We all go back a decade ago. There was a single digital currency that started to bring a new revolution in the digital world. It’s called Bitcoin. We are well aware of that. Here, I am going to talk about one of the other significant breakthroughs called “p2p bitcoin exchanges”. Yeah, you heard that right. People love the peer to peer bitcoin exchanges. Why so? Let’s get into it.
P2P exchanges have been developed to remove the limitations of traditional centralized exchanges. More and more user-friendly features were adapted into the p2p exchanges. The significant feature is it does not rely on third-party involvement for carrying the exchange and trading. We can see that in detail later. Before that look at how it works.
How does p2p bitcoin exchange works?
We have breakdown the mechanism of p2p exchange step by step. Buyer:- Users sign up in the crypto exchange platform
- Add their cryptocurrency accounts if exist or create new one
- Search for the best exchange offer listings.
- Connect with the sellers directly.
- Receive the bitcoins.
- Buyers sign up the platform
- Add their bitcoins into the account.
- Post an offer or listing in the order book.
- Connect with buyers directly.
- Transfer the coins to the buyer’s account.
Perks of peer to peer bitcoin exchanges:
1.Decentralized: P2P exchanges are decentralized nature and it doesn’t involve a third party commitment. Users directly contact each other through the platform and proceed with the transactions. Since many popular centralized exchanges are requiring more identification and formalities to undergo the exchange and transactions users are migrating towards p2p exchanges. From the very start, cryptocurrency is very famous for its decentralized nature and p2p exchanges have been allowing to do so. 2.Low fees: Centralized exchanges are charging the users for depositing their cryptocurrency in accounts. Meanwhile, p2p exchanges have not been charging them for depositing. Some p2p exchanges are charging users for withdrawal and exchange. When comparing with the centralized exchanges, the fee rate is lower in p2p exchanges. 3.Arbitrators: Arbitrators are the people involved in the transactions when there are any disputes. When individuals connect with each other in a peer to peer exchanges, there might be some misunderstandings and fraud activities occur. At this time, arbitrators came into the situation and solve the issue as per the regulations. Hence, there is more security involved in p2p exchanges also.Best p2p exchanges so far:
- Localbitcoins.com
- Bitsquare
- Localcoinswap
- Paxful
- Hodl Hodl
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