Bitcoin—this term caused a huge buzz in the finance and technology industry back in 2009 when an unknown Satoshi Nakamoto brought it to the table. Many people got more curious about what it is and how it works, especially those folks who are deeply engaged with their knowledge and enthusiasm in the advancing technology.
For those who are trying to get the hang of cryptocurrencies or Bitcoin to be specific, one of the must-knows is its very distinct peer to peer (P2P) feature.
In fintech, it is defined as sharing or giving of information, files, or assets through specialized platforms or websites, which allow such transactions or activities to happen.
Now the question is “How do peer to peer Bitcoin exchanges or trades work?” Bitcoin P2P exchanges, as previously mentioned, happen in some specialized platforms. In these platforms or marketplaces, users and traders are able to do their Bitcoin transactions—may it be to buy Bitcoin or sell it.
Traders create their own trade so they decide what requirements to set, how much profit they would like to earn, and other more specific grounds that can be included in the trade conditions.
P2P exchanges allow the seller and the buyer to have a real-time interaction through a live chat where they can have a further discussion. This also makes this trade option more personalized and efficient unlike the traditional form which doesn’t allow interactions between the people doing the deals.
While this trade option seems to be more convenient than traditional, P2P trades usually takes longer, for the span usually depends on the person you’re trading with. One of the known P2P platforms, Paxful, allows their users to set their own prices.
Trades happen with its escrow service, which holds a precise amount of Bitcoin in the escrow vault. When both parties are satisfied with the trade and complete it, that’s the only time when transacted Bitcoins will be released.
Gift cards are the most popular in terms of P2P exchanges, because you can sell your Bitcoins for these. They come at a reduced cost that makes them more enticing.
Thinking of using P2P platforms for your Bitcoin exchange? Be sure to do your thorough research and learn every step of it, may it be for your investment, trading, or savings.