I remember before FTX collapsed, they claimed that they had $10 billion in reserves and the naive people who believed what they said were the ones who suffered the most after FTX declared bankruptcy.
Even if Indodax provides proof that they have $750 million, what guarantee is there that if they get hacked again or go bankrupt, they will use that reserve to compensate you or their users? One thing you need to keep in mind is that centralized exchanges only give proof and claim that they have large reserves but they never promise or make agreement with users that they will fully compensate if they have any problem. Also, let's not forget why we abandon banks and trust Bitcoin, while exchanges and banks are centralized institutions.
Topic: should we hesitate if exchange have huge reserve? - page 2. (Read 392 times)
But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
Yes. Aside from not owning private key to your Bitcoin, there are other common disadvantage such as
1. Unable to sign message. This could be helpful when you accidentally send to wrong address and the receiver looking for proof that you're the sender.
2. Higher withdraw fee. Exchange generally charge withdraw fee higher than TX fee, since it's one of their income source.
3. Lack of privacy. Exchange usually only generate deposit one address, which makes you use that address for all kinds of usage.
Binance has $93 Billion, but I'm hesitate to leave my coins on Binance because centralized exchange isn't a place to leave your funds.
Advice is don't store your bitcoin in custodial wallets, on online platforms, on centralized exchanges.Events made you scare about custodial wallets, centralized exchanges. I agree with you, but these events are not enough to make many people fear about custodial wallets, centralized exchanges; and they continue to store bitcoin on these places.
Yep, for now, convenience and sometimes not enough knowledge outplays the common sense and the potential risks.
Interesting to see how the situation will change in the years to come.
I don't we have this philosophy not to leave huge amount of crypto specially Bitcoin in any exchange?
That has been our adage for many years and I doubt that even if an exchange has a lot of reserves and funds are supposedly SAFU, we should be keeping our coins with them.
The FTX collapse should be fresh in our mind, and even if Indodax came back as normal after the hacked, it doesn't mean that we should trust the again.
That has been our adage for many years and I doubt that even if an exchange has a lot of reserves and funds are supposedly SAFU, we should be keeping our coins with them.
The FTX collapse should be fresh in our mind, and even if Indodax came back as normal after the hacked, it doesn't mean that we should trust the again.
Binance has $93 Billion, but I'm hesitate to leave my coins on Binance because centralized exchange isn't a place to leave your funds.
Advice is don't store your bitcoin in custodial wallets, on online platforms, on centralized exchanges.Events made you scare about custodial wallets, centralized exchanges. I agree with you, but these events are not enough to make many people fear about custodial wallets, centralized exchanges; and they continue to store bitcoin on these places.
A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.
Just think about it, you transfer your house on your neighbor who you trust and lets you to live in the house. In this case, this house is yours but it's on another person's name and that person can sell or rent your house because it's not on your name anymore. Do you understand the difference now? Not your keys = Not your coins.
Even if your exchange doesn't experience any hack, keep in mind that they can block your account and seize your assets at any time, without explaining a single reason to you.
Even with large reserves, it's important to remember that keeping your assets on an exchange still carries inherent risks. Large reserves are helpful, but they aren't a guarantee against future security breaches. Exchanges remain attractive targets for hackers due to the sheer volume of funds they handle. They may cover losses in the short term but the long-term reputation, trustworthiness, and security of the exchange are still critical factors.
I am sure the owner is also a BTC hodler, if the loss figure is estimated as you said the exchange owner can immediately replace it easily whether he sells part of his BTC ownership to compensate his customer funds or uses the profit from the annual profit he earned.
For the enthusiasm and significant increase after the incident I think this is normal, maybe the owner also pumped up the performance of his exchange by buying daily alongside other users. What is certain is that Indodax is not FTx.
For the enthusiasm and significant increase after the incident I think this is normal, maybe the owner also pumped up the performance of his exchange by buying daily alongside other users. What is certain is that Indodax is not FTx.
A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.
A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.
Exchanges with huge reserve can surely be considered safer amongst others! Because even if they are hacked, at least you will get back your money after a short delay. But I am still very hesitant to keep my Bitcoins in any centralized exchanges. The good old rule - not your keys, not your Bitcoin - applies to all situation regardless of the fact that an exchange has a huge reserve. But yes, it easier for that exchange to recover from such hacking disasters faster than its peers. That's the only difference here. Prefer not to keep your coins with any exchange. Or you can also limit your amount to be kept. never keep all of your holdings with an exchange.
A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.
Sometimes these exchanges claim to have funds they don't have. There are speculations that some centralised exchanges borrow money from each other to show the public that they are healthy. How can you verify that they own the reserve funds? That exchange might not have survived if the hacker had taken more than 20 Million USD. It is also possible that they borrowed funds to balance the book.
But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
Of course you shouldn't keep your money on exchange for any longer period of time just because thet say that they have reserves. Thing is, you can't be 100% sure that they will use that money in case of the hack and there is even the question whether they really have the money they claim to have.So yeah, proof of reserve is just another way to fool the gullible ones into doing something they absolutely shouldn't.
I agree. It's each person's choice, but the risk is always looming around. Also, there is more news about exchanges being hacked and drained of their funds just like what OP said, and it's up to them and their credibility to work around it. And sooner or later, they won't be able to help everybody. Or they wouldn't want to.
Having money now doesn't necessarily mean they will pay you back. There are a lot of scenarios where they don't.
- Like if those reserves are also stolen.
- Or they can file for bankruptcy and not pay anybody back,
- Or they can take the money and run away themselves,
- Or your account alone can get hacked and the hacker steals your money only!
Leaving coins on a CEX account is just too risky that should be avoided unless you have a solid reason for it (like being in active trades).
- Like if those reserves are also stolen.
- Or they can file for bankruptcy and not pay anybody back,
- Or they can take the money and run away themselves,
- Or your account alone can get hacked and the hacker steals your money only!
Leaving coins on a CEX account is just too risky that should be avoided unless you have a solid reason for it (like being in active trades).
But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
Of course you shouldn't keep your money on exchange for any longer period of time just because thet say that they have reserves. Thing is, you can't be 100% sure that they will use that money in case of the hack and there is even the question whether they really have the money they claim to have.So yeah, proof of reserve is just another way to fool the gullible ones into doing something they absolutely shouldn't.
A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.
It's up to you to decide whether or not to trust a centralized crypto exchange(or any other company) with your money.
Bitcoin/Crypto was invented with the sole purpose of not having to trust any bank or investment fund. Unfortunately, so many people are used to depositing their money in a financial institution and having trust in that institution. They view crypto exchanges as banks, even though crypto exchanges aren't insured by the government. This won't change anytime soon(or maybe it will never change). I would never leave a big amount of crypto in a centralized exchange. It doesn't matter how big reserves this exchange has or how safe this exchange claims to be.
With or without reserves no type of exchange is ok to hodl your coins. Decentralised exchange or service can have huge reserves too and still take you coins from you . Similarly centralised exchanges can do the same especially in the case of government regulations and orders.
They also were proof that they have about 750 Million USD assets and published it on their site.
Binance has $93 Billion, but I'm hesitate to leave my coins on Binance because centralized exchange isn't a place to leave your funds.I don't care with how much money they have because when someone have the key, they can move it as much as they want.
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When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.
Definitely most people don't care with hack or something bad happen as long as it can be fixed ASAP, but if they were leave their coins in Mt.Gox, it will teach them a good lesson. 
A couple week ago, our local exchange Indodax got hacked and lost about ±20 Million USD. But, they was recovered fast and back to normal after 80 hours incident. They also were proof that they have about 750 Million USD assets and published it on their site. This means with that their huge asset, they can easily pay back to customers if got hacked on their exchange. But, as normal people, should I still hesitate to keep my bitcoin on that exchange if they have a huge reserve? because if they lost or got hacked, they can easily pay your loss and that shouldn't worry.
When I look now, that exchange back to normal operation and tends to increase transaction, which means many people in our country is look don't care about what happened on the previous week.
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