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Crypto exchange AAX suspends withdrawals

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Re: Crypto exchange AAX suspends withdrawals

#711

Post by lxgr »

867-5309 wrote: post #683
lxgr wrote: post #246

Earlier quoted context omitted.

That's not how an exchange works, though. Exchanges provide the infrastructure for trades to happen (i.e. they maintain order books, match market orders against these, ensure that settlement will eventually happen etc.), but do not take on financial positions themselves. The "exchange rate" is only determined by the order book, i.e. ultimately by supply and demand. So if an exchange makes money, it needs to charge at…

>The "exchange rate" is only determined by the order book, i.e. ultimately by supply and demand. if that were true then all exchange rates would be uniform across all providers

What do you mean by "providers"? Different exchanges?

Long-standing price differences are usually reflective of market inefficiencies that can't easily be arbitraged away, such as difficulties funding a given exchange account, insufficient volume to make it worth trading there, or many others.

Re: Crypto exchange AAX suspends withdrawals

#712

Post by wizeman »

freejazz wrote: post #698
krzyk wrote: post #663

Earlier quoted context omitted.

Basic common sense, not your keys not your coins.

Yet, not a legal position. If it wasn't your coins, SBF taking them to do whatever he wanted with them would not be illegal.

The point is that the holder(s) of the cryptographic keys is the only one(s) that can effectively manage (and transfer) the coins on the blockchain.

When you transfer the coins to a crypto exchange, the exchange becomes the holder of the keys and therefore you run into the risk of the crypto exchange mismanaging the coins, getting hacked, losing them, etc.

This can't happen if you securely hold the keys yourself (with a proper hardware wallet, seed backups and a reasonable amount of OPSEC).

But even in the case the crypto exchange is holding your coins (or they get stolen), legally, the coins are still yours, of course (well, unless the crypto exchange goes through bankruptcy proceedings, I suppose).

But you run the risk of never getting them back even if they are legally yours.

Which is why it's better to hold them yourself if you can.

Re: Crypto exchange AAX suspends withdrawals

#713

Post by bredren »

Animats wrote: post #689
bredren wrote: post #487

Earlier quoted context omitted.

Variations of this have been tried many times, for example hardware wallets. But a lot of this is too troublesome or adds too many hoops to jump through than is practical for many people.

Yes. Someone has to get the user experience right.

FWIW, that user experience is most likely Coinbase, or something very much like Coinbase. Not only is the UX good, but customer funds are taken seriously now and have been for a long time.

Re: Crypto exchange AAX suspends withdrawals

#715

Post by Spooky23 »

lbriner wrote: post #7

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…

Banks have regulatory requirements that reduce risk. There are insurance mechanisms to protect bank deposits and securities insurance to protect custodial assets.

The problem with crypto stuff is that it was the Wild West and that atmospheric attracts and breeds crooks.

Wrt loans, people were pretending that these coins were cash. The reality is that they are sort of like virtual silver. All debts get settled in legal tender.

Re: Crypto exchange AAX suspends withdrawals

#716

Post by oldgradstudent »

pclmulqdq wrote: post #509
oldgradstudent wrote: post #132

Earlier quoted context omitted.

Recent collapses have shown that Crypto exchanges are more like a casino grafted to a Ponzi scheme.

Which is remarkably similar to a bank grafted to a hedge fund.

There's a reason why Glass-Steagal prohibited grafting banks to hedge funds.

Re: Crypto exchange AAX suspends withdrawals

#717

Post by wizeman »

lottin wrote: post #659
johannes1234321 wrote: post #176

Earlier quoted context omitted.

> And that's largely because of the lack of regulation that so many cryptocurrency fans tout. In next sentence they will tell you, that you shouldn't have kept the private keys at the exchange. Use your own wallet and keep your copy of the Blockchain.

Your "own wallet" is just a piece of software, so it could potentially steal your "coins" could it not?

Hardware wallets, which are recommended for holding significant amounts of cryptocurrency, are designed so that even if your normal computing devices get hacked or trojaned, the software running on them cannot steal the coins.

This is because the private keys are securely stored in the hardware wallet, which never reveals them to the outside world. The user has to physically confirm a transfer on the hardware wallet itself before funds can be spent (which is why they usually have either a small touchscreen or a non-touch screen plus physical buttons).

Re: Crypto exchange AAX suspends withdrawals

#718

Post by calimac »

johannes1234321 wrote: post #176
danaris wrote: post #118

Earlier quoted context omitted.

And that's largely because of the lack of regulation that so many cryptocurrency fans tout. If it's not legally regulated as a currency, or a security, or anything of the sort, then why would it be considered to belong to you, and not Mt Gox, once you've given it to them? All you have is a digital account that's basically the legal equivalent of an IOU on a napkin. Welcome to your libertarian utopia.

> And that's largely because of the lack of regulation that so many cryptocurrency fans tout. In next sentence they will tell you, that you shouldn't have kept the private keys at the exchange. Use your own wallet and keep your copy of the Blockchain.

No post body was provided.

Re: Crypto exchange AAX suspends withdrawals

#719

Post by 2sk21 »

zukzuk wrote: post #444
sydd wrote: post #415

Earlier quoted context omitted.

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.

The paranoia pertains to burying metal plates underground, preparing for a post-collapse future. As if bitcoin will be a viable currency when we're all trying to figure out food and shelter.

Also, this assumes that there is plentiful electricity in this post apocalyptic future to mine bitcoins!

Re: Crypto exchange AAX suspends withdrawals

#720

Post by wizeman »

MomoXenosaga wrote: post #656
charcircuit wrote: post #198

Earlier quoted context omitted.

>The only reason it exists is because smart contracts didn't exist when they first started. Calm down. That is not true. Smart contract based exchanges do not let people exchange real money into crypto. There will always need to be offchain exchanges for trading USD for crypto. Additionally, trading off chain is much cheaper than on chain. Centralized exchanges will always exist because people want on / off ramps, pe…

The flaw of BTC: everyone wants to cash out in dollars, euros or Swiss francs. Real money BTC is barely used as an actual currency to buy things with. I could be wrong but I thought the idea was that you'd be using BTC in daily life so that you wouldn't need to go "off the ramp".

I wouldn't say that's a flaw.

There are people, even today, who have no better choice but to use BTC for transactions or for storing value.

The point is that if you want to (or need to), you can do it. So people now have that option, which they didn't have before BTC was created.

As an example, it might be the best option for doing transactions and storing value for large amounts of people in some area, in times of crisis (e.g. financial crisis, war, oppressive governments, etc). You might not be able to use a fiat currency in such cases without significant downsides, such as extreme inflation, confiscation, blocking of bank withdrawals or transactions, going to prison, etc. Bitcoin is available and can be used whenever such events happen.

In fact, if you ever run into a situation like this, you might even desperately need BTC and will be very glad it exists, so don't discount its value so easily.

That said, sure, it would be better if there was more adoption. I think there should be and hope there will be.

But it's not exactly a flaw, in the same way as you not being able to use the currency of some obscure country in your daily life is not a flaw with that currency.

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