You're not actually trading coins directly between wallets on a coin exchange, once your deposit is credited to your account the balance exists as a database entry and is incremented/decremented based upon trading, deposits and withdrawals. Essentially your coins become virtual so the decimal point rules of the client itself become irrelevant at that point. An exchange could add as many decimal points as they want but most stick with 8 because that's the standard set by Bitcoin.
The only time the 2 decimal point limitation would be an issue would be at the time you come to withdraw as the client won't allow you to send transactions with more than 2 decimal points anything in the remaining 6 decimal spaces would be dust that you can't withdraw.
Thanks for your explanation but it begs the question
if I buy .115 ETN
and buy again .115 ETN
that creates .01 ETN a valid decimal place and amount able to send or rcve.
How are the additional (6) decimal places created?
Trades are not on the blockchain and as such not limited to the same rules, there could be any number of decemal places but as soon as you try to withdraw (move the coins onto the blockchain) you will be forced to obey its rules which will generally mean any value after the first 2 decemal places wont be transferable. The same thing happens with NEO which only operates on whole numbers.
By executeing the below trades I was successfully able to send 0.0129209 ETN created
So if cryptopia is arbitrarily adding the additional (6) decimal amount then what accounting system creates these partial coins?
or If it execute a trade for 15.11 is cryptopia reducing that amount and then adding the addtional (6) decimal amount ?
4/12/2017 4:37:23 AM
Buy
0.00000651
3188.54610288
0.02075744
4/12/2017 4:37:14 AM
Buy
0.00000651
1195.84333637
0.0077849
7.89646045 ETN @ 0.00000652 BTC = 0.00005159 BTC total
again i bought
7.89646045 ETN @ 0.00000652 BTC = 0.00005159 BTC total
.00646045 + .00646045 = 0.0129209 ETN
I am now able to spend this 0.0129209 ETN
Is this not double spending?
Example;
Someone puts 0.01ETN on an exchange.
He sells that 0.01ETN to 10 people, now they each have 0.001ETN. They cant withdraw that ammount because its invalid on the blockchain but Cryptopia still have 0.01ETN (a valid amount).
Eventually one of them buys the other 9 peoples 0.001ETN and now has 0.01ETN, he can now transfer that off the exchange because it is a valid amount.
No coins were created or double spent etc. in that process, Cryptopia kept a ledger of who owns what out of the total pool and settled at the point of withdrawal, the number of decemal places is irrelevant up to this point as it is all happening off the blockchain.