A peer-to-peer (P2P) crypto exchange differs significantly from a traditional exchange in its decentralized nature and the direct interaction between buyers and sellers. Unlike traditional exchanges that act as intermediaries, P2P platforms enable users to trade directly with each other. One key distinction is the absence of a central authority holding users' funds. In P2P exchanges, users retain control over their wallets and private keys, reducing the risk of hacking or unauthorized access.

Another notable difference is the flexibility in payment methods. P2P exchanges often support a wide array of payment options, allowing users to choose methods that suit their preferences and local regulations. This inclusivity promotes financial accessibility, especially in regions with limited banking infrastructure.

Moreover, P2P exchanges generally offer a broader range of cryptocurrencies for trading compared to some traditional platforms. The decentralized nature of P2P exchanges enhances privacy and can potentially lower transaction fees, as users negotiate terms directly. However, it also introduces challenges, such as the need for a reliable escrow service and mechanisms for dispute resolution.

In summary, while traditional exchanges provide a more centralized and regulated environment, P2P crypto exchanges empower users with greater control, diverse payment options, and increased privacy in their trading activities.