Cryptocurrency exchange platforms have sparked the interest of masses – including enterprises and start-ups. Majorly, there are three forms of crypto exchanges, such as centralized exchange, peer-to-peer exchange, and decentralized exchange. In this article, we will comprehend the P2P crypto exchange and how it is revolutionizing trading.
Peer-to-Peer Crypto Exchange
P2P exchanges operate on a decentralized mechanism and allow buyers/sellers to trade without any intermediary or any third party. Globally, the P2P crypto exchange market is growing and the number of trades is increasing. For instance, it is reported that the number of trades in Africa has grown enormously to 64% within a year and also the trade volume of transactions has risen by more than 130%.
Trading Mechanism of a Peer-to-Peer Exchange
To understand the trading mechanism of a P2P crypto exchange, firstly let us understand the working of a crypto exchange. A crypto exchange has a buyer who needs to buy desired crypto assets and there is a seller who wants to sell his/her crypto assets. The buyer places a Buy Order and the seller places a Sell Order. The exchange is integrated with a matching engine that matches Buy orders with the right Sell orders. Once the orders are matched, the transactions are executed. Generally, the entire process of matching the Orders takes time. However, it is not the case with P2P crypto exchange development.
A P2P crypto exchange enables direct trades between buyers and sellers, without the involvement of any third party, thus driving quick transactions. However, the intermediary comes into action in case of any dispute between buyers and sellers.
Benefits of P2P Exchange
P2P exchange offers a secure and flexible trading platform to crypto traders. The platform provides significant benefits which are mentioned below:
Robust security mechanism
In a P2P crypto exchange, it is only the users who hold the crypto assets rather than an intermediary. If no one else holds your funds except for you then it limits the chances of losing them – intentionally or accidentally.
The cost that is levied for processing transactions on a P2P exchange is operationally lower than that on other crypto exchanges. As it does not involve intermediaries, its overhead cost is minimized. And for the traders, the transaction fee imposed is comparatively lower than other exchanges, so it is a win-win situation for both the parties.
No transaction censorship
Transactions on P2P crypto trading platforms are not affected by government rules and regulations. They work on a decentralized ledger technology and the information remains distributed on the network, making users the owners of the data.
The People’s Bank of China froze Bitcoins of two crypto exchanges and prevented them from performing any withdrawal for over a month. Fortunately, this is not the case with P2P exchanges and they remain unaffected to government interference.
P2P crypto trading platforms can break global boundaries. If we would consider fiat exchanges, then they would even take up around several days to perform an international transaction. However, a P2P exchange functions as the best model, with the ability to perform fast and efficient transactions. These are even widely functional in those areas which are limiting the scope of cryptocurrencies.
Efficient fraud prevention mechanism
If in case any fraud or scam happens, then there is an experienced community or arbitrator who can manage the privacy and settlement mechanism. Therefore, traders need not worry and can trade with confidence.
To get started with your P2P exchange platform, you need to be well aware of cryptocurrency regulations in your region. Also, make sure that you integrate all necessary features in your exchange to enable quick, secure, and easy trading.
At Antier Solutions, we operate as a trusted P2P exchange development company, helping enterprises and start-ups to launch their exchange platforms. We integrate market-leading features into your exchange platforms to deliver a great trading experience to your users.