If I were to make a change on the crypto-exchange (EXMO, Livecoin) and I have Bitcoin funds in my account that need to be exchanged for Monero, I am curious about how the exchange process would work.
Would my Bitcoin funds be transferred to another account that would then buy Monero and transfer the funds from their Monero account to my Monero wallet? Could you explain the chain of events for this type of exchange so that I can better understand how it works?

Your understanding is correct. However, it is important to verify the specifics of the exchange with the administrator before proceeding.
When it comes to exchanging cryptocurrencies through internal exchange wallets, it's best to consult with the crypto-exchange's administration to receive a full explanation of what happens during the process.

The cryptocurrency storage system functions somewhat similarly to a bank, with unique encrypted addresses serving as account numbers. These addresses are created in the blockchain to form wallets, which can be either "hot" or "cold".

A "hot" cryptocurrency wallet is constantly connected to the internet and can be accessed through online services, mobile applications, or crypto exchanges. It provides quick access to virtual money, allowing for easy buying and selling of coins without the need for additional transaction checks.

On the other hand, a "cold" wallet does not have a constant internet connection and stores cryptocurrency offline, protected by a personal key. This type of wallet is often a physical device such as a USB flash drive, and there are even specialized hardware wallets available for purchase online. These hardware wallets are electronic devices that resemble USB flash drives and come equipped with a small screen for added security.