Considering the disadvantages of centralized exchanges, crypto investors are now looking to disrupt the market by developing a new type of crypto exchange solutions development – decentralized peer-to-peer exchanges, run by software, not people.
Differentiating Between ‘Standard’ Crypto Exchanges and Peer-to-Peer (P2P) Crypto Exchange Development A ‘Standard’ Crypto Exchange Let’s first take a look at how a typical centralized cryptocurrency exchange works for crypto traders. It enables sellers to sell cryptocurrencies by specifying the amount and the price of their orders. They place these ‘orders’ in a common ledger known as the ‘order book.’ Then buyers visit the order book to look for adequate and satisfactory orders placed by sellers. In case of not being able to find an order suitable to their needs, they create their own ‘buy order.’ They specify the terms of the order according to their requirements. Then, the exchange’s matching algorithm matches buy and sell orders by price and processes the trades.
The whole process is time-consuming and involves intermediaries. A group of members or a company with staff operates these types of exchanges. A private company that acts as an intermediary is responsible for trades and transactions. It serves as an arbitrator also in case of disputes for a fee. However, the ease of use and liquidity are significant advantages of centralized exchanges.