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This question already has an answer here:

Ok, So I see A lot of people say that the bitcoin when purchased from one person to another that money gets sent to that other person in exchange for the BitCoin. Example If Bob has a bitcoin for 10 dollars and sold it to Jim, Jim would Pay 10 dollars to Bob for that Bitcoin. So what happens to the dollar when someone buys a bitcoin from cryptocurrency market. That money doesnt not vanish, so where does it go? It has to go somewhere. Its really confusing question hopefully someone can help me understand. Thank you.

marked as duplicate by Murch May 4 '17 at 16:21

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When you buy a book from Amazon (directly, not from its marketplace), who gets the money? Amazon gets it. They can use the money to buy more books to sell to other customers, pay their employees, power their servers, etc.

When you buy Bitcoins from Coinbase, who gets the money? Coinbase gets it. They can use the money to buy more Bitcoins to sell to other customers, pay their employees, power their servers, etc.

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"The Market" is not the one that sells and buys, it is a place (like an actual market) where sellers and buyers meet. So if you buy bitcoins in "The Market" you pay someone who owns those bitcoins and wants to exchange them for dollars.

After all transactions there are persons or entities selling and buying them.

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Most commonly you buy Bitcoin through an exchange platform (BTChina, Huobi, Bitfinex, Bitstamp, etc.). Then, the dollar amount you pay is debited to the bank account that you previously connected to your exchange account.

  • @B.Marsh did I answer your question? You neither accepted my answer nor accepted it. – msmna93 May 3 '17 at 12:01

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