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Two kinds of bitcoin and crypto exchange platforms exist within the cryptocurrency ecosystem – regular exchanges and their peer-to-peer counterparts.
All transactions (fiat-to-crypto, crypto-to-crypto, crypto-to-fiat) are powered by order books on regular bitcoin exchanges. The platform’s algorithm anonymously matches buyers and sellers based on the value of buy/sell orders.
The story is different for peer-to-peer bitcoin exchanges. Unlike the usual crypto trading platforms, transacting parties on peer-to-peer platforms connect directly and fulfill trading deals.
This is a general overview of regular and peer-to-peer bitcoin exchange platforms, but the two are different on a few more levels. Let’s examine the differences one by one.
[wd_hustle id="4" type="embedded"/]Time Required To Complete Trades
The greatest advantage associated with usual bitcoin and cryptocurrency exchanges is time. Since buyers and sellers interact through order books, transactions happen in a jiffy.
On the other hand, it takes quite some time to complete trades on peer-to-peer bitcoin exchanges. Why? Because transfers happen only after peers ensure complete satisfaction wrt genuity of their transacting counterparts.
Also, transactions (involving both fiat money and cryptocurrencies) are considered complete when peers receive the agreed funds in their respective accounts.
Information Of Trading Counterpart
Regular bitcoin exchanges by their very design provide anonymity to traders. So, transacting parties don’t get to know anything about their peers except the order value.
Although, we at WazirX have successfully kept the peer-to-peer nature of cryptocurrency transactions by developing the world’s first P2P engine. Also, traders can seek peers in the official WazirX Discuss Telegram group to fulfill their crypto-USDT trades.
Trading on a peer-to-peer bitcoin exchange begins with an ‘exchange’ of personal information between traders. Peers share name, location, bitcoin/crypto wallet addresses to initiate transactions.
Sometimes, traders even conduct face-to-face meetings to ascertain the source of funds, past crypto trading experience, etc. Few platforms have chat functionalities to help trading peers clarify things before executing transactions.
Other Differences
Besides the above there are few more points of distinction between regular and peer-to-peer bitcoin exchanges.
Trading on usual crypto exchange platforms happens based on digital asset prices generated through the value of trades in order books. On the contrary, users of peer-to-peer platforms can set their own rates to execute a deal.
Very few understand the functionality of peer-to-peer trading platforms. The customer journey can be long and tiring for a new user.
Whereas, with regular bitcoin exchanges, it’s just a matter of setting up an account and finishing a few steps to become eligible for trading.
Trading on peer-to-peer bitcoin exchanges can involve a substantial number of fraudulent incidents as there is no KYC procedure involved.
Dispute resolution could take longer times, with some disputes remaining unresolved. Users are responsible for the security of their funds.
In an incident of fraud or malicious activity, regular bitcoin exchanges can help restore funds, and track the source of the attack/theft due to appropriate KYC/AML procedures.
We try and do our bit in keeping cryptocurrency and fiat funds of users safe. And how?
By performing regular security audits to ensure that the platform is secure enough to buy and trade crypto assets.
To open an account on WazirX check out this link.
Also you can download the app and Start Trading Now!
Android App – WazirX – Buy Sell Bitcoin & Other Cryptocurrencies
iOS App – WazirX
Frequently Asked Questions
What Is The Meaning Of Bitcoin?
Bitcoin is a type of cryptocurrency that was first introduced in January 2009. It is invented based on the key concepts and notions presented in a whitepaper by Satoshi Nakamoto, a mysterious and pseudonymous figure. The name of the individual or people who invented technology is yet unknown. Bitcoin promises reduced transaction fees than existing online payment methods, and a decentralized authority controls it, unlike government-issued currencies.
Is Bitcoin A Good Investment For The Future?
Some investors are afraid of the risks or devastation, but others are very eager to pursue the possibility of profit from a Bitcoin investment. A Bitcoin investment is similar to stock investing, except it can be more volatile.
Is Bitcoin Trading Is Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
Is Bitcoin Mining Free?
Bitcoin mining isn't free, but it can be tried on a budget. Bitcoin mining is an essential part of the blockchain ledger's upkeep and development and the act of issuing new Bitcoins. It is accomplished by the use of cutting-edge computers that tackle complicated computational arithmetic problems. The effort of auditor miners is rewarded. They're in charge of ensuring that Bitcoin transactions go off without a fuss and that they're legal.
How Bitcoin Mining Works?
Bitcoin mining is a crucial element of the blockchain ledger's upkeep and development and the act of bringing new Bitcoins into circulation. It's done with the help of cutting-edge computers that solve exceedingly challenging computational arithmetic problems. Auditor miners are rewarded for their work. They're in charge of ensuring that Bitcoin transactions go through smoothly and legitimately. This standard was established by Satoshi Nakamoto, the founder of Bitcoin, to keep Bitcoin users ethical. By confirming transactions, miners assist in avoiding the "double-spending issue."
Is Bitcoin Safe And Legal In India?
In 2020, the Supreme Court of India lifted the RBI’s restrictions on cryptocurrencies. According to the Supreme Court, the existence of Bitcoin or another cryptocurrency is unregulated but not unlawful. The verdict has greatly aided the world of digital money in the country. To put it another way, investing in Bitcoin is perfectly legal, and you may do so through various apps and traders.
How To Convert Bitcoin To Cash?
There are many ways of converting Bitcoin to cash, such as crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, Peer to Peer Transactions. You can use cryptocurrency exchanges such as WazirX for this. Unlike typical ATMs, which allow you to withdraw money from your bank account, a Bitcoin ATM is a physical location where you may buy and sell Bitcoins using fiat currency. Several websites provide the option of selling Bitcoin in return for a prepaid debit card that may be used just like a standard debit card. You can sell Bitcoin for cash through a peer-to-peer platform in a faster and more anonymous manner.
Can Bitcoin Be Converted To Real Money?
Crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer Peer Transactions are all options for converting Bitcoin to cash. This can be accomplished by using Bitcoin exchanges such as WazirX. A Bitcoin ATM is a real place where you may purchase and sell Bitcoins with cash, unlike standard ATMs that allow you to withdraw money from your bank account. Many websites provide the option of purchasing Bitcoin in return for a prepaid debit card that works similarly to a standard debit card. Through a peer-to-peer marketplace, you may sell Bitcoin for cash faster and more privately.
What Is Meant By Bitcoin?
Bitcoin is a digital currency that was initially released in January 2009. It is based on ideas offered by Satoshi Nakamoto, a mysterious and pseudonymous figure, in a whitepaper. The name of the person or individuals who invented technology has not been revealed. Bitcoin promises lower transaction fees than other online payment systems, and unlike government-issued currencies, it is decentralized.
Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
