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I have small question, where does bitcoin "banks" keep money you pay them for bitcoins? do they keep it in some kinda bank ?

and when we sell bitcoins to dollars what fee do we pay?

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Bitcoin "banks" are markets, not savings institutions. When you buy a bitcoin, you have bought a bitcoin; the money becomes the seller's. When you sell a bitcoin the money becomes yours and the bitcoin becomes theirs; similarly when you buy something with a bitcoin.

Since the value of bitcoins is not nailed down, there's no question of a transaction fee; you just agree with the other person on what the price of the goods is in bitcoins (or on what the conversion rate to/from other currencies will be). If you don't like the price or rate one person charges, you go elsewhere.

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    However, if the transaction is mediated by an exchange, the exchange may charge a fee or commission. – Nate Eldredge Sep 3 '14 at 1:02
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If you exchange dollars for bitcoin, you gain a bitcoin and lose a dollar and the other person gains a dollar and loses a bitcoin.

The person with dollars will store them however they want to store dollars. Most of the online exchanges have bank accounts (like any other business) so they can store their fiat currency.

There is no inherent fee associated with buying and selling bitcoin. Some businesses try to make money from this practice and may charge 1% or so. Others just give you a bad exchange rate,

Its the same as when you exchange currencies at the airport.

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