P2P exchanges let users buy and sell cryptocurrency directly with one another, rather than through a centralized exchange. As centralized exchanges like Coinbase and Binance have grown in popularity, P2P exchanges may offer several privacy and security advantages.
With P2P exchanges, users’ funds are not held by a central authority, which is one of their main benefits. Centralized exchanges require users to leave their assets in the custody of the exchange, which can be vulnerable to hacks. On the other hand, P2P exchanges do not hold their users’ funds, so hackers cannot exploit a centralized point or vulnerability to break in.
P2P exchanges are also more private and anonymous than centralized ones. You don’t need to provide any personal info, or do KYC/AML checks, since you’re transacting directly with each other. Cryptocurrency users who value privacy or live in countries with strict regulations may find this appealing.
In addition, P2P exchanges may be more resilient to government crackdowns or other forms of censorship. Governments have a harder time shutting down or regulating P2P exchanges since they don’t have a central authority. A large number of users in countries with a history of financial censorship or strict cryptocurrency regulations might find this particular feature particularly valuable.
Although centralized exchanges like Coinbase and Binance have their benefits and tend to be safe and secure, P2P exchanges may offer additional security and privacy advantages. By allowing users to transact directly with one another and eliminating the need for a central authority, P2P exchanges can provide an additional layer of security and protect against certain types of risks.
