Peer-to-Peer (P2P) Cryptocurrency exchanges

Definition of peer to peer exchange

P2P(Peer-to-Peer) is define as the transfer of information, data or assets between one party to another without the involvement of any higher or central authority. The p2p transfer takes a simple decentralized approach for interactions between 2-3 individuals and groups.

This specific approach is popular as it has been use in computers and networking that is p2p file sharing and now is also use with currency trading that is a virtual currency.

Peer-to-Peer cryptocurrency exchange can be define as the transfer of money in form of virtual currency from one user to another without the involvement of any Central authority or agency.

Breaking down the p2p cryptocurrency exchange

In this Digital peer-to-peer Network, each user is an equivalent owner and a contributor of the network line. This type of network can be use for almost all types of information transfer or file sharing process, the earliest being the Napster’s file-sharing service.

In the context of currency transfer, it refers to the exchange of different types of currencies that are not create by the Central Banking Authorities of any country and an especially common application or forum is with the cryptocurrency exchange networks such as the famous bitcoins.

Virtual currency:

The type of currencies that are not trade through the physical exchange such as through the exchange and use of coins and notes are consider to be virtual currencies. These virtual currencies are simply transfer between the parties electronically.

The P2P exchange allows every individual to move currencies from their account to the account of the other person or partner without the aid or medium of any financial institution.

The p2p network relies simply on digital transfers which in turn depends on the availability of internet connection.

The peer to peer P2P cryptocurrency exchange allows the individuals to use the computer as well as the smartphones tablets for money transfer.

The peer to peer cryptocurrencies is not create or exchanged similarly as those created by the central banking institutes. The creation of a new currency, as well as the recording of all the transactions between the parties or individuals, is manage through a huge network of computers that are not maintain or governed by any other government authority and so it is maintained by a private company or by the collective.

In any type of

cryptocurrency exchange,

all this distributed ledgers and data can confirm what the other p2p advocates consider to be a notable security advantage with the transactions being record on every peer’s network or the individual in the network.

Due to the high security and scrutiny and verification on every level, it is very difficult and nearly impossible to override or falsify the ledgers or the data in any cryptocurrency exchange.

Risk involved

While all the private advocates may appreciate how the peer to peer cryptocurrency exchange allows every individual to conduct his business deals and transaction without any kind of government interference or scrutiny. The lack of transparency in the virtual currencies might be harmful. Due to the lack of scrutiny by any government agency, this may allow the individuals and groups engaged in any illegal activities to transfer and accept money without any kind of detection or oversight.