Peer-to-peer simply refers to the exchange of digital assets through a decentralized network meanwhile there is also a storage system called a spot wallet. However, every peer -to peer (P2P) platform authorizes traders to carry out transactions without using an intermediary.
It is also the distribution of data, information, and assets between cryptocurrency traders without involving a central authority.
As a digital network, each user is an equal owner as well as a contributor to the network. This network is mostly used for all kinds of trading.
This requires a decentralized means of trading between individuals who are into buying and selling.
This means of trading support only currencies that are not traded through a physical exchange, unlike through the use of coins or banknotes because virtual currencies are always transferred between people electronically.
However, it allows individuals to make use of computers and also mobile devices like smartphones, tablets as well as because transactions are recorded on every peer’s network, thereby making it very difficult to falsify ledgers in a cryptocurrency exchange.
Some exchanges that support peer to peer are: Paxful, Localbitcoins, Hodl, Binance, Remitano, Localcoinswap and Airtm
Meanwhile, the people who admire how peer-to-peer currency exchanges allow individuals to process their trading without the government’s involvement.
The lack of transparency in virtual currencies may permit some individuals or groups to get engaged in illegal or dubious activities to steal money without detection or traces.
In comparison, Spot wallet is simply a place where you can keep funds like the Binance platform before you are ready to trade.
This is used when you buy and sell any cryptocurrency of your choice if you have money in your spot account and you want to buy Bitcoin hence, while trading you will have to pay from your spot wallet.
To own a spot wallet you must first create an account with any exchange that supports it.
So, peer-to-peer is simply the process by which a transaction is carried out while spot wallets are basically where you save or store your currencies before executing any form of trade.
Using peer-to-peer means you want to buy directly from a person who has a set price. This means you can shop for the best price but when using spot wallets you will trade through the wallet to wallet.
Some exchanges that encourage the use of spot wallets are:
Finally, peer-to-peer is quite risky seeing that it deals directly with individuals while spot wallet is safe because it means your currency is secured in a storage system.
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