Topic: How does exchanges work? - page 2. (Read 581 times)

Theybare just the same to other traditional financial markets we already have like the stock amrket and the forex market. They are counted as only the brokers of the platform we are using and their jobs is to posts the buy and sell orders as well as match them for a fee. Even KYC is now a requirement for crypto exchange ever since the government has taken part with the industry. The only different thing I see is how cryptobexchanges put up their altcoins available as compared to stocks in the stock market. Compared to the stock market the ICO of an altcoin doesn't need to happen in that exchange as it can be made available in their platform even after the ICO has happened.

This the reason why a lot of coins never have chances to be listed in Binance, fees are just crazy just to have a place in there.
This is how Binance plays and still to be considered one of the best exchanges in crypto because of its volume and we can find good coins inside.

Binance is also subject to a lot of risk. They've got hacked again:

https://www.bloomberg.com/news/articles/2019-05-08/crypto-exchange-giant-binance-reports-a-hack-of-7-000-bitcoin


This is the biggest problem with centralised exchanges - they have a centralised source of vulnerability.

Binance doesn't fix prices for the trading pairs,only the traders who want to buy and sell register their desired price so eeryone just follow it based on their required profits.Buildig such trading platform is not such a complex one but their security system is one thing need to be considered.If they are very weak then hackers will find a way easier and steal all the money from the exchanges.

Perhaps the main problem for them (exchange) is the network where they are very careful every time hackers attack the system to take their money, hackers are the most worried and maybe the system they manage gets a big problem for everyone, the advantage is very much for get for Binance because Binance is a large exchange and accommodates many investors by obtaining fees from the registration of coins and the costs of any transaction, the way it works is just how to exchange other coins and can be used to trade or invest.

LOL, where you talked about them losing money got me laughing. These don't lose any money, they make a lot of money everyday, whether the trade you placed is a win or lose, they are making the money. These are platforms are for trading and they don't do it for free, you pay trade fees, and that's the money that goes to them.

Imagine how many traders are on Binance, and then check how much they charge as  trading fees and how many times people trade in their platform a day, then you will know these people are making millions of dollars everyday. So they are rich. As for how to start an exchange, not everyone can start up and run an exchange, if you don't have the money and the right connections, then you can't do it.

I'm not sure about this but I think this list will answered how they earn through their exchange:

> Coin listing - If the project meet all the requirements required from their platform they will ask the project for a listing fee.
> Withdrawals/transactions - I think every coin listed their, if you withdraw it they will take some fees from it
> BNB coin - They have their own coin that supports their platform

So far here are what I've think on how the exchange earned from their own platform.

The listing there, as I have heard, is around 50 BTC. That's freaking a lot. Knowing how to get in there is like volume heaven for altcoins especially the go-to for traders. A lot of them are actually going to be exposed to many traders looking for investments or something.

Binance are centralised exchange, I believe their source code is not anywhere on the public repository, of course profits are from fees and coin listing but both are based on a strong cryptocurrency trading engine, you can catch a glimpse on how these engine works by checking out DEX

I don't think there is any member here that knows more about Binance than you could find yourself on the internet. You should start working harder and dig dipper into the history of this company and I'm sure at some point you will surely find its origin and their comments when the company was created. You could also try to contact a member of Binance team and ask them directly for some information regarding their history even though I doubt you'll get anything.

Exchange works when there's people who uses the platform,both traders and developers are bound to work together and exchange as the middle executer of any transactions that the two sides agree, exchange always got cut from transactions that's been created so the more the popular the exchange from the traders the more it will continuously gained profits.

mostly all exchangers earn profits through fees if we check Binance last few year profits the profit percentage is huge

Don't forget that decentralised exchanges exist too - the so-called Dex's.

For example, Open Ledger:

https://dex.openledger.io/

You don't need to pay a fee to list on a dex. The real question for researchers is why users prefer the centralised exchanges instead of the dex's. Is it because the centralised exchanges advertise and the dex's don't?

listing coins fee depend on exchanges reputation.if they have huge daily volume trading and good security ofcours many projects and traders interested.moreover if they have feature community voting that used exchanges token.

with the increasing number of ico who register in the exchange, of course this will further increase the price of exchange coins themselves. so that more and more traders will stop and give life in the exchange

Exchanges really aren't that hard to understand; their ability to make a profit lies entirely on their popularity and trust from the community, essentially.

The exchange exists as a middle man who collects deposits from users (depositing Bitcoin into the exchange) and allows for them to trade what essentially amounts to tokens on the exchange's respective crypto markets. Once users purchase and withdraw their crypto, the exchange sends some of the deposits they hold to the user's wallet.

To avoid losses, the exchange charges a transaction fee for every trade made on their platform, which pays for their various expenses like servers, internet, and the like. This is also how they make a profit, usually, along with whatever other revenues they generate from options being placed on their platform. They're not affected by the volatility of the market, and in fact benefit from it in most cases, because traders may be emotionally inclined to buy or sell their coins based on the market shifting. This results in an increase in the volume of transactions and, in turn, generates more $ for the exchange because of their transaction fees.

The most difficult portion of running an exchange is security. Everything else is just maintaining your infrastructure and minimizing downtime.

there are two types of exchanges in the crypto currency world, those are centralized and decentralized. these tow platforms act different kind of behavior. in centralized there are centered authority which handling transaction. for an example we send our assets for them they sell it for someone with our price and buyer send money for them and they send money for us. that is centralized decentralized is no handlers and we can directly make a deal with buyers. these tow ways add some transaction fee. 

it looks like they were not having capital to do that when it was started and you can search the binance ico that has already ended at first july of 2017. Binance exchange site has used ico to get the funds and they had not used their own money. Binance started to hire more and more programmers after it was getting a big result in profit six months after ico.
https://www.ccn.com/binance-from-ico-to-the-worlds-largest-cryptocurrency-exchange-in-six-months

The revenue from the fees is nothing compared with revenue that comes from the listing a coin. I heard even an ico paid 5 millions dollar for listing on binance.

Here is a good read from reddit: (https://www.reddit.com/r/Antshares/comments/6jny7g/all_about_wwwbinancecom_info_in_english_as/). I even saw CZ replying on that post.  . Anyways, just like any other business, I'm sure they have huge capital to begin with to hire the best programmers and then most probably CZ was always awake and on top of every release testing of his application. They charge a fee for every trading transactions you do so obviously they are making billions of profit as of 2019. (https://www.newsbtc.com/2018/11/10/how-has-binance-been-more-successful-than-coinbase-within-a-year/).

I am not sure we know how they can make a profit, and I don't think that Binance will tell us how they can do that thing because it's related to their company secret.
Maybe you can find by yourselves from reading all the information you got from the search engine.
Besides that, we don't know how long they build the system so it could give them a profit in for a long time.