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Crypto exchange AAX suspends withdrawals

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Re: Crypto exchange AAX suspends withdrawals

#341

Post by codedokode »

dpbriggs wrote: post #320
codedokode wrote: post #298

Earlier quoted context omitted.

Regulated banks and currencies have similar issues, for example: - the government can print more money and devaluate your savings (it's like a form of tax one cannot avoid). But it is difficult to "print" more cryptocurrency. - the government can put limits on amount of money one can withdraw from a bank account. So you legally have the money but cannot use it. - the bank can refuse to deal with you under AML acts wi…

A lot of these exchanges have suddenly died because they printed more currency than could be reasonably liquidated on short notice. And borrowed heavily against these tokens. When the bank goes bust there's insurance on your deposits. If the amount stored is greater than that insurance you may want to invest the difference. And gold is practically hard to work with and barely functions as an inflation hedge (point 1)…

> When the bank goes bust there's insurance on your deposits

Usually it covers only limited amount, not full deposit. In US it seems to be generous $250 000 but in other countries it is much lower (e.g. just about $20 000 here).

> gold is practically hard to work with and barely functions as an inflation hedge

And deposit interest rates are often below inflation in developed countries.

Re: Crypto exchange AAX suspends withdrawals

#342

Post by horsawlarway »

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.

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?

Re: Crypto exchange AAX suspends withdrawals

#343

Post by alextheghost »

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.

You do know there are fireproof safes that you can keep in your home right?

Re: Crypto exchange AAX suspends withdrawals

#344

Post by kypro »

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…

I think it depends on your goals.

I mean, do you store all your cash under your bed in case your bank go bust? People keep crypto on the exchange because it makes transactions easier, and in some cases you might have other perks such as being able to lend it for interest or spend it with crypto credit cards.

This idea that you can have a digital currency without some kind of bank or exchange is fundamentally flawed imo. Unless you believe the only valid usecase of crypto is as a digital alternative to physical gold then it probably makes more sense on an exchange. The main issue here is that the exchanges are not regulated.

But I suppose given the lack of regulation I would have to agree with you that the only safe use case right now is as a "store of value" in a cold wallet.

Re: Crypto exchange AAX suspends withdrawals

#346

Post by nemo44x »

anticristi wrote: post #109

Pardon for living under a rock, but why are crypto exchanges affected by the mood in the crypto market? I thought that a crypto exchange functions like a currency market: I put an offer to sell 10,000 EUR for 1 BTC and someone else puts an offer to buy 10,000 EUR for 1 BTC. When orders cross, a transaction happens and the exchange gets a fee, whether in currency or crypto units. What are crypto exchanges fundamentall…

As far as I know, Coinbase works this way. They don't transact, trade, or create derivatives of the crypto coins they manage. They simply make a profit by charging a fee per trade. They are regulated and a publicly traded company (which means certain standards of accounting) so they might be one of the only ones standing when this thing is done falling down.

These other exchanges are doing far more exotic things like creating their own coins to grant status on their exchange and creating derivatives so traders have more leverage and therefore action. Coinbase would be considered boring to these users since it is a vanilla exchange.

Re: Crypto exchange AAX suspends withdrawals

#347

Post by jldl805 »

numlock86 wrote: post #43
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…

> If this is true, how does it get fixed? The root problem is people buying to pyramid schemes (read as: crypto).

Ding ding ding ding ding!

Re: Crypto exchange AAX suspends withdrawals

#348

Post by littlestymaar »

koheripbal wrote: post #230
rtkwe wrote: post #212

Earlier quoted context omitted.

Exchanges are the primary reason crypto value is as high as it is though. Without the easy way to get money in (and usually out) of $COINs there's less speculation, less money flowing in, less market to drive prices. If we were back in the days of Local Bitcoin being the best way to buy coins there'd be even less of the meager adoption we've seen in business too.

Satoshi also never said Bitcoin should have a high value or be an investment vehicle.

Right, they said it should be a payment method over the internet. But they failed, mostly for two reasons:

- they not anticipate ASICs, or even GPUs, which destroyed the idea of decentralized mining where individuals would just mine to get coins to spent, and forced people to buy coins instead (leading to the rise of exchanges).

- their Austrian economics prejudice misled them about the nature of money, and the link between money and scarcity. The bitcoin supply was much too small, and too limited in growth, to accommodate for a exponential growth in usage. As a result, bitcoin instantly became deflationary, which is the second worse thing that can happen to something aiming to be a mean of payment (the first one being hyperinflation). For something to be a mean of payment, you need people to be willing to spend their tokens. Economies survive two-digit inflation, but even 10% deflation makes as much damage as Venezuela or Zimbabwe-like hyperinflation.

Had Satoshi not been libertarian, and decided for instance to index the amount of mined bitcoin to the difficulty of the block, they'd have not created an investment asset headed to the moon but they'd have been much closer to create the payment system over the internet they dreamed about (putting aside the privacy and scalability issues of course).

Re: Crypto exchange AAX suspends withdrawals

#349

Post by m348e912 »

alangibson wrote: post #215
anon291 wrote: post #200

Earlier quoted context omitted.

Unfortunately, absent the crypto exchanges, which let you easily convert crypto to fiat, there is no reason why crypto has any value. Given that bitcoin transaction times are nowhere near VISA or cash times, bitcoin is fairly useless to purchase things in person and few online vendors take bitcoin alone (most use an exchange to convert bitcoin to cash instantly). So without exchanges, there is literally no purpose or…

I can't believe it's been 5 minutes and no one has said 'lightning network' yet.

It's because the ones who would have said it now know.

Re: Crypto exchange AAX suspends withdrawals

#350

Post by bmitc »

netheril96 wrote: post #191
gzer0 wrote: post #119

"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."

Centralized exchanges are the polar opposite of what Satoshi was advocating for.

It is interesting to me that Satoshi’s name gets thrown about like a sort of crypto Jesus or, maybe more accurately, Bokonon. No one knows who he is or if he even existed as a single person or what his deal was.

Certainly privacy is a thing, but one does have to wonder who they (single person or group) were and what their true motivations were. It’s possible they were just a cryptography enthusiast with an overly idealistic way of how monetary systems could work in reality.

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