In recent years, the popularity of cryptocurrencies has grown and grown. It all led to the creation of several types of cryptocurrency exchanges. One of the most popular methods that gained a lot of significance is P2P crypto exchanges.
It gained a lot due to its unique features and being a decentralized method of exchange. In this article we will go over all the differences between the exchange method and more traditional exchanges.
The Basics of P2P Crypto Exchanges
A P2P crypto exchange is a platform where you can interact with buyers and sellers directly without any intermediaries as the name suggests. P2P stands for peer-to-peer exchange, so you can avoid any person or authority in-between the entire exchange.
All buyers and sellers can create and post orders themselves, without the need for a third-party. P2P crypto exchanges are popular because they allow for a lot of anonymity when transactions are conducted. You can use it to trade cryptocurrencies in order to play live dealer blackjack games on SlotsLV, for example. Once you exchange your fiat for digital assets, you can connect your wallet to the casino platform, utilizing the coins to make deposits on the account.
There are many P2P crypto exchange platforms that allow you to sell, buy, and trade cryptocurrencies without the involvement of anyone else. Everything is taking place directly between one person and the other while remaining anonymous. The platform itself is only there to finalize and conduct the transaction between the parties. You are able to buy a plenty of cryptocurrencies like Bitcoin, Ethereum, Cardano, Monero, Litecoin, Ripple, and much more.
How Traditional Exchanges Work?
On the other hand, we have a traditional cryptocurrency exchange which is centralized, meaning the platform itself acts as the intermediary between the buyer and the seller. All these exchanges placed in non-P2P crypto exchange are owned by a single entity which could be a person, could be a platform or any other type of third-party involved in the transaction.
These types of transactions often come with fees and the waiting period is a lot longer than a simple two-person exchange. The usual method of operation is that your orders are processed through an order book, where a buyer or a seller places an order of what they want, and the platform finds a match for the order.
P2P Crypto Exchange vs. Traditional Crypto Exchange
The first difference is decentralization like mentioned before. So P2P crypto exchange platforms do not rely on any central authority to conduct the transaction and the whole exchange process, while traditional crypto exchange relies on the intermediary, where the exchanges are centralized.
Another difference is the control over the transaction. In P2P crypto exchanges you have much more control over the entire process. You’re able to choose and communicate with the other party involved, so if you are a buyer, you can choose the seller on your own and communicate with them freely. The contact with the other person is direct, as opposed to the traditional exchanges where the platform finds a match for you. However, some people might want to put their transactions through intermediaries if you do not want to do the research, you’d rather it was made by a third-party taking the responsibility off of you.
The third difference is obviously fees. P2P crypto exchanges usually have much lower fees than traditional exchange methods. You don’t need to pay for the intermediary and the services, just for the platform you are using to communicate with the other party (either buyer or seller). There are many things any investor values while going into crypto exchange market, however one of the most important ones is the amount of money to get from the transaction.
The decisive point is mostly about security and anonymity. P2P crypto exchanges are much more secure than the traditional means since all users retain control over all their funds, so it connects quite well with the control aspect of the transaction mentioned before. In contrast to that, in traditional exchanges, you are much more vulnerable to being hacked and these platforms might be susceptible to security breaches because they hold the funds in a singular place. There is also a chance of your personal data being compromised.
What is a Better Crypto Exchange Method?
Overall, it all comes down to preferences. If you value your privacy above all else, and you also want to get the most out of the whole exchange process, then P2P crypto exchanges are something you should keep an eye on.
On the other hand, if you do not want to get involved as much, and the amount of money you get from the exchange is not that important, you might want to use the traditional crypto exchange, because then you do not have to worry about choosing the best seller if you want to buy, or buyer if you want to sell. It is all up to the third-party platform that carries out the transaction for you and looks for a match based on your criteria for you.