of the risk of the loss of the goods or financial resources.

Mediation solves the problem through temporary storage of money until all requirements are fulfilled. Trust in implementation of trade deals is gained through the supervisory body which guarantees a fair process of delivery of the goods.

[Sonia_123]

Peer to Peer transaction either by buying or selling bitcoin which ever way has to be done among two genuine persons who wish to send Bitcoin directly to one another account not through the bank or any other third party .

It directly send funds from your digital wallet address to another with a decentralized global network which the miners will now verify your transactions successfully and records it  using cryptographic measures which records it on the block chain permanently without the involvement of any intermediary.

[OcTradism]

Does the introduction of an intermediary really solve the problem? The issue of trust was not fully eliminated here after introducing an escrow. What happened is that, the trust was shifted from one party to the transaction, to another person being the escrow. Now both parties will have to trust the intermediary to be honest enough to release funds to the right person when needed.

Escrow or not, just do your findings well before transacting p2p with anyone. Be sure that you are not dealing with a scammer 

Escrow is for very high trusted person or service, because Escrow acts for safety of a trade for both sides: buyer and seller. There is always risk with anything, and it's the same with Escrow but if buyer and seller actually trade directly peer to peer, with each other, without an Escrow, one of them will have to go first, and  if there is a planned scam, the scammer will not go first, while who go first will be scammed.

It's why we need an Escrow but as said, Escrow can be a scammer.