Simple diagram to explain hash to cash
http://www.bitcoinpincher.com/hash-to-cash
Mt. Gox is simply marrying buyers to sellers... and Buyers already have $$ in their accts and sellers already have bitcoins in their accts, so they don't need a stockpile of coinage.
Topic: Can someone better explain: BTC<->exchanger<???>Dwolla<->USD (Read 953 times)
They function very simply. When you deposit funds (whether dollars or bit coins) into your account they are held by the exchange. Then when you match a buyer and a seller of one currency into another, the funds are moved between the two accounts and a commision is deducted.
The exhanges are simply a trusted third party holding funds and performing the actual trade.
Dwolla and others are simply a way to send money between established real world banking entities. When you deposit or withdraw funds from mtgox they move them between real world bank account #1 (yours or mtgox) and real world bank account #2 (theirs).
The exhanges are simply a trusted third party holding funds and performing the actual trade.
Dwolla and others are simply a way to send money between established real world banking entities. When you deposit or withdraw funds from mtgox they move them between real world bank account #1 (yours or mtgox) and real world bank account #2 (theirs).
Just trying to understand the process.
I'm not educated in stocks and economies.
I am however confused as to how the exchanges function. Are there wikipedia links or something similar someone can recommend?
I'm not educated in stocks and economies.
I am however confused as to how the exchanges function. Are there wikipedia links or something similar someone can recommend?
The easiest way is to exchange into LR($) (Liberty Reserve) and then try to sell LR($) into Cash (like US-$ or EUR)
What kind of mechanism is it that gives the exchanges the ability to exchange?
I am not understanding this supply chain very well. It feels sketchy.
Basically, I am confused as to how BTC are converted to liberty reserves, dwolla bucks, etc.
Does Mt.Gox for example have a large sum of dwolla bucks that they manage around?
I am not understanding this supply chain very well. It feels sketchy.
Basically, I am confused as to how BTC are converted to liberty reserves, dwolla bucks, etc.
Does Mt.Gox for example have a large sum of dwolla bucks that they manage around?
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