Topic: The real problem with Exchanges/Services...it's quite simple. - page 2. (Read 2715 times)

The main reason Bitcoin was invented was to solve the issue of blind trust.  The funny thing is you can actually trust Bitcoin, it actually works.  Just most things built on top of it are still failing the blind trust problem.  I am wondering if maybe someday the blockchain advancements will solve this. 

Supposedly this is one of the great leaps of smart contracts, is that now, you can force third-parties to trust you via smart contracts. 

Hopefully projects like coinffeine will change the landscape soon. A decentralized solution is the most fitting.

Basically.

The most of these exchangers are ran by amateurs, hipters, scammers, kids, who think about their self that they are GODS.

That's why these things are happening. Look to their behavior. They think that they are a corporation; I am not sure why the most of these so called exchangers are posing as having large offices like Apple, Microsoft, Bank of America when it is not a shame to be modest.

You can run this business from a small and cozy office if you really want that. It's perfectly normal to do that because you don't need hundreds of employees.

You need someone(1-2 people) to reply to tickets (if you are a big exchangers), checking the incoming and outgoing transactions (by bank wire) and a part time programmer.He just have to take a look over it daily.

Mtgox or Moolah are only two examples of arrogance.

Look here : http://www.liveleak.com/view?i=e63_1404777061

https://www.youtube.com/watch?v=ob9Ak1t09Ao

This is a common behavior for almost all these "exchangers". They are "busy" people, full of the word's problems. Nobody can understand what  "burden" they carry but in essence they are some kids who saw a lot of money in their hands.

They are full of vanity....they know better than anyone how the "things" are in the financial industry even they have 25 years old.

They create FINANCIAL "scripts" on  knees and saying "it's the best"  even they only tested for 1-2 weeks. A financial software costs from few hundreds of thousands to millions of USD.

 That's why the banks and the real forex companies are paying fortunes for their software security and even so, you cannot be sure.

It is SO fucking funny when you see : "We are fully rebuilding our systems from the ground up so that customers can use Bitstamp with full confidence and trust (in 48 hours)"

https://twitter.com/nejc_kodric/status/552091195795845120

How can someone check and fix a hacking problem in days when it's about a financial platform?

Thousands of code lines must be checked and rechecked + the server configuration. It is impossible in 48 hours;not even in a week.

That's why all the hacks are happening. The greed and vanity will bring down all these so called exchangers.

Unfortunately, their clients will pay the bill.

Such a well thought out response.  And wonderful diversion from the biggest problems facing bitcoin.

Yes, let's just completely put the blame on all the hundreds of thousands of users that lost money in the past 5 or so large exchanges that scammed.   Offering real world solutions seems to be your forte.

Ah yes, AOL chatrooms.  Good times!  Now tell me when was the last time you sent a guy on AOL $5,000 to hold for you in good faith while you went and slayed some troglodytes.   

Quite an uneducated post OP, nobody is forcing you to leave your coins with an exchange.

In fact it's highly recommended you do the opposite.

Hello, AOL? We have an escapee from your walled garden... yes, if you'd send the goons with the batons and strait jackets that would be good, thanks.

I know where you're trying to head with this.  And very, very few companies start out as million dollar or billion dollar powerhouses.  

However, even when Gates and Jobs first started, they were still real individuals with real names with real addresses.  Even before the internet existed, you had to physically call a land line number associated with a person, and mailing items had to be done with an originating address or PO box associated with a person or persons.  There was still a sense of accountability.

The internet has allowed for much greater leeway when it comes to pulling off scams.  Proxy servers, vpn's...anon domain registrars...all allow (or at least make it extremely tough) for someone to know exactly who they're dealing with.  Compound that with the fact that bitcoin addresses do not have IP addresses or physical names attached to them, and it makes it a true game of blind faith when dealing with a lot (or should I say majority) of these bitcoin startups and exchanges.  

No.  Creating an exchange with just an internet screenname is not acceptable.  I don't care how much you try to rationalize it...we've seen this play out one too many times.  The system has to change.  With new technology comes greater responsibility.  And greater responsibility commands accountability.  You cannot have accountability and remain anonymous.  Those two are not synonymous in a non-ideal world.


It's really a tough situation.  Hardcore bitcoiners want a sovereign currency freed from the reigns of legislation and government control.  Yet those same users end up getting scammed because of the lack of government controls and regulation.   It's yet another case of 'you can't have your cake and eat it too.'

Most of the crop of "microcomputer" software and hardware computer companies of the 70s and 80s, started up with shitty little mail order line ads in the back of electronics magazines. In Apples case, run out of Job's garage at the time, many others would have been run from living rooms and kitchen tables.

They announced the Apple I in person, at a meeting of the Homebrew Computer Club, and they had a demo unit. They sold them through the Byte Shop in Santa Clara, California. The history of Apple is well known, and the founders were never anonymous.
Samsung started as a grocery and noodle company owned by an old, well-known land-owning family. Then they were a woolen and trading company. By the time they got into high-tech, in the 1960s, they were already a big company.
Microsoft did start small, but Gates had been going to Harvard and his family was rich. Same for Facebook and Zuckerberg.  Page and Brin were both at Stanford, and both were the sons of college professors.

Bitcoin is a protocol. It can be designed any way we want. In fact, it's the ideal currency for children to carry.

The public internet didn't exist when Apple was founded, but other than that, let's think about your question. When Apple built and sold its first personal computer, nobody knew who Steve Wozniak was and by all accounts I've heard Steve Jobs was some college kid who used a lot of LSD and made his money building and selling devices to defraud the phone company. They didn't start out as a multi-billion dollar international corporation with a huge corporate headquarters. They were two almost completely anonymous guys in a garage. If the public internet were around and as popular as it is today, Apple's achievement obviously wouldn't have been as big a deal as it was, but I wouldn't be too surprised if Woz and Jobs ended up announcing their new product on some online forum, where they may or may not be using their real names.

I don't know much about Samsung's backstory, but I'd be willing to bet almost any amount of money that they also didn't start out as a multi-billion dollar international corporation with a huge corporate headquarters. The world just doesn't work like that, and Bitcoin doesn't change that fact. Most likely it was a couple guys in a garage or a university dorm room (same can be said for Microsoft, Facebook, Google, Dell).

Once you become a big company like Apple, Samsung, Microsoft, Facebook, Google or Dell it becomes a lot harder to hide your identity.. but I seriously doubt anyone with the possible exception of a few investors had ever heard of the founders or CEOs of those companies before they became big household names.

Bitcoin was not designed to be child proof. It was designed for the "novice" user to have an advanced understanding of how bitcoin works.

The problem is that even now the Bitcoin protocol has not gotten any more child proof however various applications have been designed so that they are more user friendly which is causing more people to end up loosing their money

Non-responsive response noted. I'll take that as 'I have no idea how XCP, Ripple, or any other decentralized mechanism might solve this problem'.

In that case just find your nearest Bitcoin ATM.

But that's not how gambling addicts think. A few bad apples make all the headlines. Bitcoin needs to be child-proof.

I'm not saying to not trust them at all. I'm saying trust them only in a prudent fashion commensurate with the risk they present.

Look - your initial thought about needing some trustworthy exchanges is good. Instead of despairing that none exist, why don't you seek them out? There are some that even I would trust with a chunk of change. Temporarily. In limited amounts.


Well, it works. Yes, it seems archaic. But really, this is only a gateway matter. To me, the point of crypto currency is not to be continually exchanging between crypto and fiat -- it is to completely get off of the fiat* rails (some work left to be done here, yes).

* Fiat being, of course, the only form of money whereby every participant except the financiers are absolutely _guaranteed_ to have their purchasing power slowly but steadily stolen from them, and placed into the pockets of selfsame financier class.

Once out of fiat, I personally have no reason to convert back to fiat. Exchanges are not something I have repeated need for. Exchanges be gone.

The problem is...how are people supposed to exchange bitcoin if we are not to trust exchanges...at all?  

F2F is of course the most foolproof method...but that's essentially destroying the entire point of crypto currency.  It's for the digital transfer of funds quickly and efficiently to people 1 mile away...or 8,000 miles away.   Having to seek out potential buyers in your local city, set up meet times/drive to meet...is a borderline archaic method in this day an age.  About the only time people do this is for the sale of tangible goods like furniture on craigslist.  It should not be the go-to means of digital currencies...or that's a very very bad sign.


I'd love to see alternative exchange technologies that have truly secure means, or are physically insured.  But I'm not sure they exist.  Or else I'd assume they'd be way more popular by now.  Either that, or they have some severe disadvantages that has prevented them from gaining large volume.

hmmm... You say this is a solved problem? Maybe I need to learn more.

Assume I have a fistful of US Dollars, and I want ... oh ... Bitcoin. There is someone else on the other side of the planet that has Bitcoins he wants to dump for USD. Pick your favorite system -- be it XCP, Ripple, or something else -- and walk me through the capital and information flows, including all third parties, that this system uses to execute such a trade. Please.