Press Release: Monday, November 2019, 14:30 CAT | Source: Paxful
Recently the press reported that a major South African bank plans to close the bank accounts of certain cryptocurrency exchanges in South Africa. Paxful operations have not been impacted by this development.
In light of the heightened public discussions about how bitcoin is purchased and sold; we thought it might also be useful to explain how Paxful – a peer-to-peer marketplace – operates differently from traditional crypto-exchanges.
Bitcoin marketplaces operate slightly differently
For most of bitcoin’s existence, the public relied on traditional bitcoin exchanges to buy and sell cryptocurrency. These exchanges typically link your bank account (e.g. credit/debit cards) to their platform and match buyers and sellers via an order book system. Then came along bitcoin peer-to-peer marketplaces like Paxful, which provide an alternative way to buy and sell bitcoin.
Paxful is a peer-to-peer marketplace (or person-to-person trading platform) that allows people to interact directly with each other to buy and sell bitcoin. Unlike traditional crypto exchanges, the platform allows users to transact with over 300 methods of buying and selling bitcoin including online wallets, gift cards, etc.
Transactions occur directly between individuals on Paxful. Buyers and sellers sign up, post their trade advertisements to buy or sell cryptocurrency at a specific price and define the terms of each transaction. Paxful aids the transaction by providing an escrow service to safeguard the bitcoin from the seller to the buyer when the transaction is ongoing. Paxful also offers a digital wallet for its users to store their bitcoin.
Another important difference
The fees on traditional bitcoin exchanges can be higher. Since the exchanges act as a middleman for bitcoin trades, more fees are often charged for their services. Peer-to-peer marketplaces like Paxful on the other hand, only charge the seller of the bitcoin as little as 0.5% of the transaction value, depending on the payment method.
We believe peer-to-peer bitcoin marketplaces are the future
Bitcoin has a variety of uses beyond speculation, from wealth preservation, to remittance, payments and social good. With bitcoin’s original mission of financial inclusion in mind, peer-to-peer marketplaces like Paxful, aim to provide anyone, anywhere the opportunity to access the global economy through cryptocurrencies.
The volume of transactions processed by Paxful globally has increased substantially over the past year.
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This article is a Press Release received from Paxful. SA Crypto did not receive any form of compensation for its publication, and as this material is deemed newsworthy for the Southern African blockchain industry, it was thus published accordingly.