How does an exchange work?

Great question! An exchange is a platform where traders can buy and sell cryptocurrencies like Bitcoin or Ethereum. Essentially, it connects buyers and sellers, allowing them to trade their digital assets for other digital assets or even fiat currencies like USD or EUR. When you use an exchange, you typically create an account, deposit funds, and then place orders to buy or sell cryptocurrencies. The exchange matches your orders with those of other traders, and the trade is executed when both parties agree on the price and quantity. Exchanges can be centralized, meaning they are run by a single company, or decentralized, where transactions are verified and recorded on a blockchain network. They also offer different features and services, such as trading pairs, order types, and fees. So, in summary, an exchange is a marketplace for trading cryptocurrencies, connecting buyers and sellers and facilitating the exchange of digital assets.