Are you a cryptocurrency enthusiast? Or building a Bitcoin trading software?
Do you want to know more about cryptocurrency exchange development?
Well, this article will tell how cryptocurrency is changing the entire idea of global trading. And also we will walk through basics of peer-to-peer exchange, how it works, its advantages and many more.
Let’s get started…
What is P2P exchange?
Peer-to-peer also known as decentralized exchanges are operated and maintained exclusively by the software application. P2P transfers allow the traders in the crypto market to trade directly with each other with no relied on the third celebration to process all trades. In short, P2P exchanges allow the users to trade with each other without any third party.
P2P networks depend on digital transfers, which in turn depend on the availability of an internet connection. This enables users to use computers as well as mobile devices, such as tablets and phones.
In this method of trading, buyers and sellers sign up to a website and post trade advertisements to buy or sell cryptocurrency at a particular price, or within a specific price range, in a predefined location. Considering all the things, the peer-to-peer cryptocurrency exchanges are vivid examples of the decentralization philosophy.
How does a P2P Exchange work?
Now, when you know what actually P2P exchange is ? now let’s see how the exchange works? Is it similar to other exchanges or the process of transaction is different.
Let’s glance at how the exchange works
Basically, in order to eliminate third-parties and brokers, this type of exchange leaves behind all the work on the nodes participating in the trade. Initially, once you generate the sell or purchase order, you forget about them and the automatic trading engine automatically matches your order with the optimized buyer.
But in this type of exchange it leaves a lot of manual work on the users. Instead of matching the orders, this exchange system matches the people. Sell or purchase order in the network won’t be picked up by the system. A buyer need to click on the link and notify the seller that he is interested in buying the sale order and in return the seller will continuously check if any buyers have shown interest in buying the released sale order.
Even though the software is alone of matching the buyers and sellers without the need of third-party, yet it loses its vitality when it dissipates the important resource like time. The clearance of bitcoin might take 5 minutes to hours. As there is no intermediary trustee, the rate of the transaction becomes low. Thus, makes the complete procedure a tedious
What are the Benefits of P2P Trading?
If you wish to build your own peer-to-peer exchange clone script, then understanding their benefits is highly important.
Let’s take a look at few fruitful benefits of using P2P cryptocurrency exchange
1. Fully secure and safe
Each transaction is recorded in a public ledger or blockchain. Therefore, there is no issue about who is dealing with you. Moreover, the KYC details are always synced with the database. Hence, the identity of the person is not mistaken. Since there is no centralized authority to control, chances of fraud is quite low.
2. Censorship in transactions
The blockchain is a public ledger in which your transactions happen. Thus, there are no chances of hacking your details. Every information and transaction detail is distributed. So no one can track all of them together. This automatically brings your popularity for your peer-to-peer exchange clone script.
3. Transactions done to anywhere
At present, the fiat money being used take huge time for international transactions. Cryptocurrency exchange is not of that kind. This enables users across the world to use the P2P system. Moreover, countries that are not legalized for cryptocurrency usage can transact in this mode. This is the main reason behind the increase of several buyers and sellers in this mode.
4. Low operational fees
P2P exchanges operates through software. Thus, pulls down the operational fees to zero. Sometimes it exists but is very less when compared to other exchanges.
5. Complete privacy
No third party operators are involved in P2P cryptocurrency exchange. Thus, this mode of exchange assures complete privacy. This trading software aids you get in touch with a buyer or seller. The transaction takes place between you both. Thus, nobody can steal or lose cryptocurrency. It can never happen either unintentionally or intentionally.
Considering all the things, Although P2P cryptocurrency exchanges includes few benefits over centralized crypto exchanges, it can be beneficial for traders and investors looking freedom of payments, lower fees or privacy in particular when conducting their transactions.