Peer-to-peer (P2P) exchanges allow individuals to buy and sell bitcoin directly with one another, without centralized intermediaries holding funds or requiring identity verification. This aligns with Bitcoin's cypherpunk roots: minimize trust, preserve privacy, and maintain self-custody.
Why P2P?
| Problem with CEXs | P2P Solution |
|---|
| KYC/AML surveillance | No identity required |
| Custodial risk (exchange hacks) | Self-custody throughout |
| Withdrawal freezes | No gatekeeper on settlement |
| Geographic restrictions | Permissionless, global |
| Single point of failure | Decentralized coordination |
How It Works
Generic P2P Trade Flow
- Maker posts an offer (buy or sell)
- Taker accepts the offer
- Both parties lock funds in a multisig or deposit bond
- Fiat payment moves off-platform (bank transfer, cash, etc.)
- Bitcoin is released from escrow once payment is confirmed
- Disputes are resolved by bonded mediators or reputation systems
Escrow Models
| Model | Mechanism | Trade-off |
|---|
| 2-of-2 multisig + mediator | Both parties + mediator hold keys | Trust in mediator, but they can't steal |
| 2-of-3 multisig | Two parties + arbitrator | More decentralized, complex setup |
| Reputation bonds | No deposit; reputation limits exposure | Faster onboarding, less security |
Bisq
- Desktop app, Tor by default
- 2-of-2 multisig + bonded mediator
- Supports fiat and altcoin trades
- Full node integration (verifies own chain)
Bisq 2 (Easy)
- Reputation-based model (no deposit required)
- Smaller trades, simpler onboarding
- Same Tor and privacy defaults
HodlHodl
- Web-based, hosted (but non-custodial)
- 2-of-3 multisig escrow
- Wider range of payment methods
RoboSats
- Lightning-native, Tor-only
- Temporary robot identities (no persistent reputation)
- Fast settlement via Lightning
Comparison
| Platform | KYC | Custody | P2P | Decentralized |
|---|
| Bisq | No | Self | Yes | Yes |
| Bisq 2 (Easy) | No | Self | Yes | Yes |
| HodlHodl | Minimal | Self | Yes | No (hosted) |
| RoboSats | No | Self | Yes | No (Tor-only) |
| Kraken/Coinbase | Yes | Custodial | No | No |
Risks
- Trade duration — fiat settlement can take days
- Low liquidity — less volume than major CEXs
- Mediator reliance — disputes require third-party judgment
- User error — losing bond or failing to confirm payment
Circular Economy Connection
P2P exchange is the acquisition side of the circular economy: earning and spending bitcoin without re-entering the fiat banking system. Combined with merchant tools (Lightning POS, Cashu, BTCMap), P2P exchange enables closed-loop bitcoin economies.
- Bisq — Decentralized P2P exchange
- BTCMap — Merchant discovery for spending earned bitcoin
- Cashu — Ecash for offline/private payments
- No-KYC Acquisition Methods — Broader privacy-preserving acquisition methods
Resources