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As the world of cryptocurrencies is getting popular, Peer-to-Peer platforms are also getting the light as people are searching for a way to buy cryptocurrencies with minimal risks attached to it. This comprehensive guide (among the others we have written) explains what you need to know about how to complete a trade on Peer-to-Peer platforms.

Peer-To-Peer Platforms

Peer-to-peer platforms are one way you can easily buy cryptocurrencies such as Bitcoin from other people. Peer-to-Peer as the name suggests, means you and I. The process normally includes a maximum of three steps after signing up and verification.

Sign Up:

Here are some of the most popular Peer-to-Peer trading platforms in Africa by trading volume. Ensure that the URL is correct at all times to avoid phishing.

Know Your Customer

Some people claim that uploading your identity verification strips off the anonymous nature of cryptocurrencies. Well KYC also adds a layer of protection on your account, in such a way that if you lost access to your account, the platforms could verify if you were the real owner. KYC includes: 

  • Uploading the proof of identity documents. ( ID, Passport).
  • A picture of your face.
  • A note with the current date and your signature.

Security

Maximize the security of your account by adding two factor (2FA) authentication layers. This could add your mobile number to receive codes sent to your phone whenever you are trying to access your account, buy cryptocurrencies or withdraw your cryptocurrencies. The second option could use 2FA authenticators such as google authenticator which generate codes. It’s a requirement to log in using this, whether you’re completing trades or withdrawing funds, but this is optional.

Selecting a Seller

Now that your account is set up and secure, the next step would be to visit the marketplace by clicking on buy and selecting the coin you would like to buy, it is also wise to select the currency in which you would like to make payment in and the mode of payment. Once you have selected what you want, the platform will display a list of sellers. To select a good seller, ensure that you have looked at their number of past trades and reputation score. Some Peer-to-Peer  exchanges have this  displayed on the seller’s offer; others you would have to click on the username to have more details. Peer-to-Peer  exchanges work with a module of trust, so it’s always good to select vendors or sellers who have high reputation scores and zero or close to zero negative scores. You go through the same process when selecting a buyer.

Escrow

Assuming that you are comfortable with a particular vendor, the next thing would be to check how much he or she will sell. If you meet the threshold, click on buy. A new page will pop up, here the platform will request you to input the amount you will buy. Next, start the trade. The cryptocurrencies will automatically be held in escrow, on some exchanges you will be requested to accept the trade to lock the coins in escrow. Escrow is a software that acts as a third party. Its key role is to ensure that it only releases the cryptocurrencies when all the above conditions are met. The platform managing the escrow account takes a fee for performing the third-party service.


Making Payment

It is time to make payment. Collect the details provided by the seller / vendor and make the payment. Ensure that everything is correct. Avoid any mistakes. If something does not seem okay, interact with the vendor on the provided chat section. Always keep all communications on this part. Avoid having conversations outside the provided chat section.

Once you have made payment, ensure that you click on I have paid or mark as paid. This will lock the cryptocurrencies in escrow in such a way that, even if the trade period expires, the coins will remain in escrow.

Vendor Releases Coins

Once you’ve made payment and marked the trade as paid, the vendor will get a notification that the buyer has made payment and it is their turn to release the coins. Upon confirming this transaction, they will click on release crypto.

Credited Into Your Account.

Once the seller releases the coins, you will get a notification that they have added coins to your wallet. Now you can do whatever you wish to do with them.

Dispute

In case you have an issue with the trade, you can always dispute the trade and explain what transpired. A support representative will join to analyze what the matter is. It is always advisable to ensure that you provide evidence to add weight to your case.

Tips!

  • You want to be keen on the fees. Each buyer/seller, payment method and indeed the platform incur a fee whenever you transact. Also factor in the volatile rate of your chosen crypto. Buy low/Sell high is the general phrase crypto heads use to maintain a profitable business.
  • Avoid third-party payments at all costs. These are payments done with different names as the vendor.
  • Cryptocurrencies are volatile, you can always choose to buy stable coins if you are risk averse.
  • Avoid deals that seem too good to be true, i.e, buying cryptocurrencies at very high/low rates to the market rate.
  • Ensure  the payment method you use has no risks of chargebacks.

NB: This content is for informational purposes only, and not for financial advice. Trading in cryptocurrency is risky, and while its market is available worldwide 24/7, please do your own risk assessment as you explore. Tell us your experience on completing a trade on a Peer-to-Peer platform. How did it go?

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