Did you know that back in early 2018, Indian government banned all transactions from banks to crypto exchanges. This meant that you could not transfer any form of fiat to your crypto exchange account in order to buy crypto. Despite that crypto industry managed to thrive until early 2019 when Supreme Court ruling lifted this ban for once and all.
But how did people buy and sell crypto using fiat back then? Well, that’s primarily the topic of the day. We’re going to talk about P2P transactions and how to do one using WazirX. God forbids, if something of this sort were to happen, this is going to be your best bet to trade cryptos.
What is P2P?
As the name suggests, P2P or peer to peer is a method of exchanging assets between two parties directly. It’s like saying, that you pay me $36,000 and I give you 1 BTC in return. It is the go to method of converting your fiat into crypto for no cost whatsoever. In a P2P transaction you send money directly to the bank account of the person who is selling the crypto.
Benefits of P2P Transaction:
While it may not be as simple as buying a crypto using markets listed in the exchange itself, but it still has some inherent benefits over it. Let’s discuss:
Unlike the exchange transactions that involve a maker and taker fee for buying crypto assets, P2P transactions are absolutely free. You are literally paying someone directly in exchange of assets.
I know, I know! Let’s address the elephant in the room. If you are dealing with the seller/buyer directly, who is going to ensure that transaction is fraud-proof? What if the buyer/seller runs away with my funds?
That’s where the exchange kicks in. WazirX acts as an escrow in this case where crypto is locked from the seller’s end as soon as you proceed to make the payment. Once the payment is made and seller confirms the reception of the funds, crypto is released to you.
C. Hedge against Regulations:
Banks have traditionally set their own norms and forced citizens to abide by it. Imagine it’s your money and you cannot chose to send it to the person/organization of your choice. P2P by-passes such nuisance by allowing bank holders to transact with each other directly.
Downsides of P2P:
Well, before you jump in right away, there are some obvious negatives of dealing in P2P too. Being a responsible investor/trader, let’s talk about it quickly:
P2P transactions are slower than exchange swaps for obvious reasons. There is due diligence involved at every step. Therefore, even in the best cases, you would receive your assets or funds in no less than 5 odd minutes. This might not be much for someone who’s buying or selling for long term. But for traders, this is absolutely unacceptable.
While the escrow (WazirX) tries it’s best to educate people on how to do P2P transactions, there are cases where people become victims of online scams.
Once, one of my community members was stuck in an extremely unfortunate scam. He did everything right. However, when he released the crypto in return of money in his bank account, the buyer raised a fraudulent transaction request with the bank. All his money was then withdrawn. He did raise it to his bank but nothing happened as no body entertains crypto related transactions.
How to do P2P on WazirX?
As mentioned it is extremely important to understand the nitty gritty of a P2P transaction before doing one. So here goes a step by step guide to do a P2P transaction on WazirX. While the process of doing P2P is pretty similar on mobile and web, I would be using the web version to demo.
Step 1: Select the P2P Tab
Choose the P2P option from the tab as shown in the screenshot below. Currently you can only buy stablecoin USDT through P2P on WazirX exchange. On the left, you see the current price of last 10 orders of USDT. For the uninitiated, USDT is a stablecoin which is pegged to a dollar.
Step 2: Decide the Amount
Enter the amount of USDT you want to purchase. You can either enter it in the form of USDT or INR.
Please note: The minimum purchase amount for USDT is 15 USD.
At this point you can also select a preferred seller. This is applicable if you have been used P2P for a while now and trust a specific user.
Also, you can select the price at which you want to purchase USDT.
Once you tap on buy, WazirX matches your price with all the sellers, and sends you a mail if the price is matched.
Step 3: Payment
Once you get the notification on email for the price match, there is a set timer of 15 minutes within which payment has to be made.
Post that there are no surprises for guessing the next steps. It’s all about moolah from there on.
If you don’t pay within 15 minutes your order would be cancelled.
Now that you have a fair idea of an alternate way to buy crypto, what are you waiting for? Go P2P away! If you’re stuck somewhere and need help, hmu!
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Until next time..
For our beloved “non readers”, I also do quick carousels on these topics over Instagram. Come join the fun. Hit me up here.
Btw, if you are a seasoned trader or just testing the waters with derivatives, here’s an exchange specifically meant for that. Head over to MCS using this link. Still not convinced? Join the vibrant community that is talking about MCS on Telegram, here.