<p>Exchanges generate a new address for each user when a user wants to deposit, so when they receive a deposit to a specific address, they know who to credit the deposit to.</p>

<p>Since Bitcoin does not use accounts, there is no need for the exchange to consolidate their received Bitcoin. They can simply spend from multiple addresses when they want to send Bitcoin to someone, e.g. for a withdraw.</p>

CC BY-SA 4.0
2018-06-11T15:04:53.500Z
But how would they keep the amounts of bitcoin? I mean they will be run out after their users withdraw in the end.
西田龍
CC BY-SA 4.0
2018-06-11T17:45:22.713Z
They periodically refill the hot wallet with coins from cold storage. However since coins people deposit go into the hot wallet, the hot wallet does not become empty because when someone withdraws, someone else is depositing.
Ava Chow
CC BY-SA 4.0
2018-06-11T23:29:52.250Z
I think unless concentrating the BTC to their address for withdrawals as a user deposits, it would be hard to know how much the user deposited, because if we use BTC from the user's address, we can't distinguish if the transaction is the user's or theirs for their users' withdrawals.
西田龍
CC BY-SA 4.0
2018-06-11T23:55:53.990Z
Exchanges have their own internal accounting system which they use for tracking user balances. There is no need to have to read the blockchain in order to figure out what the balances are.
Ava Chow
CC BY-SA 4.0
2018-06-12T08:43:24.410Z
I see, but isn't there a concern that the fees for withdrawals transactions become more expensive I mean the number of inputs can be more unless they make an address that has lots of BTC?
西田龍
CC BY-SA 4.0
2018-06-12T09:06:18.330Z
Fees generally are not a concern since the customer pays them and usually way overpays. Most exchanges will have some flat rate "miner fee" that they charge when you withdraw from them and that "miner fee" is more than enough to cover the actual transaction fee.
Ava Chow
CC BY-SA 4.0
2018-06-20T16:25:30.457Z
I see. By the way, how do they charge the fee of transferring the bitcoins that are not needed currently to their cold wallets in order to prevent being stolen?
西田龍
CC BY-SA 4.0
2018-06-20T22:07:32.223Z
Since exchanges make money, presumably they eat that cost themselves. User balances do not change, just the expenses of the company increase.
Ava Chow
CC BY-SA 4.0
2018-06-21T10:30:32.407Z
Understand, so what their processes for calculating their users deposits are like know users total received amount of bitcoins by using “getreceivedbyaddrrss” after that, calculate the users funds by using the total received bitcoins plus how much users get benefits/loss, right?
西田龍
CC BY-SA 4.0
2018-05-12T17:18:03.197Z
2018-05-12T17:18:03.197Z
Ava Chow
<p>When you want to deposit to an exchange, you request a deposit address from the exchange.  This address is generated specifically for you.  So the exchange knows that any coins received by that address are coming from you (or someone who wants to pay you), and should be credited to your account.</p>

CC BY-SA 3.0
2018-03-09T15:11:51.720Z
But I think they soon have to send to their accounts to concentrate, and it's going to be unproductive because they have to pay for fees when their users deposit.
西田龍
CC BY-SA 3.0
2018-03-09T14:49:28.487Z
2018-03-09T14:49:28.487Z
Nate Eldredge
<p>I know some altcoins have features that allow senders to attach messages to transactions and using those features, exchange services distinguish the sender.
However, I don't know if there's such a function in Bitcoin. How can exchanges tell who paid them without such a feature?</p>

<exchanges><identity><deposit>
How do exchange services distinguish who sent to them?
西田龍
# How do exchange services distinguish who sent to them?

(Asked by: username_0 on 2018-03-09)

I know some altcoins have features that allow senders to attach messages to transactions and using those features, exchange services distinguish the sender.
However, I don't know if there's such a function in Bitcoin. How can exchanges tell who paid them without such a feature?

**Tags:** exchanges, identity, deposit


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## 2 answers

### Answer by username_1 on 2018-05-12. Score: 1

Exchanges generate a new address for each user when a user wants to deposit, so when they receive a deposit to a specific address, they know who to credit the deposit to.

Since Bitcoin does not use accounts, there is no need for the exchange to consolidate their received Bitcoin. They can simply spend from multiple addresses when they want to send Bitcoin to someone, e.g. for a withdraw.

> **Comments:**
> **username_0**: But how would they keep the amounts of bitcoin? I mean they will be run out after their users withdraw in the end.  
> **username_1**: They periodically refill the hot wallet with coins from cold storage. However since coins people deposit go into the hot wallet, the hot wallet does not become empty because when someone withdraws, someone else is depositing.  
> **username_0**: I think unless concentrating the BTC to their address for withdrawals as a user deposits, it would be hard to know how much the user deposited, because if we use BTC from the user's address, we can't distinguish if the transaction is the user's or theirs for their users' withdrawals.  
> **username_1**: Exchanges have their own internal accounting system which they use for tracking user balances. There is no need to have to read the blockchain in order to figure out what the balances are.  
> **username_0**: I see, but isn't there a concern that the fees for withdrawals transactions become more expensive I mean the number of inputs can be more unless they make an address that has lots of BTC?  
> **username_1**: Fees generally are not a concern since the customer pays them and usually way overpays. Most exchanges will have some flat rate "miner fee" that they charge when you withdraw from them and that "miner fee" is more than enough to cover the actual transaction fee.  
> **username_0**: I see. By the way, how do they charge the fee of transferring the bitcoins that are not needed currently to their cold wallets in order to prevent being stolen?  
> **username_1**: Since exchanges make money, presumably they eat that cost themselves. User balances do not change, just the expenses of the company increase.  
> **username_0**: Understand, so what their processes for calculating their users deposits are like know users total received amount of bitcoins by using “getreceivedbyaddrrss” after that, calculate the users funds by using the total received bitcoins plus how much users get benefits/loss, right?  

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### Answer by username_2 on 2018-03-09. Score: 0

When you want to deposit to an exchange, you request a deposit address from the exchange. This address is generated specifically for you. So the exchange knows that any coins received by that address are coming from you (or someone who wants to pay you), and should be credited to your account.

> **Comments:**
> **username_0**: But I think they soon have to send to their accounts to concentrate, and it's going to be unproductive because they have to pay for fees when their users deposit.  

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