An API is a set of rules that allows different software applications to communicate with each other. It determines the ways in which systems, applications, or devices can interact. Crypto exchanges often provide APIs to enable automated trading.
APIs work by establishing a contract between the provider of the API (the server) and the consumer (the client). Here's a simplified overview of how APIs function:
Imagine you're sitting at a table with a menu of all the dishes you can order. But the kitchen, where the food is prepared, is off-limits. You need a way to get your order into the kitchen and have your food brought out to you. That's where the waiter (or API) comes in.
The waiter is the link — the interface — that communicates your order to the kitchen and then delivers the food to your table. Similarly, an API takes a software program's request (like your order), tells the system what to do with it, and then returns the response back to the software program (like the waiter bringing your food).
In the examples provided:
In both cases, the API helps your program to communicate with the system and get the information it needs or perform the action it wants.
