271–280 of 843 posts
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This is the correct take, and why American regulators need to address crypto sooner rather than later.
But the WHOLE point of crypto was to avoid governmental control. If the government is regulating it that means they can control it. And it becomes completely worthless. If you want digital gold as an inflation hedge you can literally buy a GLD ETF. It gives you digital shares in actual GOLD.
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They should make money in the same way that the New York Stock Exchange does - by taking a small fee from every trade.
That's how they made their money for most of their existence, and how crypto exchanges still do, but not anymore. The NYSE actually makes most of its money now by charging for colocated server space which HFT's use to get super low latency connections to the market.
[0] https://www.reddit.com/r/algotrading/comments/2c1r4e/how_muc...
Forgive my ignorance but it seems that one major problem with crypto-exchanges is that they don't necessarily have any assets other than the crypto that has been deposited there, which means all overheads (which I am assuming for some of these guys is $Ms/year) can only come from trading crypto unless they are charging reasonable money for the privilege of using their exchanges. In the FIAT world, banks make tonnes o…
It gets fixed by largely replicating the traditional finance system, which would of course be completely pointless. The whole point of crypto is to evade government regulations, which means this kind of stuff is inevitable.
Banks are audited every month to verify that their reserves are there. They are also audited to see the balance between their risks and assets. Their systems are audited to ensure accountability (everyone must take at least 5 days of PTO a year, to ensure no single point of failure/fraud).
But the kids that are creating these new Crypto CeFi companies hate being boring. They got in because of the millions and the whirlwind of excitement that the Crypto space brings. And for that reason they have a mess in their internal ledgers.
I love Blockchain technologies, Bitcoin and Ethereum. But I couldn't care less for all the "cool kids" wanting to get into this train without proper adult supervision.
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Then it proves that crypto is flawed for other reasons.
Literally a non-argument lol
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People usually have crypto on exchanges for leverage, which is a valid reason. People do this with many stock brokers as well, e.g. for option trading.
That’s probably a fairly small minority who really really like gambling. I had some ETH on coinbase until earlier this year when I sold it because that was the easiest method.
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This was a failure of traditional financial institutions and people who are ok with them, not of crypto. Satoshi wouldn't be encouraging people to put their coins on a trusted third party like that. All fundamental crypto values say this.
> Satoshi wouldn't be encouraging people to put their coins on a trusted third party like that. All fundamental crypto values say this. You can literally say this about "regular" currency. Just don't put your money in banks! But people do, why? Once you answer that, you'll realize why people do it for crypto too. You can't complain that it's "against fundamental crypto values" when it doesn't have any mechanism for p…
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You can say that, but when MtGox went bankrupt, and also lost 4 fifths of its stored crypto, the court just heaped together all assets into one big pile and all creditors into one big pile and let them fight it out. So now there's a bunch of assholes including but not limited to Peter Vessenes, that are suing the bankrupt entity for billions (completely frivolous of course) and all the depositors have waited for 8 ye…
Crypto isn't money. You are not a bank customer depositing cash. I'm not sure why their customers should be creditors at all, it's a bit like asking GMail for your emails back when Google goes bankrupt.
And I sure as heck would want by e-mails back if Google goes bankrupt. Google shouldn't own them, they're just an exchange for e-mails. The idea that another entity would buy those e-mails and do with them what they like is ridiculous, regardless of any juristic reality.
Forgive my ignorance but it seems that one major problem with crypto-exchanges is that they don't necessarily have any assets other than the crypto that has been deposited there, which means all overheads (which I am assuming for some of these guys is $Ms/year) can only come from trading crypto unless they are charging reasonable money for the privilege of using their exchanges. In the FIAT world, banks make tonnes o…
An exchange shouldn't count deposited crypto as their asset. It is an asset of their customer. I do not think the actual problem here is crypto exchanges being unprofitable. Even if a crypto exchange goes under, it could (and frankly should ) still be able to go under gracefully, e.g. letting all customers withdraw their assets for a month (and E-Mailing private keys as a last resort). The issue here is crypto exchan…
Exactly. A brokerage firm doesn't own your stocks, so if it goes bankrupt you can still recover what is yours.
FTX pretended to be that, but they just plain lied.
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Precisely the failure of crypto is thinking that people will follow "fundamental crypto values" and underestimating the power of convenience and ignorance. "Traditional financial institutions" are inevitable in crypto.
A lot of day traders on FTX are learning first hand the value of DeFi and self custody.