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How Peer to Peer Works On Eco-Friendly Trading Platforms

Shutterstock Photo License - Jozsef Bagota
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Sustainability is becoming a more important part of our lives. We have talked about measures various industries have taken, such as construction, agriculture and logistics. There is even an entire sector known as eco-logistics.

However, there are other industries that are moving towards sustainability. The financial sector is one of them. Many peer-to-peer trading platforms are starting to shift towards eco-friendly business practices.

The Institute for Electrical and Electronics Engineers talked about the benefits of sustainability for peer-to-peer trading and the steps that these companies can take to move in that direction. In order to appreciate the benefits of sustainability in the peer-to-peer trading space, it is important to have an understanding of the services and how they work.

Overview of Sustainable Peer-to-Peer Trading

As technology advances, there have been several efforts to eliminate the need for a third party during transactions. However, the presence of an intermediary reduces the control participants have while carrying out transactions. Besides, losing an intermediary implies no sales channel, and traders must start from scratch.

For this reason, a peer-to-peer service ensures that participants can interact directly with each other. In this case, buyers and sellers can carry out transactions through peer-to-peer services.

As you can imagine, these types of services use a lot of energy to process transactions. This leads to a large carbon footprint if they are not adequately controlled.

More peer-to-peer networks are finding ways to curb their carbon footprints by becoming more energy-efficient. Farhan-Bin-Tarik of the University of Dhaka pointed out that they are turning to new forms of renewable energy, which can make them much eco-friendlier.

This guide will discuss how eco-friendly peer-to-peer networks work in trading platforms.

How do Eco-Friendly Peer-to-Peer services work?

Several file-sharing systems, including Napster (a music-sharing application), have popularized the peer-to-peer concept. This allowed many internet users to directly connect and collaborate to function as search engines created by users. This is in stark contrast with the client-server model, which involves transferring information from and to a central server.

In recent times, peer-to-peer services have grown beyond just internet services, even though they are seen as internet-based. These services comprise activities that can vary from buying and selling to people thought to be part of the sharing economy. Various peer-to-peer services even require no need for paid transactions by the users. Yet, this involves people coming together to work on projects, disseminate information, or communicate directly without the need for any form of intermediary. These peer-to-peer services may be run as nonprofit services or generate revenue. This can either be achieved by advertising to users or by selling users’ data.

Peer to peer is one of the safest means of trading on cryptocurrency wallets. The platform serves as the middle man and maintains transparency between both clients. BitQT ensures the satisfaction of both clients at the end of a transaction and ensures that no dubious activity goes on in the transaction.

Anytime an intermediary is eliminated from a transaction, there is often a more significant risk than the service provider may not deliver. The service may also be of the expected quality, or there may be no payment from the buyer. These added risks can contribute to an added cost of the transaction to a peer-to-peer transaction. In most cases, peer-to-peer services are created with the hope of hastening these transactions while minimizing any risk that buyers and sellers might be exposed to. For example, both buyers and sellers might be required to pay the service cost, or they may enjoy the service for free while generating revenue in other ways.

Unfortunately, the additional features require greater energy consumption. This is not beneficial for the planet. This has necessitated the transition to renewable energy sources to power them.

A number of experts have come up with new adoptions to peer-to-peer trading networks that can use more renewable energy. They have even found ways to offset their overall carbon footprint by using their infrastructures to support the trading of renewable energy. Cornell University’s Wayes Tushar and his colleagues have discussed this change in their recent article.

What are the examples of eco-friendly peer-to-peer networks on trading platforms?

Peer-to-Peer networks have found several applications in several industries. Many of them have become eco-friendlier. Some of these are discussed as follows:

Open-source Software

This implies that any system member can subject the software code to modifications. Open-source software ensures that the influence of centralized authority is eliminated by crowdsourcing the coding while controlling the quality of software.

File-sharing

This involves downloaders and uploaders meeting to swap software files. Besides peer-to-peer networking, file-sharing services can present security for shared files. In some cases, they can also provide users the ability to bypass intellectual property rights anonymously. They may also offer enforcement that is required for intellectual property. 

Online Marketplaces

These comprise a network that involves private sellers of goods looking for potential buyers. Online marketplaces can also present sellers with promotion services and ratings of buyers and sellers, which depend on history and payment processing.

Cryptocurrency and Blockchain

A blockchain is a technology that supports cryptocurrencies due to decentralization. This network involves users making payments and verifying payments without the need for a central currency issuer. This technology eliminates the need for a third-party intermediary and enables people to carry out businesses by using cryptocurrencies and enforcing smart contracts.

Homesharing

Homesharing ensures that property owners can lease part or all of their property to any short-term renters. Typically, these services offer quality assurance, payment processing, and the qualification of owners and renters.

Peer-to-Peer Networks Are Becoming Eco-Friendlier

In recent times, transactions do not require intermediation by third parties. This ensures fast and reliable transaction processes.

Unfortunately, the powerful features they offer has increased their carbon footprint. The good news is that a growing number of peer-to-peer trading companies are shifting towards sustainable practices. This can help lower their carbon footprint in the years to come.

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