Crypto space has become the delightful investment option at which investors show their assets in this digital era. The evolving fintech industry is discovering innovative techniques to keep its users engaged and ergonomic. The exchange market, the notable industry of the fintech sector, has experimented with lots of projects, and the most remarkable one is P2P exchanges!
The leading P2P exchange Paxful has expanded its payment methods by supporting the BiLira (TYRB), a stable coin by Turkish Lira. With this integration of BiLira, Paxful’s key aspect of supporting various payment modes have grown to around 300. This stable coin enables crypto investors and on boarders to buy and sell Bitcoin(BTC) and Tether(USDT) on the Paxful platform. Paxful’s various payment options have paved the way for trading crypto assets across the globe, even if the particular federation does not support crypto money. In the federations like this, the interested crypto investors can purchase the crypto-coins from Paxful using gift vouchers and wallet money.
If you’re a novice on the P2P exchange market topic, this blog is dedicated for you to explore the head to toe operation the P2P trading!
What is a P2P exchange? – A glimpse!
A P2P exchange is a platform that enables its users to buy and sell assets directly without the intervention of central authority or third-parties. P2P exchanges are decentralized, and the transactions are recorded and managed through blockchain technology.
The P2P exchanges operate on automated computer protocols or smart contracts based on the architecture. As there are no human interventions in the process, a large workforce is reduced; thereby reducing the transaction costs.
Just a small difference marks the success of P2P exchanges. Let’s reveal it!
Difference between conventional and P2P exchanges- Marks the success of P2P!
Conventional exchange platforms are automated by top-notch match engines that process the trade even without investors’ consent, whereas this is not the scenario in the P2P trading platform! The conventional exchange matches the orders from the order book and concludes the deal. Then, the process is notified to the buyer and seller of the trade. The exchange platform charges the notable cost from the peers and makes a profit!
The P2P exchanges are also automated protocols that match the peers of matching orders and share the contact information. The peers can proceed with the trade deal if found reasonable. The P2P exchange acts as a platform that notifies peers with similar interests. As the trading peers connect directly, the transaction costs are negotiable. P2P exchange platforms are marked for its privacy and quick processing of trades with a trusted party.
How are trade deals concluded on P2P crypto exchanges?
As mentioned before, the P2P crypto exchanges operate by software protocols. The conventional trading is a time-consuming process and has the discomforts. First, let’s explore conventional trading!
In conventional trading, the seller specifies the amount of crypto-asset and the bid desired for and other details in the exchange platform, which is known as “order.” The orders are recorded on the “Order book” of the exchanges. The buyer can browse the order book’s orders and bid for the asset if required; otherwise, they can create their own order with the desired price. The match engine employed in exchange platforms connects buyer and seller orders, then concludes the transaction.
In Peer-to-Peer trading, the match engine connects buyers and sellers with similar terms and conditions. The trading peers can discuss and conclude the deal without any third-party interventions. Once they decide to conclude the deal, the seller’s cryptocurrency, which has been quoted, is locked in the escrow wallet. The buyer of the crypto asset can unlock the coins when the payment is completed. The exchange opts for the seller to confirm the payment transaction for trade. P2P crypto exchange is a complete win-win architecture that is designed to trade securely!
However, the P2P exchange has its own fruits and limitations. Let’s roll our eyes over it!
Benefits of P2P crypto exchanges
1️⃣ Devoid of AML process
The crypto investors and novice traders can kick-start their trading process in P2P exchanges without any KYC or AML processes. This promotes the quick processing of trade deals.
2️⃣ Devoid of transaction costs
The P2P exchanges do not charge any transaction fee to withdraw crypto or fiat assets from its wallet. These platforms do not have control over the crypto assets owned by the users and devoid of limitations.
3️⃣ Enhanced privacy & security
P2P exchanges conclude the trade deals directly within the trading peers by taking care of anonymity. The smart contract protocols are designed to clutch the seller’s asset until the buyer clears payment. Hence, the P2P exchanges enhance the security of assets spent by both trading peers. In case of disputes, the arbitrators dive in and resolve the chaos in between peers.
4️⃣ Vast payment options
Paxful, one of the leading brands, supports over 300 payment modes for trade transactions. Similarly, almost all the P2P exchanges render humungous payment methods in their POS. Depending on the payment service provider, the supported payments vary on exchange platforms.
5️⃣ Globalized scope
P2P exchanges offer a wide range of payment options. Hence, even if the federations do not support cryptocurrency transactions, the trader can utilize gift vouchers and other popular wallet money to buy and sell crypto assets.
To admit, there are some limitations and concerns in P2P crypto exchanges too!
Limitations of P2P exchanges- Of course, limited!
Let’s take a quick look!
Lower liquidity as the P2P crypto exchange concept is completely new to space. The user base of P2P exchanges is just now increasing; hence the active trade deals are low.
The P2P exchange operates on a decentralized blockchain network, which requires periodical up gradation of information. This feature, in turn, requires high computing power and reduces efficiency.
Forking of blockchain network needs to be taken utmost care as the loopholes may pave the way for counterfeiters.
P2P crypto exchanges are booming in the crypto space for its humungous benefits. The various payment options, globalized market space, enhanced privacy, and trading peers’ desire to make P2P exchanges unique.
If you’re an entrepreneur looking to establish a business, a P2P crypto exchange launch can be a hassle-free ideology. We can build a customized, feature-packed, flawless P2P crypto exchange that can stand out in the competitive market.
To get a quote about P2P crypto exchange development, let’s have a P2P latte talk!