reason of price drop : Chinese exchanges dont have proof of 100% reserve

nextblast

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Quote from: SunBin on August 18, 2014, 11:16:56 PM

Quote from: percocet on August 18, 2014, 09:10:18 AM

The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...

If the volume is real, that will mean China alone have more than 50% of the daily trading volume on bitcoin. This can't possibly be right.

AFAIK, BTCChina has real volumn, but Huobi's and OKCoin's volumn are both fake to some extent.

derpinheimer

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Quote from: SunBin on August 18, 2014, 11:16:56 PM

Quote from: percocet on August 18, 2014, 09:10:18 AM

The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...

If the volume is real, that will mean China alone have more than 50% of the daily trading volume on bitcoin. This can't possibly be right.

Its not that odd. I dont think its all real volume (Bots, low fees, etc), but they are still really large exchanges.

SunBin

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Quote from: percocet on August 18, 2014, 09:10:18 AM

The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...

If the volume is real, that will mean China alone have more than 50% of the daily trading volume on bitcoin. This can't possibly be right.

wasserman99

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Quote from: Beliathon on August 18, 2014, 08:08:45 AM

Quote from: zedicus on August 16, 2014, 12:06:04 AM

Quote from: sly5am on August 15, 2014, 11:39:40 PM

Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious

The fact that chinese exchanges do not charge trading fees certainly makes it look like they are somehow bilking BTC from their customers as it makes little sense as to how they are making their money.

Bingo. Anytime you can't figure out how a capitalist is making a profit, or their business model doesn't add up.... run.

This is probably true, however my question would be, how does this affect the price of bitcoin elsewhere? If exchange operators have already spent customer funds then the prices have already been affected. If the exchanges can only cover 90% for example of customer deposits, then they can simply force their customers to withdraw 90% of their balance into a wallet they control and take a loss on the other 10%, customers would not necessarily want to sell what they have left.

cointalent

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Is there a way to prove that they don't have the funds to back up the coin they are selling? If there is indeed "virtual" coins being sold this could be a major problem, wouldn't that make Bitcoin more of a ponzi scheme rather than a currency?

speculationator3000

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Quote from: mercistheman on August 16, 2014, 01:49:55 AM

Perfect time to buy Wink

I bought my first Bitcoins yesterday, and I do not like how it has turned out today... What do you more experienced guys say? Will it ever get back over $550 or more?
Bought at $475....
I am quite a Bitcoin newbie, but thought it would be funny to try out, and I believe it is to be used in the future ( I hope at least )

dlowings

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I've said this all along… People who do not have and use a local wallet and put their trust in these exchanges are going to get hurt in a big way down the road just like the people of MtGox.

percocet

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The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...

Beliathon

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https://youtu.be/PZm8TTLR2NU

Quote from: zedicus on August 16, 2014, 12:06:04 AM

Quote from: sly5am on August 15, 2014, 11:39:40 PM

Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious

The fact that chinese exchanges do not charge trading fees certainly makes it look like they are somehow bilking BTC from their customers as it makes little sense as to how they are making their money.

Bingo. Anytime you can't figure out how a capitalist is making a profit, or their business model doesn't add up.... run.

NUD

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Fractional reserves are still likely to be a problem for cryptocurrencies in the same manner that it is a problem for monopoly money. The difference is that it is much easier to prove you are solvent. People should get into the habit of checking their financial institutions independently.

iarsenaux

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Quote from: rapport on August 16, 2014, 01:39:07 AM

If the Chinese exchanges have to acquire btc then this could push the price up

i doubt it will happen that way. What if they took the same path with Gox? Filing bancruptcy since they don't have enough holdings to cover everything. Then price will go the opposite side.

Sheldor333

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There is always a possibility of exchanges faking of what they really have and using it to cheat so they would earn more money. But if there was a way to know what each exchange has that would be easier to find out and maybe it would avert some of them from doing it.

mercistheman

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Perfect time to buy Wink

rapport

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If the Chinese exchanges have to acquire btc then this could push the price up

halfawake

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Yeah, this does seem like a legit reason for the big drop in price. And China doesn't have anywhere near the kind of regulations that exist in the USA and Europe around these sort of things, so I'd be surprised if they crack down on it. These exchanges are bringing down the whole bitcoin economy, it's quite a shame imho.

zedicus

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Quote from: sly5am on August 15, 2014, 11:39:40 PM

Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious

There are legitimate reasons to not give out their cold storage addresses, one of which being that if you can figure out how much total BTC they have on deposit, then if you know how much they have in cold storage then you know how much they have in their hot wallet, potentially making them a target for an attack.

The fact that chinese exchanges do not charge trading fees certainly makes it look like they are somehow bilking BTC from their customers as it makes little sense as to how they are making their money.

btcguys

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Now i have concerns and I want to know how good are Bitstamp, coinsetter and BTC-e

sly5am

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Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious

Gargulan

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Quote from: bigasic on August 15, 2014, 09:56:08 PM

So you are saying that the chinese exchanges are selling coins that they do not have, correct?

If this is true, they are doing quite well considering the price has dropped quite a bit.

They can buy back the coin at lower or possibly much lower price.

fryarminer

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Quote from: p2pbucks on August 15, 2014, 10:07:25 PM

Quote from: lyth0s on August 15, 2014, 10:02:14 PM

If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.

Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar financial product )on their platform . This strategy really works on many greedy guys .

AND , many Chinese players are new to crypto they don't know how to withdraw bitcoins to onchain-wallet ( blockchain.info ,qt .etc) ,onchain-wallets are too difficult for them . So , they put their bitcoins on trading platform . I know it sounds ridiculous but it's true .

Once you get into lending and borrowing you fabricate coin that isn't there, just the same as a bank lends and borrows money that doesn't exist.

Topic: reason of price drop : Chinese exchanges dont have proof of 100% reserve (Read 5153 times)