It’s safe to say that trading has evolved a lot of the past couple of years. There are now so many ways to trade and it has never been safer and more efficient. Recently, we’ve seen a surge in popularity for peer-to-peer bitcoin marketplaces. This new-style kind of trading platform has changed the game for the better and it does so by giving users—from around the world—literally hundreds of payment options. This includes gift cards, online transfers, bank transfers, and platforms like these even give you the option for buying bitcoins with cash.
More efficient trading
So how does trading differ on this kind of platform as compared to traditional bitcoin exchanges? To understand that, let’s first discuss how trading on a traditional bitcoin exchange works.
Traditional bitcoin exchanges have been around since the dawn of bitcoin. Because they’ve been around longer, they’re more popular and more well-known in the bitcoin community. On a traditional platform, buyers are matched with sellers via order books. Once they are matched, the platform acts as a middleman to help carry on the trade. This way, the buyers and sellers rarely have to interact with one another. For some people, this is ideal. Unfortunately, it can also lead to a few complications. Another big problem is that the help that you get from the platform doesn’t come for free. The fees usually stack up and you end up having to pay a hefty sum in fees when the trade is over.
This is where peer-to-peer marketplaces come in. Instead of having a middleman complete the trade for them, buyers and sellers get to hash it out and complete the trade themselves. There is less confusion as trade partners are allowed to interact with one another. Peer-to-peer marketplaces essentially add a personalized touch to the trading experience. For buyers, they have the option to choose an offer based on their preferences. They also have the ability to ask directly for help if they’re a bit confused. Sellers have the option to create offers with personalized features like profit percentage, how they’d like to be paid—payment method and currency, and even trade with people from selected areas in the globe. This gives users on peer-to-peer marketplaces more power to work with which, in turn, means more control over their finances.
Peer-to-peer finance’s real-life uses
People are starting to use this newfound control and power as an opportunity not only for investment but for survival as well. Peer-to-peer finance is ushering in new and creative ways for people to use their cryptocurrency—here are some of the ways they are doing so:
A lot of the world economy’s money flows through remittances. The problem is, standard remittances have begun to show its ugly side, especially in the places that need remittances the most. Transactions are often slow (with some taking a week to process), expensive (the fees end up stacking up), and non-transparent (the status of your funds is often a mystery). Also, Money Transfer Operators (MTOs) are often linked to Remittance Service Providers (RSPs), causing further delay and even more fees on top.
Cryptocurrency remittances, on the other hand, have MTOs that are cloud-based—making it more efficient, faster, and cheaper. People have started to jump on board with this trend as a growing 15.8% of the world’s remittances was done via cryptocurrency in 2017, according to a study done by Clovr.
Not only that, people are even starting to earn profits via remittances by taking advantage of the different prices around the world. Let’s use India as an example. The legality of bitcoin in India has remained in a gray area for the most part and because of that, the market price for bitcoin is higher. If you are able to buy bitcoin from, let’s say, the United States and sell it in India, you’d end up making a profit in doing so.
Although making payments doesn’t sound too challenging to those in living in a first-world country, it’s a problem for people in economies that are struggling. More often than not, there are low limits on credit cards for populations wherein the majority is unbanked. For example, Nigerian credit cards have limits as low as $100. This makes it incredibly hard for people to pay for critical purchases. Cryptocurrencies provide an alternative to making payments—an alternative without limits.
The ability to make payments with cryptocurrencies has also advanced the e-commerce real-use case. Since payments are cheap and close to instant, it can help business owners expand their market to anywhere in the world. By starting to accept cryptocurrency as payment, it’ll make it easier for customers to pay business owners.
There are a lot of economies that are struggling out there. They’re looking at the value of their very own currency diminish extremely before their very eyes. Luckily, people from these struggling economies have a temporary alternative—cryptocurrencies. By putting their money into cryptocurrency, people are protecting their funds from the extreme inflation happening around them.
A blazing path
These are just a few of the real-use cases that are being used by peer-to-peer advocates around the world but as you can see, this is why peer-to-peer marketplaces have been gaining a lot of traction lately in the cryptocurrency community. Because of peer-to-peer platforms, bitcoin and other cryptocurrencies are no longer being used merely as an investment tool. They’re more than that now. They’re being used for survival and mainly, they’re being used to look out for the little guy.
We’ll be seeing more of these new and creative ways soon enough and when that happens, hopefully, the world will see how much good cryptocurrencies can actually do.