[vgordon]

Exchanges are the same as auctions in the sense that the person that is buying the item is the one who bid the highest price. There is a reason why the buying prices is called a bid.

Auctions are not limited to a single item, radio frequencies and bus routes are just few of the examples that are sold in multiple item auctions. There is nothing special about the number one in auction rather than a single item is limited in supply, but in most cases two items can be of limited supply as well and even millions. Good example for that can be engineers. Even though there are many of them, their supply according to many is still limited, which causes their salaries to rise.

[gibybo]

>Exchanges are the same as auctions in the sense that the person that is buying the item is the one who bid the highest price. There is a reason why the buying prices is called a bid.

No, because then I could say "exchanges are the same as auctions in the sense that the person that is selling the item is the one who is willing to offer the cheapest price". This would imply exchanges tend to produce a price lower than the actual value of the item. Of course that isn't the case because unlike auctions, exchanges are balanced.

It's not just that it is only one item, it's that in your examples there is only one seller. In exchanges, there are many sellers selling identical items.

Do you really think Bitcoins are sold more like radio frequencies and bus routes than oil/gold/corn/stocks?