Topic: The real problem with Exchanges/Services...it's quite simple. - page 3. (Read 2715 times)

Well, if the inevitable result of entrusting exchanges is getting ripped off, then yes - I suppose we each should expect the worst. It seems to me no different than any other part of life. If you are going to trust the untrustworthy, you're gonna get screwed. I'm not saying that the thievery is justified. I'm saying that we should regard it as inevitable that enabling scammers is going to result in scams occurring.


I guess this one is on me for not clarifying. How 'bout I say f2f - as in face-to-face. I've had a 100% track record so far with this. As have all of which I am aware.


I must have misunderstood you then. Perhaps due to an earlier quote from your OP:



I have no idea what you are indicating by "What good is fiat without banks?".

I don't think there is any particular 'supposed to do'. Crypto is a technology, not a director of human activity. Maybe start by asking what it is that you want it to do for you? Hoarding is a possibility, sure. If more of the planet comes onboard, you're likely to accumulate purchasing power by simply holding a fixed amount of it. Of course, with no activity, the world may not hop onboard. You can use it to purchase things.... the list of vendors is large and growing larger by the day. I personally feel that remittances (a multi-billion USD market with astronomical profit margins) will be the first real 'killer app', but I expect that it is dependent upon several more years' worth of infrastructure buildout.

Despite the cynicism I display in the opening sentences of this post, I am hopeful that crypto continues to grow, to the point where it overtakes fiat in gross global economic activity. I see this as more likely than not (your analysis may differ). A wonderous world awaits humanity if we can wrest monetary control from the hands of self-rewarding parasitic warmonger vampire-squids. (That last sentence should be a clue that I suspect that you and I likely could have an extended discussion on the merits or demerits of the fiat monetary system - but that should likely wait for another thread).

Plus there are decentralized solutions like I explained above. These will very quickly become the norm I expect.

I feel that this statement is accurate, but you are missing the real problem: ignorance. There is nothing wrong with having faceless entities on the internet, but the people that trust them with their money are stupid.

There are already decentralized answers like XCP and although many argue it is too centralized Ripple also solves this problem.

So basically the problem is already solved.

Next!

Plus there are other solutions in Bitcoin itself like multi-sig transactions. OP I think you need to learn a bit more about how BTC works

I agree with some of the issues raised regarding the quality and trustworthiness of bitcoin exchanges in general (excluding coinbase). I am currently providing market making services on 6 of the major bitcoin exchanges. I have met the respective c-level executives/ founders in person and know their real names etc. I have not been trading large volumes on Bitstamp for the obvious red flags: Slovenian based exchange, UK incorporated service company trading in USD using banking facilities in eastern Europe. While the founders of Bitstamp are well known the corporate structure is opaque at best.

If you are tired of having to worry about the security of your BTC/ USD funds but want aggressive pricing and volume then sign-up for liquidcoin.io

The company will be based in the US with fiat deposits handled through a well known North American payment provider. Wallets will be handled by a VC funded multi-sig wallet specialist.

Bingo.  Completely agree with this.


Jbreher: I agree with some of your points, though to me (may not be the same for all) it seems like you're trying to downplay the greater issue by staking blame of risk vs. reward at the end user when most have been essentially robbed blind without recourse.  Or are we all to just 'expect the worst' in the crypto community when entrusting our bitcoins in transactions?

p2p? I've combed over that multiple times in other posts.  It's no different.  You're still putting your trust in another faceless entity over the internet with no verifiable name/address/location.  Go through an escrow? Lol.  What if the escrow packs of shop once they've hit personal economic hardship?

This is the biggest problem facing bitcoin, in my personal opinion.  You keep saying I'm blaming the technology.  No, I'm not.  I'm blaming the people who are using it, because the motives thus far have been anything but charitable.

What good is fiat without banks?  Or are we all to just hoard coins in our personal computers and let them collect dust while maintaining a 'wait and see/trust no one' approach?  I'm sure that's the entire point of bitcoin, right? To just hoard and remain stagnant. 

It could be done, but it'd involve every bitcoiner start using PGP to build a collective web of trust. Now that'd be a nice thing to see, but it ain't gonna happen. It's too much hassle and complexity for the avg Joe, just like generating high-entropy private keys or signing offline transactions.

Well, some exchanges. There are others that are backed by industry titans that earned their cred long before bitcoin existed.


Pretty much everything of value in life incorporates some attendant risk. The issue is managing said risk in an appropriate manner. If you do so, you can go through life with minimized (note I did not say zero) losses.

I see you've still not cracked the p2p trade idea. Fine.

How much of your total stake can you risk at any moment? If an exchange has been in biz for over a year, do you feel comfortable enough to entrust them with (e.g.) 1% of your stake? If so, deposit that 1% with them, exchange it, and remove the proceeds. Deposit another 1%, exchange, cash out. Deposit 1%... ad nauseum. You can never lose more than 1% it the exchange cuts and runs. The 'year' and the '1%' are obviously illustrative example figures. You need to carry out your own cost/benefit risk assessment.

You want to be a day trader? That's a different matter. With potential reward comes additional risk. Welcome to life. Understand exchange risk and counterparty risk, and actually do a thoughtful analysis as to whether it is worth it.

The above might not suit you. I don't know. It should suit the needs of most who really have a use for crypto. But to come here with guns blazing, blaming "the technology" for simple human foibles is misguided at best.

This instant trading on speculation is nothing but gambling. The best analogy I've seen is playing cards where the dealer sees your hand and gets to play too. There's nothing wrong with low volume while development ramps up. The most important aspect of bitcoin transactions is security, security, security.

You're multiple post rebuttal was basically agreeing with me.  Exchanges have no verifiable identities.

Now.  The greater question: how do YOU suppose bitcoin should be transacted/traded? I mean, if none of these exchanges are trustworthy, what other alternatives are there?  Or is that not an option whatsoever?

All of this is necessary and to be expected. If we are to have truly reliable BTC exchanges they must necessarily emerge in response to spectacular fuckups. Market process, they call it.

The solution is absolutely stunning in its simplicity. Don't give your bitcoins to anyone you would be unable to slap in the face with a dead fish. Literally. And I don't mean figuratively literally. I mean literally literally.

Dude. [eta - or dudette - don't mean to offend the fairer sex] You're so far from the shores that your dried bones are bleaching.

The only thing in your rant that has ended up in the wrong hands is the bitcoins that the gullible have eagerly forwarded. It has absolutely zero to do with the technology. It is a basic failure to think things through to their logical conclusion.

Flashman has it exactly right. Act like a grownup and take responsibility for your own poor decisions.

The shiller will always shun away constructive criticism/reality.  This is no real surprise.

Keep living in your perfect world, though.  Seems like it's doing you a lot of good up 'til now.  After all, we all know technology thrives/grows when it's never amended or improved.  Just let it rot stagnant and it all will be gravy!

Consider it a response to the general amount of whining you've been doing lately.

Reading is fundamental, and apparently you suck at it.

Please re-read my OP.  I said bitcoin as a technology has so much advantages in its premise.  It's just fallen into the wrong hands.


And please enlighten me: how exactly is bitcoin supposed to flourish and grow when every single one of its exchanges goes belly up?  Is everyone just supposed to do peer to peer transactions doing FS/Wanted trade threads on forums?

Agreed.  This is a vital requirement or these scams will continue happening.  Guaranteed.

Why do you think actual fiat banks around the world are able to work?  Because they are physical entities with verifiable employees/assets.  Additionally, most are FDIC insured.  Meaning, should the absolute worst case happen, they are backed by the federal government and all your funds would be replenished should they go bottom up or robbed.

This is a fundamental flaw in the bitcoin banking system.  The anarchists will claim 'BUT HAVING REAL NAMES AND REAL PEOPLE GOES AGAINST THE TRANSPARENCY OF CRYPTOS!'  No.  You can't have it both ways.  Either you have accountability or you get taken to the cleaners.  The 'blind trust' system never works on the internet.  Never has.  Never will.

I don't know how you've been here this long and missed this.... the responsibility for your own bitcoins, is in your own hands.

It's not up to the whole of the internet or the bitcoin community to lead you by the hand, wipe your arse, and help you cross the street, if you can't put on your big boy pants and man up to your own mistakes then tough shit, life is continually going to suck for you. At the moment you think it's bitcoin making it suck, but I'm afraid you'll get out of bitcoin, and things start to suck in your other ventures, what is the common factor there? Oh, it's you.

Is that we are dealing with faceless entities over the internet and entrusting them with hundreds of thousands, if not millions, of our hard earned money.

Has anyone ever stopped to think how ridiculous it is that we actually put our faith and send money blindly to a most likely foreign operation ran by members known merely by an internet screenname?  I mean how damn professional is it knowing that a good majority of these exchanges are owned by teens and mid to late 20's Russians simply known as 'XxShadowRoguexX' or 'SysOp69_4u.'  With no physical company building or readily verifiable business location.  Well.  Let me rephrase that.  Even having a physical location such as Mt. Gox didn't stop Mr. Karpeles from cleaning out shop.

Step back for a second and think about this.  Do you think a company such as Apple or Samsung could just get away with being ran by anonymous CEO's that simply go by an internet screenname?

Bottom line is there's zero sense of accountability.  Which is precisely the reason why they're able to scam...and keep scamming.  Because they can make up any bullshit excuse they want and follow the crowd by saying they were 'hacked'...and there's nothing we can do about it.

And this is precisely the reason why I believe bitcoin will ultimate fade into the sunset of obscurity along with failed techs like tablet pc's and palm pilots.   Could another, better tech supplant it in the future? Possibly.  But as of now, it is nothing more than a haven for scammers, and has fell into the wrong hands.  Assuredly the same exact hands Mr. Nakamoto feared.