P2P

Peer-to-peer (P2P) is the term used to indicate a system in which two or more people communicate or share information with one another directly, thus eliminating the need for a central authority or a mediator. In the case of cryptocurrency, P2P is about users transferring funds among themselves utilizing the underlying blockchain technology. The network acts as the only validator and recorder of the transaction, which means that no bank or payment processor or company is involved in the approval of the transfer.

The elimination of intermediaries in P2P transactions leads to faster, cheaper, and more convenient transactions, and especially in countries where banking services are scarce, it’s the latter that the users would benefit the most. A person can send Bitcoin, stablecoins, or other cryptocurrencies directly to someone else almost anywhere in the world, as long as both parties have internet access and a wallet.

Another feature of the P2P system is that it provides its users the opportunity to exchange cryptocurrencies for local currencies on turnarounds of certain platforms. The whole process is direct between buyers and sellers rather than through an exchange holding the funds. The platform only supplies escrow services and reputation instruments to ensure the fairness and security of the trades.

Moreover, apart from the crypto sector, P2P networking also supports numerous technologies in communication, file transfer, and decentralized apps that Power people daily.

In very simple terms, P2P indicates a transaction “person to person” without any central middleman, only individuals connecting and exchanging value through the network based on shared rules.