Challenges in having full crypto P2P transactions

P2P transactions are getting very popular on Hive. I have also been helping some of my friends invest in crypto by providing them with directions. When I give them suggestions, I ask them to use P2P mode to deposit their money. We don't have proper regulations or guidelines in our country on what is allowed and what is not allowed. It is up to the individuals to show their income from other sources and pay their taxes. That's definitely a separate topic altogether.

When it comes to P2P transactions, it is one of the most convenient methods to transact in crypto or withdraw crypto to the real world. I have seen many people making use of P2P transactions and cashing out their Hive earnings. Only a few people keep their money invested for the long term. There are some people who would like to invest when the market is down and they then cash out when the market is high again. My strategy is to convert the liquid to a stablecoin when the market is good because we will not be able to find more buyers during a good market and we will not be able to see sellers during a bear market. When we convert the funds to stablecoins, we can make use of them to invest back during a bear market or book profits at any time.

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Risk of dealing with bad actors

When we are doing P2P transactions, there is a high possibility that we might end up dealing with bad actors. There are always bad people everywhere and if are very unlucky we might get stuck with one like that. But there are some precautionary methods that can be used to keep ourselves safe from such bad actors. Recently there was a long tweet on how people are cheating others in P2P transactions if we do trading with strangers.

When we use platforms like Binance, there is a rating available for every trader. We are able to choose one with good reviews and trade with them. There can be instances where only new people would be available for trade with no proper review. I would personally wait for the next good person to pop in and then do the trading with them. This way the bad actors can be avoided.

Another biggest and safest method is to always deal with people whom we know. Every country in the Hive ecosystem has something like this. People make use of the escrow services offered by the community through chat or something and they trade with people who are familiar and long-term Hive members. This way it is safe to trade.

Regulatory challenges

The regulatory challenge we face with P2P transactions is that we are not sure if the exchanges would disclose the transactions we do with others to the government when asked. I'm not sure what regulations would be imposed on these transactions. Sometimes the transaction between people can just be a friendly transaction or something like transferring money to a friend. But anything to do with conversions would be tracked and if the P2P exchanges give the data to the government, we are definitely attracting trouble if we don't give proper explanations for the same.

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Affects Government revenue

P2P transactions can sometimes be very simple and not even visible. It is like giving a box full of Tomato to someone and getting another box full of Potato from them. There is no need to disclose this transaction to anyone. The same type of transaction is happening in the crypto world too. These days people deal with others with the help of P2P transactions. But the government has some revenue generation in the form of a tax system. If we are going to be doing P2P transactions, then it might affect the revenue of the government.

Standardization

Each coin will have its own standards and each exchange will have its own standards and it can be hard to keep track of everything or adopt and adapt. As we are dealing with something globally, it is very hard to have one single regulation implemented across the world. It can differ from coin to coin and it can differ from one platform to another platform. In some cases, the type of transaction that people do can also make the transaction different and regulate it differently. Bringing standardization across everything is very challenging and in most cases, the government will not be able to do this either.

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