One of the cardinal reasons why peer-to-peer exchange (P2P) came into place is go give everyone the freedom to buy and sell cryptocurrency by removing the limitation that might have been put place by the government authorities.
As if the brain behind P2P had seen the future or possibly what might come from the government, the world experienced several anti-crypto law and policies from Nigeria to China and several countries around the world.
The anti-crypto policies were a blessing in disguise because it gave rise to the number of P2P exchanges.
So, how does it work and what are the advantages of using a crypto exchange?
What is Peer-to-peer exchange?
P2P is a decentralised cryptocurrency exchange platform that brings together buyers and sellers which allows them to trade directly with one another without a third party. What makes p2p unique is the fact that middlemen are eliminated. It eliminates government control, it removes government policy that tries to gag their participation.
For instance, in February 2021, the Central Bank of Nigeria (CBN) banned financial institutions from allowing crypto enthusiasts to fund their crypto wallet their bank accounts.
Within a week, the crypto traders moved massively to embrace P2P platforms to continue their crypto trading activities.
How does it work?
Mr Cosmos has 10 bitcoins to sell, he signs up on a P2P platform where he places what he has to sell, Mr Innocent who wants to hold some BTC shows interest and they open a trade and connect directly.
Benefits P2P To Crypto Traders
- Security
- Freedom to set your price
- Low cost transaction fees
- Flexible and multiple payment methods
- Privacy protection
Security
The security measure put in place by P2P exchange ensures that traders are protected and are able to trade in a secure platform since there is no third party.
Freedom To Set Your Price
There is no unified price which makes it possible for users to trade at preferred prices. Most of them allow users to fix their trade advertisements.
Low-Cost Transaction Fees
There is low transaction fees. In fact, the number of P2P crypto exchanges has brought more competition into the market, thereby making transaction fee more competitive.
For instance, there is an exchange that charge the seller low fee while the buyers are charged zero fee.
Flexible And Multiple Payment Methods
When you use a platform that has close to 200 payment methods, there is no way you won’t find the one that would work for you.
The seller chooses how they want to be paid while the buyer also chooses how they want to pay the seller.
In fact, some of them now have payment method like PayPal among other payment methods.
This is one of the reasons why Nigerian crypto users overwhelmingly embraced peer-to-peer exchanges after the CBN’s decision to restrict their trade in early 2021. Nigeria is one of the crypto adoption countries at the time of this publication, restriction out in place by the apex bank indirectly was a blessing in disguise.
Privacy Protection
Peer-to-peer exchanges do not collect information about buyers and sellers that’s funding your wallet via your online banking is completely eliminated so that no one collects your data.
Featured image credit:
- Austin Distel of unsplash.com