What Are Centralized Cryptocurrency Exchanges?What is a decentralized market?

in bitcoin •  7 years ago 

For most digital currency investors, the centralized cryptocurrency exchange is one of the most important vehicles for transacting. Centralized cryptocurrency exchanges are online platforms used to buy and sell cryptocurrencies. They are the most common means that investors use to buy and sell cryptocurrency holdings.
you have to know to need basic question answer first
I will clear your term
1] What is a coin exchange?
Sometimes Technically coinbase is not an exchange. They operate as a wallet service that allows individuals to buy/sell only via ACH/credit cards. Unlike MTGox which is an exchange that allows users to continually buy and sell coins without requiring funds being sent back to the bank.

2] What does a Cryptocurrency exchange do?
A bitcoin exchange is a digital marketplace where traders can buy and sell bitcoins using different fiat currencies or altcoins. A bitcoin currency exchange is an online platform that acts as an intermediary between the buyers and sellers of the cryptocurrency. The currency ticker used for bitcoin is either BTC or XBT.

3] What is a decentralized market?
A decentralized market is a market structure that consists of a network of various technical devices that enable investors to create a marketplace without a centralized specific or any location.

4] What is a decentralized currency?
A decentralized system doesn't have one person with that much control. Instead of a government that prints money for itself, everyone can mine Bitcoin. Instead of putting trust in a government to back a currency and maintain its value, Bitcoin's value comes from the network of people using it.

5] How do Bitcoin exchange work?
Trading bitcoin is like trading anything else on an exchange. You can trade dollars for euros through forex, and dollars for bitcoins on the exchanges. It's very similar, but it depends on the idea that it's traded on an actual currency, said Lord. There's a little bit of a disconnect when talking about it.

6] What do you mean by Decentralisation?
The third type of administrative decentralization is devolution. When governments devolve functions, they transfer authority for decision-making, finance, and management to quasi-autonomous units of local government with corporate status.

When you buy Bitcoins from an exchange using a bank transfer or credit card, where are the Bitcoins you're buying sourced from? It was my understanding that you have to buy Bitcoins from an individual who's actively selling their Bitcoins. Do they just buy a massive amount of coins all at once and slowly sell them off?
In a centralized exchange, you press trade and things just happen in the background while in a traditional decentralized exchange there are multiple transactions involved to exchange one cryptocurrency to another.
For most digital currency investors, the centralized cryptocurrency exchange is one of the most important vehicles for transacting. Centralized cryptocurrency exchanges are online platforms used to buy and sell cryptocurrencies. They are the most common means that investors use to buy and sell cryptocurrency holdings.
An overwhelming majority of trades in the cryptocurrency space are made on centralized exchanges, as opposed to decentralized exchanges.

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