Authored by Bennett Stein
Imagine the cryptocurrency that you are trading is an item that is being traded in the same manner as an auction — with auctioneers on one side of the room shouting out prices that they are willing to buy at and auctioneers on the other side of the room shouting out prices that they are willing to sell at. If a buyer and a seller both agree to the same price, a transaction occurs.
Decades before the advent of electronic trading, this is how almost all trades were made. To this day, all major cryptocurrency exchanges use this double auction system for their order books, but instead of transacting in person, it is now done over the internet.