The main concept of bitcoin, when it first came out, was the peer-to-peer aspect. At the time, it was never done in the finance or money industry. But what is a peer-to-peer bitcoin exchange? How can it really change the bitcoin game? Let’s find out.
Peer-to-peer vs. traditional bitcoin exchanges
First, you have to know the difference between a peer-to-peer and a traditional Bitcoin exchange. Both forms allow you to buy and sell bitcoins, but the process is different.
Traditional Bitcoin Exchanges
Traditional bitcoin exchanges are more used and more well-known between the two. In traditional exchanges, buyers and sellers match with one another via order books. In traditional exchanges, buyers and sellers never interact with one another. This means that they don’t know who they’re dealing with. This allows traditional exchanges to have more privacy because there are no direct interactions between the two parties.
Pros: Traditional bitcoin exchanges have faster trade times. This is because of the way trades are on these platforms. Since there is a middleman completing the trade for you, trades are faster and more intuitive.
Cons: Traditional bitcoin exchanges tend to have more expensive rates. There is a middleman organizing each trade and transaction. There are fees and they pile up with this amount of work that goes to each transaction.
It is also important to note that people are running traditional bitcoin exchanges. Users run the risk of being exploited by regulatory restrictions. An example of this was when all withdrawals were frozen for a month in China. The People’s Bank of China intervened and it affected two of the largest exchanges. As a user, this is not something you’d want.
Peer-to-peer Bitcoin Exchanges
What is peer-to-peer bitcoin trading? Where does it happen? In a peer-to-peer bitcoin marketplace, buyers and sellers match with each other. This time, they carry on with the trade themselves. This means that users can set their own requirements, set their own profit, and enter the live chat. In a sense, peer-to-peer exchanges add a personalized experience to trading. This means more efficient trades on the exchange. Although peer-to-peer platforms are less used, they are rising to be one of the best and easiest way to buy bitcoin.
Pros: There are tons of payment methods on peer to peer bitcoin exchanges. This allows more variety when it comes to trading for bitcoins. Peer-to-peer platforms also offer cheaper operations due to the nature of trading. Since there is as less interference from the platform, fewer fees are implemented on the users.
On peer-to-peer platforms like Paxful, vendors can set their own prices. Transaction chats are also enabled. This gives the traders the opportunity to clarify things before finalizing a trade.
On Paxful, with its escrow service, will hold the specific amount of bitcoin in escrow vault and release once the trade is completed and both parties are happy.
Cons: It usually takes longer to trade on peer-to-peer platforms. This is due to the nature of trading. Bitcoin and fiat transactions have to come through before a trade is completed. The time often depends on the person you’re trading with.
Peer-to-peer platforms also have a steeper learning curve. Newbies will have a harder time figuring out how to use the site compared to a traditional exchange.
Choosing an exchange depends on the style you prefer. To determine your style, study each kind of platform and then see which style you prefer. Always make sure to do your research before getting into any exchange.
Peer-to-peer, the catalyst
With bitcoin’s mission in mind, peer-to-peer bitcoin exchanges popped up. Like Paxful, these marketplaces aim to give the common people the opportunity to get their hands on some bitcoins. Either for wealth preservation, investment, or trading for profit, peer-to-peer marketplaces saw the mainstream need for bitcoin and provided an easier way for bitcoin traders to connect with each other.
A good example of a peer-to-peer marketplace is Paxful. Paxful is ideal for buying and selling bitcoins because it presents a new way people can get bitcoin. It comes with the benefits of every peer-to-peer platform. These include setting your own prices and live chatting with your trade partners. If you’re buying bitcoins, you can set preferences to filter the offer list. Factors such as location and reliability of the vendor are things to consider.
Gift cards as the prime example
Gift cards are a perfect example of how peer-to-peer bitcoin trading has changed the game. It’s the most popular payment method on Paxful (among 300+ payment methods) because of how easy and safe it is. You can sell your bitcoins for gift cards at a discounted price. For example, if you’re looking to buy a new something on Amazon, you can look at the offers available for Amazon gift cards. If you’re a gamer, you can buy credits by looking at offers for PlayStation Network or Steam gift cards. You can even buy groceries by looking for Walmart gift card offers. This method of buying gift cards lets you buy and sell bitcoins in the comfort of your own home. Gift card offers come at a discounted price which makes them even more appealing.
Peer-to-peer and its benefits for society
The peer-to-peer bitcoin exchange system doesn’t only help people on an individual scale. By using the same system, Paxful’s #BuiltWithBitcoin project has helped so many people over the years. Paxful invites people for their generous donation to build something using bitcoin. Currently, Paxful’s #BuiltWithBitcoin project finished building its second school in Rwanda. The project has also provided scholarship program for female Afghan refugees.
Peer-to-peer is the future
Peer-to-peer bitcoin trading is bringing bitcoin into a new light, a more hopeful light. Not only is it easy to trade, but it can also do a lot of good for people. Peer-to-peer traders can open their business to accept bitcoin as payment using their bitcoin wallet. Also, they can trade all they want with the thousands of peer-to-peer traders out there! You don’t need to know the technicalities of bitcoin to start trading but having some information on bitcoin will always go a long way.
Not long ago, people think that bitcoin transaction are only for illegal activities. The great news is that the ratio of legal to illegal acts has now been flipped. Bitcoin is now in a great light and is ready to show the world that it has a lot of potentials to help the world.
Peer-to-peer finance is holding the torch for an idea. The idea of a universal currency that is accessible by everyone. Peer-to-peer is the difference we can all make to show that bitcoin is on the right path. Although the currency isn’t completely mature, it’s going in the right direction.