Digital currencies have evolved in the last few years and have proven to be resilient especially during this time of the global pandemic. The crypto world is making headway into the mainstream financial services industry with major Central banks across the globe looking at ways on how to safely introduce these forms of digital money into the formal financial system.
There are two ways to buy crypto. One is via a regular exchange and the other is via a peer to peer exchange. The regular exchange works like any other exchange such as a stock exchange which uses an order book to match buy and sell orders between traders.
We are going to look at the most common way of participating in the new world of money which is p2p exchanges, while studying closely how Bitzlato, a HongKong based p2p exchange operates.
What is a P2P Exchange?
According to Investopedia, “P2P refers to the exchange of currencies that are not created by a central banking authority, and an especially common application is with cryptocurrency exchange networks such as Bitcoin.”
To put it in simple terms, a peer-to-peer (p2p) exchange is an online platform that allows users to buy and sell cryptocurrencies directly with each other under their own terms without a central body. These exchanges don’t hold users funds nor do they facilitate any payments thus enabling them to operate across the globe without much regulation. The peer-to-peer exchanges usually don’t require users to provide much documentation regarding identity and they simply provide an escrow service for both the buyer and the seller.
Virtual currencies are usually managed and recorded through a network of computers, unlike the fiat currencies that are created or managed by central banks.
Bitcoin, the world’s most popular crypto, is one of the first digital currencies to use peer-to-peer technology to process instant payments while lowering the charges as well as providing privacy.
When you buy Bitcoin or any other cryptocurrency through a P2P exchange, the coins are usually kept in a seller’s private wallet. The exchange’s escrow service keeps the seller’s coins and releases the assets to the buyer’s wallet address once the buyer makes the payment. The seller also has to confirm payment for the exchange to release the coins.
Bitzlato
Bitzlato is one such exchange. Bitzlato is based out of Hong Kong and recently launched in Africa with Kenya being its first market.
The platform began operations in 2015 by a group of crypto enthusiasts who were looking for a simpler and more convenient way to buy and sell cryptocurrency.
According to information on their website, the engineers behind the project first created a P2P Telegram bot for P2P crypto trading while the web version was created in 2018. The P2P platform is now a leader in the ruble cryptocurrency exchange market.
Bitzlato’s custodial crypto exchange also allows users to exchange Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), Litecoin (LTC), Dash (DASH), Tether (USDT), Monolith Ruble (RUBM) and Dogecoin (DOGE) and supports more than 20 crypto-to-crypto markets, allowing you to switch coins at very low fees.
Most peer to peer exchanges allow traders to choose how they want to be paid. Bitzlato supports most payment methods including Mpesa, and PayPal.
Learn more about Bitzlato on their medium page here; https://bitzlato.medium.com/
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Editors Note; This is not investment advice. Exchanges provide highly varying degrees of safety, security, privacy, and control over your funds and information. Perform your own due diligence and choose a wallet where you will keep your bitcoin before selecting an exchange.
