Do bitcoin exchanges own the bitcoins they trade with?

Moderator: kyletorpey

Do bitcoin exchanges own the bitcoins they trade with?

by sofy » Thu Apr 17, 2014 1:21 pm

If I have a balance in USD with any exchange, and I placed an order to buy bitcoins, how does it work for the exchange?
 
Posts: 17
Joined: Thu Apr 17, 2014 5:27 am

Re: Do bitcoin exchanges own the bitcoins they trade with?

by kyletorpey » Fri May 23, 2014 11:21 pm

There are a few different types of exchanges out there, so it really depends on which site you're using. For a site like CoinAgent, you are basically purchasing bitcoins directly from CoinAgent. You're also selling bitcoins to them whenever you decide you need to cash out. For a more traditional exchange, such as BitStamp, the trading engine is used to match buyers with sellers.

On a side note, it's also important to keep in mind who owns the private keys for the bitcoins. The person who owns the private keys is the one who owns the bitcoins at the end of the day. If you're exchange also has access to the private keys you store on their website, then you need to think about whether or not you trust that exchange with your bitcoins.
 
Posts: 29
Joined: Tue May 20, 2014 7:14 pm


Who is online
Users browsing this forum: No registered users and 1 guest
cron