Temporary pause of Bitcoin withdrawals on Binance

Work for Bitcoin (wage)

Sell goods and/or services for Bitcoin

Trade Bitcoin on P2P platforms (Local Bitcoins, Bisq, etc.)

> You really cannot make this up.

Not only you can make this up but it's literally happened hundreds of times in the history of cryptocurrency. So much that there is even a catchphrase for it: "Not your keys, not your Bitcoin". MtGox being the most infamous example.

> As usual crypto in practice is the opposite of decentralized because people. Will. Not. Run. Their. Servers.

1) Only a small percentage of the total Bitcoin supply is held on Binance.

2) Self-custody doesn't require running your own server.

Why is this the top comment? I don't know (but I have my suspicions).

I am so happy about this. I hope this is going to sour crypto for "investors". I use quotes, because they really are not -- investing should be reserved for fronting cash to create some value (like buying stock to infuse capital into a corporation). As it is all crypto trading is purely speculation.

The world would be so much better if money tended to be exchanged in good faith, to improve something rather than just to exploit market instability.

Reposting from the other thread:

I would like to provide some context to people unfamiliar with how the bitcoin mempool works and what you can do to avoid getting your transaction stuck. The mempool is all of the transactions that have ben gossiped about but have not yet been mined (finalized) into a block. Each node has their own mempool. You can see [1] that there are roughly 6 hrs worth of transactions in this node's mempool (everyone should have a similar mempool, though not identical). So Binance's claims of network congestion are "true" on the surface, however there are a few interesting points that lead me to believe that they are acting fishy.

1. Why does Binance not have RBF enabled on their withdrawal transactions?

  RBF mean "replace by fee" and it's a way you can mark an unconfirmed transaction as replaceable by a similar transaction that pays higher fees. This is extremely useful when you need to ram a transaction into a block by increasing the fee you're willing to pay miners to mine your transaction. I highly recommend you only use a wallet that allows you to use RBF & to have RBF enabled by default. Of course Binance knows about RBF so why aren't they using it? 

2. Why does Binance not use 'Child Pays for Parent'? CPFP is a little hard to understand if you don't understand that bitcoin transactions are linked together in a graph structure. In short, a bitcoin transaction is a data structure that points to previous transactions to spend. CPFP is when you make a new transaction that spends from your previous unconfirmed transaction (un-mined transaction in the mempool) and over pay in fees to cover the cost of both transactions. This incentivizes miners to include BOTH transaction in the same block. Once again Binance should be doing this. An ideal way to do this would be to batch a bunch of customer withdrawals in a single transaction. This would save a lot on network fees. They would make this big transaction payout a large amount back to themselves so that they could CPFP this batched withdrawal transaction.

3. Binance has their own mining pool with 11% of the network hash[2]. Binance could easily prioritize their "stuck" withdrawal transaction in their pool's blocks. Of course if they didn't subsidize their miners for this they risk them switching to another pool. One would think that halting withdrawals is an existential risk to their business so temporarily paying their miners to ram transactions through should be worth it?

So what is the take away from all of this? There are numerous tools at Binance's disposal. Why did they not work/why are they not using them? My hunch is that they don't have all of their ducks in a row & are running a fractional reserve. (this is pure speculation on my part) They likely had a lot of (your) bitcoin tied up in "risk-free" interest accounts (Celsius) and are scrambling to get ahold of bitcoin to give back to customers.

[1] https://mempool.space/ [2] https://mempool.space/mining/pool/binancepool

I have two buying/selling indicators for crypto.

1. When my mom or other people who have no business in investing in crypto ask me how much bitcoin they should buy. (selling indicator)

2. When people start liquidating their positions and call crypto a grift. (buying indicator)