Exchanges
Order books, matching, and who really holds your coins.
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Step 1 of 5
An order book of offers
A centralised exchange keeps a list of offers called an order book: buyers' prices on one side, sellers' prices on the other.
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Step 1 of 5
An order book of offers
A centralised exchange keeps a list of offers called an order book: buyers' prices on one side, sellers' prices on the other.
Step 2 of 5
Matching sets the price
When a buyer's price meets a seller's, the exchange matches them. The trade happens at the price of the offer that was already waiting in the book.
Step 3 of 5
The exchange holds the keys
Coins you keep on an exchange sit in its wallets, under its keys. You are trusting the exchange with custody of your coins.
Step 4 of 5
Where most trading happens
In August 2026 about four fifths of crypto spot trading, meaning buying and selling the coins themselves, happened on centralised exchanges.
Step 5 of 5
What can go wrong
If an exchange fails, is hacked or commits fraud, customers can be locked out. FTX stopped withdrawals in November 2022 and collapsed. Hackers stole about $1.5 billion from Bybit in February 2025. Try it below.
Try it
You can withdraw to a wallet you control.
Prices in the order book are made-up examples.
Quick check
Did it stick?
2 questions. Get them right to complete the lesson.
Or skip ahead to lesson 7: Swaps and pools.
Sources
Checked 4 October 2026- Matching engineCoinbase Exchange documentation
- A centralised exchange keeps an order book: buyers' prices on one side, sellers' prices on the other.
- When a buyer's price meets a seller's, the exchange matches them.
- The trade happens at the price of the offer that was already waiting in the book.
- Ethereum walletsethereum.org
- Coins you keep on an exchange are under its keys: you are trusting the exchange with custody of them.
- Securing your walletbitcoin.org
- Exchanges can be hacked, fail or freeze access to funds.
- Exchange Review, August 2026CoinDesk Data
- In August 2026 about four fifths of tracked crypto spot trading happened on centralised exchanges (decentralised exchanges had 18.7%).
- SEC v. Samuel Bankman-Fried, complaint, 13 December 2022US Securities and Exchange Commission
- FTX stopped withdrawals in November 2022 and collapsed (paused 8 November, bankrupt 11 November).
- North Korea responsible for $1.5 billion Bybit hackFBI Internet Crime Complaint Center
- Hackers stole about $1.5 billion from Bybit in February 2025.
Corrections to this lesson: none so far. Spotted something wrong? See how we check facts on the sources page.