Peer to peer refers to the direct exchange of an asset between individuals without the presentation of a central authority or a third party.
P2p cryptocurrency exchange software is a real decentralized trading exchange script that can launch a p2p crypto exchange software based on decentralization. The motivation behind the establishment of Bitcoin, the most widely used cryptocurrency, was to create a strictly peer-to-peer crypto exchange. It has made the transactions most accessible by eliminating the risk associated with middlemen as it has elevated the levels of security.
In general, a peer-to-peer exchange platform is known for its decentralized network, transparent, and highly secure transaction mechanism.
Let’s see the difference between the p2p crypto exchange software and the traditional form before we move on.
Standard Cryptocurrency Exchange
In The traditional form of a crypto exchange or the typical centralized crypto exchange, sellers can sell Bitcoins by defining the quantity and price of their orders.
They track the orders in an order book. Buyers must go through the order book for appropriate satisfying orders submitted by sellers. They specify the order’s terms based on their requirements. The exchange’s matching system then matches buy and sell orders based on price, and the traders are processed. When you buy or sell cryptocurrencies using a traditional exchange, you don’t get to transact directly with the counterparty. Instead, you can use charts and other market aggregators to determine the optimal time to buy, sell, or hold cryptocurrencies. The exchange platform will organize the transaction on your behalf, and the market price determines the final price at the time of the transaction.
The rest of the procedure takes time and needs the use of intermediaries. These types of exchanges are controlled by the members of the employees of that firm.
How does a p2p exchange work?
In the P2P exchange, buyers and sellers can browse crypto ads or post ads of their own. P2P exchanges also provide a layer of protection for everyone that is involved in the transactions.P2P can protect both buyers and sellers to safeguard transactions and reduce the risk of fraud.
Users register on a p2p exchange platform
Then they complete the KYC verification process
Buyer places a buy order
A wallet address is created for the buyer
The matching engine matches the buyer with the appropriate seller
The traders must confirm and agree on the terms of the trade
Smart escrow holds the seller’s crypto assets to be sold
The buyer makes the payment for crypto assets to be purchased
The seller confirms the payment
Escrow payment releases the crypto assets, transferring the same to the buyer’s wallet address
Buyer can transfer the assets to his/her cold wallet for more security
P2P cryptocurrency exchange features
Cheaper cost of operation
P2P crypto exchange software is run by trading software that doesn’t demand transaction/brokerage fees. It is optional if a trader needs its transaction to be authenticated by a miner.
SSL security and two-factor authentication, such as email authentication and google authentication, add an essential layer of security to our P2P exchange platform.
Escrow security system
It aids to secure trading transactions and avoid fraud. Not only make p2p exchange safe by sending/receiving escrow but analyze the entire market and community.
Multicurrency p2p trading platform
The multicurrency p2p exchange aid your traders to trade Bitcoin and altcoins, and can streamline all digital coin-related operations in a single medium.
Preferred trader selection
Buyers have the flexibility to choose their preferred sellers, and vice versa, for a more confident and trusted trading experience.
Security and privacy
Depending on the exchange, there is no need for Know Your Customer (KYC) or Anti-Money Laundry (AML) policy. If you are the kind of person that thinks buying cryptocurrency is your private business, then p2p is an excellent choice for you.
Advantages of p2p exchanges
1. global market
One of the advantages of using a p2p exchange is that it gives you access to a global market of cryptocurrency buyers and sellers. It is accessible from different countries all around the world. Although the number of countries each exchange support depends on the services that each cryptocurrency exchange software development company provides for its customers.
2. multiple payment methods
When you trade on traditional exchanges, you may not get as many payment options as compared to p2p exchanges. P2p exchanges support various payment options that traders can choose among them.
3. zero trading fees
While traditional cryptocurrency exchanges attract a fixed fee or percentage per trade, p2p exchanges allow traders to connect and perform transactions with zero fees. Not all p2p exchanges offer this feature, so make sure to check the term and conditions when choosing a peer-to-peer exchange.
4. providing privacy
Many crypto exchanges need to sign up with personal details and identity proof like Email ID, passport, ID card, ETC.
In the decentralized exchange, there is no requirement to sign up. Most of the p2p platforms ask for sign-up, but they don’t require personal information.
Disadvantages of p2p exchanges
- Slower trading speeds
While p2p transactions can be conducted instantly once both parties have confirmed the transaction, each side of the transaction might delay the transaction for various reasons. With traditional trading, you don’t need to wait for the buyer or seller to confirm before you can move on from the transaction.
With p2p, the buyer or the seller can change their minds halfway through the transaction and decide to end it.
- Low liquidity
P2P exchanges are still relatively new and have lower liquidity than centralized exchanges. Because of this, some traders may prefer to use complete major transactions using the standard exchange.
How to get the most trades on the P2P exchange platform
- Stay up to date on market rates for crypto and set realistic prices
- Don’t make a habit of canceling transactions before completion
- Regularly monitor your ads and check newly posted ads
- Accept more payment methods to attract more buyers
- Communicate promptly and clearly with counterparties
- Exchange feedback to build your own rating
The best p2p crypto exchange development
- Binance P2P