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Topic: WARNING ABOUT CRYPTSY (Read 2446 times)

sr. member
Activity: 350
Merit: 250
'Slow and steady wins the race'
October 01, 2014, 07:54:25 PM
#24
Security inefficiency is not an excuse to hold someone's BTCD for 48 hours. It's already quite established crypto. Other major exchanges don't have problems with withdrawals. They process them immediately
I wouldn't necessarily call what bitjon was describe as inefficiencies, but rather precautions that would protect your money at the end of the day.

IMO it is a good thing for a withdrawal to take a long time when a third party controls the private key to your coins. The longer it takes them to process a withdrawal, the longer you will have to stop it in the event your account is hacked
sr. member
Activity: 462
Merit: 250
September 29, 2014, 04:39:04 PM
#23
Security inefficiency is not an excuse to hold someone's BTCD for 48 hours. It's already quite established crypto. Other major exchanges don't have problems with withdrawals. They process them immediately

I was giving a list of reasons it could be held for 48 hours. Seeing as how you received them it was likely for one of those reasons. Other exchanges rampantly are hacked and bled dry and/or wander off with your cash/coins. Cryptsy is the oldest altcoin exchange (next to BTC-e) and still going strong. Though we would like to avoid some of these issues to protect funds we occasionally have users that experience delays.

Ok, I will keep using and see.
Thanks for response.
hero member
Activity: 826
Merit: 1001
@Bit_John
September 29, 2014, 11:39:45 AM
#22
Security inefficiency is not an excuse to hold someone's BTCD for 48 hours. It's already quite established crypto. Other major exchanges don't have problems with withdrawals. They process them immediately

I was giving a list of reasons it could be held for 48 hours. Seeing as how you received them it was likely for one of those reasons. Other exchanges rampantly are hacked and bled dry and/or wander off with your cash/coins. Cryptsy is the oldest altcoin exchange (next to BTC-e) and still going strong. Though we would like to avoid some of these issues to protect funds we occasionally have users that experience delays.
sr. member
Activity: 462
Merit: 250
September 29, 2014, 11:01:34 AM
#21
Security inefficiency is not an excuse to hold someone's BTCD for 48 hours. It's already quite established crypto. Other major exchanges don't have problems with withdrawals. They process them immediately
hero member
Activity: 826
Merit: 1001
@Bit_John
September 29, 2014, 10:43:39 AM
#20
There are a few factors that can cause what your explaining:
- Hot wallet runs dry we have dialed down our ratios based on the current environment we prefer the security to the inconvenience. Just the nature of it.
- Password resets automatically force a 24 hour withdraw freeze.
- An account can be flagged for other numerous reasons for review "laws and such" yeah it sucks but its still 1000% faster than if your bank flagged a transaction.
- some withdraws are flagged for a manual release I wont say what causes this as its another security measure, but if it is flagged you can expect a delay until a human reviews it.

So "WARNING ABOUT CRYPTSY" should read Cryptsy has some annoying security features protecting my coins... My reply would then be its the nature of the beast.
full member
Activity: 147
Merit: 100
www.secondstrade.com - 190% return Binary option
September 28, 2014, 11:22:00 PM
#19

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC

It could be a sign of cryptsy running with fractional reserves, or it could be that they need to get it from a cold wallet, and that might take some time..
[/quote]I would say it has more to do with trying to take money out of their cold storage of their altcoins. Due to the fact that many altcons have very long orphaned chains (usually due to both short confirmation times and centralization of mining power) they need to wait for a lot of confirmations before spending the coins transferred into their hot wallet from cold storage as they do not want to send a TX that will become invalid due to an orphaned chain (the same is true for "change" sent back to their hot wallet from a TX to their customer
sr. member
Activity: 462
Merit: 250
September 28, 2014, 07:18:20 PM
#18
Haven't I just written few times exactly the same?
That they tried to cheat laws of mathematics by using fraudalent bot system and false entries (ala fractional banking but with no limit of deposit multiplication).

Basically, you repeated twice what I already said...

You might consider expressing yourself more clearly then. Smiley But then we are all on the same page, and we're all jolly good friends!

I'm certainly jolly dumb if I got tricked myself into dealing with Cryptsy :-)
hero member
Activity: 490
Merit: 500
September 28, 2014, 05:36:58 PM
#17
Haven't I just written few times exactly the same?
That they tried to cheat laws of mathematics by using fraudalent bot system and false entries (ala fractional banking but with no limit of deposit multiplication).

Basically, you repeated twice what I already said...

You might consider expressing yourself more clearly then. Smiley But then we are all on the same page, and we're all jolly good friends!
sr. member
Activity: 462
Merit: 250
September 28, 2014, 04:29:36 PM
#16
They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.

Yes, because they scammed with bot system.
That's why it all collapsed quickly. They thought they would cheat mathematical laws of nature.

You might be confusing terms here. Bitcoin is 'guarded' by the 'laws of mathematics', however coins on exchanges are most often nothing but database entries, and can be altered by an administrator of an exchange.

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC

It could be a sign of cryptsy running with fractional reserves, or it could be that they need to get it from a cold wallet, and that might take some time..

Haven't I just written few times exactly the same?
That they tried to cheat laws of mathematics by using fraudalent bot system and false entries (ala fractional banking but with no limit of deposit multiplication).

Basically, you repeated twice what I already said...
hero member
Activity: 490
Merit: 500
September 28, 2014, 04:11:55 PM
#15
They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.

Yes, because they scammed with bot system.
That's why it all collapsed quickly. They thought they would cheat mathematical laws of nature.

You might be confusing terms here. Bitcoin is 'guarded' by the 'laws of mathematics', however coins on exchanges are most often nothing but database entries, and can be altered by an administrator of an exchange.

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC

It could be a sign of cryptsy running with fractional reserves, or it could be that they need to get it from a cold wallet, and that might take some time..
hero member
Activity: 490
Merit: 500
September 28, 2014, 04:09:42 PM
#14
They certainly can place sell orders on their orderbook for coins they don't physically own by changing the numbers in their database. Cryptsy trades don't happen on the blockchain, they are just numbers in a database and need not correspond to actual coin holdings. Nobody would know they had made up some coins unless everyone tried to withdraw at once, like happened at MtGox.

This is true. Any bank real bank could also do the same. Supposedly there are safeguards in place to avoid it form happening, all kinds of shenanigans goes on in banks anyway, but it's sophisticated and wrapped in fancy catch words and elaborate fine print. The traditional financial market is supposed to be regulated, how effective the regulation is is another discussion entirely.

As for exchanges dealing with cryptocurrencies, there's no oversight whatsoever, so basically you need to trust the exchange operator. If he wants, he can inject any amount of currency in his own systems. For example, if you deposit 1 BTC to an exchange, your account will hold 1.0 BTC. But the administrator of such an exchange could adjust that number to any number he would chose. For instance, he could change it to 10.0 BTC, or 100.0 BTC, or any other number.

As long as trades are only done on the site, this will not be a problem, everybody will be trading, and everyone will be happy.

The problem starts when people wants to withdraw, and there are delays when withdrawing, because the imaginary database coins does not have a sufficient amount of real cryptocurrency to back it up, so withdrawals needs to be supported by new depositors.

Once it gets around that there are withdraw problems, more and more people become sceptical and stop using the site, and because of these news, more and more people want to withdraw their funds, but they can't because it doesn't exist. So the site 'implodes' and a lot of people use money.

There are probably ways to prove your reserves of cryptocurrencies, but if the site does nothing to prove the existance of such funds, as a user you cannot really trust the exchange not to behave unethically or inject imaginary funds to the exchange.

I do think however, that in the long run, the bad actors will be weeded out, like we saw with MtGox. There are many examples in history about companies which are comfortably big and complacent, lose their position and dwindles away, perhaps of unethical behaviour, outright fraud, poor customer service or otherwise. Sometimes such shitty companies survive for a long time, perhaps because there's little competition, but eventuallly they will be replaced.

A good rule of thumb is to never deposit more cryptocurrency to any site than you can afford to lose. Once you have deposited it, it's no longer yours. It's the site that now controls the cryptocurrency that you just deposited, and the only thing that you have is a promise that they will return the funds to you when you request it. If they do not honour the promise, there's not much you can do.

But - we have seen that both Trendon Shavers and Butterfly Labs has faced the traditional justice system, so bitcoin crooks cannot be sure that they're untouched by the law. Bitcoin is not the wild west.

It's also in the interest of an exchange operator to be honest, as this will keep him in business for a long time. But sadly, and unethical operator might get away with the ocassional 'hacked' accounts. Sometimes it could be genuine hacks, other times it could be the exchange stealing the funds themselves.

There should really be some sort of rating site, where all users of an exchange could rate their exchange, and based on this, it would be easier to select a legit exchange.

But to protect yourself, never put all your eggs in one basket. If you have a lot of bitcoins, don't put it all on a single site, and esp. not if you cannot tolerate to lose it all. And with sketchy sites with a poor reputation, don't trade with too much money..

sr. member
Activity: 462
Merit: 250
September 28, 2014, 03:57:56 PM
#13
They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.

Yes, because they scammed with bot system.
That's why it all collapsed quickly. They thought they would cheat mathematical laws of nature.

received some coins around 0.75 btc within 2 minutes. No problems with crypts so far

Try to withdraw 100 BTC
legendary
Activity: 2940
Merit: 1333
September 28, 2014, 12:22:57 PM
#12
They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed.

You're confused.

They certainly can place sell orders on their orderbook for coins they don't physically own by changing the numbers in their database. Cryptsy trades don't happen on the blockchain, they are just numbers in a database and need not correspond to actual coin holdings. Nobody would know they had made up some coins unless everyone tried to withdraw at once, like happened at MtGox.
TSE
newbie
Activity: 47
Merit: 0
September 28, 2014, 12:14:03 PM
#11
received some coins around 0.75 btc within 2 minutes. No problems with crypts so far
legendary
Activity: 1736
Merit: 1001
September 28, 2014, 12:03:43 PM
#10
Best place for your coins are on your persons.
legendary
Activity: 1038
Merit: 1000
Bitcoin entrepreneur and Pro Trader
September 28, 2014, 12:00:52 PM
#9
They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.

Oh yes they can. Remember MtGox? Everyone was trading btc that didn't exist.
sr. member
Activity: 462
Merit: 250
September 28, 2014, 11:48:05 AM
#8
Flawless for me so far. When I did have a problem logging in I contacted them and they replied within an hour.

They replied within an hour:
"Thank you for contacting us!

We apologize for the inconvenience. I have reported this issue to our technical team. I will update you soon as your withdrawal transaction has gone thru. Thank you for your patience.

Sincerely,
Gretchen"

Then I have not heard from them since. It was almost 42 hours ago.

They obviously do it deliberately. They must use our coins to trade.

That seems unlikely. As far as I know they don't prove that they physically control all the coins in their orderbooks, so they don't *need* your coins to trade. They can just make up coins, fractional reserve style.

I'm not saying that nothing shady is going on, just that it's unlikely to be that they're trading with your coins.

They can't just make up coins out of thin air like Fed, because it isn't possible due to how the cryptocurrencies are designed. They may, although false bot sells/buys in their trade.
legendary
Activity: 3052
Merit: 1273
September 28, 2014, 11:42:05 AM
#7
Flawless for me so far. When I did have a problem logging in I contacted them and they replied within an hour.
legendary
Activity: 1974
Merit: 1003
September 28, 2014, 11:17:49 AM
#6
i had problems with them too in the past, im avoiding them
sr. member
Activity: 462
Merit: 250
September 28, 2014, 07:30:27 AM
#5
They obviously do it deliberately. They must use our coins to trade.

That seems unlikely. As far as I know they don't prove that they physically control all the coins in their orderbooks, so they don't *need* your coins to trade. They can just make up coins, fractional reserve style.

I'm not saying that nothing shady is going on, just that it's unlikely to be that they're trading with your coins.

Regardless, they are obvious manipulators. Haven't received neither my coins nor reply to my ticket.
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