Recently the press reported that a major South African bank plans to close the bank accounts of certain cryptocurrency exchanges in South Africa.
For most of bitcoin’s existence, the public relied on traditional bitcoin exchanges to buy and sell cryptocurrency. These exchanges typically link your bank account (e.g. credit/debit cards) to their platform and match buyers and sellers via an order book system. Then came along bitcoin peer-to-peer marketplaces like Paxful, which provide an alternative way to buy and sell bitcoin.
Paxful is a peer-to-peer marketplace (or person-to-person trading platform) that allows people to interact directly with each other to buy and sell bitcoin. Unlike traditional crypto exchanges, users don’t need a bank account to use Paxful. The platform allows users to transact with over 300 methods of buying and selling bitcoin including online wallets, gift cards, etc.
Transactions occur directly between individuals on Paxful. Buyers and sellers sign up and post their trade advertisements to buy or sell cryptocurrency at a specific price, within a certain price range and agree on predefined terms. Paxful aids the transaction by providing an escrow service to safeguard the bitcoin from the seller to the buyer when the transaction is ongoing. Paxful also offers a digital wallet for its users to store their bitcoin.
Another important difference
The fees on traditional bitcoin exchanges can stack up quite a bit. Since the exchanges act as a middleman for bitcoin trades, more fees are often charged for their services. Peer-to-peer marketplaces like Paxful, on the other hand, only charges the seller of the bitcoin as low as 0.5% depending on the payment method.
We believe peer-to-peer marketplaces are the future
With bitcoin’s original mission of financial inclusion in mind, peer-to-peer marketplaces like Paxful, aim to provide anyone, anywhere the opportunity to access the global economy through cryptocurrencies. Bitcoin has a variety of uses beyond speculation, from wealth preservation to remittance, payments and social good.