What is a Bitcoin Exchange Provider ?
What is a Bitcoin Exchange Provider and What Does It Do ?
What is a Bitcoin exchange provider ? What does it do ? We get these questions a lot.
There seems to be a fair amount of confusion. We’re going to lay out a simple answer.
Of course, iceCUBEDX is a Bitcoin exchange provider. One of the best. But that’s probably not what you were looking for.
More to the point, what do iceCUBEDX and similar Bitcoin exchanges do?
Well, an exchange is a place where buyers are sellers meet to trade things, with each other.
This is the key point. The buyers and the sellers are trading with each other. The exchange itself only provides the ‘place’ to trade.
An exchange is a platform. This ‘place’ is on the internet. It’s not physical. It’s a website.
To use an analogy, if it were a physical place, it would be similar to your local food market. The exchange would be the provider of the space for the market. And the buyers and sellers would meet at the physical market space to exchange things with each other.
So the buyers and sellers each meet at icCUBEDX, and similar exchange platforms, to trade with each other. In this case they are trading Bitcoins, Altcoins and Fiat currencies (ZAR, USD, etc).
A buyer may have bitcoin and he wants South African Rand. So, he will go to the exchange and log in. At the same time, someone else might have Rand and wants Bitcoin. The exchange provides a way for them to meet each other in one spot and trade.
This is where the Bitcoin price comes from; the interaction of buyers and sellers on exchanges, deciding with each other what a bitcoin is worth.
The average price of Bitcoin across all exchanges is 658.95 USD
— bitcoin price (@bitcoinprice) July 12, 2016
This is very different from a brokerage type service. With a broker the platform keeps an inventory of stock, say Bitcoin. When you go to such a service you are not exchanging one thing for another with a fellow user of the platform. Rather, you are buying the Bitcoin, by example, from the platform provider’s inventory.