Coin exchange markets create the coin "out of thin air "

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Quote from: 20kevin20 on January 28, 2021, 05:04:49 PM

If they wouldn't and the BTC they gave you were false, then at some point they would not have enough liquidity to fulfill the withdrawal requests. It'd probably also be illegal. what I'd doubt more than that is the "Bitcoin" they have on the Binance blockchain instead. Never looked into it, so I have no idea whether it's backed by real BTC for sure or not.

What you should be worried about is how PayPal does it tho. Since they never let you withdraw to personal BTC wallet, their "BTC" might actually be non-existent coins created to inflate the market artificially. Especially since their terms and conditions clearly mention that, as a customer, you are not holding any specific recognizable cryptocurrency on their platform.. so what are you holding exactly? Just a number Cheesy

PayPal, as a public company, would be making a potentially business-wrecking move by not pairing user crypto purchases with actual crypto. If they were "faking it" they would be on the hook for funding the difference when the price rises out of their own pocket, and with an asset as volatile as bitcoin it would be extremely risky. So on the face of it, I would severely doubt they're faking it because there are only downsides to doing so. Further, they have said that users will eventually be able to withdraw crypto, so that wouldn't do that if they didn't have the coins to back it up.

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Quote from: paxmao on April 28, 2021, 06:29:51 AM

Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

Firstly, not your keys not your bitcoin. Having said that, no coin is not created out of thin air, they do need to have enough bitcoin in reserve to cover all the positions of their clients or else they would risk going bankrupt in the even of having a significant amount of withdrawals at the same time and that is something that may happen. I guess they could opt for taking some risk, just like real banks do, a create some bitcoin without having reserves, but I think that is a very risky move and that it could potentially be detected which would carry a loss of confidence and massive withdrawals at the worst possible moment.

therefore service to customers and increasing trust in customers can make the exchange attractive and many clients will place their funds. indeed, there are also many exchanges that are insolent because they don't get the trust of consumers, or are even hacked into by hackers

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

Firstly, not your keys not your bitcoin. Having said that, no coin is not created out of thin air, they do need to have enough bitcoin in reserve to cover all the positions of their clients or else they would risk going bankrupt in the even of having a significant amount of withdrawals at the same time and that is something that may happen. I guess they could opt for taking some risk, just like real banks do, a create some bitcoin without having reserves, but I think that is a very risky move and that it could potentially be detected which would carry a loss of confidence and massive withdrawals at the worst possible moment.

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

I understand what you meant but you should know that exchanges like Binance don't create coins out of thin air. This is particularly because they only serve as a medium of exchange between the seller and the buyer. A buy order from you is only filled if there's a sell order from somewhere that has the same price as your buy order.
Exchanges are just platforms where sellers meet buyers and help them make transactions. Of course, they take their commission from trading fees emthat every buyers and sellers pay and from withdrawal fess when one tries to withdraw

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

In this transaction, really, Binance gives you BTC ?

I think OP is asking whether Binance (or any other exchange) is creating the coins that are put into your account once you buy them--and no, that isn't the case. Because that bitcoin that you bought is recorded on the blockchain, there's no way for Binance to just create it out of thin air. Some other customer deposited bitcoin and was looking to sell it for cash, and when you buy it for cash, the order is filled (and Binance takes a cut of course).

Quote from: mediaBuzz on April 24, 2021, 04:54:59 AM

You are calling it by their name "exchanges", not "markets". You pay to buy from someone who wanted to sell.

Props to you and your answer. There are a lot of members here who just don't understand the basics of markets, exchanges, and all that--but they'll learn about that stuff if they do any trading (and reading posts here, too).

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Use can define the value of an exchange coin. Binance uses their coin well for loads of activities and now the big one called BinanceSmartchain which is helping the Defi ecosystem. So if any exchange coin that solves no real complex problem might just be a speculative asset that could fade away with the exchange in the future.

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You are calling it by their name "exchanges", not "markets". You pay to buy from someone who wanted to sell. Binance is just a middleman. There are processes like coin minting, distribution, and trading. But actually you can say about minting as they are creating the token "out of thin air". But that's another story.

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3 coin exchange markets stopped their activities (Turkey based exchange markets)
We understand that they didnt have coins but they sell coins

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Quote from: CarnagexD on February 03, 2021, 05:26:16 PM

Pretty sure exchanges like Binance just match you with someone else who wiuld like to trade too so there's no coins created out of thin air because basically you guys are just baking the bake on. . And in the process they were badicslly judt passing up the coin. So again, there's no coins being created out of thin air. A simole answer to a simple question

That's my thought as well, the cycle is like this:
someone deposit to binance address -> binance receives and move it to hot wallet -> someone withdraw their crypto -> binance move the coin from hot wallet to the withdrawal address
and binance could possibly bank some cryptos which they got from market fee just in case if there's no suifficient amount of crypto left in the hot wallet which rarely happens. Otherwise, they would've get sued by many people since ages ago.

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Exchanges make their services get tied up with their own token. With most of the cryptocurrency exchanges provides with additional discount on trading fees when used. This is a way to give an usage to the token and keep them under regular circulation. You can see more cryptocurrencies listed on the exchanges have good volume at the beginning and finally gets delisted. Such scenario won't happen with any of the exchange backed tokens and for sure there is continued growth.

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

I think the answer is straightforward depending on the method you used to purchase bitcoin. From your narration, you didn't get any "extra" bitcoin from your purchase so it doesn't appear like Binance created BTC out of thin air and distributed to you. The $3.5 you paid would mostly be the fee you paid for their services and it was charged with your deposit method. Deposits via cards and other methods comes with a fee. There's only a few methods that I know that doesn't included a fee for the service.

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Pretty sure exchanges like Binance just match you with someone else who wiuld like to trade too so there's no coins created out of thin air because basically you guys are just baking the bake on. . And in the process they were badicslly judt passing up the coin. So again, there's no coins being created out of thin air. A simole answer to a simple question

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

The answer is yes. But you can not withdraw the bitcoin since the fee will be too high from that.

Quote from: temelispanyolca on January 28, 2021, 05:26:11 PM

When you first time bought the Btc from Binance, Binance took commision from transaction.
or How do you know the seller is Binance robot or real seller ?

questions?

It is not Binance, but the seller will be the trader, so that is a real human which selling their bitcoin to you or other orders. Even if that is robot that means a trader use a software to trade, that will be the same as human as they sell bitcoin to you.

Quote from: temelispanyolca on January 29, 2021, 06:18:26 AM

Binance will be suspending withdrawals temporarily in order to address a large increase in requests from new unique users.

Rest assured funds are #SAFU and we apologize for any inconvenience caused.

Updates to follow.

It is normal to see Binance suspending withdrawals temporarily because I think they found something suspicious and they need to investigate that thing before it makes a problem to that exchange. But in that image, Binance only suspending the address which are a new unique users, so that will not happen to all users. But I do not know the truth.

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Quote from: joniboini on January 29, 2021, 06:40:05 AM

It is possible that they do something and get away with it though, so it is safe to say that you if you don't want to get into trouble, might as well use a DEX or withdraw asap.

If you want to keep Bitcoin and have doubts about CEX, then the best choice is like that. Choose DEX and withdraw all funds from CEX because nothing is impossible. The vulnerabilities that CEX has are not shared by DEX. The OP should follow this method to clear his doubts. You have higher authority over your own assets, no one can interfere. Not only doubts about cheating, you are able to fully decide what to do with your coins. Even so back to individual tastes, no one can blame your choices and views. Doubts will always arise in people who are careful about their assets.

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

There's no guarantee this isn't what's been done on most low volume exchange especially the scammy ones that refuse your withdrawal due to them not having enough bitcoin or any other coin to process this volumes coming in. The big exchange though would hardly try this since they know they're been closely monitored and they can easily top on their reverse since they make a lot of money from trading, listing fees and all other avenue they used to generate income.

Before now I always thought each time an exchange goes on maintenance is due to them not having enough funds for processing withdrawal, exchange likes mercatox was known for always suspending withdrawal for trending coins and it was becoming obvious they lacked the volume. Exchange like yobit and Livecoin could easily be guilty of this practice and I won't be surprised because they lack the volume and their mode of operation are shitty.

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

It helps to know the origin story of the "create money out of thin air" line.

In past decades, some fiat currencies were gold backed. Paper bills could be exchanged for gold.

Later some mints abandoned this practice. Critics accused mints of "creating money out of thin air". Printed paper money was no longer backed by gold, precious metals, oil reserves or anything of intrinsic value.

This is a criticism that has been made about the US dollar for decades, since it abandoned a gold standard in 1933.

That's the origins story of "creating money out of thin air".

Some now use it to criticize crypto. In many cases, it is a poor criticism. Due to tether and some crypto being better backed than most assets in the world.

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

A rather strange example! Say you have $ 10. You can transfer them to your friend through the banking application for 0.1%. But you decide to order the shipment in a separate DHL box, which costs $ 100, because you need it urgently. The same strange example

If you know that such a large commission - why send an amount commensurate with the transaction costs. And Binance has nothing to do with it - this is a service whose price is tied to the cost of transactions in the network + overhead costs.

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Quote from: temelispanyolca on January 28, 2021, 05:26:11 PM

Quote from: odolvlobo on January 28, 2021, 05:19:11 PM

Binance (and other exchanges) have buyers and sellers. If you buy 0.0001 BTC, you are buying from a seller. If you are buying from the exchange, then the exchange is acting as the middle man.

When you first time bought the Btc from Binance, Binance took commision from transaction.
or How do you know the seller is Binance robot or real seller ?

questions?

In fact many exchanges had their own bots doing the trading. The market is mostly unregulated so there's nobody watching. If they want to manipulate the price or have their own "willy bot" trading using fake fiat balance they can pull it off. It's a bit risky because when Chinese exchanges were faking volume in 2014 the government shut them down.

Even if they're trading for themselves, what can you do? You can stop using them and use the nearest ATM that will later sell your coins at one of those big exchanges.

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

do you mean you are doing P2P transactions with Binance itself? like when you buy crypto instantly with a credit card?
yeah, Binance will give you only numbers unless you withdraw your Bitcoin or send it outside Binance, they will give you the real Bitcoin.
Most of the exchanges use their latest price on the spot market to fulfill your instant order. They give you the Bitcoin that they buy automatically from the spot market orders. CMIIW. I am not sure about it too.

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Quote from: temelispanyolca on January 28, 2021, 04:58:19 PM

Coin exchange markets create the coin "out of thin air "

You first buy the 0.0001 BTC from Binance or any local coin exchange markets.
You give 3.5 dolar to Binance and Binance add 0.0001 btc to your account.
In this transaction, really, Binance gives you BTC ?
Huh

I don't think this going to work on a large scale because the bitcoin price is fluctuating heavily these days. I would be very careful if someone promises you a fixed Bitcoin amount over a longer period of time. Creating coins out of thin air is not really possible, somewhere there must be a profit being made by binance to give you such good offers.

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