"Funds are SAFU": Here we go again, but with Coinbase! - page 3.

Ultegra134

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Quote from: NotATether on February 29, 2024, 08:11:43 AM

It is baffling that people still keep their entire balance inside exchanges after what happened to FTX. Like it was so bad, it was even publicized everywhere - and not just in the Scam Accusations or Exchanges section of the board by the way - but all over the news, and even the government, newspapers, and TV got on it, and the founder is now doing jail time.

It is like these people somehow expect that the exchanges will stop them from getting scammed by returning the money to their account like a bank.

I also have a decent amount of money on Binance due to Launchpool projects that I'm taking advantage of, but certainly not my entire balance; I keep my Bitcoin in a separate wallet, away from exchanges. However, although history has proven that incidents such as FTX occur (see Mt. Gox exchange and possibly others as well), my question is: how do whales trust them and keep balances worth millions stored in them? I've seen multiple sales of hundreds of dollars worth of cryptocurrency on Binance and other exchanges in real time, and honestly, it's an every-day phenomenon.

How do you respond and how do you explain this?

Edit: Right now, as we speak, there are Bitcoin transactions of over $300,000 on Binance, in a single transaction or over $1,000,000 trading stablecoins (see FDUSD/USDT), which means that there are people with a great sum of money stored on the exchange.

NotATether

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Quote from: Fiatless on February 29, 2024, 08:01:51 AM

Quote from: Ultegra134 on February 29, 2024, 07:38:07 AM

Money in exchanges is relatively safe; if they were as unsafe as people here portray them to be, no one would use them. In the meantime, billions of dollars worth of volume are transacted on Binance every day. I'm not recommending storing in exchanges, but sometimes it's necessary because people are actively using their funds.

This was how people felt that exchanges like FTX were solid and safe until the unexpected happened. Using exchange from trading is not wrong but keeping large sums in them is not safe.

It is baffling that people still keep their entire balance inside exchanges after what happened to FTX. Like it was so bad, it was even publicized everywhere - and not just in the Scam Accusations or Exchanges section of the board by the way - but all over the news, and even the government, newspapers, and TV got on it, and the founder is now doing jail time.

It is like these people somehow expect that the exchanges will stop them from getting scammed by returning the money to their account like a bank.

Fiatless

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Quote from: NotATether on February 29, 2024, 05:49:39 AM

It no sense, because a software wallet like Electrum isn't something you lave to take lessons on how to use like it's a university course, it is literally just a software program like Google Chrome, VLC, and Adobe Reader.

Do you take lessons or tutorials to use any of those? Of course not. That is because they are intuitive to use. The same goes with wallet software. Except for full nodes but those are not included in this discussion.

There are even convenient non-custodial mobile wallets such as Trust Wallet, and Coinbase Wallet (LOL) which you can access by opening an app. There is literally no excuse for normal people to go to an exchange website and sign in in order to access your coins.

These wallets are very easy to use even for a semi-illiterate. You will be surprised to know that most people don't even know that wallets exist. They assume that exchanges are the only means of keeping and trading cryptocurrencies. Some of them joined the crypto space because they want to make quick money so they are now concerned about learning anything about the sector.

Quote from: Ultegra134 on February 29, 2024, 07:38:07 AM

Money in exchanges is relatively safe; if they were as unsafe as people here portray them to be, no one would use them. In the meantime, billions of dollars worth of volume are transacted on Binance every day. I'm not recommending storing in exchanges, but sometimes it's necessary because people are actively using their funds.

This was how people felt that exchanges like FTX were solid and safe until the unexpected happened. Using exchange from trading is not wrong but keeping large sums in them is not safe.

NotATether

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Quote from: franky1 on February 29, 2024, 07:20:48 AM

Quote from: NotATether on February 29, 2024, 02:33:30 AM

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet.

i will never understand why a crypto exchange doesnt utilise crypto techniques of database/ledgers, to avoid such glitches
im not saying full on private blockchains for user database.. but at least some of the crypto techniques to preserve data

heck even decades ago "clouds" were suppose to be the answer to database glitches by decentralising the database so if one database is lost/glitched, they can pull a copy instantly from another source as if the problem never happened/went unnoticed to customers

You know why the cloud seems to be almost as brittle as Dave's production server? It's because all it takes to take down the infrastructure is just one bad line of code. That's it.

When everything else crashes because of that, chaos ensues. This really hasn't changed over the last 20 years. It's pretty much a fact of life that people always create bugs in their code.

Ultegra134

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Quote from: Die_empty on February 29, 2024, 04:02:26 AM

If a glitch causes customer balance to become zero, then I am afraid that more serious technical problems could make people lose all they have in these exchanges. Some people tend to learn lessons only when they have a bad or costly personal experience. We have had may issues with exchanges that would have made people avoid using these platforms as decentralized wallets.

It was just a visual glitch; their balance didn't suddenly disappear. I believe that you're overexaggerating and making unnecessary assumptions about the future. I doubt this is the first time it's happening, and I'm not solely talking about exchanges but any kind of financial institution. Even Metamask, a completely decentralized wallet, showed that my balance was zero multiple times due to visual or connection glitches. A quick look at an explorer was enough to confirm that my balance was still there, while the issue usually resolved itself with a few refreshes.

Quote from: Die_empty on February 29, 2024, 04:02:26 AM

Anyone who wants to invest in the cryptocurrency sector should be willing to do research. Information about the crypto space is all over the internet and anyone would understand how the system works. The comments by the CEO Binance is a common lie that can be dispelled easily by a simple Google search. Instead of reading, most people tend to rely on rumors or hearsay.

Money in exchanges is relatively safe; if they were as unsafe as people here portray them to be, no one would use them. In the meantime, billions of dollars worth of volume are transacted on Binance every day. I'm not recommending storing in exchanges, but sometimes it's necessary because people are actively using their funds.

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Quote from: NotATether on February 29, 2024, 02:33:30 AM

I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet.

Because of the responsibilities behind? Seriously, these people are used to be like that the same on the idea of how people handle their bank account/s — it's up to the banks now. They probably know what are the disadvantages but they just let it as they see more benefits of doing so in their POV, like insurance, assurance and whatnot like what banks do. Simply put they don't like the idea of "be your own bank".

franky1

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Quote from: NotATether on February 29, 2024, 02:33:30 AM

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet.

i will never understand why a crypto exchange doesnt utilise crypto techniques of database/ledgers, to avoid such glitches
im not saying full on private blockchains for user database.. but at least some of the crypto techniques to preserve data

heck even decades ago "clouds" were suppose to be the answer to database glitches by decentralising the database so if one database is lost/glitched, they can pull a copy instantly from another source as if the problem never happened/went unnoticed to customers

MusaMohamed

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Quote from: NotATether on February 29, 2024, 02:33:30 AM

People who are not trading coins do not need to use an exchange. It is just ridiculous seeing people on X/Twitter having a mental breakdown over this even after hearing about "not your keys, not your coins" so many times.

Reminder: do not keep your money in online accounts
Bitcoin Q&A: Not your keys, not your bitcoins.

Many Bitcoin Spot ETFs chose Coinbase as their Custodian.
https://blockworks.co/bitcoin-etf

Are ETFs better than self custody?

NotATether

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Quote from: davis196 on February 29, 2024, 03:05:01 AM

At least 80% of the Bitcoin/crypto users aren't that tech savvy. I also think that at least 80% of all crypto users prefer convenience over safety. Maybe dealing with a centralized entity dives them a false sense of security. It's like having a bank account in a big and trustworthy bank. You think that all your problems will be solved and you trust the bank, simply because the bank is big and it has millions of users. The same thing applies to big crypto companies like Coinbase. In this case it was a technical glitch, but I really expect some big centralized crypto exchange to get hacked again and many crypto supporters waking up with $0 in their accounts.

It makes no sense, because a software wallet like Electrum isn't something you lave to take lessons on how to use like it's a university course, it is literally just a software program like Google Chrome, VLC, and Adobe Reader.

Do you take lessons or tutorials to use any of those? Of course not. That is because they are intuitive to use. The same goes with wallet software. Except for full nodes but those are not included in this discussion.

There are even convenient non-custodial mobile wallets such as Trust Wallet, and Coinbase Wallet (LOL) which you can access by opening an app. There is literally no excuse for normal people to go to an exchange website and sign in in order to access your coins.

edit: missed a word

9TONNN

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Quote from: NotATether on February 29, 2024, 02:33:30 AM

Panicking Coinbase users woke up today to find their bitcoin balances at $0 because of a technical glitch.

Source: https://www.msn.com/en-us/money/markets/bitcoin-s-price-surge-briefly-broke-coinbase/ar-BB1j4tNN

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet. People who are not trading coins do not need to use an exchange. It is just ridiculous seeing people on X/Twitter having a mental breakdown over this even after hearing about "not your keys, not your coins" so many times.

People are lazy. That's why. They must transfer their coins to a non-custodial or paper wallet for long-term safekeeping and storage.

Z-tight

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Another event to show you that whatever is displayed in your exchange account is nothing but numbers, the exchange use your coins in fractional reserve scam and to make more money for themselves, the moment they lose that money, your funds is gone and the exchange files for bankruprcy.

However, good thing for Coinbase users that it was just a glitch, they said they are experiencing more trading in their platform as a result of the pump in BTC price. But it is still worth mentioning that even if this was a glitch, your funds should not be there in the first place, move your coins into your self custodial wallet as soon as possible.

Zaguru12

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Quote from: kro55 on February 29, 2024, 04:31:50 AM

tech-savvy, another reason is that people only consider bitcoin or cryptocurrency as a financial market, not too many people consider bitcoin as a place to store assets or a protect their assets.

You don’t need to be a tech savvy person to relate to what OP said, if you’re knowledgeable enough to buy any coin from the exchange you’re knowledgeable enough to take them out to your wallet. Leaving coins at exchanges is more of a convenience thing than a knowledge thing to me

Quote from: kro55 on February 29, 2024, 04:31:50 AM

In addition, a more interesting thing is that no matter what we say, CEX is always the place with the largest liquidity in the market. And for financial markets, liquidity is the most important thing. So it's no surprise that people will use it even if more centralized exchanges collapse like FTX.

We are not distinguishing the use of CEX here, that’s a privacy issue. One can use any exchange they want to get a coin but the warning is never ever leave your coin on an exchange no matter how big or how much liquidity you think they have. Using of DEX is to avoid KYC for privacy oriented people

kro55

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Quote from: davis196 on February 29, 2024, 03:05:01 AM

Quote from: NotATether on February 29, 2024, 02:33:30 AM

Panicking Coinbase users woke up today to find their bitcoin balances at $0 because of a technical glitch.

Source: https://www.msn.com/en-us/money/markets/bitcoin-s-price-surge-briefly-broke-coinbase/ar-BB1j4tNN

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet. People who are not trading coins do not need to use an exchange. It is just ridiculous seeing people on X/Twitter having a mental breakdown over this even after hearing about "not your keys, not your coins" so many times.

At least 80% of the Bitcoin/crypto users aren't that tech savvy. I also think that at least 80% of all crypto users prefer convenience over safety. Maybe dealing with a centralized entity dives them a false sense of security. It's like having a bank account in a big and trustworthy bank. You think that all your problems will be solved and you trust the bank, simply because the bank is big and it has millions of users. The same thing applies to big crypto companies like Coinbase. In this case it was a technical glitch, but I really expect some big centralized crypto exchange to get hacked again and many crypto supporters waking up with $0 in their accounts.

In addition to the fact that most people are not tech-savvy, another reason is that people only consider bitcoin or cryptocurrency as a financial market, not too many people consider bitcoin as a place to store assets or a protect their assets.

In addition, a more interesting thing is that no matter what we say, CEX is always the place with the largest liquidity in the market. And for financial markets, liquidity is the most important thing. So it's no surprise that people will use it even if more centralized exchanges collapse like FTX.

Despairo

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What could be the reason? it's because their poor server can't hold high traffics?

Quote from: davis196 on February 29, 2024, 03:05:01 AM

At least 80% of the Bitcoin/crypto users aren't that tech savvy. I also think that at least 80% of all crypto users prefer convenience over safety. Maybe dealing with a centralized entity dives them a false sense of security. It's like having a bank account in a big and trustworthy bank. You think that all your problems will be solved and you trust the bank, simply because the bank is big and it has millions of users. The same thing applies to big crypto companies like Coinbase. In this case it was a technical glitch, but I really expect some big centralized crypto exchange to get hacked again and many crypto supporters waking up with $0 in their accounts.

Speaking of convenience, both of them are not really different.

When you use centralized exchange, you don't have to login because you've download their apps and login into your account, you will save your email and password in case you're forget.

When you use non custodial wallet, you also don't need to login anymore because you've import your seed phrase, and you've save your seed phrase.

The reason why people choose centralized exchange over non custodial wallet because they can stake their coins to earn interest, they're choose profit over security.

Die_empty

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Quote from: NotATether on February 29, 2024, 02:33:30 AM

Panicking Coinbase users woke up today to find their bitcoin balances at $0 because of a technical glitch.

Source: https://www.msn.com/en-us/money/markets/bitcoin-s-price-surge-briefly-broke-coinbase/ar-BB1j4tNN

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet. People who are not trading coins do not need to use an exchange. It is just ridiculous seeing people on X/Twitter having a mental breakdown over this even after hearing about "not your keys, not your coins" so many times.

If a glitch causes customer balance to become zero, then I am afraid that more serious technical problems could make people lose all they have in these exchanges. Some people tend to learn lessons only when they have a bad or costly personal experience. We have had may issues with exchanges that would have made people avoid using these platforms as decentralized wallets.

Quote from: _act_ on February 29, 2024, 03:07:49 AM

Quote from: Amphenomenon on February 29, 2024, 02:46:49 AM

I thought after FTX investors would have been wise to know not your key not your coin but its far from it, People continue to fall for CEX drama but at least we will just continue to speak the truth not your key not your coin, those who will listen will listen while the others will later accept it after being victimised

People can also easily be following lies. Example of the lie is when Binance former CEO CZ said funds on noncustodial wallet are not also that save that centralized exchanges are safe when he noticed high outflow of money from Binance to noncustodial wallet. Many people started not to send their coins from Binance to noncustodial wallet as the outflow reduced after he said that. Those words alone deceived many people.

Anyone who wants to invest in the cryptocurrency sector should be willing to do research. Information about the crypto space is all over the internet and anyone would understand how the system works. The comments by the CEO Binance is a common lie that can be dispelled easily by a simple Google search. Instead of reading, most people tend to rely on rumors or hearsay.

_act_

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Quote from: Amphenomenon on February 29, 2024, 02:46:49 AM

I thought after FTX investors would have been wise to know not your key not your coin but its far from it, People continue to fall for CEX drama but at least we will just continue to speak the truth not your key not your coin, those who will listen will listen while the others will later accept it after being victimised

People can also easily be following lies. Example of the lie is when Binance former CEO CZ said funds on noncustodial wallet are not also that save that centralized exchanges are safe when he noticed high outflow of money from Binance to noncustodial wallet. Many people started not to send their coins from Binance to noncustodial wallet as the outflow reduced after he said that. Those words alone deceived many people.

davis196

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Quote from: NotATether on February 29, 2024, 02:33:30 AM

Panicking Coinbase users woke up today to find their bitcoin balances at $0 because of a technical glitch.

Source: https://www.msn.com/en-us/money/markets/bitcoin-s-price-surge-briefly-broke-coinbase/ar-BB1j4tNN

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet. People who are not trading coins do not need to use an exchange. It is just ridiculous seeing people on X/Twitter having a mental breakdown over this even after hearing about "not your keys, not your coins" so many times.

At least 80% of the Bitcoin/crypto users aren't that tech savvy. I also think that at least 80% of all crypto users prefer convenience over safety. Maybe dealing with a centralized entity dives them a false sense of security. It's like having a bank account in a big and trustworthy bank. You think that all your problems will be solved and you trust the bank, simply because the bank is big and it has millions of users. The same thing applies to big crypto companies like Coinbase. In this case it was a technical glitch, but I really expect some big centralized crypto exchange to get hacked again and many crypto supporters waking up with $0 in their accounts.

headingnorth

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The learning curve of self-custody is rather steep and probably daunting for many.

Self-custody is a simple thing for me to do now because I have been doing it for so long (many years).
But it was not a simple thing to learn at first. There is definitely a learning curve.

Good thing there is now a spot ETF available that makes the buying and holding process much simpler for those who can't or won't get into the weeds of self-custody.

boyptc

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That's depressing when they've got thousands to even millions there, but wait, why keep that amount there?

Their similar answers will be, it's easy to store there, a trusted company and can easily dump it when you want to.

It won't justify any security matters and they understand that they have no private keys that they're holding there and yet, they're still there keeping their bitcoins on exchanges. Glad that it's just a glitch.

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Quote from: NotATether on February 29, 2024, 02:33:30 AM

Panicking Coinbase users woke up today to find their bitcoin balances at $0 because of a technical glitch.

Source: https://www.msn.com/en-us/money/markets/bitcoin-s-price-surge-briefly-broke-coinbase/ar-BB1j4tNN

Well at least they were lucky that it was just a glitch! I will never understand why normal people are keeping their coins in an exchange and not even in a software wallet. People who are not trading coins do not need to use an exchange. It is just ridiculous seeing people on X/Twitter having a mental breakdown over this even after hearing about "not your keys, not your coins" so many times.

Those people that keep their coins in an exchange are gambling with their coins, and I will say that they are the ones putting themselves into panic, because I don't see any reason why someone who is not a trader will turn deaf ears to the advise of using a noncustodial wallet, despite all the news about the flaws in exchanges, and still continue to keep their coins with third party.

Imagine assuming it wasn't a glitch, but an exit scam or a hack. These people will start blaming Coinbase, instead of blaming themselves for not learning from what happened in the past to FTX. I just hope that other investors who still keeping their coins on exchanges will learn from this, and also these panicking Coinbase customers will also transfer their coins to a noncustodial wallet after the glitch is fixed. It is 50/50 using an exchange to keep your coins, and don't be a victim, because the risk is higher than what you benefit from the exchange. Anyone with High Blood Pressure might collapse, when he checks his account in Coinbase and sees $0

Topic: "Funds are SAFU": Here we go again, but with Coinbase! - page 3. (Read 532 times)