Person-to-person (P2P) transactions are one of those wonders that make us grateful to live in this era, they are being used more and more frequently and They have arrived to tear down borders and revolutionize the way in which payments are made globally. To give you an idea of the magnitude of this revolution, in Spain alone it is expected that during this year there will be 100 million dollars for P2P transfers.
Likewise, In Latin America, the use of peer to peer applications is becoming increasingly popular, which make it easier to receive remittances, divide bills and accounts with friends or family. But what exactly are P2P? How do they work? And why use them instead of turning to traditional, centralized financial systems? We will answer all these questions to you in this article, in which in addition we will tell you how they relate to cryptocurrencies and the benefits they can bring you.
What is P2P?
P2P stands for peer-to-peer and refer to an online technology that allows people to exchange information directly with each other without the need for a central entity to intervene to store that information.
It is important to make clear that the term defines a type of application architecture and not the specific functionality of a final application; that is, this technology is used as a means to achieve a higher end.
When we talk about P2P payments we refer to those that are done through applications or networks that allow their users to send money to another individual's account, for which a device with internet access is used. Although there are P2P platforms where a third party must be trusted to store banking information and carry out the corresponding transactions, such as PayPal, there are also applications that allow users to exchange such information directly with each other, which happens in El Dorado, because on our platform, the bank account details to be transferred are indicated directly in the order, but we'll talk about this later.
This allows P2P markets to be key to the objective of expanding and diversifying the use of cryptocurrencies, since through this type of application, the decentralized and private spirit of cryptocurrencies can be maintained, while streamlines the process of sending, receiving, and buying or selling cryptocurrency using various local payment methods, without the need to complicate your life with a lot of technical knowledge, exchanges or platforms that significantly limit your options.
With the definition and essence of P2P clear, it's time to dive into what you'll enjoy the most: The benefits!
Advantages
Since this technology emerged, users saw several advantages and benefits in it, and the crypto world was no exception, so we will detail those that you can enjoy when you join a P2P marketplace.
- Ease of use and speed, faster than going to the bank to get cash and as easy as sending a text message. P2P applications they allow you to send or receive money in a matter of minutes, without having to leave your house or regardless of whether both parties are thousands of kilometers apart.
- Practicality, with traditional payment methods, a large amount of data and different bureaucratic steps are needed to ensure the transfer of money. While in this case the only thing both need is a common payment method and to agree with the established price and Voila! The money will be moved from one account to the other so that both of you can enjoy your benefits.
- Decrease in commissions, although there are P2P platforms that charge small fees for transactions made by users, these are much lower than those of centralized protocols that allow international transfers, buying and selling currencies and more. So in the long term, using this option helps you save.
- Creating opportunities, because P2P allows the emergence of a market for the purchase and sale of goods, different prices begin to emerge for the same asset, this allows those willing to invest time and some money to generate income when carrying out different transactions, which we explain with More detail here. This opportunity is accessible to anyone with a bank account.
- Democratization of finance, on peer to peer platforms users have an open market where they choose who they will exchange their money and the price with of the same.
- Financial Inclusion, through this alternative, those who do not have an international bank account can easily receive payments from other latitudes if they have access to the internet and a smartphone, which allows millions of people to be included in a financial system that gives greater power to its protagonists; Users.
Are there risks?
In general, P2P applications are secure and implement strict security measures which are constantly evolving for the benefit of users, but as with any economic activity, there are usually risks, mostly linked to user errors when implementing adequate security measures to protect their information and money. In addition, because people generally interact with another unknown person, it can happen that the counterparty has malicious intentions.
However, in the face of both scenarios there is a solution, in the first case the risk can be significantly minimized by implementing these safety tips, while to protect yourself from attempted scams, peer-to-peer platforms develop reputation, escrow and conflict resolution systems that allow honest users to be kept safe.
In El Dorado, to ensure that transactions are completed successfully, users who wish to operate on the P2P market must complete an identity verification (KYC). In addition, the platform has an escrow system and asks P2P participants to qualify their counterparty each time a transaction is completed, creating a reputation that other users can see when they want to buy or sell cryptocurrency.
In short, peer to peer markets are a safe place to exchange money and be included in the crypto world, which brings various benefits for everyone who uses it. Are you ready to enjoy the benefits of P2P and start your journey to El Dorado? Create your account, verify your username and start connecting with other people through your local currency.
