Scam, scam, scam! Yet, a major issue in the cryptocurrency world. If you’re trading crypto in Nigeria, especially using peer-to-peer platforms, it’s important that you know how to avoid P2P scams.
Cryptocurrency is relatively new; It’s like a baby in the midst of adults in the world of finance. As much as crypto has its own blossom advantages, it also has its faults. You know! I like to explain these faults as when something new just pops up, and due to the relevance, it gets, bad eggs begin to crawl in and spoil things. That is exactly what is happening in the cryptocurrency world today.
But as a smart crypto trader, which I believe you should be, you importantly need to know how to avoid scams. Scam remains a very big issue, yes o! This is a very big issue in the crypto space. Causing more fear and doubt. But that’s why I am here (smiling). In this article, I will discuss practical ways to avoid crypto P2P scams.
Use Of Peer-to-Peer (P2P) Trading Platforms In Nigeria
You may be curious why I will focus more on P2P scams. The reason is because that’s the most common use of crypto trading in Nigeria. Let me explain.
Unlike crypto-friendly beta countries like Switzerland, Malta, and Singapore, which embrace the good crypto offers to the financial sector, Nigeria decides to be the black sheep among its peers. What do I mean? Well, the Central Bank of Nigeria banned cryptocurrency.
Does it even make sense? A country that holds one of the most crypto-oriented users globally is banning crypto. As silly as that may sound, that is exactly what happens. So this means that you can’t buy or trade crypto directly with your bank or even use a Naira card to trade anything crypto-related.
Due to this outrageous restriction, crypto trading platforms had no other option than to implement peer-to-peer systems in such countries. So, as a crypto trader based in Nigeria, you have no option of trading cryptocurrency than using a P2P system. And this is where scams, the big issue, erupted.
What Is Peer-to-Peer In Crypto?
Peer-to-peer is usually coined in crypto language to be “P2P”. It is a type of crypto trading where a crypto trader or (user) can buy a crypto coin and sell it directly with another crypto user within a particular crypto exchange platform like Binance. This is like a virtual way of buying and selling something in a physical market. But now, instead of a physical market, it’s a crypto trading marketplace where you trade your crypto. This also means that you’re dealing with a stranger, and there’s no guarantee that the person you are trading with is legit. And this is where the scam comes in.
The highest a crypto trading platform can do is to verify a user’s identity using the KYC (Know Your Customer) system. But is this enough?
How Does P2P Work In Cryptocurrency
With my little explanation, you can tell that p2p is a fundamental part of cryptocurrency trading. When one party initiates a transaction on p2p, it is usually broadcasted on the network. The nodes on the network then verify the transaction by checking if the sender has enough funds to initiate that transaction. The nodes also check if the transaction obeys its rules. Now, once the trade is validated, it is added to the blockchain and becomes a part of the permanent ledger. And now that the transaction is valid, it is visible for any interested buyer to accept or trade in.
For instance, you could be a legit buyer who wants to buy Bitcoin, and you’ve gone to the marketplace of any platform of your choice and placed a bid. A seller would have to accept your bid, which may take a lot of time. So, if you needed a quick transaction, P2P may fail you. Now let’s assume a seller has accepted; the next thing is for you to send the amount in “Naira” if you’re trading using Nigerian currency. After you send the payment, normally, the seller will have to confirm payment before sending the agreed amount of Bitcoin to your BTC wallet.
But what happens if the seller receives the money you sent and fails to release the Bitcoin to you? Do you see? This is what happens frequently using P2P system. But not to worry, I’ve got you!
5 Ways To Avoid Crypto P2P Scams In Nigeria
Here are five practical ways to deter peer-to-peer scams in Nigeria:
1. Don’t Use P2P
Yeah! You read that right. Logically, the best way to avoid P2P scams is to avoid using P2P. Although P2P trading in Nigeria seems to be the most popular way of trading crypto, there is a better option. And that is OTC.
OTC stands for Over-The-Counter. What the OTC system does is that it enables users to trade cryptocurrency without transacting with a peer or any second/third party. Personally, this is currently the best trading system available in Nigeria.
With peer-to-peer trading, you do not know who you are trading with. You can’t tell if they have the intention to scam you. The exchange platforms themselves do not know exactly what their users look like or their residence addresses. So it is easy for fraudsters to do away with your money. Therefore, it is best for you not to use a peer-to-peer system when trading cryptocurrency.
One of the best OTC crypto trading platforms in Nigeria is Breet. With Breet, you can quickly sell your cryptocurrency for Naira or Cedis (if in Ghana) and withdraw your funds to your local bank account within a few minutes.
You don’t have to wait for hours like P2P; trading is instant. And you have your peace of mind because you are trading with yourself, no stranger, no peers, and no scams.
But just in case you get coconut head and still want to trade with a P2P system, I have some more tips.
2. Lookout For Ratings and Feedback
As I have mentioned several times. The most common scam in P2P is transacting with a fraudulent buyer or seller. So how can one recognise a cheat?
One good method is to check their ratings and feedback from previous trades. For every trade in the P2P system, the other user has the opportunity to leave a rating and review of their trade with the seller. This way, you can deal with a seller that is reputable, and you can trust. If you see that a seller has negative feedback and low ratings, it’s best you avoid them.
3. Avoid Using Scandalous Platforms
Another tip you need to know is to always use a P2P platform that can be trusted. Too many crypto trading platforms are out there, and not all are reliable. I usually advise users to stick to P2P platforms that are already well-known. My recommendation is Binance P2P. At least, even though these Binance fees can be quite expensive, I know that CZ (Binance CEO) may not fail us. I am also aware that Binance has responsible customer support and security measures in case of any issues. Since you still want to use P2P (side eye).
Some Examples Of Reputable P2P Platforms In Nigeria
- Binance P2P
- Paxful P2P (Deprecated)
4. Be Vigilant When Sending Payment
You MUST never send payment to any user outside the P2P platform. This is a common tactic these silly scammers use to avoid detection. They’ll ask you to send payment to their personal account instead of the one displayed on the P2P platform. If you send money outside the P2P platform, otilo! Don’t even ask me what that means.
Don’t fall for such scams, be alert. Always pay to the options provided by the P2P platform. And if a seller insists otherwise, walk away and report them.
5. Always Review Your Transactions Before Completion
You must double-check the details of your trades before finalising them. Ensure you’re purchasing the right crypto coin and that you’re getting the right amount. Do not be in a rush without doing your due diligence., Take your time, crosscheck the little details, and be satisfied with everything before clicking that “buy” button.
My Conclusive Thoughts On Avoiding P2P Scams In Nigeria
And that’s it! My helpful tips on how to avoid P2P scams in Nigeria. Crypto is exciting, and P2P trading can be a great way to get in on the action, but staying safe and protecting your assets is important. If you follow these tips, you’ll be well on your way to becoming a P2P crypto trading pro in no time.
I have an article that will help you further in your crypto journey titled, ‘How To Become a Better Crypto Trader In Nigeria’. You should check it out and expand your crypto knowledge. Well, see you again next time. I mean, virtually. We’re in the multiverse, hmm no, metaverse! LOL, Bye!