Are exhanges making use of the blockchain internally?

[Agiravax]

1- Are the trades on exchanges (from a buyer to a seller) made through the blockchain or is it virtual (exchanges only have one main wallet and virtually credit/debit the different accounts) ?

I am confused because for as I see it, transactions made on exchanges are usually credited instantly and the fees taken seem to only represent the exchange fees (not the miners fees) but at the same time, each user have several personal addresses to send the different coins.

If it is virtual, then volumes calculated for all transactions would require to be adjusted in order to take into account exchanges + blockchain.

2- If my first assumption is correct, is coimarketcap giving volumes adjusted (volumes on all exchanges + volumes through the blockchain) ?

I am asking because I am looking for the volume data to analyse the market (starting with btc) and found different sources but they all provide different numbers which is confusing:

https://coinmetrics.io/data-downloads/   
https://www.blockchain.com/fr/charts

Thanks

[elda34b]

1. They trade it virtually. Each exchange has several addresses (personal address) for their user. They use this address to identify which user account should be credited if there's a deposit/withdrawal. Your assumptions are correct.
2. Adjusted volume is, as coinmarketcap define it, a volume from exchange spot market without the volume from 0-fee market and transaction mining which can be used to increase exchange volume dramatically.

[Findingnemo]

I am not much sure about how exchange's wallets works,but I believe most of the wallets are tied up together.They can send and receive funds between those wallets without any fee and confirmations so all belongs to same wallet with different identifier to differentiate funds between each wallet.

[incomefromcoins]

Internal trading wont be possible in cryptocurrency unlike in shares and other market crypto current and decentralised and no one control or manipulate the market

[The Cryptovator]

Once you bought a coin from exchange it's just virtual. It's not include your wallet address. It's just an algorithm system. For example you bought eth from exchange if you check your deposit address on etherscan its will not show your balance. But you can transfer your eth to other address. Every exchange have hard wallete. They will approve your withdrawal from there. Your exchange address is just for identity of your deposit. You can see same address for all erc20 token. Means that address for you. Regarding volume calculations I am not 100% sure how they are doing it. Perhaps exchange calculate it depend on value of circulation coins. And CMC collect data from all exchange that coin are listed. There is something related like API. Once you will try to list a coin on CMC they will ask for trading link to collect volume data. And everytime you need update once you will add new exchange.

[exstasie]

1- Are the trades on exchanges (from a buyer to a seller) made through the blockchain or is it virtual (exchanges only have one main wallet and virtually credit/debit the different accounts) ?

I am confused because for as I see it, transactions made on exchanges are usually credited instantly and the fees taken seem to only represent the exchange fees (not the miners fees) but at the same time, each user have several personal addresses to send the different coins.

On centralized exchanges like Bitfinex, Bitmex or Coinbase, there is no blockchain involved. They use a database and an order matching engine to execute trades between accounts. The blockchain is only involved when customers make deposits and withdrawals from the exchange.

On decentralized exchanges like IDEX or Etherdelta, trades are executed through smart contracts on the blockchain.

2- If my first assumption is correct, is coimarketcap giving volumes adjusted (volumes on all exchanges + volumes through the blockchain) ?

The exchanges voluntarily report their trading volumes, same as price data. Coimarketcap just aggregates and publishes that self-reported data.

[davinchi]

They do not do it on blockchain. From one person to other person usually all exchanges make it off blockchain and just credit the same amount to that person. It only uses blockchain when there is a withdrawal in order to give you your coins but aside from that it is purely "credits" system you talk about. Since, they do not use blockchain to change credits on people the blockchain moves are just added on top of the current volume.

It means if for example binance had 1000 btc moves today and bitfinex had 800 and so forth you add the blockchain volume on top of that and have the total volume for a coin. That is the calculation right now and that has been for a while. If you do not put the blockchain in you miss out on the real transactions, if you do not put the exchanges in you miss out on the trades, so you use both of them together combined.

[eminemcookie]

It makes little sense for them to do it on a blockchain when they can easily do it without and not have to pay any fees. The only case for using a blockchain would be a private solution but that would still have some cost. Given that they don't have to move funds each time a trade happens (only on deposit or withdrawal) it's far more efficient to do it virtually.

[BitHodler]

Databases are faster and more scalable than blockchains are, and with that in mind, there is no point for any centralized service to dip its feet in blockchain technology. It's a buzzword rather than a useful tool.

By the time everyone in this space wakes up and understands how insignificant the blockchain is as technology for the corporate world, the appreciation for crypto currencies as decentralized networks will explode.

I don't understand how databases have been overlooked that blatantly throughout the years before Bitcoin came into existence. You can 'bling out' databases the way you want and issue tokens as well. I don't get it.

[deisik]

Databases are faster and more scalable than blockchains are, and with that in mind, there is no point for any centralized service to dip its feet in blockchain technology. It's a buzzword rather than a useful tool.

By the time everyone in this space wakes up and understands how insignificant the blockchain is as technology for the corporate world, the appreciation for crypto currencies as decentralized networks will explode.

I don't understand how databases have been overlooked that blatantly throughout the years before Bitcoin came into existence. You can 'bling out' databases the way you want and issue tokens as well. I don't get it.

Strictly speaking, blockchain is a database

More specifically, it is a variety of a distributed database which uses asymmetric cryptography for validating write access to its records and proof of work to add these records to the database. Obviously, centralized databases, which you implicitly refer to here, are more efficient as they don't need to be distributed (read each node having to keep an up-to-date copy of the database), nor do they need all the fuss with proof of work as they are existing in a trusted environment per definition. The tokens you mention will be a centralized, private money, and I don't think this is what the majority here needs or wants

[BitHodler]

The tokens you mention will be a centralized, private money, and I don't think this is what the majority here needs or wants

You are wrong. The majority consists of people who don't give a shizzle about what they buy or trade or use. If it offers convenience, the possibility of returns, they will be digging into it, and they already do.

If anyone even for a second bothered to look into why crypto has value in the first place, the amount of shitcoins and projects selling tokens wouldn't be anywhere near it is today.

It all comes down to the demand there is for this, and that demand will only keep increasing. If you thought that 2017s bubble was bad, then wait for how ugly the next one will be, where even less people will value decentralization.

[deisik]

The tokens you mention will be a centralized, private money, and I don't think this is what the majority here needs or wants

You are wrong. The majority consists of people who don't give a shizzle about what they buy or trade or use. If it offers convenience, the possibility of returns, they will be digging into it, and they already do

If you are right, why is Bitcoin still the top currency then? If people don't care about decentralization, anonymity, transparency, accountability, that is everything which blockchain offers as they "don't give a shizzle about what they buy or trade or use", where is that Bitcoin killer coin, really?

If we follow your logic through, then the overhead that decentralized blockchain-based coins come with is completely unnecessary and Bitcoin should have been dethroned long ago by private monies that don't suffer from all this unnecessary stuff, right?

In short, what you desperately need is a good reality check