What is C2C transaction
C2C encryption refers to the direct purchase and sale of cryptocurrency between users without the involvement of a third party or intermediary. This approach is different from cryptocurrency trading using a centralized exchange (CEX), where you cannot trade directly with your counterparty.
In CEX, use charts and market order aggregators to determine current market prices and determine the best times to buy, sell, or hold cryptocurrencies. When you are ready to buy or sell, the trading platform will enter your order into its order book and complete the trade on your behalf.
Depending on the order type you use, you may not get the exact price you expect due to factors such as sliding spreads. In C2C trading, you have full control over pricing, settlement time, and who to buy or sell.
C2C transaction operation form
C2C trading platforms are similar to Facebook Marketplace in that they both serve to connect buyers and sellers. However, there may be some difficulties in conducting transactions on Facebook Marketplace because the transaction partners are strangers and lack a basis of trust.
C2C trading platforms are designed to provide a layer of protection that safeguards both buyers and sellers by protecting transactions and reducing the risk of fraud. Buyers and sellers can browse cryptocurrency ads, post their own ads, and enjoy the protection provided by systems such as feedback and credit ratings.
In addition, C2C trading platforms provide escrow services to protect bought and sold cryptocurrencies until both parties confirm the transaction. For example, if you plan to sell your Bitcoin in exchange for fiat currency, the platform will hold your Bitcoin (BTC) in escrow. After receiving the fiat currency, you can confirm the transaction and the BTC will be sent to the buyer's wallet.
If either party is dissatisfied with the transaction, they can file a complaint, resolve the dispute with the transaction partner, or let the platform's customer service intervene. However, please note that appeals must be made during the order processing period, which means the order is still pending payment by the buyer. These measures help improve the security and reliability of transactions and reduce transaction risks.
Advantages of C2C transactions
Global Market
You can trade cryptocurrencies with people around the world and enter the global cryptocurrency trading market in just minutes.
Various payment options
Supports more than 700 payment methods for user convenience
Zero transaction fees
Allow users to trade with both parties for free.
Escrow Protected Transactions
Protect buyers and sellers. When you choose to trade using escrow, the payment will be temporarily held by the trading platform until both parties are satisfied with the terms of the transaction, and the payment will not be released to the seller. Transaction existence time stipulation; if the buyer fails to pay the fiat currency within the stipulated time, the order will be canceled and the cryptocurrency will be returned to the seller's wallet.
Personalized convenience
Buyers and sellers can decide the buying and selling price themselves. As long as the conditions of both parties are consistent, a transaction agreement can be reached.
Disadvantages of C2C transactions
Transactions are slow
Although C2C transactions can usually proceed immediately after both parties confirm the transaction, one party may delay the transaction for various reasons. Unlike traditional transactions, there is no need to wait for confirmation from the buyer or seller before the transaction can proceed.
Low liquidity
Due to the special nature of C2C trading platforms, their liquidity is usually lower than that of CEX. Therefore, large traders with high trading volumes may prefer to use over-the-counter (OTC) trading or buy and sell through standard trading platforms.
How people benefit from C2C transactions
C2C trading is a convenient way to invest in cryptocurrencies. Not only does it allow you to buy and sell cryptocurrencies directly with others, it also allows you to avoid some of the transaction fees incurred by traditional trading platforms. People use C2C transactions for three main purposes:
currency arbitrage
We can make profits by taking advantage of the price differences between different fiat currencies.
Binance, as a trading platform, offers over 100 fiat currency options, which provides arbitrageurs with more choices.
As a simple example to explain how arbitrageurs exploit price differences, let’s assume we use Bitcoin trading against the US dollar and the euro.
In the BTC/USD trade, the buy price is $21,000 or €23,100 and the sell price is $20,800 or €22,880. If we buy Bitcoin and immediately sell it for USD, we will suffer a loss of $200 or €220 (selling price minus buying price).
However, in the BTC/EUR trade, the buy price is $21,364 or €23,500 and the sell price is $21,182 or €23,300. If we buy Bitcoin in USD and sell in Euros, we will make a profit of $182 or €200.
From the above example, we can see that it is more profitable to buy Bitcoin in the US market and sell it for Euros than to trade only in the domestic market. Arbitrageurs calculate price differences and potential profits between different markets and choose the most profitable trading strategy.
Post a buy or sell ad
You can advertise the property you're interested in buying or selling and specify a price. Other users can decide whether to transact with you after seeing the ad. Once someone is interested in your ad, a transaction request will be sent to you, and once you receive it, you can complete the transaction.
Are C2C transactions safe?
C2C transactions are generally safe, but the specific security depends on the trading platform and the security measures it takes. Older C2C trading platforms present higher risks of theft and fraud, while newer platforms have improved security measures.
Leading C2C exchanges now offer measures such as escrow services, regular security updates, and strict identity verification processes to ensure user safety. These measures help reduce the risk of fraud and theft. However, even with strong protection measures, there are risks in all trading activities, and C2C transactions are no exception.
Users should take some additional precautions to protect themselves when conducting C2C transactions. For example, carefully check the reputation and reviews of the seller or buyer, avoid using public Wi-Fi for transactions, make sure to use secure payment methods, etc. In addition, if you discover suspicious activities or encounter problems, you should report them to the trading platform in a timely manner.
Summarize
Through this article, you can learn about the advantages and disadvantages of C2C transactions, and how to operate to help you benefit from the C2C transaction center. However, before any form of transaction, please make sure to fully understand the risks and take appropriate security measures to protect your personal property. Safety.
This article comes to an end. If you have any questions or better suggestions, please leave a message below and we will be happy to answer you.
Let's explore the infinite possibilities of this world together. Remember to follow us, thank you for your support, and see you in the next article!