What’s a Bitcoin Exchange?
It is the digital marketplace where the traders may buy or sell bitcoin by using various fiat currencies and alt-coins. The bitcoin exchange is the online platform, which acts as intermediary between the buyers and the sellers of cryptocurrency.
Knowing About Bitcoin Exchange
The Bitcoin exchange platforms will match the buyers with sellers. Just like the traditional stock exchange, the traders may opt to buy & sell bitcoin just by inputting the market order or limit order. When the market order gets selected, trader will be authorizing an exchange to trade their coins for best available rate in an online marketplace. With the limit order set, trader directs this exchange for trading coins for the price below its current ask and above its current bid, which depends on if they’re selling or buying.
For transacting in the bitcoin on exchange, user needs to register with an exchange or go through the series of verification procedures to authenticate the identity. When authentication is successful, account will get opened for user who needs to transfer their funds in the account before they will buy the coins.
Some Key Takeaways
The Bitcoin exchange will act as an intermediary between the buyer & seller, and to use the cryptocurrency language, between “maker” & “taker.” The bitcoin exchange generally works like the brokerage, so you may deposit money through wire, bank transfer or other common ways of depositing. But, you may often pay the price for such service. Suppose the trader wants trading between the cryptocurrencies, they may pay the currency conversion fee, same to the institutional banks while trading money from the different countries.