In this article, the main points of a peer to peer exchange platform will be described.
Firstly, peer to peer exchange means there is no central party (or third party) to each transaction. Buyer transact with seller directly. There could be automated peer to peer exchange where buyer is matched with the seller based on the buy and sell information. Peer to peer exchange can be useful in various domains, such as stock exchange, energy exchange, derivative exchange, etc.
Now let us look at energy exchange as an example. The sellers have excess energy to sell, be it generated from the roof-top solar panel or wind farm. The buyers want to buy green energy.
On the exchange platform, the seller is presented with a UI. The seller clicks on the UI and enter the sell information. The below UML use case diagram shows how the seller interacts with the exchange software.
Similarly, the buyer is presented with a UI. The buyer clicks on the UI and enter the buy information.
A background process does the seller and buyer matching. The matching is based on price , volume, and timing of the order. If there is a match, the contract is established.
After there is matching, the software can instruct the smart meter of the seller to send the agreed energy amount to the buyer at the agreed time.
Secondly, to establish the trustworthiness of the selling information, there is a need to check the capacity of the seller. Think about it, what if the seller enters an selling amount which he/she is not able to provide for.
Instead of letting seller keying the selling information without verification, the software can read from the smart meter on the excess energy generated. The information read is then sent to the exchange platform.
This diagram above is based on the assumption that the smart meter output a file. If the smart meter supports JSON RPC, the exchange platform software can query smart meter as well.
Thirdly, peer to peer exchange can utilise blockchain to achieve a decentralised peer to peer exchange. Without the use of the centralised database, and centralised server application, a truly decentralised peer to peer exchange can be built. Imagine we replace the database with blockchain.
In conclusion, peer to peer exchange is a way to move forward for exchange platform.