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Crypto exchange AAX suspends withdrawals

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Re: Crypto exchange AAX suspends withdrawals

#451

Post by notch656a »

MichaelCollins wrote: post #260
kkielhofner wrote: post #106

Earlier quoted context omitted.

As I've noted before on HN the entire concept of people being able to manage their own wallets flies against everything we know about people. People forget stuff, make mistakes, and lose things. The margin of error for a wallet is tiny. It's not rare for crypto forums, twitter, etc to prescribe completely ridiculous processes and systems for securing wallets, backing up seed phrases, etc. There's an entire cottage in…

Print your private key on paper and lose it all when your house burns down. vs Give your private key to an exchange, and enrich the shitheads running the exchange when they run away with your money. First option seems preferable. If you're going to lose your money, better for the money to be truly lost than to enrich a thief.

I'm amazed how many people think the average person can't memorize a 12 word phrase. Most people I know can memorize their social security number, address, at least one if not more passwords, their own phone number as well as the phone number of at least one loved one for emergencies, the DOB of their children and their own DOB. Most of that is a gobligook of numbers rather than words.

Absolutely no one needs to be putting a private key on paper in their house, that is insanity.

---------------

RE:

>The question is if you can reliably remember it in ten or twenty years without ever using it in the interim.

I check my bank account daily for fraudulent transactions; it would behoove anyone storing any sizeable amount of value to check/refresh on that daily, however that looks like for your form of storage.

Re: Crypto exchange AAX suspends withdrawals

#452

Post by [deleted] »

nemo44x wrote: post #331
MichaelCollins wrote: post #260

Earlier quoted context omitted.

Print your private key on paper and lose it all when your house burns down. vs Give your private key to an exchange, and enrich the shitheads running the exchange when they run away with your money. First option seems preferable. If you're going to lose your money, better for the money to be truly lost than to enrich a thief.

You could put it in a fireproof safe or a safety deposit box or both.

[deleted]

Re: Crypto exchange AAX suspends withdrawals

#453

Post by thr0wawayf00 »

bmmayer1 wrote: post #219
adammarples wrote: post #148

"Industry" People gave us money and now they want it back but we spent it

This. If an exchange cannot 1:1 fund withdrawals it is not an exchange, it's a ponzi scheme. Full stop. All real exchanges should be releasing evidence of 1:1 backed customer deposits ASAP like Coinbase has. And if they don't, it should be considered a canary of systemic risk.

Problem is that exchanges are getting caught fudging their "proof-of-reserve" reports. Crypto.com just got called out for "accidentally" sending $400M to a rival exchange that used the balance to prop up their reserve reports. It's becoming a joke at this point.

https://www.benzinga.com/fintech/22/11/29692377/crypto-com-r...

Re: Crypto exchange AAX suspends withdrawals

#454

Post by Closi »

xur17 wrote: post #432
Closi wrote: post #333

Earlier quoted context omitted.

> But at least in crypto I have the OPTION of storing it myself. You have the option with Fiat too - you can get paper currency and store it yourself in a secure location. $10,000 can be stored in $100 bills in as little as c0.03 meters^3. Using a bank is much more convenient to store Fiat though if you want to buy/sell things, much like using an exchange to store Crypto is much more convenient if you want to trade c…

> You have the option with Fiat too - you can get paper currency and store it yourself in a secure location. $10,000 can be stored in $100 bills in as little as c0.03 meters^3. That's really not the same though. With crypto I can store on a hardware wallet that requires a pin to unlock (and resets after 3 attempts) with a backup seed stored elsewhere (potentially split up in n of m shares). How do I backup my cash? H…

> How do I lock up my cash in a similar way?

You buy a vault or a safe, which you can access with a 'pin-code' (in the fiat world this is called a combination lock). Safes come with two keys, which allows you to keep a backup of your 'secret' elsewhere, and you can also insure the cash inside if you want to pay for a full 'backup'.

In addition, "smart" safes and dual lock safes are available which have two keys, mean you need approval from another person to initiate the transfer.

It's not an exact 1:1, but you can hardly say that you don't have the option of storing Fiat by yourself.

Re: Crypto exchange AAX suspends withdrawals

#455

Post by alasdair_ »

tablespoon wrote: post #424
horsawlarway wrote: post #342

Earlier quoted context omitted.

Can we acknowledge that both of those options are utter trash compared to conventional banking, though? The system that the crypto advocates hate on, but provides 250k per person + per bank + per account type as insurance by default to all registered financial institutions?

> Can we acknowledge that both of those options are utter trash compared to conventional banking, though? Yes, yes we can. The only things that ever justified the use of cryptocurrency were ideological fantasies and speculative gambling. Every other justification is just hype created as a post-hoc rationalization for one of those two things. If you look at any of them closely, they completely fall apart when compared…

Buying drugs online was a real use case that actually worked, as was being able to smuggle wealth out of a country with exit restrictions.

As for legal uses, yeah, there are not many at the moment. Maybe some day there will be a DAO-type org that is worth being invested in or something but not today.

Re: Crypto exchange AAX suspends withdrawals

#456

Post by grey-area »

sydd wrote: post #415
SV_BubbleTime wrote: post #371

Earlier quoted context omitted.

The venn of arts and crafts, paranoid delusions, and blockchain.

Heh I would not call them paranoid after all these crypto collapses. Say I'd have $100000 in a crypto wallet, I'd etch it too and keep it in a safe instead of giving it to a website with no state backed guarantees.

You could just print it on a piece of paper and put it in a safe!

Re: Crypto exchange AAX suspends withdrawals

#457

Post by rufusroflpunch »

horsawlarway wrote: post #342
MichaelCollins wrote: post #260

Earlier quoted context omitted.

Print your private key on paper and lose it all when your house burns down. vs Give your private key to an exchange, and enrich the shitheads running the exchange when they run away with your money. First option seems preferable. If you're going to lose your money, better for the money to be truly lost than to enrich a thief.

Can we acknowledge that both of those options are utter trash compared to conventional banking, though? The system that the crypto advocates hate on, but provides 250k per person + per bank + per account type as insurance by default to all registered financial institutions?

In Lebanon, people are robbing banks to get their own money out. Maybe they are a little bit more comfortable than you are with holding keys to an unseizable asset.

Re: Crypto exchange AAX suspends withdrawals

#458

Post by gjulianm »

xur17 wrote: post #318
gjulianm wrote: post #206

Earlier quoted context omitted.

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.

But at least in crypto I have the OPTION of storing it myself. Also, if I do decide to use a custodial provider, I can choose to use a provider that publishes proof of reserves [0], giving me more confidence in the provider. [0] https://www.kraken.com/proof-of-reserves

That's nice, but it's unrelated to the issue I'm talking about. If we care about crypto widespread usage, we have to look at what most people will do, and most people will choose convenience and won't have enough knowledge/interest/time to make informed decisions. Relying on "but you have the OPTION to do it properly" just leaves all those people behind and vulnerable to scams and situations like this. And ultimately, as the parent comment says, crypto will just speedrun financial history and find out why regulations exist.

Re: Crypto exchange AAX suspends withdrawals

#459

Post by Ajedi32 »

spamizbad wrote: post #80
brnt wrote: post #33

So, having been around since the early bitcoin days, core to the salespitch back then was the fact you would have control. You'd have your coins in your wallet, and no need for banks etc. Apparently nobody does this anymore, and gives their wallets to these exchanges (i.e. banks) and balks when the obvious happens in pyramid schemes. People just don't get distributed currency if they promptly undistribute it. Or is i…

Most people hold Bitcoin these days in the hopes of making money. The distributed consensus nature of crypto is irrelevant.

This is the key to understanding a lot of things about the "cryptocurrency community". There are two groups there with wildly different interests.

A large chunk (probably even a majority) of the people involved in the cryptocurrency space don't actually care about cryptocurrency as a technology at all, they're just there to make money. To these people, market price is everything, and the technology is irrelevant except to the extent that it affects the market price.

Then in the other camp there's a group of people who don't care about the current trading price, they're just interested in the technology and the new capabilities it enables.

I'm in that second camp (perhaps unsurprisingly, since this is Hacker News), so in my view this story isn't really all that interesting or surprising. From a legal/societal perspective, yeah this is terrible and probably someone should go to jail. But from a technical perspective, the fact that exchanges can scam people out of their money is hardly new information. As the saying goes: not your keys, not your crypto.

Though obviously for those who are interested in cryptocurrency solely to make money on speculation, yeah this is a big story.

Re: Crypto exchange AAX suspends withdrawals

#460

Post by logicalmonster »

Every new form of money and trade had the people learning important financial concepts and took many, many years to start to iron out their weaknesses through better technology or best practices.

For instance, when barter and basic trade was used, people had to figure out new methods to do accounting and record-keeping: whether through sticks, tablets, papyrus, etc. It seems simple now, but these basic methods were incredibly huge technological leaps that took a long time, perhaps centuries in some cases, to develop.

When silver/gold were beginning to be used, different lessons had to be learned such as making the edges of coin ridged to prevent certain people from clipping chunks off of coins and taking a small piece of precious metal.

With fiat currencies that are not backed by anything, people had to learn the lessons of inflation. I'd argue that not all humans have even learned this lesson even today. While inflation is particularly glaring today, all people alive today have been systematically robbed of their savings every day, yet this fact is commonly ignored. The amount of value lost by people to inflation is much more glaring than any loss that's happened in the crypto space. In comparison, crypto doesn't have this flaw: there can be no circumstance that changes the fact that Bitcoin only ever has 21 million units and cannot ever be inflated.

Crypto has much smaller problems in comparison to other forms of money. It certainly needs better user interfaces and best practices and a little time for social acclimatization, but the progress from what was a proof of concept in just 13 years has been remarkable.

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