They’re not all as unreliable as Mt. Gox.
Exchanges provide a way to turn fiat currencies like sterling and the dollar into bitcoins. You pay whatever sum of money you like in a currency of your choice to the exchange. The exchange then stores that money and releases lumps of it in bitcoins to you as and when you request them.
Tell me more
Sure. Most exchanges work simply as mediums between buyers and sellers of bitcoins. The buyer can set limits on how much they want to buy bitcoins for, just as the seller can set limits on how much they will sell bitcoins for.
The exchange then pairs up a buyer and seller whose conditions match each other.
So how many exchanges exist?
There’s around 70 exchanges across the world (Planetbtc.com provides a good list), each offering to turn fiat currencies into cryptocurrencies including, but not limited to, Bitcoin.
Hey, what about Mt. Gox?
You mean the Mt. Gox that lost 650,000 bitcoins in an alleged hack? Yeah, that didn’t do much for Bitcoin’s image.
But lots of other exchanges issued a joint statement at the time to insist Mt. Gox’s failure did not reflect a common problem shared by them – indeed, the industry view is that Mt. Gox was more at fault than Bitcoin.