If you decide to scan your 'deposit' address QR Code that is displayed in BTC Markets you will find that your coin balance is 0 (or 20 for ripple).
This is because when you buy coins on BTC Markets - your coins are pooled with other BTC Markets users into a great big bucket of coins.
- Address A, B and C are all deposit addresses (public keys) for 3 different BTC Markets users. The private key for these accounts is stored with BTC Markets.
- Address D is another deposit address that BTC Markets owns and controlls (there are many like this)
- All the money from A, B and C is automatically transferred into account D - this is why BTC Markets has the private keys for accounts A, B and C.
- When someone pays user A (with address A) - the money automatically goes into account D. BTC Markets has a ledger of its own to keep track of whose money address D is made up of.
- When you ask BTC Markets how many coins you have - BTC Markets checks its internal ledger - NOT your deposit address (because that would always return 0).
Heres some food for thaught...
- Its called a 'deposit address' for a reason - its only for depositing!
- Imagine that 100 people gave you cash (and you were honest enough not to do a runner). You would probably want to write down somewhere how much money did everyone give you (ie... keep a ledger). You should also take the money and store it in a safe so its easier to keep track of it (address D).
- Here is one (of many) Ethereum address that BTC Markets 'stores' its ether on... 0xa0bb4ba19f578a63fa3f67adaf7bbca15ccadc45
- When you pay someone else who is also using BTC Markets - no 'coins' leave BTC Markets wallet - because the money is moved on BTC Markets own internal ledger.
- When you buy coins and the seller is on BTC Markets - no money ever leaves BTC Markets wallet
- Your bank does something very similar!