Cryptocurrency is the new medium of exchange in this modern era. Though it has not yet replaced the real money to a greater extent, many people have moved towards the use of such virtual currency methods and P2P cryptocurrency exchanges are becoming more mainstream in order to buy in or trade in this new age of money.
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Certainly, new technologies are emerging each day and sometimes there is quick adoption by consumers, but more often than not, it takes a while to mainstream a new idea and adopt such technologies into their daily lives. The time is coming though! Money has always been a matter of major concern, and new business strategies are replacing traditional ones. We see this with currency exchanges as well. Below are some of the bullet points that you will need to understand for P2P cryptocurrency exchanges and why you might want to familiarize yourself with it now.
What is Cryptocurrency?
According to blockgeeks, cryptocurrency is an “internet-based medium of exchange which uses cryptographical functions to conduct financial transactions.”
What Does P2P Cryptocurrency Exchange Mean?
Most of the trades have third-party involvement for the completion of the trade but a P2P exchange does not include any third party involvement at all. Remember, P2P is peer-to-peer, which removes the middle man so the cryptocurrency trade or exchange takes place directly between the participants. This exchange is software driven, so technically no fees are charged, however, it is important to note that sometimes the software developers add a small fee to help cover their cost. In any event, this exchange is the main feature for the decentralized nature of cryptocurrency.
Why Choose A P2P Exchange?
There are no boundaries between participants when carrying out a transaction. Apart from this, this type of transaction is safe and you don’t need to worry about privacy issues at all. Again, one of the best features is that there are very low to no transaction fees at all. This depends on what wallet you’re using, but in essence, for a direct P2P transaction, all you have to do is to decide the terms of exchange and make it happen.
How Does It Happen?
As stated earlier, there is no centralized authority for such an exchange. At first, both the participants are connected with each other through software on the P2P exchange. This software will act as a marketplace for buyers and sellers. The biggest detriment is perhaps sending to a wrong address or connecting with a shady character for the transaction.
Placing An “Order” To Sell
To start a trade, both the participants must have the matching order terms. The software conducts this match. If you are a seller and want to sell your Bitcoin, then you can easily create an “order” which will appear in the “order book.”
Placing A “Buy Order”
On the other hand, the buyer will place the “buy order” with all the desired terms. You no longer need to go through all the orders placed by the buyers. The software matches the terms of various orders. It then connects those participants who have the matching terms. Now trade settlement is quick and easy without the need for an intermediary.
Where Do I Go?
It’s very important to research the P2P exchanges where you wish to buy in, sell or trade cryptocurrency.
Here are three P2P cryptocurrency exchanges that have excellent security ratings. Note: They may have low transaction fees, but often do not have deposit or withdrawal fees.
BISQ – a peer-to-peer open sourced application to buy and sell your cryptocurrency.
PAXFUL – boasts that they have more than 300 ways to buy Bitcoin.
LocalBitcoins – buy and sell Bitcoins near you.
Have you tried peer-to-peer exchanges before? What was your experience and which service did you use? We’d love to hear from you.
Disclaimer
Content provided by CryptoTraderNews is for informational purposes only, and should not be construed as legal, tax, investment, financial, or other advice. All information is of a general nature. As always, there is risk with any investment. In exchange for using our products and services, you agree not to hold CryptoTraderNews Pro, its affiliates, or any third party service provider liable for any possible claim for damages arising from decisions you make based on information made available to you through our services.
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