beginnereconomics

exchange

Definition

A Bitcoin exchange is a marketplace where buyers and sellers agree on a price and trade Bitcoin for traditional currency or other assets. Unlike holding Bitcoin in your own wallet, keeping funds on an exchange means trusting that company to secure them on your behalf.

Example

BitcoinMarket.com, launched in March 2010, was the first Bitcoin exchange where prices were set by buyers and sellers.

Related Terms

Bitcoin

A decentralized digital currency that operates without a central bank or single administrator.

Transaction

A transfer of Bitcoin from one address to another, recorded permanently on the blockchain.

Fiat

Government-issued currency that is not backed by a physical commodity like gold.

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