What are the Differences Between Peer-to-Peer and Regular Bitcoin Exchanges?

By August 28, 2020March 28th, 20223 minute read
Peer-to-Peer and Regular Bitcoin Exchange

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.

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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

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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 Many Bitcoins Will Ever Be Created?

The source code of Bitcoin stipulates that it must have a restricted and finite quantity. As a result, only 21 million Bitcoins will ever be generated. These Bitcoins are added to the Bitcoin supply at a predetermined rate of one block every ten minutes on average. The supply of Bitcoins will be depleted once miners have unlocked this number of Bitcoins. It's possible, however, that the protocol for Bitcoin will be altered to allow for a higher suppl

How To Create Bitcoin Account?

Firstly, Go to the WazirX website and sign up. Then, a verification mail will be sent to you. The link sent via verification mail would be available only for a few seconds so make sure you click on the link sent to you as soon as possible, and it will verify your email address successfully. The next step is to set up security, so select the most suitable option for you. After you have set up the security, you will get a choice to either proceed further with or without completing the KYC procedure. After that, you will be directed to the Funds and Transfer page, where you could start depositing Bitcoins to your wallet. You can also deposit INR and then use it to buy Bitcoin for your WazirX Bitcoin wallet.

Is Bitcoin Cash A Good Investment?

Bitcoin Cash is a hard fork of Bitcoin formed in 2017 to address Bitcoin's scalability and challenges. Bitcoin Cash seeks to make global transactions faster, cheaper, and more secure. Bitcoin Cash is now accepted by thousands of online and offline businesses all over the world. Studied correctly, Bitcoin Cash may be an investment worthy of consideration.

How Does Bitcoin Technology Work?

The blockchain is the foundation of Bitcoin. It is a decentralized, distributed ledger that tracks the provenance of digital assets. The data on a blockchain can't be changed by design, making it a real disruptor in industries like payments, cybersecurity, and healthcare.

Who Created Bitcoin?

Bitcoin is the first application of the concept of "cryptocurrency," first articulated in 1998 on the cypherpunks mailing list by Wei Dai, who proposed a new form of money that relies on cryptography rather than a central authority to manage its creation and transactions. Satoshi Nakamoto published the initial Bitcoin specification and proof of concept on the cryptography mailing list in 2009. Satoshi exited the project in late 2010, with little information about himself available. Since then, the community has evolved, with numerous people working on Bitcoin. Satoshi's anonymity has sparked unfounded fears, many of which may be traced back to a misunderstanding of Bitcoin's open-source nature.

Is Bitcoin And Cryptocurrency The Same Thing?

Bitcoin is a cryptocurrency that was designed to facilitate cross-border transactions, eliminate government control over transactions, and streamline the entire process without third-party intermediaries. The absence of intermediaries has resulted in a significant reduction in transaction costs. Satoshi Nakamoto, the creator of Bitcoin, created the first cryptocurrency in 2008. It began as open-source software for money transfers. Since then, plenty of cryptocurrencies have emerged, with some focusing on specific fields.

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.

How Many Bitcoins Are There?

There are 18,730,931.25 Bitcoins in circulation as of June 2021. The total number of Bitcoins that would ever be there is just 21 million. On average, 144 blocks are mined every day, with 6.25 Bitcoins per block. The average number of new Bitcoins mined every day is 900, calculated by multiplying 144 by 6.25.

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.
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