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When we buy ETHERS at an exchange, how does it get added to the account in blockchain? I understand that the money (eg dollars) is for the exchange, but how does the exchange add it to the account in blockchain? Do they have special privileges on some special smart contracts which can add any number of ETHERS to an account?

closed as off-topic by Badr Bellaj, Rob Hitchens - B9lab, Nicolas Massart, Thomas Jay Rush, Jamie Hale May 2 '17 at 16:48

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TLDR Exchanges either have the ETH in their own accounts, or they go and buy it, again, in their own accounts. What they do in the fact, is keeping associated an ETH balance with your user account.

  • Then how do they add ETH to their own account in the first place? I mean where does it actually start/originate? I am unable to visualize/believe that it originates out of nothing. – Ashish Sinha Apr 26 '17 at 14:49
  • Some users will do the opposite: Give ETH to get FIAT. If the exchange doesn't have enough ETH, it will buy it from another agent. – Herman Junge Apr 26 '17 at 20:11

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