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How does a Bitcoin exchange platform work?

A Bitcoin exchange platform is an online platform where traders buy and sell bitcoins with the help of different fiat currencies and other cryptocurrencies.

The aspects behind the operation of a Bitcoin exchange
  • Market order or limit order will be inputted for buying and selling Bitcoins

  • Choosing the market order option enables traders to get the best available price 

  • Selecting the limit order option helps traders to price coins below the current ask or above the current bid according to buying or selling motive 

  • Buyer or seller who sets the limit price is a maker

  • A trader who places a market order that is immediately filled is a taker 

  • Transaction fees depend upon the volume of transactions and type of exchange

  • Different payment methods would be available for the transfer of funds 

  • Currency conversion fees may be charged by exchanges depending upon their location and their in-built liquidity

  • Wallets used for storing coins and authorizing payments are also chargeable 

These are the key things to keep in mind to know the functioning of a Bitcoin exchange.