The Value Of Reputation Over Verification

. 5 min read

One of the most interesting things that can be observed about any kind of peer-to-peer (P2P) transaction is how verification of the other person’s identity and reputation matters. It’s an interesting look at psychology and how little we think about those we transact with during our day to day lives. Often, we don’t even realize many of the platforms we use are themselves just a less obvious form of P2P trading. However, many people are shocked if someone suggests P2P trading directly, such as suggesting they should consider using a P2P cryptocurrency exchange over a centralized one.

Aliases and Handles In The Internet Age

A side effect of the revolution brought about by the internet is how much it has depersonalized people. While it’s easy to look at the rampant use of social media and how public people can be regarding their lives online, it’s easy to forget how much of that isn’t accurate. Many things are merely exaggerated, cherry-picked, or complete fiction.

It’s typically easy in many cases to spot a scammer’s blatantly fake account messaging you out of the blue. However, often so little effort is put into those accounts because the types of people that they are targeting generally aren’t "tech-savvy" enough to notice any oddities or red flags. Still, even those of us more adept at noticing scams can be fooled when caught off guard by a well-cloned account with a subtle change to the handle or username.

This is a very raw but practical method often used for sifting for the best potential targets as those less likely to be taken advantage of just won't respond after spotting inconsistencies, brand new or clearly fraudulent accounts. Most of us involved in cryptocurrency have been approached personally at one time or another, particularly if we are active in cryptocurrency groups, something common to experience on Facebook or Telegram especially.

A lot of people are choosing to move away from identity-focused platforms or using aliases on those that typically encourage revealing your identity or personal details, and not just those involved in the crypto community. One of the reasons why the crypto community on Twitter, Telegram and other social platforms that aren’t focused on their user's real names are flourishing these days is due to the fact they don’t force excessive verification involving divulging personal information. In most cases, don’t even expect you to use your real name.

When you look at communicating with people behind a username or handle, and perhaps sharing personal information with them, which can often happen, what builds that trust? It’s not verification, as often there isn’t anything concrete or at least nothing you can verify unless you’ve met them in the real world. Even then it's often still more disconnected than many types of real-world relationships.

It can be argued this seemingly odd behavior is actually based on the reputation earned by interacting with them or watching how they’ve associated and engaged with others. Strangely, often this reputation and trust can be far more tangible than ever could be built sending a photo of your ID would be. It can be interesting to consider how this kind of trust is sometimes formed just with time and familiarity but often can be based purely on preceding public, private, and observed behaviors.

What Platforms Like eBay Have Taught Us About Reputation

While eBay is one of the best examples due to its prevalence, as it’s likely familiar to just about anyone reading this, the following observations still apply to many other similar sites as well that are popular in various regions. Online marketplaces of all types frequently use a reputation system, and you deal with a person or business typically behind a handle, username, or similar arbitrary identifier. Yet you likely rarely even wonder what the person's identity is, let alone ask to verify it.

In the early days of eBay, there were swarms of people scoffing, thinking a platform like that would never last and that people would rip each other off. One would send junk or poor quality items, maybe nothing at all. Perhaps the other person wouldn’t pay as they promised or issue a chargeback if the payment type used allowed it, but yet these platforms flourished and continue to do so.

While there are dispute systems on most of these platforms that have evolved over time, the average buyer or seller rarely finds themselves needing to use them. Provided they deal primarily with other buyers or sellers with a good reputation and account history or make lower-risk transactions it's likely a high percentage of exchanges will go as expected. Typically the exchange will go smoothly if some caution is taken. Still, if the item is damaged in shipping which is an issue often faced, and as such makes a great example, this can result in a difficult situation. However, the better the vendor's reputation is, the more likely they are to work with you to resolve the problem happily, rather than to risk damaging their reputation and dealing with disputed transactions that perhaps result in damage to their reputation on the platform.

If you jump on eBay and look at just about any high volume vendor they typically have an almost perfect reputation score even with thousands of sales/purchases they may only have a handful of questionable transactions which were likely resolved but the other party just ended up leaving negative feedback anyway. As always when dealing with people there’s always a minority that will do the wrong thing or never be happy with the transaction, with that in mind when you take into account the success rate of transactions on these platforms it’s quite impressive.

What This Teaches Us About P2P Cryptocurrency Exchanges Like LocalCoinSwap

While many people who have never used a peer-to-peer exchange will often say things like “how can you trust them, they are strangers, why would you send money to a stranger” or “I'd much rather send crypto to a centralized exchange they are a business, not just some person” yet that’s precisely what people in many exchanges. It just happens more often in ways that people don’t realize are much the same as we have become accustomed to exchanging goods, service, and assets that way in specific scenarios without a second thought. Ironically, most of these same people have probably at one point or another made an eBay purchase, bought something on Etsy, sold their old car on Craigslist and did essentially the same thing, they dealt with people based on reputation or a personal level. Just as many people choose to do when using P2P exchanges when trading cryptocurrency.

When dealing with a larger centralized exchange often the wait times for support requests can be extensive, sometimes months, especially for smaller account holders who may not be seen as a priority, most of us have heard more than a few horror stories. Sometimes even when a support ticket does get a response, further delays can ensue and more waiting while they try and work out what went wrong on their end before giving you back access to your account. Dealing with issues that can occur on a P2P platform is often far simpler as most of the problems faced are between two parties. Generally, it’s relatively easy to discern who did the wrong thing in the trade when a dispute arises.

With all this in mind, if you are one of those people on the fence about trying a P2P exchange ask yourself, what matters more to you? Knowing who someone is (or who they claim to be) or knowing their reputation and seeing how they’ve dealt with other people in the past? You may have heard the old saying “past behavior is the best predictor of future behavior” in today’s world full of social disconnection it’s even more relevant.

Embrace Peer-to-Peer Trading With LocalCoinSwap

When it comes to P2P trading for cryptocurrency LocalCoinSwap is a brilliant choice for a variety of reasons. LocalCoinSwap values its community and supporters by keeping fees low, focusing on inclusivity, and access for as many people as possible.

If you see the importance of people, freedom of exchange, privacy, community, and reputation over verification, then come and try LocalCoinSwap and trade your way.