How do bitcoin exchanges work?

mirpur10
Posts: 6

How do bitcoin exchanges work?

Post#1 » Thu Jan 19, 2017 8:44 pm

A great exchange is in which buyers and vendors conduct their enterprise. A seller regarding BTC deposits BTC with all the exchange's address. They can then use his / her positive BTC balance inside the exchange to promote his BTC regarding Dollars (or perhaps other coins). In the same way, a buyer regarding BTC deposits USD with all the exchange and then uses the balance to buy BTC coming from sellers.

phunter
Posts: 55

Re: How do bitcoin exchanges work?

Post#2 » Fri Jan 27, 2017 2:28 pm

So the best price to buy bitcoins for is then 105. ... A seller of BTC deposits BTC with the exchange's address. He can then use his positive BTC balance in the exchange to sell his BTC for Dollars (or other coins). Similarly, a buyer of BTC deposits USD with the exchange and then uses the balance to buy BTC from sellers.

james
Posts: 55

Re: How do bitcoin exchanges work?

Post#3 » Fri Jan 27, 2017 2:29 pm

Real exchanges, like MtGox or Bitstamp, are really just a medium between traders. People can set limit orders to buy / sell bitcoins for a certain price. The exchange will match buyers and sellers when conditions of both the buyer and the seller are met.

More concrete, there are two types of orders: limit orders and market orders. Limit orders allow a trader to buy bitcoins at a price lower than the current price or sell bitcoins higher than the current price. However, these orders will only be executed once another user accepts them. Market orders will just find the best matching limit order.

sberry
Posts: 55

Re: How do bitcoin exchanges work?

Post#4 » Fri Jan 27, 2017 2:30 pm

Image

An exchange is where buyers and sellers conduct their business. A seller of BTC deposits BTC with the exchange's address. He can then use his positive BTC balance in the exchange to sell his BTC for Dollars (or other coins). Similarly, a buyer of BTC deposits USD with the exchange and then uses the balance to buy BTC from sellers.

Thanks,

Return to “Bitcoin Exchanges?”

Who is online

Users browsing this forum: No registered users and 1 guest