Anti-money Laundering (AML)
AML refers to laws and procedures intended to prevent people from disguising illegally obtained funds as legitimate income. Paxful takes AML protocol seriously, and we abide by all laws, regulations, and procedures.
Bitcoin is a digital currency in which encryption methods are used to regulate the generation of units and transfer of funds, operating independently of a central bank.
Bitcoin address types
There are three bitcoin address formats currently in use:
- P2PKH addresses start with the number 1.
- P2SH addresses start with the number 3.
- Bech32 addresses also known as "bc1 addresses" start with bc1.
- QR Codes can also be used as a wallet address.
Paxful allows withdrawals to P2PKH, P2SH, and Bech32 addresses.
- P2PKH addresses start with the number 1.
Bitcoin wallet address
A Bitcoin wallet address is a set of letters and numbers that is used to send and receive Bitcoin. It can be shared publicly if you want other people to send you Bitcoin.
Here is an example of a Bitcoin wallet address:
A wallet address can also be presented as a QR code.
Block chain, blockchain
The Bitcoin blockchain is a public record of all Bitcoin transactions. You might also hear the term “public ledger” to describe it. The block chain shows every single record of bitcoin transactions in order, dating back to the very first one. The entire block chain can be downloaded and openly reviewed by anyone, or you can use a block explorer to review the block chain online.
Coin locking/coinlock is when a buyer uses the escrow to hold onto the seller's cryptocurrency without the intention to send payment and complete the trade. This is a common case of cryptocurrency fraud.
A cold wallet is a hardware wallet not connected to the internet. A Paxful Wallet is considered a cold wallet if you're offline.
Confirmation means that the transaction has been verified by the network and you receive this confirmation when sending out Bitcoin. Once a transaction is confirmed, it cannot be reversed or double spent.
Cryptocurrency or digital currency uses cryptography instead of a central bank to provide security and verify transactions. Bitcoin is the first developed cryptocurrency.
A dispute is an argument or disagreement between people or groups. Disputes on Paxful are useful when a trade does not go as planned. When arises misunderstanding, miscommunication, disagreement or any other controversion between parties. When a dispute is started, a moderator will intervene to help settle the trade.
Escrow keeps the money in safekeeping until a transaction is completed. An escrow fee covers the cost of the service being provided.
ETH or Ethereum is an open software platform based on blockchain technology that enables developers to build and deploy decentralized applications. Like Bitcoin, Ethereum is a distributed public blockchain network. the Ethereum blockchain focuses on running the programming code of any decentralized application. In the Ethereum blockchain, instead of mining for bitcoin, miners work to earn Ether, a type of crypto token that fuels the network.
An exchange is a digital marketplace where traders can buy and sell cryptocurrencies using different fiat currencies or altcoins. Cryptocurrency exchange platforms match buyers with sellers. Like a traditional stock exchange, traders can opt to buy and sell cryptocurrency by inputting either a market order or a limit order.
Fiat or fiat money is a currency that a government has declared to be legal tender, but it is not backed by a physical commodity. The value of fiat money is derived from the relationship between supply and demand rather than the value of the material from which the money is made. Fiat money only has value because the government maintains that value, or because two parties agree on said value. Fiat money was first introduced as an alternative to commodity-backed money.
Google authenticator (GA)
Google Authenticator is a mobile application that implements two-step verification services using the time-based one-time password algorithm and HMAC-based one-time password algorithm for authenticating users of mobile applications by Google.
Authenticator provides a six- to eight-digit one-time password which users must provide in addition to their username and password to log into Google services or other sites. The Authenticator can also generate codes for third-party applications, such as password managers or file hosting services. Previous versions of the software were open-sourced but subsequent releases are proprietary.
A hash is a mathematical function that generates unique identifiers needed to solve blockchain computations and secure the network.
A hot wallet is a Bitcoin wallet that is connected to the internet, such as wallets installed on a desktop computer or smartphone.
Know Your Customer (KYC)
KYC is a term used to describe how businesses such as Paxful, identify and verify their users' identities. KYC is part of AML. For more information on Paxful’s KYC protocol visit our page in the Help Center and check our Privacy Notice.
A physical or electronic log book containing a list of transactions and balances typically involving financial accounts. The Bitcoin blockchain is the first distributed, decentralized, public ledger.
Margin is an amount added on top of the cost price to get to the final selling price or the gross profit.
It can be calculated in a fiat amount or in a percentage. A margin can be both positive and negative, and a negative margin means that you expect the buyer to pay for the item less than its cost price.
A computer or group of computers that add new transactions to blocks and verify blocks created by other miners. Miners collect transaction fees and are rewarded with new bitcoins for their services.
Mining is the process of using computer hardware to do mathematical calculations to confirm transactions on the Bitcoin network. Miners collect transaction fees for the transactions they confirm and are awarded bitcoin for each block they verify.
Nigerian Naira Token (NGNT)
NGNT is a stablecoin pegged to the Naira. NGNT can be used as a payment method when buying or selling cryptocurrency on Paxful.
For more information on how to buy and sell crypto in the Paxful marketplace, check out these articles:
Offers are trade proposals split into Buy and Sell categories and have options such as currency, exchange rate, and payment methods.
Buy offer: This is a trade proposal created by users who are trying to buy cryptocurrency in exchange for a different payment method (i.e. gift cards, fixed currencies). Payment methods are set by the buyer in this instance. Users can find buy offers here.
Sell offer: This is a trade proposal created by users who are trying to sell cryptocurrency in exchange for a payment method set in the offer. Users can find sell offers here.
Who can create an offer?
An offer can be created by any user. It is important to note that some of the offers require a bond, a minimum balance in your Paxful wallet or KYC.
Why create an offer?
You can trade on Paxful by searching for existing offers. But in this case, you depend on the terms of others. Creating your own offer gives an option to set your own terms, trade partner-related requirements, and create a flow of trades.
An offer term(s) lists all the requirements and other additional information needed to complete a transaction on Paxful. An offer term often includes the buyer’s preferred payment method and a list of actions that the seller needs to complete to make the trade successful.
Note: Offer terms must be in accordance with Paxful Terms of Service.
Peer-to-Peer is a type of network where participants communicate directly with each other rather than through a centralized server. The Bitcoin network is an example of a peer-to-peer network.
Pegged currency is a digital currency that is directly connected and has equal value as its designated currency, such as USD or EUR. A pegged cryptocurrency is also referred to as a stablecoin.
Tether is one of the most popular pegged cryptocurrencies. Here are three examples of Tether being pegged to conventional currencies:
- 1 USDT is pegged to 1 USD.
- 1 EURT is pegged to 1 EUR.
- 1 CNHT is pegged to 1 CNH.
A Power Trader is a special status given to users in recognition of their impeccable behavior when trading with Paxful users. In addition to following Paxful’s buying and selling guidelines, Power Traders also have high trading activity. All Power Traders have additional benefits and receive a badge that indicates their status to other Paxful users.
A price point is the suggested retail price of a product, and it is determined in a way that competes with prices of other products. A product may be introduced with a specific price point, but the price may be altered depending on current demand and competition. Some price points may not be available for the public, and every exchange platform sets its own price points.
A private key is a string of data (letters and numbers) that shows that you have access to Bitcoins in a specific wallet. Think of a private key like a password; private keys should not be shared with others as they allow you to spend Bitcoins from your Bitcoin wallet through a cryptographic signature. It is similar to your password when online banking.