Why Cryptocurrency Traders are Longing for More Peer to Peer Crypto Exchanges?
P2P crypto exchanges has been a growing in trend where more traders are choosing for when compared to the centralized counterparts. P2P crypto exchange gives surprising and have overcome the shortcomings of centralized exchanges, including holding users’ funds, security issues due to centralization, manipulation of various aspects like prices, faking volume, lack of privacy, and many more.
P2P exchanges script allows traders to interact with each other in online exchange platform directly to buy and sell crypto coins. All they need to do is sign up on a website, either a P2P exchange, platform, or marketplace, and post their trade advertisements to buy or sell crypto coins at specific prices or within a particular price range and, most importantly, in a predefined location.
Traders are opted for P2P platforms over their centralized counterparts since they provide more payment options and withdrawal options, offer faster trades in many cases, and provide greater privacy with some of the best requiring no KYC. Most importantly, in P2P there is no central authority or middleman for controlling user funds.
P2P has Many Benefits Over Centralized Exchanges
A platform like localBitcoins allows individuals to trade crypto for fiat in over 248 countries and 8223 cities. This creates a global marketplace where traders are flexible to trade with local, domestic, and even international counterparts. Today you could be buying crypto from someone in Japan and the next day selling it to another in Venezuela. The possibilities here are limitless.
Another awesome thing about P2P platforms is they allow traders to deposit and withdraw funds in many ways compared to centralized exchanges. A platform like Paxful allows over 350 ways to buy and sell BTC. This has seen its popularity grow and currently has over 3 million registered users. With more users, their trading volume has also increased, with over $1.6 billion traded in 2019 alone.
Fees on P2P platforms are quite minimal due to their cheap operations. These platforms are run by software; therefore, they incur little to no corporate overhead. In contrast, centralized platforms are run by people, and these people need to be paid for work done.
Privacy is critical within cryptocurrencies, and with growing regulations from governments, many platforms have been forced to comply with AML and KYC rules. For traders that want to remain anonymous P2P exchanges like NeuronEx don’t ask for KYC.
Thanks to fourth generation blockchains like Neuronchain, with high throughput capacity, a platform like NeuronEx can facilitate the exchange of multiple currencies. With the launch, there will be available NRON, BTC, ETH, LTC, XRP, EMC, DASH, DOGE, and near to the middle of August will be added EOS, BCH, BSV, EURT, USDT, CNHT, XAUT.
Other Key Issues
Security remains a crucial issue, especially with centralized exchanges. A central point of authority means a central point of failure. Over the past year alone, over 12 exchanges were hacked with crypto worth over $292,665,886, and around 510,000 user logins stolen. It’s different for P2P exchanges since they don’t hold coins for their users. All they do is connect buyers and sellers, allowing them to deal directly, and this makes them much safer.
P2P platforms are transaction censorship resistance, and this makes them attractive to traders who want to avoid government-imposed restrictions. Since people run centralized exchanges, they are vulnerable and can easily be exploited by governments. Not long ago, the People’s Bank of China forced two of the largest exchanges in China at the time to freeze all BTC withdrawals for a month. Such a scenario is quite unpleasant to any trader.
On the other hand, P2P marketplaces are practically immune to government interference since they lack a central point of authority that can be coerced. Still, it’s possible to force some parts of these platforms to cease operation, but the rest of the system will remain unaffected.
How Disputes Are Resolved
Yes, P2P exchanges are fantastic for traders that want more privacy and the many other perks they offer, but since they lack authority, how do they prevent fraud? Various P2P platforms employ different solutions to this problem. Some use a reputation-based system where traders are rated after every trade, and this tells if they can be trusted or not.
This information is visible to anyone using the platform and can be seen before a trade is initiated. If a dispute arises, let’s say a buyer sends money, and the seller fails to release the crypto coins. An arbitrator appointed by the community will listen to both sides of the story and resolve the issue.
Some P2P platforms will use deposits to compensate the victim of fraud and pay for the arbitrator’s services. There is also a reputation system for these arbitrators ensuring they don’t abuse their powers.
The development of Bitcoin led to the birth of centralized exchanges, which acted as gateways into the cryptocurrency world. A sort of interface between the real world and the crypto world was needed given the few businesses that accept cryptocurrencies as a mode of payment. The downside of having these centralized platforms is unlike cryptocurrencies; companies run them. They employ staff to oversee and manage all interactions between users, where there are disputes they serve as arbitrators and, in the process, collect fees. This leads to several disadvantages we have mentioned above.
To resolve these issues, P2P platforms have evolved as people involved with cryptocurrencies have felt the need to disrupt this market and offer decentralized solutions that are run by software and not people. Now, more P2P platforms are coming up, and with them gaining popularity among traders, we don’t see this trend ending anytime soon.
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