Cryptocurrency for Peer-to-Peer Transactions Worldwide (Guide)
A Guide to worldwide payments with Binance P2P transfers
- This is a comprehensive guide. Feel free to skip sections you are already familiar with and don’t need guidance for.
- Binance sign-up link with 20% discount on trading fees is here.
- Guide on setting-up a Binance wallet from Sri Lanka is here.
- Guide on using Binance P2P to purchase cryptocurrency is here.
Preface & Context
Conversations related to cryptocurrency typically revolve around trading and investment. However, the core utility of cryptocurrency goes far beyond simply trading and investing in the emerging asset class.
With a total market cap which stood at over $2 trillion at its peak, it’s easy to see why the conversation is almost exclusively focused on the trade value of cryptocurrencies. However, the use cases for blockchain technology that are being explored by the 12,000+ crypto projects currently in existence truly deserves more attention.
Peer-to-Peer (P2P) transactions arguably constitute the first use case for the design of cryptocurrencies. In fact, the white paper published for Bitcoin by Satoshi Nakamoto as early as 2009 is titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” The white paper can be read here if anyone is interested.
We are much further along on the journey of establishing crypto as an improved alternative to traditional currency, or as I like to call it “Better Money.” The advent of stable coins, central bank digital currencies and specialized cryptocurrencies designed for micro-transactions has ensured that we are much closer today to replacing fiat currencies with cryptocurrencies, and facilitating transactions is one of the most important aspects of that paradigm shift.
Cryptocurrency: The Better Money
The natural question to the proposition that cryptocurrency is better money is what sets crypto apart from cash which in all honesty, seems to be working just fine and seems to have worked fine for centuries.
In reality, money isn’t working quite as well as it seems to, and it isn’t even a new problem. Currency as we know it today has undergone several iterations throughout history.
The first form of currency is arguably commodities, which were bartered against each other as a medium of exchange in early history. Next came metallic money or coins as we know them. Coins were far more effective as a medium of exchange and as a store of value than commodities because the value of coins could be ascertained accurately by their weight.
Because of how inconvenient it was to lug chests full of metal coins, monarchies started signing off credit notes on paper, and these were the next iteration of currency. A key differentiator between currency as we know of it today and the early versions of paper money was that credit notes undersigned by monarchies were backed by precious metals which were held in their coffers.
Until the 15th of August, 1971, the US Dollar was a credit note backed by the gold reserves held by the US. Essentially, this prevented (in theory) the Federal Reserve from undersigning credit notes that exceeded Gold reserves in value.
However, as of 1971, with President Nixon’s decision to abandon the Gold Standard paved the way for the next iteration of currency, which is money being issued as credit. We largely maintain this principle of credit transfer today.
As of 2019, it was quoted that only 8% of money in circulation in the world exists as physical currency. Obviously this has led to a number of problems with Central Banks liberally printing money and increasing circulating supply beyond the value of their respective GDPs. But, that is a conversation for another day.
The final form of money which we are currently in use of, which is digital money, or the balances shown in your banking apps and digital wallets.
If we think of this process of iteration which currency has undergone over centuries, it seems natural that a better form of money will replace currency as we know it today, and cryptocurrency is making a great case as a viable candidate for the role.
Cryptocurrency Vs. Cash for P2P Transactions
Strictly in the context of peer-to-peer transactions, crypto outperforms traditional currency across several fronts.
Low or No Transaction Fees
The first advantage of crypto over traditional currency as a medium of exchange is the low transactional fee imposed on crypto when making transfers. Some cryptocurrencies such as Bitcoin and Ethereum have high transactional fees and are less than ideal for low fee transactions.
However, USDT and BUSD, which I’ll be focusing mostly on cost between $0 and $1 based on whether or not the transfer is internal between Binance accounts or not. Compare this to cross border transaction fees which average around $26 or $50 and the ideal choice is obvious.
Instant Transfers
Crypto transactions are processed in under 5 minutes. Crypto also doesn’t have any authorization requirements or the need to speak to an agent. The transfers go through round the clock and is processed immediately.
Privacy & Anonymity
This isn’t my favorite feature personally, but the reality is that cryptocurrency payments are anonymous to a large degree. Transactions happen with reference to wallet IDs which are unique strings of characters and numbers as opposed to identities of the parties involved in the transaction.
Personal Insight from the Sri Lankan Economic Crisis
Living in Sri Lanka has given me a painful demonstration of how flawed traditional currency systems are is and the risk of allowing centralized authorities have complete control over my personal financial health.
For anyone who isn’t familiar, Sri Lanka where I live is currently undergoing the worst economic crisis in the history of the country’s 74-year run as a sovereign nation. Due to gross negligence on the part of the Central Bank and Government, the Sri Lankan Rupee has depreciated by nearly 50% and domestic inflation is recorded at over 100% year on year.
As an extension of the economic challenges faced by Sri Lanka, citizens are also unable to make foreign money transfers to other countries, and also have hard limits on the amount of money that can be spent outside of the country.
This situation has resulted in major setbacks for many Sri Lankans including importers who no longer can make payments to foreign suppliers for raw materials and products. Students pursuing higher education outside of the country are facing challenges making payments to their universities, and parents of students living abroad are unable to send allowances and tuition fees to their children.
Local customers are unable to shop online from foreign stores, travellers are unable to make purchases when they travel out of the country and even simple services like advertising on Facebook or purchasing subscriptions on the Google Play Store are restricted.
For Sri Lankans and potentially for any individual, cryptocurrency is a better form of money with minimal control in the hands of Central Banks and Governments to regulate how personal wealth is spent, saved and invested.
Using the Binance Peer-to-Peer Platform for Global Transactions
Binance offers a simple to use P2P platform for global transactions which essentially allows users to transfer money to anyone, anywhere in the world, instantly with low transaction fees.
Step 1 — Sign-up for a Binance Wallet
The first step is to sign-up for a Binance wallet and transfer some money to the Binance wallet to begin making transactions.
Use this sign-up link to enjoy a 20% discount on trading fees when using the Binance platform.
Setting up a Binance wallet is pretty simple, but here’s a step-by-step guide to set-up your wallet and complete the necessary verifications.
Once you’ve set-up the Binance wallet you’re ready to make transfers. The next step is to make funds available in the Binance wallet.
Step 2 — Use the Binance P2P Platform to Fund the Wallet
The Binance P2P platform allows users to purchase cryptocurrencies using their country’s fiat currency. Use this comprehensive guide to learn how to fund your Binance wallet using the P2P platform.
Step 3 — Transfer & receive funds using Binance
Transferring funds to anyone using Binance peer-to-peer transactions is extremely simple. All that is really required is that the above steps were completed and that the transfer is made to another crypto wallet.
Step 3.1 — Receiving payments using Binance
Receiving peer-to-peer payments is a simple process with Binance. The first step is to log-in to the Binance mobile app and navigate to the “Wallets” section. Once in the “Wallets” section, select “Spot” at the top of the screen, and then select “Deposit.”
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From the list of cryptocurrencies that are on the next screen, select USDT (or whichever cryptocurrency you plan on receiving a transaction of).
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From the “Choose Network” screen that appears, scroll to the bottom of the list and select “Tron (TRC20).” It’s important to ensure that the sender of the payment is aware what network is being used for the transaction.
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The final step is to copy the “Wallet Address” from the next screen. This address is a unique string of characters which will enable anyone, anywhere in the world to transfer funds to you via the Tron (TRC20) network.
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Step 3.2 — Sending payments using Binance
Sending payments using Binance peer-to-peer transfers is an equally simple process as receiving funds.
The first step is to navigate to “Wallets” in the Binance app, similar to before. Select “Spot” from the list of wallets at the top of the screen, and also ensure that the funds that are being transferred are in the Spot wallet.
Next, select “Withdraw” from the options in the middle of the screen.
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Next step is to select the currency that is being withdrawn from the screen that appears. For this example, USDT will be used.
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Once the cryptocurrency is selected for making the transfer, two options will be available. The first option is to “Send via Crypto Network” which should be used for making transfers to non-Binance wallets. The Tron (TRC20) network costs approximately $0.8 per transaction to non-Binance wallets.
The second option will be to “Send via Email / Phone / ID,” which should be selected if the funds are being transferred to another Binance wallet. Transfers from a Binance wallet to another Binance wallet are free of charge and don’t incur a transaction fee.
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Based on the selection, a variation of the screen below will appear. The next step is to fill in the following fields accurately.
The first field is “Address” which is the wallet address of the receiver. Request for this from the receiver.
The second field is “Network.” Use the Tron (TRC20) network.
The third field is the “Amount,” which is self explanatory. Key in the amount that is being transferred.
Next, click the “Withdrawal” button at the bottom of the screen to finalize the payment. Based on security settings, a 2-factor authentication code will be sent to the email and phone number that has been registered with the Binance wallet. Fill-in both codes and click “Withdraw” to complete the transaction.
Outro
Congratulations! You are now able to make cryptocurrency transfers to anyone, anywhere in the world and receive payments from anyone.
If you live in Sri Lanka or a country with similar restrictions on financial infrastructure, then this is a highly useful tool. Whether to pay suppliers abroad for goods and services or to send money to loved ones.
These transactions are also a great way to easily receive business payments or send out payments to small-time suppliers outside of the country without incurring heavy payment gateway fees.
Once a cryptocurrency payment has been received, the recipient can convert the cryptocurrency to fiat currency (normal money) using the Binance P2P platform. The guide to using the Binance P2P platform can be read here, and the Binance P2P platform can be accessed from this link.
Best of luck with all of your financial endeavors!
