<p>The first thing you need to understand is that cryptocurrencies like bitcoin <em>are</em> the real money.  They are not merely a measure of government fiat currency denoted in a different unit.  With that in mind, your question doesn't make a lot of sense.  It's like asking where the real money is stored when you purchase gold.  The gold <em>is</em> the value.  You have simply traded some other currency in exchange for it.</p>

<p>Exchanges, web wallets, and other "cloud banks" (although I've never seen this term) are just services that store your bitcoin for you.  They manage your transactions, and often your private keys, so that you don't have to run software on a computer to do so.  If you have given them US dollars, what you have done is <em>purchased</em> bitcoin with those dollars.  This is just like purchasing a bag of groceries with your USD.  Someone isn't storing the money you spent as a backing for the value of your bag of groceries in your pantry.  You've simply exchanged one thing for another.</p>

CC BY-SA 3.0
2017-06-19T17:50:22.343Z
2017-06-19T17:50:22.343Z
Jestin
<p>I would add that there isn't a "where". Cryptocurrency isn't printed, nor does it ever exist in a physical location. There are only verified, recorded transactions between users/peers.</p>

CC BY-SA 3.0
2017-06-20T05:04:36.963Z
2017-06-20T05:04:36.963Z
schuylerwise
<p>I'm trying to understand how cryptocurrency works, and there is something I really don't get: </p>

<p>Exchanges; some are calling themselves "cloud banks" but I thought there was no banks, no place to stock the money, nothing was centralised. how do they do? Where are the dollars going/stocked? </p>

<exchanges>
Where is the real money stocked? Are exchanges banks?
scouech
# Where is the real money stocked? Are exchanges banks?

(Asked by: username_0 on 2017-06-19)

I'm trying to understand how cryptocurrency works, and there is something I really don't get:

Exchanges; some are calling themselves "cloud banks" but I thought there was no banks, no place to stock the money, nothing was centralised. how do they do? Where are the dollars going/stocked?

**Tags:** exchanges


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## 2 answers

### Answer by username_1 on 2017-06-19. Score: 1 | Accepted answer

The first thing you need to understand is that cryptocurrencies like bitcoin *are* the real money. They are not merely a measure of government fiat currency denoted in a different unit. With that in mind, your question doesn't make a lot of sense. It's like asking where the real money is stored when you purchase gold. The gold *is* the value. You have simply traded some other currency in exchange for it.

Exchanges, web wallets, and other "cloud banks" (although I've never seen this term) are just services that store your bitcoin for you. They manage your transactions, and often your private keys, so that you don't have to run software on a computer to do so. If you have given them US dollars, what you have done is *purchased* bitcoin with those dollars. This is just like purchasing a bag of groceries with your USD. Someone isn't storing the money you spent as a backing for the value of your bag of groceries in your pantry. You've simply exchanged one thing for another.


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### Answer by username_2 on 2017-06-20. Score: -1

I would add that there isn't a "where". Cryptocurrency isn't printed, nor does it ever exist in a physical location. There are only verified, recorded transactions between users/peers.


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