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

By August 28, 2020May 9th, 20233 minute read

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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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.

What Is Bitcoin Used For?

Bitcoin was created as a means of sending money over the internet. The digital currency was designed to be a non-centralized alternative payment system that could be used in the same way as traditional currencies. Bitcoin is being used by an increasing number of businesses and individuals. This includes establishments such as restaurants, apartments, and law firms.

How Can I Get Bitcoin?

To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process. Following that, you'll be sent to the Funds & Transfers section, where you can begin depositing Bitcoins into your wallet. You may also use INR to fund your WazirX Bitcoin wallet and then use it to purchase Bitcoin.

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.

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.

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."

What Is Bitcoin?

Bitcoin is a decentralized digital currency that may be purchased, traded, and traded without intermediary like a bank. Bitcoin is built on the blockchain, which is a distributed digital ledger. Wei Dai suggested a new kind of money that relies on cryptography rather than a central authority to oversee its production and transactions on the cypherpunks mailing list in 1998. Bitcoin was the first application of that notion. In 2009, Satoshi Nakamoto sent out the first Bitcoin specification and proof of concept to a cryptography mailing group.

How Can I Convert Bitcoins To Cash?

Bitcoin may be converted to cash in various ways, including crypto exchanges, Bitcoin ATMs, Bitcoin Debit Cards, and Peer to Peer Transactions. You may do this by using Bitcoin exchanges like WazirX. You may also sell Bitcoin for cash faster and more anonymously through a peer-to-peer marketplace.

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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