When i buy bitcoin where does my money go

Other cryptocurrencies have seen similar spikes, though they trade for much less than bitcoin. We may receive compensation when you use Bitit. I’ve never lost any money to scams or thefts. Bitcoin provides sound and predictable monetary policy that can be verified by anyone. This section aims to provide more clarity on how a trade might work using one of these exchanges.

Why You Should Buy Bitcoin — At Least Us$100 Worth

Do you remember the first time you ever bought a stock? I remember being nervous as I drafted and re-drafted that first buy order email to the broker. I wanted to make sure I got it right. I didnt want the broker at the other end to see me bitcoiin what I was, a nave teenager out of his depth. I remember Id come across the term GTC, short for Good til Cancelled, an order that is in force until either the stock is bought, or the order wgen. So, I threw in a GTC at the end of my order for good measure. That way, I thought, hed know I was a pro.

Why Invest in Bitcoin?

By using our site, you acknowledge that you have read and understand our Cookie Policy , Privacy Policy , and our Terms of Service. This question seems to me to be such an obvious question, that it must be answered somewhere. As I understand it is necessary to buy bitcoins using dollars or some other currency. Where do those dollars etc. The money goes to the party that sold it to you — that party owned the bottle before you owned it.

Some people kill time at the airport by browsing duty-free shops. I decided to shop for bitcoin.

By using our site, you acknowledge that you have read and understand our Cookie PolicyPrivacy Policyand our Terms of Service. This question seems to me to be such an obvious question, that it must be answered. As I understand it is necessary to buy bitcoins using dollars or some other currency. Where do those dollars. The money goes to the party that sold it to you — that party owned the bottle before you owned it. You might be able to trace ownership of that bottle all the way back through the supply chain, to the point at which it was manufactured.

It probably had several prior owners before you got it. If you purchase from a market exchange like Mt. Goxhere’s how that works. Gox, like most market exchanges, operates using deposit accounts.

To sell 10 bitcoins you must have deposited 10 BTC to your account with the exchange. Then when you withdraw your BTCs, the exchange will send that amount of bitcoins from the exchange’s wallet to yours. When the seller withdraws the USDs or whatever currency the coins were sold forthe exchange will send those funds.

This generally occurs through the banking system, with the funds eventually arriving in the seller’s bank account. There are other types of bitcoin sellers — direct sellers, who have an inventory of bitcoins that they purchased previously, or will make a trade behind the scenes to be able to deliver your order. So the dollars from your purchase goes to them in exchange for the bitcoins they owned. Then there are other types of trades which involve risk. These include financial derivatives where you may speculate on bitcoins using cash but until you actually withdraw those bitcoins to your own wallet, you only own a claim against those bitcoins or against a financial position on bitcoins.

But that is an example where there is not a simple buying and selling of bitcions at a certain price. Now every bitcoin in existence originated from mining. Mined coins arrive 50 at a time about once every ten minutes.

They are earned by a mining operator or mining pool and distributed to the mining operators who were mining. To mine, one must buy expensive hardware, expend the effort to build and operate the equipment, and purchase the electricity expended during mining.

The mining operators can then deposit their bitcoin proceeds to an exchange to sell them and receive cash in exchange. It’s like when you buy anything. When you trade your dollars for somebody else’s eggs, you get the other person’s eggs, and they get your dollars. You can then sell the eggs to somebody else if you like — then you get their dollars, and they get your eggs. If you are able to sell your eggs for more than you paid for them, you make a profit. Instead of buying eggs, it is possible to mine them using a device commonly known as a ‘hen’.

Hens make eggs out of thin air, and are effectively a license to print money since the eggs they make can be traded for dollars. They do require fuel to run, which costs money. Miners need to determine whether their earnings from mining eggs is enough to offset the fuel costs.

Unlike eggs, however, there is a fixed limit of 21 million bitcoins that will ever be created, which makes them relatively scarce, and helps give them value.

Home Questions Tags Users Unanswered. Where do when i buy bitcoin where does my money go dollars go? Ask Question. Asked 7 years, 4 months ago.

Active 2 years, 6 months ago. Viewed 40k times. When you buy a bottle of soda at the convenience store, where does the money go? Bitcoins are like a commodity that works the same way. Stephen Gornick Stephen Gornick So in the case of an exchange like Coinbase, do they hold a «pool» of Bitcoin that they hold and sell to people? Chris Moore Chris Moore 14k 5 5 gold badges 56 56 silver badges 81 81 bronze badges.

Heh, this is a great way of explaining it! Chris How does this work in the case of exchanges like Coinbase? Directly to people who are currently selling if you don’t count the minor exchange fees. Featured on Meta. Update: an agreement with Monica Cellio. Linked 0. Related 4. Hot Network Questions. Question feed. Bitcoin Stack Exchange works best with JavaScript enabled.

HOW TO BUY BITCOIN WITH CASH IN 10 MINUTES!!

Here’s What Happened When I Bought Bitcoin In Person

Bitcoin exchanges have a checkered history. Chapter 1 Introduction. Many Bitcoin exchanges have been hacked and lost customer funds. On some level, I figured one fear might cancel out the. BitQuick Popular.