As you have known, all transactions occur over a software designed to manage digital currency trading.
This is how cryptocurrency exchanage works, you design an order when you want to sell crypto coins. These orders will specify the price and the quantity of coin the buyer would like to trade. All these order are then forwarded to a large database called order book where the potential buyer can then have access to.
For transaction to occur, the buyer that seeks to purchase crypto coin will search through the order book for a price and quantity he/she needs. When the buyer cannot find one, they create their own order which when submitted, there are terms which the exchange platform tries to match their conditions with the existing orders and the exchange is made.
The back draw with most exchanges is the time lag before an exchange is finalized. Sometimes this takes a couple of minutes to days depending on the platform. Developer have devised two ways to speed up this process. First, they match the buyer and seller physically using intermediary software as opposed to iterative terms. In this case, the third party can act as an arbitrator.
The Advantages of Cryptocurrency Exchange is the there is no concentration of power and it is run by people. There is low or no fees attached to transactions, the decentralized exchanges have so many privacy and there is no central point of authority with decentralized exchanges. Although on the flip side, trade times and lower liquidity.