Your compromised privacy
Every time you buy or sell digital assets on a domestic or foreign exchange you leave a detailed digital trail behind. That’s because your identify has been carefully verified during the compulsory Know-Your-Customer (KYC) verification the exchange had to perform at the time you registered. And that’s not all. The registration process probably also required you to hand over other personal details including your bank statement, passport details and even a mugshot.
As a result, your financial privacy has been compromised and your transactions can now be traced, monitored and even censored. Or worse, a government has the power to freeze your assets. Online exchanges are much like banks. They provide custodial services to their clients and are therefore subject to regulatory oversight.
The risk of loss of your bitcoin and digital assets
Part of an exchange’s service is to hold and protect your private keys, which are used to unlock your digital assets – such as your Bitcoin savings. This often makes online exchanges the target for hackers attempting to steal these private keys. Once a private key has been stolen or publicly revealed, the digital assets it was meant to protect are usually irrevocably lost. Sometimes the exchanges themselves are responsible for the loss of private keys and their clients’ digital assets such as the infamous Mt. Gox disaster.
The Solution: Peer-To-Peer Exchange (P2P)
As you may have guessed by now, there is a better and safer way to buy and sell Bitcoin and other digital assets without the need for a bank, exchange, intermediary and KYC verification. The method is easy to understand, improves your privacy and eliminates the risks involved with intermediaries. Enter Peer-To-Peer Exchange. With Peer-To-Peer Exchange a financial transaction is conducted directly between the buyer and seller. There is no need to contact your bank or register with an exchange, which means you also don’t have to undergo a KYC verification. You have 2 options to conduct peer-to-peer transactions:
- Peer-To-Peer exchange in person. This is a safe option improving your financial privacy. The buyer and seller meet in person (face-to-face) at a location agreed upon. For example, they agree to meet at a coffee shop in Central Bangkok. No registration required. In fact, buyer and seller don’t even have to know each others names. The buyer of bitcoin is required to bring two things: Cash and a software wallet on his smartphone. The seller only requires his software wallet.
- Peer-To-Peer exchange over a true decentralized exchange (DEX) allowing you to exchange BTC for fiat currency using different payment methods such as National bank transfer, Revolut, N26 or similar. The available payment methods vary by country. At the time of this writing, the best true DEX is Bisq.
