SEC-S19/W3 | Mastering the P2P Market

Hello Academy and greetings to my Steemit friends. The topic of this S19W3 Crypto Academy Engagement Challenge, Creation 19 with Three, is P2P (Peer-to-Peer) Transactions. P2P (Peer-to-Peer) transaction is very important and we need to know about it in depth. When our assets are transferred from one exchange to another exchange, P2P transactions are done, if the transaction is not done with all the documents or information correctly, your assets may be lost. So let's get into the details.

Explain how the P2P (Peer-to-Peer) market for USDT works on platforms like Binance and Huobi. What are the main characteristics that differentiate P2P transactions from traditional transactions on a centralized exchange platform?

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These are decentralized market places where buyers and sellers of digital assets can exchange assets directly without having to deal with an intermediary provider; some of the P2P platforms include those of Binance and Huobi. USDT abbreviated as Tether is stable coin linked with the US dollars hence highly preferred in P2P trading because of the stability and acceptance all over. Here’s how P2P markets for USDT work on these platforms:

How P2P Transactions Work:

1. Listing Creation: A typical example is a user with USDT who wants to make a sale and as a result offer it on the P2P where he/she sets his/her price, method of payment and terms.
2. Order Placement: Also, any other user willing to purchase USDT can view these offers and select the one, which has the most reasonable price, and/or preferred payment system.
3. Escrow Service: In this case, the USDT is held on the P2P platform and the sound of the imprisonment until the buyer confirms the payment on the transaction’s agreement.
4. Release of Funds: Once the buyer pays the price in USDT, the amount is confirmed, and the USDT gets released from the escrow account to the buyer’s account.
5. Feedback and Rating: In case of a completed transaction the buyer and the seller are allowed to give feedback and rating of each other in order to enable them enjoy a reputable status among the community.

Main Characteristics Distinguishing P2P Transactions from Traditional Centralized Exchange Transactions:

1. Decentralized Nature: P2P transactions are performed directly between users therefore the activity is not centralized. On the other hand, centralized exchanges intermediate; they own their users’ funds and assets facilitating trades.
2. Direct Negotiation: P2P markets allow users to reflect in decisions involving terms of involvement directly since they can bargain on issues like payment method and rate, which is not possible in centralized markets where the rates set are market-determined.
3. Flexibility in Payment Methods: P2P platforms are adapted to a large number of local payment options that can be bank transfer, cash, and electronic wallets. Generally CE is almost always limited to bank transfers and credit/debit cards.
4. Reduced Counterparty Risk: The escrow service minimizes the chances of being defrauded or not receiving products compared to direct deals but there is always a certain measure of risk in P2P business.
5. Anonymity and Privacy: For one, P2P trading can be somewhat more private than centralized trading platforms, especially those that request most clients’ identification for a large percentage of their transactions to meet Know Your Customer or Anti-Money-Laundering protocols.
6. Global Access: The numerous P2P platforms can be active in user account from any geographic location of the world and one does not require having a banking system to buy or sell the digital currencies since such a system might not be available in certain geographical locations or even at all.

P2P trading of USDT on Binance and Huobi and other such sites and exchanges is a cutoff and more free-form compared to traditional exchange-based transactions. Through, it enables users to personalize their trades and make direct trades hence improving the payment methods.

P2P online trading is generally riskier than the conventional trading since users need to engage due diligence to identify the right trading partners. In information sharing always ensure that the counterparty has a good reputation followsllow the guidelines of the platform to avoid the following risks.

What is TRC 20 USDT and what are the main differences between TRC 20 USDT and other USDT token standards like ERC 20?

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TRC-20 USDT is an implementation of tether, a stable coin, on the tron network with the trc-20 token standard. USDT or Tether, is an example of a stablecoin which aims to be backed 1:1 by the U.S dollar to allow users to invest in a more stable cryptocurrency when the rest of market is volatile. When talking about the USDT as a TRC-20 token it means that stablecoin complies with a specific token standard known as TRC-20, developed by the TRON protocol.
Overview of TRC-20 Standard

It is a basis for the creation of tokens based on the TRC-20 standard for the TRON network’s management. Somewhat similar to the Ethereum’s standard known as ERC-20, there are certain distinctions that have been made specifically for the TRON system. To understand how tokens are supposed to work on the TRON network or how they will be transferred, how balances will be managed, or how the tokens will be approved, we rely on the TRC-20 standard.
Main Differences between TRC-20 USDT and ERC-20 USDT

1. Blockchain Network

• The USDT with a standard of ERC-20 is specifically built for the Ethereum network.
  TRC-20 usdt is a type of USDT that is located in the tron network.

1. Transaction Speeds and Costs

• ERC-20 USDT may take some time to process and may be costly since the Ethereum network might be congested and come with high gas fees. Sometimes, you can find that TRC-20 USDT experiences more significant transaction speed and less charge because the TRON system is more efficient in the throughput and most operations do not entail the charge known as gas fees.

1. Technical Specifications

ERC-20 token standard has restricted the number of total decimals for a token to 18 while TRC-20 can go up to a total of 24 decimal places. As for other aspects, ERC-20 tokens have the problem of allowances that need another contract call, while TRC-20 tokens have approvals integrated into a transaction.

1. Community and DApp Ecosystem

• Ethereum has a larger number of decentralized applications (DApps) and its native tokens are ERC-20, which everybody accepts.
• TRC-20 tokens are within the TRON network and can come with features or collaborations particular to the TRON system.

1. Energy Consumption

Hence, it is generally argued that TRC-20 transactions are more energy efficient compared to ERC-20 transactions since while TRON uses a delegated proof-of-stake consensus mechanism that is more energy efficient than Ethereum’s proof-of-work mechanism.

The features that might differentiate TRC-20 USDT and ERC-20 USDT might therefore include transaction speed, cost, compatibility, as well as the required usage in different applications. Both of these standards are used to generate USDT tokens.however, they work in two different blockchains, which have their own strengths and weaknesses. Thus the important networks to monitor include network updated and fees structure related to TRC-20 & ERC-20 USDT to determine the most preferred protocol.

What is the role of Escrow protection in P2P transactions and how does it help secure transactions for buyers and sellers?

P2P escrow protection can be considered an essential feature in the P2P transactions since this function facilitates the protection of buyers and sellers from unfair actions and helps to make the transactions safe during the trading process. Here’s how escrow protection works and how it helps secure transactions:Here’s how escrow protection works and how it helps secure transactions:

What is Escrow Protection?

• Definition: Escrow protection is a special service when money or any other property purchased or sold by the two parties involved is kept in the hands of a third party, usually called an escrow agent, until the both parties fulfill all the requirements of the contract.
• Purpose: Its principal function is to minimize the fraud risk by bringing the transaction under its cover until all conditions have been met.

How Escrow Protection Works:

1. Funding the Escrow: The buyer makes a payment for the goods or the service at the escrow account held by the escrow service provider.
2. Completion of Transaction: After the payment has been made through secure means, the buyer is asked to release the payment for the seller and send the merchandise or provide the service.
3. Inspection and Acceptance: The buyer takes delivery of the goods and examines them to see if they have complied with the stipulated standards.
4. Release of Funds: It means that today there is an opportunity for the buyer who wants to buy some goods and for the seller who offers the goods If the goods are as described and the buyer is satisfied, then the escrow service transfers the money to the seller.
5. Dispute Resolution: In the event of a differend, the escrow service tries to help solve the issue and will not let the funds be released unless the matter is resolved. The resolution therefore stems from the findings and conditions that have been agreed on.

Benefits of Escrow Protection:

• Security: As a result, it safeguards the interests of the seller who will be paid for the goods as well as the buyer who receives his or her goods.
• Trust: It forms a relationship between parties who may not have previous acquaintance; thus, making transactions more secure and genuine.
• Dispute Resolution: It helps prevent people from having to go to court additional, an action that they will incur pre-time and costs to achieve.
• Transparency: For the purpose of taxation the buyer acknowledges that there is clear evidence of the transaction in the event that there is any legal process at the courts.

Example in P2P Markets:

An example of a P2P crypto transaction is where the buyer transfers USDT to an escrow account. Thus, the seller transfers the cryptocurrency to the buyer. After the buyer confirms that they have received the goods and signs to check the transaction, the escrow service frees the USDT for the seller, thereby closing the deal.

This simply means that the Escrow protection will always have to be a major key when it comes to safe P2P transactions. It depicts a method that guarantees that in trading, it is safe and can work to their mutual benefit without necessarily requiring prior acquaintance between the two parties involved. Due to the creation of the escrow services, a middleman is created that plays an essential role of a third party hence minimizing risks inherent in such transactions and easing the process in the current digital economy.

What are the different payment methods available on P2P exchange platforms for USDT transactions? Compare at least three payment methods in terms of speed, security and fees.

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The payments choice of P2P platforms for USDT transactions has a wide range of options to choose from, which has its’ specifics in question of the speed of deals, security and prices. Here, we compare three common payment methods: NETELLER, ClickandBuy, Bank Transfers, Credit/Debit Cards and Bitcoins.

1. Bank Transfers

Speed: The time that may be taken before the funds reflected on the recipient’s account differs with the transfer being domestic or international and the two banks that have been used in the transfer may take 1-5 business days.

Security: These are often thought to be safe because the use of credit cards is covered by the features put in place by the banking systems.

Fees: Charges for bank transfers can be a very small amount for local transfers but may be slightly higher for international transfers starting from a dollar or two to a percentage of the amount to be transferred.

1. Credit/Debit Cards

Speed: Those done through the use of credit or debit cards normally take very short time, within seconds to minutes.

Security: Despite the protection of card details is encrypted and protected by the card network’s rules and regulations, the risk is a bit heightened than the one related to bank transfers meaning the person has to be very careful when dealing with card details.

Fees: Credit/debit card itself comes with higher fees of 2-5 percent of the amount to be transacted due to fraud and convenience.

1. Hypothetical markets involving instruments such as cryptocurrencies (for instance, Bitcoin, Ethereum).

Speed: The third use of cryptocurrency is among the most important one; transactions with cryptocurrency are very fast, especially if the network is not loaded. Confirmation can take as soon as in minutes to several hours depending on the type of the blockchain and the current network demands.

Security: Consequently, trade information is entered into a distributed database, which is very safe and can hardly be changed. Nevertheless, users need to be very cautious when handling matters that concern their private keys, and wallets.

Fees: Such fees can range from very cheap where there is little traffic on the network to relatively very expensive especially when there is increased traffic in the network. It involves conduction of transaction fees to the miners or the validators to guarantee first-priority in handling of the transaction.

Comparison Chart

Payment Method	Speed	Security	Fees
Bank Transfers	1-5 business days	High (bank-backed)	Low to moderate
Credit/Debit Cards	Fast (seconds-minutes)	Moderate (high risk of fraud)	2-5% of transaction amount
Cryptocurrency	Fast (minutes to hours)	High (decentralized ledger)	Variable (low to high)

Concerning the choice of payment method for USDT transactions on P2P, one should distinguish between the speed of the payment, its security level, and costs in the form of fees. Bank transfers: these are reliable for large transactions and that do not need to be processed immediately Credit/debit cards and Cryptocurrencies: these are more costly, less secure but provide fast transactions. At the same time, never forget about these aspects and compare them with your requirements or the rules of the platform.

Complete a P2P transaction to purchase USDT using a payment method of your choice on a P2P exchange. Document each step of the process with screenshots or detailed descriptions, and share your observations about the benefits and challenges encountered.

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The process of buying USDT (Tether) with a peer-to-peer (P2P) transaction on Binance can be simple, read our step-by-step guide. To do peer to peer transactions you must be verified on the exchange some exchanges require verification and some exchanges do not, keep in mind that.

Step 1: Log In to Your Binance Account.

• Go to the Binance website or open the Binance app.Log into your account using your credentials.

Step 2: Access the P2P Trading Section

• Once you're logged in, you can proceed to the P2P trading page. This may usually be found in the main menu or on the homepage.

Step 3: Select the Currency and Payment Method

• On the P2P trading section you will select what currency you want to buy (In this case USDT) and what payment method you want to use (Binance account).The offers may need to be filtered based on your preferred currency and payment method.

Step 4: Choose a Seller Review the available offers.

• You will see details like price per USDT, minimum and maximum amount you can buy, seller’s ratings, and transaction history.Choose a seller with a good reputation and competitive prices.

Step 5: Initiate the Transaction

• Click on the “Buy USDT” button for the selected offer. Specify the quantity you are interested in buying and the total cost.

Step 6: Follow the Payment Instructions

• The seller’s payment instructions are shown. It should be easier since you’re using your Binance account.
  Kindly let me know that you are satisfied with the transaction terms and would like to make payment.

Step 7: Confirm Payment

• After you have made the payment, you should then click on the “I have paid” button to inform the seller. The system will now prompt you to notify the seller by pressing the “I have paid” button after making your payment.The seller will then verify the payment.

Step 8: Release of USDT

• After seller releases USDT from escrow it will be sent to your Binance account. Check account balance for confirmation of the USDT purchase.

Step 9: Review the Transaction

• On completion of the deal you may be required to accord your opinion regarding the seller.This means there is trust and transparency within the P2P trading community.

Important Tips

Always review the sellers profile and transaction history prior to initiating a trade.By all means you should read and understand the payment instructions and terms of the transaction.Secure your account by keeping your login information confidential.Always remember that, when you use your Binance account as a payment method in a P2P transaction, it may require transferring money from your bank account or just make use of the available balance on your Binance account. You should ensure that there are sufficient funds in your Binance account or follow these steps to deposit funds if that is not the case.

Conclusion

Conquering the P2P market is heavily based on comprehending the economic characteristics of the market, technology, and trust. These are the general trends; some of the main strategies are user experience, security, easy payments, and community. Thus, constant enhancement based on the users’ requirements is crucial for maintaining oneself in this saturated environment. Another feature, which is of paramount importance for the companies’ efficient work and laying foundation of their market leadership, is engagement, reliability and responsiveness.