R2D2

R2D2

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Before diving into arbitrage, let me first tell you about the not-so-pleasant side of this business. I think many of you will lose the desire to make money after reading this.

So, the first thing that can throw you off track is the issue with Federal Law 115. The law on countering money laundering doesn't impose any serious penalties except fines. In practice, your cards will be constantly blocked. So, in any case, you will need help from acquaintances or, at worst, the help of "drops" to register new cards. There's nothing criminal about this; the bank detects suspicious activity on your card and requests income confirmation. If you can't provide it, you probably won't be able to open accounts in that bank anymore. Again, if you work for a long time, you'll definitely face these card blocks. So, it might not be worth risking your own cards even at the start, and you should consider using acquaintances or drops.

Unfortunately, there's a possibility of encountering something more serious. If, for example, you receive money from a shady card (or send money to one) through which dirty money from drug sales, weapons/terrorism financing, protests, etc., is being laundered, things will be different. To begin with, most likely, people will show up at your home/office as if you're the most dangerous criminal in the country. Then, you'll be taken to extremely uncomfortable conditions, and investigations will begin. Try to prove that you weren't involved in a criminal scheme but just exchanged cryptocurrency for someone. Without a skilled lawyer (and an expensive one), you won't get through it. Depending on how the cards fall, you might end up spending a couple of years in Siberia. Real cases exist.

If you only deal with cash, things aren't as scary. The key is to choose a reliable exchanger that won't betray you at the worst moment. You can start with BestChange (read reviews, check the ratings), find an exchanger to work with regularly. Sometimes, when you go to the office to pick up cash, a police team might show up (not for you but for the exchanger's admins). By fortunate coincidence, you end up in the wrong place at the wrong time and go to the police station with everyone else. Most likely for a short period, until they figure out who you are and what you were doing there.

Now, let's move on. The triangle. What is it?

A scammer negotiates with their victim to buy something. For example, they sell non-existent software for 600$. The victim sends money to the scammer and receives nothing in return. The scammer disappears and doesn't respond. But what does this have to do with us? The scammer sends money to our card, not their own, a card of a P2P trader, which is ours. They make a deal with us, the victim sends money to our card, and we, unsuspecting, send it to the scammer's card. In the end, it looks like this: the scammer tricks the victim out of 60,000, who is now sitting in a police station writing a report. But we are the ones who are guilty because the victim sent the money to our card. Try to prove anything to them. You can take precautions by requesting documents and verifying them with the name on the card, but sometimes even that doesn't help. For a detailed guide on how to avoid falling into this trap, check here.

Not everyone encounters the problems mentioned above. This is more of an exception than a rule. If you are ready to live on the edge, then continue reading the article.

What do we need for arbitrage?​

Connections. Obviously, nobody will reveal their profitable working connections easily, and they probably won't sell them either. If you come across a seller offering super-profitable connections, keep in mind that you've most likely encountered another scam.

So, it's better to find connections on your own. What do you need for that? Well, ideally, you should be part of various P2P chat groups. Here's an example of one such group. There, you can find approximate information on which coins/currencies can help you boost your balance. Specific connections, again, are unlikely to be disclosed in the chat. As soon as a connection becomes public, its days are numbered.

You'll have to search on your own. Once you have a rough idea of which currencies/tokens can help you find connections, start exploring various ways to buy them cheaper and sell them at a higher price. You'll need to go through all possible payment systems and various banks. Typically, the most profitable connections are made using foreign banks. There's no one-size-fits-all recipe for finding them. You just need to invest a significant amount of time to explore various options on your own. However, if you come across a connection offering a profit of 8-10% per round, you'll get a good reward. Here's a convenient tool and another convenient tool for automating some processes.



Cards and Wallets. Here everything is pretty standard. We need to have cards from all popular banks and wallets for all popular payment systems. If you happen to come across a profitable combination but don't have a warmed-up card from the required bank on hand, that's not a good situation. You might lose potential profit. By the way, about warming up. Yes, it's not a good idea to use clean cards right away. Ideally, before working in P2P, a card should be used for 1-3 months as usual. It needs to be used for payments in stores, cafes, online, paying for subscriptions, sending and receiving money from friends and acquaintances. The bank's anti-fraud system should assign your card the highest security rating, and to achieve that, you need to demonstrate the most routine activity. If the bank calls you to confirm a transaction, that's a bad sign. You might consider taking a break from using the card for a couple of months and then start warming it up again.

Cards will eventually get blocked, so we will definitely need drops/friends/relatives. You can easily reach an agreement with someone to get a percentage of the profit. Next, you need to go to the bank with a person, register the card, and write a power of attorney for its use (so you can verify accounts on different platforms and handle all matters independently). If the volumes are small to start with, you can try working with your own cards. Conversely, if the volumes are large, find an assistant to search for drops and register cards.

P2P Platforms. Binance P2P, BitZlato, Garantex, TotalCoin, LocalBitcoins, Huobi P2P, Bitpapa.

Well, Binance is the most convenient platform for me. There are no transaction fees. As for BitZlato, I can say that there are a lot of scammers, so you need to be very careful. Garantex is also a good platform, and you can even withdraw cash through their offices. As for the rest, you can take a look for yourself, they are all more or less the same.

Common Mistakes:​


Well, the most common problems are obviously related to card and account blocks in payment systems. We've already discussed the need to warm them up. Some banks are more lenient with arbitrage, while others are stricter. For example, the likelihood of getting banned on Tinkoff is the lowest. There have been cases where clean cards from them were used for transactions worth 5 million without getting blocked. On the other hand, with Alfa Bank, you probably wouldn't be able to pull off such a thing.

There are often fees for transfers/deposits and withdrawals of funds/purchasing currency, etc., on various payment systems. Inattentive P2P traders may not account for these fees when calculating their profit. So, they might end up breaking even or even in the negative if the fees are too high. Just be more attentive and don't forget that you can lose on this.

Another mistake is making a transfer after the allotted time has passed. You can set a time window for each order within which you need to complete the transfer. If you get distracted from your deals or forget about an open order, and suddenly see that there are only 2-3 minutes left, you rush to make the transfer, but when you return, the order has already closed because the time ran out. It will be difficult to get your money back in such cases, and you can only hope for the honesty of the recipient.

Double transactions. When dealing with multiple transactions, some people manage to send money for the same order twice. For me, it's hard to believe, but such cases do happen.

And remember to watch out for scammers. You will most often encounter triangle fraud. Again, inattention and lack of vigilance can lead you to significant losses.

Non-P2P Arbitrage Methods:​


Simple Arbitrage. The goal is to buy a specific asset at a lower price on one exchange and sell it at a higher price on another trading platform. You can monitor cryptocurrency arbitrage by comparing prices on different crypto exchanges.

Conversion Scheme. In some cases, you can increase your profit by converting a coin into another asset before selling it. This strategy can be used when there's an opportunity to profit from converting assets within an exchange. For example, you can buy 1 BTC for $10,000, and 1 BTC equals 42,786 XRP. Due to the difference in exchange rates, 42,786 XRP can be worth more than the initially invested $10,000. Multiple cryptocurrencies can be involved in this scheme.

Exchange Deposits. For arbitrage, you'll need to create accounts on the exchanges you're interested in and pre-fund your wallets. When one cryptocurrency becomes more expensive on one exchange while it's cheaper on another, you can execute a transaction: buy where the price is lower and sell where the rate is higher. Afterward, you need to balance your deposits.

I won't dwell on this too much because exchanges currently offer almost identical rates for any tokens. If in the past you could see Bitcoin on Huobi for $25,000 and on Binance for $26,000, that's no longer the case.

Conclusion:​


In P2P arbitrage, much depends on you personally. If you manage to find a good combination, don't miss the opportunity to earn. Work with it as much as you can. Look for assistants who can help you extract even more profit from the found combination. But at the same time, don't forget about safety and be aware of the risks involved in such activities. The main thing is not to make mistakes.

Right now is a highly favorable time for P2P. Cryptocurrency is highly volatile, and there are significant changes happening with the ruble. So, while the opportunity exists, take action.
 

Inkogneto

Inkogneto

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Level in 2017 when they just started learning about this topic
 
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