What is the Bitcoin(cryptocurrency) exchange?

[willerickson90]

I asked some time ago but get no useful answers. What is the main conceptual difference between Bitcoin(cryptocurrencies) exchange and fiat-exchange? I get something about safety. It was like " in bitcoin exchange - there are no secure, no safety" explanation was not clear. I never traded Forex or New York Stock Exchange so could you explain me in simple words like:

In New York St.Exchange nobody want to kill you, in Bitcoin world - everyone.  


Summary: I'm looking for conceptual difference between Bitcoin exchanges and fiat/stock exchanges. Could you the newbie?

Thank You

[DannyHamilton]

I asked some time ago but get no useful answers. What is the main conceptual difference between Bitcoin(cryptocurrencies) exchange and fiat-exchange? I get something about safety. It was like " in bitcoin exchange - there are no secure, no safety" explanation was not clear. I never traded Forex or New York Stock Exchange so could you explain me in simple words like:

In New York St.Exchange nobody want to kill you, in Bitcoin world - everyone.  


Summary: I'm looking for conceptual difference between Bitcoin exchanges and fiat/stock exchanges. Could you the newbie?

Thank You

Most fiat and stock exchanges are regulated by governments and must follow a long list of strict rules to protect the users.  They also are typically audited by independent third parties and are usually insured.

Bitcoins exchanges are unregulated, uninsured, and are not audited.  If you use a bitcoin exchange, you are hoping that they will act in a trustworthy manner, but have no way of knowing if you will ever get your money back.

Other than that, mechanically they essentially work the same way.  The exchange provides a market place for buyers and sellers to find each other and maintains an order book to provide the necessary public information for price discovery. The exchange handles the transfer of fiat and bitcoins between the buyer and the seller.  For providing this service, the exchange charges a fee.

[willerickson90]

I asked some time ago but get no useful answers. What is the main conceptual difference between Bitcoin(cryptocurrencies) exchange and fiat-exchange? I get something about safety. It was like " in bitcoin exchange - there are no secure, no safety" explanation was not clear. I never traded Forex or New York Stock Exchange so could you explain me in simple words like:

In New York St.Exchange nobody want to kill you, in Bitcoin world - everyone.  


Summary: I'm looking for conceptual difference between Bitcoin exchanges and fiat/stock exchanges. Could you the newbie?

Thank You

Most fiat and stock exchanges are regulated by governments and must follow a long list of strict rules to protect the users.  They also are typically audited by independent third parties and are usually insured.

Bitcoins exchanges are unregulated, uninsured, and are not audited.  If you use a bitcoin exchange, you are hoping that they will act in a trustworthy manner, but have no way of knowing if you will ever get your money back.

Other than that, mechanically they essentially work the same way.  The exchange provides a market place for buyers and sellers to find each other and maintains an order book to provide the necessary public information for price discovery. The exchange handles the transfer of fiat and bitcoins between the buyer and the seller.  For providing this service, the exchange charges a fee.

Is do not have any regulation in the exchanges by the administration?

and there were an history with MtGox. It was the biggest echange but crashed and now everyone shout "Scam!!". What happens with MtGox?

[gelar24]

I think his playing bitcoin much risk

if lost in one of the exchangers yes sometimes not be back again, I often experience it.

and no its law in this bitcoin world: D

[kingama]

MtGox failed due to some combination of incompetence, security issues, and banking/regulatory problems. The lawsuit and investigations are ongoing.

You need to be careful with any sort of exchange. Find out who the owners are, have they acted honorably in the past, and if there are recent complaints about the service. If your not sure, ask here. In general these pure cryptocurrency exchanges are more dangerous since they don't need any real world identity associated with them at all(i.e. No bank account required). I would actually trust a well-run one more however since the boogie man is less likely to seize your means of access and shut it down.

[Buziss]

and there were an history with MtGox. It was the biggest echange but crashed and now everyone shout "Scam!!". What happens with MtGox?

long story short, mtgox somehow lost 750000 btc (they don't even know how they lost it), didn't disclose the loss but continued to do business, and eventually became insolvent.