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What is a Peer-to-Peer Trading System (What is Peer-to-Peer Payment)

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What is a Peer-to-Peer Trading System? What is a Peer-to-Peer Trading System?Inv

What is a Peer-to-Peer Trading System (What is Peer-to-Peer Payment)

What is a Peer-to-Peer Trading System? What is a Peer-to-Peer Trading System?

Investors in cryptocurrencies such as Bitcoin and Ethereum trade through peer-to-peer (P2P) exchanges in the traditional financial market. Due to the concepts of openness and transparency, as well as zero fees, these exchanges are referred to as “decentralized exchanges.” This approach helps individuals without bank accounts or access to banking services participate more easily in the investment portfolio market and profit. However, these companies also need to pay expensive fees to enter this field.

Although many consider this a scam, P2P systems offer a solution that allows people to deposit funds from their wallets and convert them into fiat currency without transferring to a third party. This means they don’t want their money to be used for trading but for other purposes.

For some users, this is because most traders usually prefer to interact directly with the clients. When it comes to digital assets, they often use P2P platforms as intermediary institutions, so they can access various products. However, peer-to-peer trading systems offer a unique benefit: anyone can buy and sell tokens without intermediaries. Therefore, “you can’t guarantee that your funds won’t be lost forever.”

For example, if someone wants to send his private key to another owner, he must first know how to create an account and sign an email, then return it to him; if he wants to buy a new wallet, the wallet should be owned and controlled by its holder. (Bitcoinist)

According to CoinDesk data, the average daily active addresses of peer-to-peer trading systems have increased to 32,000. Most of them come from retail investors in the United States, Canada, Europe, and other places. Although most people believe that this trend will change in the coming months, in 2019, this trend has eased.

In addition, a recent paper revealed another problem with P2P trading platforms: “Can we fully automate? Why not simply change this as easily as traditional peer-to-peer models?”

In fact, during the bull market in 2018, Bitcoin has started to show new upward momentum. After reaching its peak, the price of Bitcoin soared more than 10 times. However, over time, Bitcoin is going through a prolonged correction period. It now appears that BTC is still in its early stages and seems to be returning to the high levels at the end of 2017 as the market matures and trading volume increases.

On the other hand, Bitcoin also faces a series of regulatory obstacles, including fraud, high interest rates, and lack of liquidity. One of Bitcoin’s main drawbacks is its high volatility, particularly in the US stock market.

To address the above two key challenges, the global economy has been severely affected by the COVID-19 pandemic, forcing central banks around the world to take action to limit inflation.

What is Peer-to-Peer Payment

Peer-to-peer (P2P) transactions are transactions conducted on the blockchain, usually through interbank transfers. This model allows users to directly obtain funds from other users for payment or convert cash into another currency and then send it to the other party to receive Bitcoin and other digital assets. When it comes to cryptocurrencies, this can be seen as an alternative method that allows people to transfer their funds without providing any information to merchants.

However, due to limitations such as lack of transparency, slow speed, and complexity, most transactions require a “central” intermediary to process before they can be executed. This method is unlikely to work for most people, but it does offer many benefits, including reducing costs and lowering expenses.

For example, by partnering with Coinbase and Kraken to launch the P2P payment network, peer-to-peer payment systems are now available for small retail transactions; creating tokenized exchanges on Polygon, thereby eliminating intermediaries. Polygon supports instant settlement transactions as well as seamless cross-chain transfers—a fully open-source project aimed at facilitating communication between different blockchains; Polygon is the first wallet to integrate the Polygon network.

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