Business Technology

Everything you need to know about a P2P exchange platform

Be it traditional fiat money or cryptocurrencies, exchanges are the focal point where investors gather to buy or sell their assets. Cryptocurrency exchanges have tremendously evolved over the recent years, and are currently widely prevailing in the market. Many entrepreneurs have become millionaires by launching their own cryptocurrency exchanges, and this evoked many new entrepreneurs to aspire to launch their own exchange platform. 

With the constantly growing market volume and the constant furtherance of technology, crypto exchanges also evolved into new forms and new use-cases. One such novel crypto exchange platform that is currently the most trending and most preferable among potential investors is the P2P exchange platform. In this article, we are going to discuss all about P2P exchanges. If you’re a novice crypto entrepreneur, let’s begin with what a p2p exchange platform is. 

What is a P2P exchange? 

P2P exchange is the abbreviation for peer-to-peer exchange. It is a completely decentralized platform that allows traders to directly exchange between themselves without involvement from any third party to execute trades. P2P exchanges, unlike any other exchange, run not by people, but entirely by a blockchain-based software. 

How does a P2P crypto exchange work? 

As mentioned earlier, P2P exchanges do not involve any intermediary to execute transactions. Unlike a centralized exchange where the orders are matched via an order book, P2P exchanges connect the buyers and sellers directly with one another to negotiate their own terms and conditions and conduct direct transactions. P2P exchanges work based on smart contracts and an escrow system.  Smart contracts help with the automation of transactions once the involved parties consent to the terms and conditions. And the escrow system holds the funds until the buyer and seller confirms the payment, and releases it after it’s done, to avoid any breaches. 

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There are several advantages involved with a P2P exchange that attracts global potential investors towards the exchange. Let’s take a look at what they are. 

Advantages of a P2P exchange

  • Enhanced security 

P2P exchanges operate based on a decentralized blockchain network which automatically links the users’ KYC information with the blockchain database. This eliminates the chances for identity theft or any other fraudulent activities. Also, blockchain completely safeguards the users’ and the asset information with a chain of blocks encrypted with cryptography. 

  • Enhanced Privacy 

As P2P exchanges operate without involving a third party, and allow traders to directly exchange among themselves, they ensure complete user privacy. Also Blockchain provides user anonymity and its immutable nature ensures more security to the users and the entire platform. 

  • Faster Globalized transactions

P2P exchanges enable quicker, more efficient, highly-secure, cost-effective global transactions when compared to a traditional exchange platform. In a P2P exchange, any trader from anywhere around the world, even from countries where usage of cryptos are not allowed, can conduct transactions at any time, without any hassle in this platform. This is also a major reason why it is gaining huge traction among investors. 

  • Censorship of transactions 

As we discussed earlier, in a P2P exchange, all transactions happen on blockchain’s distributed public ledger. This eliminates the chances of fraudulent activities. Also, the whole transaction information is distributed across the network which offers user transparency, and the involved parties can easily track or trace any information they require. 

  • Cost-friendly operations 

When there is too much involvement from third parties, the operation fee will automatically increase. Whereas in the case of a P2P exchange, there is no such involvement from any intermediary, hence the transaction costs are nominal to almost zero depending upon each exchange platform. 

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Now with demand and competition for P2P exchanges at its peak, it would be profitable to create a solid P2P crypto exchange software to sustain and gain increased reach among the existing competitors. For that, it is essential for you to know the key features that you shouldn’t miss integrating. Let’s find out what they are. 

Primary features for a P2P exchange software

  • Multiple cryptocurrencies and multilingual support
  • Robust Trade Matching Engine 
  • Automated KYC/AML verification
  • Multi-currency crypto wallet
  • Crypto swapping option
  • Cutting edge blockchain technology and smart contracts integration
  • Admin Backend panel 
  • Payment gateway integration
  • Preferred trading option
  • Multi-Factor Authentication
  • Multi-layer security integration

What is the best way to create your own P2P exchange software? 

There are two ways to go about creating your P2P exchange software. The first one is building the platform from scratch. This involves a fair amount of procedures that will consume a lot of time, money, and requires quality technical support. For the widely prevailing demand in the market, this will not be a viable option.  

The better alternative would be to obtain white label P2P exchange software solutions. Whitelabel software is a ready-to-use software built by qualified experts and is 100% reliable, and is available at cost-effective prices. It will help your exchange platform get cracking in the market, within almost next to no time. Whitelabel exchanges also offer wider customization scope and you can structure your exchange according to your desired preferences. To achieve a robust white label P2P software, conduct ample research, choose a well experienced P2P exchange development company, and enjoy million-dollar profits.

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Mia Perla
Mia Perla is a Market Research Analyst at Infinite Block Tech. I'm enthusiastic with learning new advancements in the crypto and blockchain market.