Topic: How do exchanges acquire BTC? (Read 873 times)
Where do exchanges sell their BTC (fees) for fiat?
Mining is the only way in which bitcoins come into existence.
Before any exchanges were ever formed, a considerable amount was already in circulation between miners and early adopters.
OTC trading started well before any orderbook-based exchange got started.
Before any exchanges were ever formed, a considerable amount was already in circulation between miners and early adopters.
OTC trading started well before any orderbook-based exchange got started.
So the actual supply of BTC comes from the miners originally?
People deposit BTC there, and create limit orders to fill up the order book just like how you deposit fiat there and create your own orders.
A new exchange uses BTC supplied by its owner/investors to seed the initial order book.
A new exchange uses BTC supplied by its owner/investors to seed the initial order book.
Exchanges don't acquire btc, they provide a platform for people to buy and sell each other btc/fiat. I.e. people who want to sell BTC deposit it on an exchange.
I was thinking about what sort of plan (coin?) someone might come up with for getting around a government ban on fiat->BTC transfer and I realized I don't know how an exchange *actually* acquires the BTC that they transfer to you in exchange for fiat. How is that done?
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