Peer to Peer P2P transaction in cryptocurrency
Peer to peer is a word that is popular in the financial world. And for crypto enthusiasts whose country’s government has banned the trading of cryptocurrency in their country, the word “Peer to Peer” is not strange.
Nigeria has the third-largest transaction volume of Bitcoin in the world after the USA and Russia. The transaction and adoption skyrocketed despite the ban of cryptocurrency by the Apex bank in the country, the central bank of Nigeria. The secret is the adoption of peer to peer by the teaming young digital population.
Peer-to-peer is the medium of transferring money via digital means from one person to another through an intermediary, typically referred to as a P2p application.
There are many exchanges that allow the use of P2P as a means of exchange, examples are Binance, Paxful, and Coinbase.
How does peer-to-peer work?
Peer-to-peer works in a networking kind of way. Joe is looking to transfer $50 worth of cryptocurrency to his friend Yolanda in South Africa. If they belong to the same cryptocurrency exchange platform, it’s easier for the system to link them up and allow successful transactions.
What are Cryptocurrency Exchanges?
Just like the FIAT currencies, where the bank stores your money. That is what exchanges do in the cryptocurrency system, they help cryptocurrency enthusiasts save their coins and carry out transactions. The exchanges allow different means of carrying out transactions such as using ATM cards, wire transfers, and peer-to-peer methods.
Advantages of Peer-to-peer transaction on cryptocurrency exchanges
- Low transaction Fees
Compared to traditional banking platforms, P2P transactions on cryptocurrency exchanges have low transaction fees. One of the incentives that cryptocurrency offers to its enthusiasts is the low cost of transactions.
2. Fast Transaction
Carrying out a P2p transaction on cryptocurrency exchanges is faster and has less bureaucracy like the traditional banking platforms, especially when it comes to international transfers. Sometimes traditional banking can take days and this long waiting period is very frustrating while that of cryptocurrency exchange is almost instant.
3. Risk Reduction
In a world where cybercrime is the order of the day, it is easier to protect your funds and avoid scammers’ by trading on a P2p cryptocurrency platform. Most p2p platform exchanges ensure that the transactions are encrypted.
The only issue that is likely to occur is if you are careless and send your cryptocurrency to the wrong wallet address, the probability of recovering your fund is next to zero.
Technology is a powerful tool that is shaping our world. The P2p transaction has ensured that the decentralization purpose of cryptocurrency is maintained by providing a way for cryptocurrency enthusiasts to convert their money to FIAT, when needed, regardless of the position of the government.