What are the mechanics of a bitcoin exchange, or any ‘classical’ exchange that is?
Say I want to go back into fiat because the local italian join doesn’t like bitcoins…lol. Anyway.
I hop onto the exchange, (hear: any) and select the exchange of XBT to USD. I move bitcoins to the exchange and wait for confirmation. When the coins are confirmed, I execute the exchange and my bitcoins are gone and now I have USD. I then wire my USD to a bank account, hop into the car, go downtown, and get me some good ladsagna.
Now, I’m not that knowledgeable about the exchange market so hear me out:
1.) Do the bitcoin exchanges have a single wallet that all funds go into, or does the user have their own?
2.) Do all exchanges of bitcoins to fiat or v-v exist on the main-chain or does it exist off chain?
3.) How are prices determined? Are they a running average of all take/give prices of bettors/sellers?
4.) What are the usual fees associated with the exchange?
Again, not to savy when it comes to this, (although, you may argue other things that I am not too keen on, please PM your jokes to me.)