Crypto exchange AAX suspends withdrawals
171–180 of 843 posts
Re: Crypto exchange AAX suspends withdrawals
#172So, 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…
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…
> There's an entire cottage industry built around people etching their seed phrases on steel plates for people to (I'm not kidding) bury them like they're gold in the 1800s.
"I write these words in steel, for anything not set in metal cannot be trusted." - The Well of Ascension, by Brandon Sanderson
Re: Crypto exchange AAX suspends withdrawals
#173Earlier 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.
If you let somebody borrow your car and they steal it, that's still a crime. You don't need to be a regulated and registered automotive lender to make it anymore or less of a crime. The law has surprisingly strong enforcement of even informal agreements (such as e.g. an email), and these agreements were anything but informal. Incidentally, protection of property rights is one of the primary roles of the government in…
> you let somebody borrow your car and they steal it, that's still a crime
Agreed. But there is no public requirement to direct prosecutorial resources towards your recovery. If the criminal is prosecuted, recovery is a secondary concern, an enforcement cost often borne by the victims through civil action.
Re: Crypto exchange AAX suspends withdrawals
#174Earlier quoted context omitted.
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…
> exchange shouldn't count deposited crypto as their asset An exchange shouldn’t have deposits. That’s a word for banks and brokers. In practice, these shops act like funds.
Crypto exchanges act like brokers and exchanges. They match orders and they also hold client money.
Re: Crypto exchange AAX suspends withdrawals
#175"At this point I'm convinced Satoshi Nakamoto was actually a public administration professor trying to teach kids why financial institutions have the rules in place that they do. Given enough time, the entire crypto space will have reinvented every regulation they tried to get rid of and understood why they existed in the first place."
People look at all the market failures and declare the system is broken. Crypto is here to show us all the market failures that didn't happen.
Re: Crypto exchange AAX suspends withdrawals
#176Earlier quoted context omitted.
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…
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.
Re: Crypto exchange AAX suspends withdrawals
#177Earlier quoted context omitted.
> exchange shouldn't count deposited crypto as their asset An exchange shouldn’t have deposits. That’s a word for banks and brokers. In practice, these shops act like funds.
Crypto exchanges act like brokers and exchanges. They match orders and they also hold client money.
> match orders and they also hold client money
Matching orders is what brokers canonically do. Exchanges came about to consolidate their activity. There is nothing resembling a true exchange in the crypto space.
Re: Crypto exchange AAX suspends withdrawals
#178Earlier quoted context omitted.
You're not taking crazy pills. It's become abundantly clear that the vision of everybody being their own bank will never work. People don't want to be their own bank, just like they don't want to be their own bakery, or their own farmer. Sure, some people do bake their own bread, but they do it either because they have to, or because they enjoy it. So the people who control their own keys need to have a reason to do…
> You want to hold more cash than FDIC guarantees This is a solved problem up to millions of dollars [1]. Past that, you buy Treasuries. The real third case is you’re doing something illegal. [1] https://accountopening.fidelity.com/ftgw/aong/aongapp/fdicBa...
Yeah - there's a whole industry of this.. I worked with a large nonprofit that had something like $50M FDIC insured through CDARs.
https://www.intrafinetworkdeposits.com/
I suspect the government / Fed will have something to say about these in the future since it's a bit contra the purpose/intent of FDIC insurance but for the moment, you can abstract away all of the complications.
Re: Crypto exchange AAX suspends withdrawals
#179Earlier quoted context omitted.
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.
Let's not forget that "crypto" here is short for cryptocurrency.
Re: Crypto exchange AAX suspends withdrawals
#180So, 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…
I read an interesting thread on why this isn't a pyramid scheme. Basically there's no one at the top. It's decentralized so there's a loose federation of edges arranged in a many-sided polygon. So we need a new name. Instead of Ponzi, this is a Nakamoto Scheme.