In this post we’re going to talk about- How Peer To Peer Bitcoin Trading Work?
Since its creation 10 years ago, bitcoin has evolved in many ways we never thought it would. It has then developed several real-life uses that help people in everyday situations. This is all about people starting to appreciate the peer-to-peer aspect of trading it. Because of peer-to-peer finance, people are getting more creative with the way they buy, sell, and earn bitcoins.
In the earlier days, there was only one type of exchange: traditional bitcoin exchange. This is the reason why traditional bitcoin exchanges still remain to be the most popular method of buying bitcoin. However, now, there is an emergence of peer-to-peer marketplaces. These peer-to-peer marketplaces have changed the way people trade bitcoins for the better. With hundreds of payment methods available on these platforms, buying bitcoin has never been easier.
How Peer To Peer Bitcoin Trading Work
The concept of peer-to-peer bitcoin trading may seem a little intimidating to newbies, especially if it means cutting the middleman out completely. It is, in fact, the contrary. Peer-to-peer bitcoin trading is extremely easy and once you know how to minimize all the risks, it becomes one of the safest ways to buy bitcoins.
Each peer-to-peer platform has its own trade process but to give you an example, let’s use the process of Paxful, one of the leading peer-to-peer bitcoin marketplaces in the world. Here is a general overview of the trading process on Paxful:
1. Create an account – Every trading process begins with the creation of an account. Upon signup, users get a free bitcoin wallet so they’re ready to go as soon as they register.
2. Select an offer based on your preferred payment method – Take note that some payment methods are more popular than others. There are 4 factors to think about when selecting an offer:
- how much bitcoin you’ll be getting on the dollar
- the payment requirements of the vendor and if you can comply with them completely
- the reliability of the vendor – there are specific indicators to look for
- availability of the vendor
3. Begin the trade – This step involves you submitting your payment. Each payment method will have different requirements so be sure to look at the offer terms and requirements. After submitting the requirements, be sure to click on “mark as paid” and the vendor will then process and verify your payment.
4. Wait for the vendor to release the bitcoins from escrow – After the payment has been verified, you’ll just have to wait for the vendor to release the bitcoins and the trade is complete.
Peer-to-peer bitcoin trading also works the same when you’re selling bitcoins. All you have to do is create an offer, set your preferences, and wait for a fish to bite.
Why people prefer peer-to-peer marketplaces over traditional bitcoin exchanges
Now knowing how it works, what makes it better over bitcoin exchanges? There is one main reason peer-to-peer marketplaces are preferred over traditional bitcoin exchanges: more control over your funds. The personalized touch that peer-to-peer marketplaces add can mean everything to a trader. This allows them to filter out who they buy from and as a seller, you get to set personal preferences like profit percentages, payment windows, and location.
Bitcoin and its peer-to-peer real-life uses
With the emergence of peer-to-peer platforms, communities of people have begun to explore the real-life uses of bitcoin. With more real-life uses coming into fruition, the communities that are struggling the most are the ones thinking of creative ways to appease their situation.
Africa, for example, is taking advantage of bitcoin’s real-life use of sending/receiving remittances. It can sometimes get expensive to send money to a loved one across the world. The African population, a severely underbanked population, is using peer-to-peer finance and bitcoin to cut costs. Bitcoin and other cryptocurrencies now take up almost 16% of the total remittances sent around the world, showing us that it really is a viable option.
Another example is that of Venezuela. Venezuela is currently experiencing an extremely high inflation rate. To counterattack this, they are converting their fiat into bitcoin before the inflation depreciates their money even more. Bitcoin can be a valuable tool when it comes to wealth preservation.
People around the world are also using peer-to-peer finance to earn a decent living. Everyone hears stories about people becoming millionaires and buying Lamborghinis but no one talks about the people using bitcoin for basic survival needs. Bitcoin is giving these people a stable enough income to feed themselves and their families.
As said earlier, people are finding more creative ways to use bitcoin to their advantage. They are not only finding ways out of the struggle, but they are also finding a way to make a little extra on the side. There are money-making opportunities like these everywhere and could learn a thing or two from the people who know how to find these opportunities.
These were all about how peer to peer bitcoin trading work. You should understand this and make the best from bitcoin trading.