P2P Crypto Exchange
Crypto space has become an investment option at which investors showcase their assets in this digital era. The evolving market/industry is discovering creative techniques to keep users engaged and ergonomic.
As soon as the crypto space evolved, the number of centralized crypto exchanges increased rapidly. These exchanges make crypto assets effortlessly available there is a single point of failure. Besides, from the part that these cryptocurrency exchanges are run by centralized organizations that act as intermediate. Thus, even if the asset trades in decentralized qualities, the tool used to trade is centralized. It beats the entire meaning of the concept.
Now, here peer-to-peer exchange comes into play. A P2P crypto exchange is a decentralized form of exchanging crypto tokens. It provides traders with a marketplace where they can directly connect without third-party involvement. Investors from all over are eager to trade in this rapidly expanding market.
Benefits Of P2P Crypto Exchange
These are the benefits of a P2P crypto exchange, which has led to an increase in the use of P2P crypto exchange.
Lower transaction fees
Centralized exchanges involve a third party, an intermediate such as asset custodians who need to get paid. Besides this, these crypto exchanges need staff to run the operations. All this adds up to the operational costs. As a result, the user ends up paying these costs as transaction fees. However, P2P crypto exchange development eliminates intermediate and automatically matches the traders. There is a cost associated with the transaction. Thus, P2P exchange users pay less than traditional exchanges.
A centralized exchange requires traders to hand their digital assets to the exchange for trading purposes. As a result, the security of funds is complete with the exchange. But now and then, centralized exchanges lose user funds to hacker attacks.
On the other hand, P2P exchanges do not hold funds. It is because, in P2P exchange, you only connect with traders who are not required to transfer their assets. Traders have complete control over their digital assets. And thus, users ensure the security of their funds.
A P2P platform is an open setup. As a result, it might become difficult for the users to trust each other. P2P exchanges incorporate solutions such as management, face-to-face meetings and mandatory deposits to overcome this problem and prevent fraud.
The management system allows traders to find a trustworthy buyer or seller. On the other hand, the system asks both parties to deposit a certain amount of crypto funds. If the trade goes well, the funds are released. Otherwise, these are used to compensate the trader at a loss due to misconduct trade.
Convenient Payment Terms.
You can deposit and withdraw funds without any bank account or payment card. The P2P platform offers additional payment methods such as International transfers, top-ups, gift cards etc. The payment methods depend upon the payment service provider.
Global Transaction Support
Some countries are levying strict laws on crypto exchanges to work in their jurisdiction. As a result, crypto fanatics are unable to trade in such countries. In such cases, the trader can utilize gift vouchers and other popular wallet money to buy and sell crypto assets. Users can use P2P exchange that enables fast, efficient and cost-effective transactions.
Downsides of P2P Crypto Exchange Development
Before buying P2P Exchange software, specifically read through some challenges that a P2P exchange platform might face.
- Slow Trade Speed: For a trade to complete in a P2P exchange, the platform needs to find a seller and a buyer. If you find an exact match, then the business can go through. As a result, the medium leads to longer times. To overcome this problem, you need to have more traders so that the possibility of finding the counterparty becomes easy.
- Low Liquidity: P2P is not in demand with professional traders who seek fast transactions to make deals. However, P2P exchanges might take time to build liquidity & due to this transactions might get delayed. These exchanges can be valuable to people interested in advantages such as privacy, security, and multiple payment options. However, the solution to this problem is to attract more and more traders.
What is the future of P2P Exchange?
Blockchain technology is about decentralization due to its advantages like supporting multiple currencies, security and better privacy solutions. Even though there are some limitations, with the evolution of technology, the P2P exchange is all set to become the future of crypto trading.
If you are looking to establish a business to build a P2P crypto exchange, Blockcoders can help. We provide white-label P2P crypto exchange solutions and can help you quickly launch your platform into the market. We can build a customized feature-packed platform which can stand out in the market and fulfill your business requirements.
Schedule a demo with us of our white-label P2P exchange platform and connect with us to share your business requirements for a custom exchange.