P2P (peer-to-peer)

P2P stands for Peer-to-Peer. It is a model of a decentralized network in which participants communicate and conduct transactions directly with each other, without the need for a central intermediary or server. This principle became famous with file-sharing services (like BitTorrent) but is now widely used in many areas, including finance.

In the context of P2P trading, most commonly with cryptocurrencies, this model allows buyers and sellers to trade directly with one another. A platform, in this case, acts merely as a marketplace where users post their offers to buy or sell at a specific price, using their preferred payment methods. To enhance security, the platform usually provides an escrow service—it temporarily locks the cryptocurrency being sold until the seller confirms they have received the payment. This trading method offers more flexibility and privacy than a traditional exchange market.