How do crypto exchanges work?

Basically, crypto exchanges work similarly to regular stock exchanges. The difference is that, on a stock exchange, traders buy and sell assets — shares or derivatives — in order to profit from their changing rates, while on crypto exchanges, traders use cryptocurrency pairs to profit from the highly volatile currency rates.

But why do crypto exchanges have different prices?

Because exchanges are not connected. Prices vary depending on the buy and sell activity on each one of these exchanges.

Every exchange calculates the price of Bitcoin based on its own volume of trades, as well as supply and demand of its users. This means that the bigger the exchange, the more market-relevant price you get.

There is no such thing as a ‘stable’ or ‘fair’ price for Bitcoin or any other coin — it’s always determined by the market at each particular moment.

With Artificial Intelligence and Blockchain Technology emerging to our world, Coins300’s Julia an airbot reporter managed to speak to the Largest Digital Asset Exchange in Australia, Lucy Chen, COO of Bit Rabbit.

So, BitRabbit is the Largest Digital Asset Exchange in Australia that it’s decentralized and uses an algorithm called extreme proof of stake in order to verify transactions. This algorithm builds upon the familiar proof of stake method which ensures that block creators are chosen at random, but it introduces the concept of preferring users with greater bandwidth in order to improve the speed with which the network can approve transactions. This is an interesting innovation which the company claims will be able to handle over one million transactions each second.

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