Ray holds expertise in marketing, business development, UI/UX Design, Systems Architect and Systems Admin.

Humankind has been no stranger to peer-to-peer transactions. Back in the early days of civilization, when money was an alien concept, barter systems, or exchange of goods between two parties, came into prominence. Anything under the sun was traded back in the day; for example, fishermen exchanged their excess catch with farmers who had surplus corn. As this system became the new norm of doing business, some commodities were deemed more necessary than others. These products became known as commodity money. Salt, for instance, was considered to be commodity money as it wasn’t easily accessible, and its food preservation properties were highly valued. Over time, commodity money began to lose its importance as it became inconvenient in commercial trading due to value fluctuations and the perishable nature of such commodities.

From commodity money to bitcoins, the use of currency has evolved over time. With the evolution of technology and digitalization of the world, virtual currency, known as cryptocurrency, has emerged. Cryptocurrencies can operate as a medium for peer-to-peer (or person-to-person) exchange, enabling them to make direct transactions between each other. A major reason for their growing prominence is the transparency and safety that cryptocurrencies offer. These currencies are powered by sets of unique codes containing transactional data, the movement of which cannot be changed or edited. Furthermore, cryptocurrencies are decentralized, meaning they cannot be controlled by a single entity like a bank. Formed under Blockchain technology that uses decentralized databases, cryptocurrencies enable users to make payments and store funds safely, lowering the risk of theft or fraud.

One must have heard about bitcoin, one of the most popular forms of cryptocurrency. Back in 2009, when it first emerged, the worth of bitcoin was less than a dollar, but over the years, the price of bitcoin has surged to unimaginable heights.

The Need For Peer-To-Peer Finance
Cryptocurrency exchanges initially acted as intermediaries between their customers and

would charge a fee to make a profit. In 2014, the industry faced many setbacks in the form of scams, discouraging people across the globe from exchanging cryptocurrency. This is when peer-to-peer (P2P) exchanges came into existence, a concept that existed for centuries. Peer-to-Peer exchanges are a prime example of the crypto revolution. These P2P exchanges now allow customers to deal directly with each other thus eliminating middlemen who charged a fee or a commission for facilitating the transaction. The blockchain technology used in cryptocurrency further reduced the dependency on traditional banks allowing for seamless, quicker, and cheaper financial transactions.

The Changes Made By P2P
In the past, trading bitcoin was slow and time-consuming. Consumers who wanted to sell bitcoin would specify the amount and price first, which would be registered in a common ledger known as the ‘order book’. The person on the other end, who was looking to buy the same amount, would either look up the ‘order book’ or create their own ‘buy order’ deal. Lasting anywhere between five minutes to several hours, the shift from tedious trading system to P2P exchanges was welcome, as the process became easier and more efficient. The advanced trading software connects people with similar interests instantly and gives them access to seek orders from around the world without involving a third party. P2P exchanges match the consumers directly and do not process the trade immediately. They connect the buyers and the sellers letting them strike a deal based on their terms and preferences. Since the system does not hold its customer’s bitcoins, the entire process is safer, limiting the chances of losing or stealing bitcoins to a minimum. Third parties may still be involved in this process as arbitrators just to resolve disputes of any kind. P2P exchanges are protected from interference by governments or banks, ensuring a safer and cheaper trading environment. This new P2P system has changed the cryptocurrency industry, which is where players like Zebpay, Paxful, Binance, CoinCDX and others come into play.

The blockchain technology used in cryptocurrency further reduced the dependency on traditional banks allowing for seamless, quicker, and cheaper financial transactions

The Wonders Of P2P Finance
To ensure safety in the trading process and prevent customers from potential fraudulent activities, several P2P exchanges have come up with different solutions for their customers. Many, companies have come up with various anti-money laundering compliance solutions and automated blockchain analysis solution, giving people the ability to perform seamless financial transactions online anywhere in the world.

Promising Signs Ahead For P2P Finance
While the acceptance of cryptocurrencies by merchants is rising, there is still a long way to go. In order for cryptocurrencies and P2P exchanges to be more widely used, the industry must first gain recognition and acceptance. With time, people are starting to notice the volatility of cryptocurrencies and various ways of utilizing it, making digital currency an attractive investment. With growing awareness among the crowds, P2P exchanges are laying the foundation for future global transactions. For P2P exchanges to become a part of the mainstream financial system, they will have to cater to different regulations. These include safeguarding the consumer’s personal information, using complex coding to avoid hacker attacks, all whilst making it easy for consumers to use. Additionally, it is crucial to ensure no form of money laundering and unethical activities are taking place. The potential of P2P exchanges to become a part of the highly-regulated fiat currencies has its challenges, but is not impossible.