P2P Crypto Exchange Development | The Future of Digital Trading

It is because they have emerged as one of the most intriguing innovations in the constantly changing world of cryptocurrency trading.

Also, after numerous instances of fraud, hacks, and other issues related to centralized crypto exchanges, users are shifting towards P2P crypto exchanges.

P2P systems enable users to transact directly with one another without requiring any centralized authority. It is contrary to traditional exchange platforms, which are centralized and managed by a single entity.  

In this blog, let's discover why P2P cryptocurrency exchanges are rising in popularity and why some people are calling them the trading platform of the future. 

Also, Read | The Rise of P2P Crypto Exchange after the FTX Debacle

Benefits of Developing a P2P Crypto Exchange Platform 

Decentralization 

Decentralized means that P2P exchanges do not need a central authority or middleman to facilitate transactions. It enables them to withstand censorship and intervention while increasing their transparency and security.

Customization

Users of a P2P exchange agree on a price, the method of payment, and other terms of their deals. It simplifies for users to find transactions that suit their unique requirements and preferences. 

Privacy 

Due to the lack of a Know Your Customer (KYC) process or the requirement for users to give personal information, P2P exchanges frequently provide greater privacy than centralized exchanges.

Lower costs 

Because P2P exchanges are not required to pay for the upkeep of a centralized infrastructure or deal with regulatory compliance, they often charge lower fees than centralized exchanges.

Improved Accessibility 

P2P exchanges are a resourceful choice for users in countries where centralized exchanges are not accessible. 

More Power over Transactions 

P2P exchanges give users more control over their transactions by allowing them to pick and select with whom they want to trade. They also enable them to negotiate the terms of their trades. 

People who want to trade large amounts of cryptocurrency or have specific trading needs can choose a P2P exchange. They can do trade without concerns about giving control of their funds to custodial wallets of centralized exchanges.

You May Also Want to Read | Compact Insights into Decentralized P2P Exchange Development

Why prefer Developing a Decentralized P2P Crypto Exchange over a Centralized One?

Security 

Centralized exchanges are a popular target for hackers because they house large sums of money from investors or dealers.

A Slovenian exchange called Bitstamp was disrupted in 2015 by an unknown hacker who accessed the company's active hot wallet and took away 19,000 Bitcoins, which were then worth $5 million. 

Another well-known Bitcoin hack occurred at Mt. Gox, a defunct controlled cryptocurrency exchange. Hackers hacked it twice, once in 2011 and once in 2014, losing more than 750,000 Bitcoins each time. Investors could not get their money back and still incur losses.

Centralized exchanges are more vulnerable to hackers as the trading volume of digital currencies rises. 

On the other hand, decentralized exchanges are growing in popularity and user-friendliness. They improve investor security by eliminating the need for intermediaries or third parties, leaving no room for fraudulent activities.

Greater Control over Assets

There are more problems with centralized exchanges besides hacking. Users do not fully control their money, and centralized exchanges also have a monitoring effect. 

Investors often experience several limitations, restraints, and even monetary losses, as a consequence.

Before users planned to withdraw their assets from centralized cryptocurrency exchanges in a single day, a crypto exchange called HitBTC began suspending user accounts. 

The "Proof of Keys" event, organized by the crypto community, was an effort to ensure that exchanges could honor deposits, much like a bank run.

Another odd incident from the last year involved the discovery that the proprietor of the Canadian cryptocurrency exchange QuadrigaCX had died and that he was the only one in possession of the secret keys that gave him access to the exchange's storage wallets, leaving $200 million in debt. 

In addition, users later discovered that the proprietor had handled user payments carelessly.

Again, because a decentralized crypto exchange software is not custodial, funds remain in the possession of users and cannot be taken away by a centralized authority. Their funds remain unaffected no matter what happens to the exchange tomorrow because they still have access.

Enhanced Privacy

Across various jurisdictions, centralized crypto exchange software solutions fall under the category of money service providers (MSPs). 

Therefore, users must go through mandatory user identification verification procedures such as know-your-customer (KYC) and anti-money laundering (AML) checks.  

However, since individuals have no control over what happens to their data or which authorities learn about it, many people show reluctance to give their personal information to third-party organizations.

The development of P2P cryptocurrency exchanges isn't centralized. Therefore, there are no identity requirements beyond having a wallet address for accessing the platform. 

Also, Check | Analyzing Peer-to-Peer (P2P) Cryptocurrency Exchange Model

Financial Accessibility

Many exchanges with centralized bases have restricted user access in specific nations in response to mounting regulatory pressure.  

Due to the dangers of appearing to offer unregulated trading of securities, exchanges have most recently started to stop offering services to users in the United States. 

Even the most popular centralized exchange, Binance, declared it would geo-block US users from using its platform until it launched its plans for complying with US regulations. 

 In another instance, Bittrex and other popular crypto exchanges delisted numerous tokens and coins.

Since no centralized authority controls a decentralized exchange platform that may shut it down, it renders users capable of trading digital currencies from anywhere.  

P2P crypto exchange transaction fees are far lower than those on regular exchanges. In addition, investors can invest as little as they want to profit from trading operations.

In Trend | Hybrid Crypto Exchange Model

What's Next 

 These reasons demonstrate an appropriate time to develop a highly modern decentralized P2P crypto exchange software.

Oodles is an emerging service provider in the space. We offer state-of-the-art crypto exchange solutions that help you quickly develop and launch your exchange.

Our crypto exchange developers have significant experience developing methods that provide the best p2p cryptocurrency exchange development for all your business requirements.