What is the P2P Trading Exchange & its work and the Benefits of a P2P Crypto Exchange? A P2P is a Peer-to-Peer trading exchange used for exchanging cryptocurrencies from one network member to another directly. The term itself suggests an intermediary-less trading platform for secure transactions of coins and other digital assets. A P2P trading exchange is especially used when users do not want to get any influence from a third party for constituting trade through various mechanisms.
In terms of traders, different users from all over the world add their value into a single liquidity pool and draw money from it. But the only thing that differentiates a centralized system from this decentralized mechanism is no influence from a third party like a bank or broker. Due to the installation of the blockchain mechanisms the system has become more and more secure and usable.
So, before jumping over the development part you must understand why you need a decentralized P2P exchange system.
Essential Benefits of a P2P Crypto Exchange A P2P crypto exchange is a significant trading engine that is used widely to constitute trading efficiently:
Lack of Intermediaries: When using a conventional exchange there was a lack of a secure system, which means banks and brokers had access to your transaction history. This is why in P2P
exchange no intermediary can look into your wallet and transactions without your knowledge.
Security Just because of the installation of blockchain technology the transactions officially become secure and strict. Thus, when you enable the process of transaction every channel becomes secure and the buyer and seller are also verified over the network. Also, the transactions are held with an escrow which releases the amount only when the buyer and seller confirmation is accepted and verified.
Anonymous Unlike conventional methods of exchange, a P2P exchange platform prevent the collection of user data. This is done in order to trespass any occurrence of defaults in payments by the integration of AML/KYC methods. This also allows all the parties to transact money and maintain the privacy of their system.
Ratings A P2P exchange allows for the evaluation of the seller after the completion of each transaction through a process of rating management. This helps other users to identify genuine sellers and trust them with their money. The ratings also allow an individual to choose the most reliable users.
No Commission By using a P2P exchanger traders won’t have to pay the fees of the transaction, and this is why they can save a lot of money. Whereas sellers need to pay a minimal fee for selling a currency. The transaction charge does not exceed 1% of the total amount to be charged.
Convenient Payment Methods The most advantageous method of payments is imposed in a P2P trading exchange. That means you can add and withdraw money hassle-free and store them for longer purposes. Users can do international transactions, send gift cards, and even do phone top-ups etc.
How Does a P2P Trading Exchange Work? A P2P is a Peer-to-Peer direct exchange service facilitated by the blockchain network whereby two individuals exchange directly with each other. Here, the use of intermediaries is not observed which allows for secure exchange. Understand here, the working of a P2P trading exchange:
The seller will decide the amount and quantity of cryptos for exchange.
The seller will then place the order on the platform, after which the amount gets stored in the order book.
The buyer will place the buying order simultaneously from the other side, and the requirement will get listed in the order book.
If the buyer-seller order matches, the P2P exchange will connect the traders directly.
Now, the traders can negotiate for their transactions and go on for the completion of transactions.
Wrap Up For your requirement, we found all the possible ways that can harness your knowledge about the P2P exchange platform. If you are new to the concept of cryptocurrency and need to develop cryptocurrency software then you must hire Awapal Solutions. This is the best exchange platform development company in the USA and follows trending technologies for secure development. You can get your application development from them hassle-free and on time.
Reference Url:
https://medium.com/@awapalsolution/what-is-the-p2ptrading-exchange-88d9d7a4ecb8