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I'm curious how one writes software to link in as an exchange. I haven't read the Bitcoin code throughly, but I'm not sure if I understand how to initiate a transaction with the network. Is there anywhere that documents it well?


The usual method is interfacing with bitcoind via the JSON-RPC interface: https://en.bitcoin.it/wiki/API_reference_(JSON-RPC)

There's also bitcoinj: https://code.google.com/p/bitcoinj/


What about making withdrawals to real life banks?


They're using 3rd parties like Dwolla for that.


The Bitcoin application / daemon can be controlled via RPC calls, so I presume that's how they do it.




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