Topic: What will you do when the BTC liquidation pools dry up? (Read 947 times)
I will finally release those balloons that live in my house just like Up and float away to a world of marvellous adventure.
i think btc pools still operations and maybe the fee will be increase but if for dry up, i don't think so. actually, i don't really matter about this because i don't mining bitcoin, i only mining altcoins. and no one can guess this predictions will be happen or not, so better we see what will be happen in future.
We have been warning people against fiat too and Billions are still using it and are still stupid enough to deposit their money in banks. 
.. I guess
people are just idiots by nature. We have seen several examples of the fiat system failing, but we still support it. Greece / Cyprus / Zimbabwe... can
I go on? Dude you are pissing against the wind..
.. I guess people are just idiots by nature. We have seen several examples of the fiat system failing, but we still support it. Greece / Cyprus / Zimbabwe... can
I go on? Dude you are pissing against the wind..
I don't share the oversimplification of the thread starter regarding the motives of exchange operators. And I neither share the nebulous Ponzi scheme allegations against Bitcoin or its holders. Judging from the post structure and the eagerness to "save" people from adverse fate I'm under the impression that the thread starter may have lost his touch with reality.
The world is much more diverse, not all exchanges are alike. Especially there is no problem with demand for Bitcoin. In reality, demand for Bitcoin is constantly increasing, because transactions / usage is growing. You can clearly see that from statistics and I can confirm this from first hand experience: More and more people are getting interested in Bitcoin. Of course, owning Bitcoin is not without risk and it might still fail - however it is consistently getting de-risked as it becomes more popular.
Of course it is preferable if people buy Bitcoin p2p and don't use centralized exchanges. But even the centralized exchange marketplace is much more diverse that it has been 4 years ago. Users can choose from a significant variety of exchanges. That said, it has long been best practice to immediately withdraw funds from exchanges to a personal wallet.
ya.ya.yo!
The world is much more diverse, not all exchanges are alike. Especially there is no problem with demand for Bitcoin. In reality, demand for Bitcoin is constantly increasing, because transactions / usage is growing. You can clearly see that from statistics and I can confirm this from first hand experience: More and more people are getting interested in Bitcoin. Of course, owning Bitcoin is not without risk and it might still fail - however it is consistently getting de-risked as it becomes more popular.
Of course it is preferable if people buy Bitcoin p2p and don't use centralized exchanges. But even the centralized exchange marketplace is much more diverse that it has been 4 years ago. Users can choose from a significant variety of exchanges. That said, it has long been best practice to immediately withdraw funds from exchanges to a personal wallet.
ya.ya.yo!
exchanges are not "getting hacked" due to buyers drying up.
but because users throw in their bitcoin (to use as a store) but are only actively trading 1% of the time.
this allows 99% of funds to just sit there. tempting exchange owners (usually basement dwellers, not experienced finex guys) get tempted to use that 99% elsewhere, instead of just leaving it in cold store.
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
its when these background trades go against the exchange, EG a unforseen price spike or dump losing the exchange its reserves. they then try to back peddle and double down to recoup the losses until they are at a point where they are upto 50% loss and know they cant recover, that they declare a hack months after the actual losses were made.
so dont worry about the potential of the supply-demand drying up. all that happens is a stagnant price.. but the real loss is background trading without customer consent (fractional reserves, technically abusing reserves) that you have to worry about
some exchanges already do it.
behind the scenes they share keys with each other so they all have partial control of multisigs(via bitgo). so say poloniex and bitfinex shared keys, they would both see and know who had what and be in full control of when it would move. this would allow bitfinex to be "credited" with a balance on poloniex and poloniex to be "credited" with a balance on bitfinex.
we all know it has happened. (bitinstant was the middle guy between btc-e<->mtgox in 2012) bitfinex admitted they had reserves in mtgox. and all these new 'sidechains" are based on allowing backdoor reserve accounting between the exchanges (sidechain: liquid)
Here I learn another lesson why I should not leave my bitcoins in exchanges other than hacking. It is really shocking me that exchanges are in practice of background trading with our funds. It is time, we must move onto decentralized exchanges. but because users throw in their bitcoin (to use as a store) but are only actively trading 1% of the time.
this allows 99% of funds to just sit there. tempting exchange owners (usually basement dwellers, not experienced finex guys) get tempted to use that 99% elsewhere, instead of just leaving it in cold store.
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
its when these background trades go against the exchange, EG a unforseen price spike or dump losing the exchange its reserves. they then try to back peddle and double down to recoup the losses until they are at a point where they are upto 50% loss and know they cant recover, that they declare a hack months after the actual losses were made.
so dont worry about the potential of the supply-demand drying up. all that happens is a stagnant price.. but the real loss is background trading without customer consent (fractional reserves, technically abusing reserves) that you have to worry about
some exchanges already do it.
behind the scenes they share keys with each other so they all have partial control of multisigs(via bitgo). so say poloniex and bitfinex shared keys, they would both see and know who had what and be in full control of when it would move. this would allow bitfinex to be "credited" with a balance on poloniex and poloniex to be "credited" with a balance on bitfinex.
we all know it has happened. (bitinstant was the middle guy between btc-e<->mtgox in 2012) bitfinex admitted they had reserves in mtgox. and all these new 'sidechains" are based on allowing backdoor reserve accounting between the exchanges (sidechain: liquid)
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
This is a serious problem if exchanges are doing this on a large scale.. The exchanges are not investment funds or "banks" and they offer nothing in return for using the customers funds (in a bank you gain interest in order for the bank to give away your money in loans etc).
Exchanges should always have 100% of customer funds in reservers, no matter what. If they want to speculate they can use the money they get from the trading fees, which are still quite substantial..
Makes me wonder if this behaviour is causing the trading volumes that we are seeing on some alts.
1. banks do not give customers interest in order for the bank to give away customers money in loans.
imagine it this way
banks show their reserves and are allowed to create 900% new cash due to holdings. its this 900% new holdings that get handed out as loans not the customers funds.
(EG $1000 reserves= $9000 new money creation...... total bank now has is $10k. but doesnt touch the customers $1k and only hands out the new $9k)
and the interest of 5% on the 9000= 45% of the customers holdings..
($9000 new money creation = $450 interest)
to legally generate this new cash, bank made a deal that they have to give some of the 'profits' to the customers because it was the customer funds that was being used as collateral.
(EG customer gets $50 banks keeps $400)
remember the banks never touched the $1000..
however if a bank loses the $9k then there is a risk of banks needing either a bailout or the banks just go bankrupt and uses the $1k customer reserve to pay off debts.
in bitcoin, exchanges CANNOT do fractional reserve in the sense of banks. but they do loans. EG they lock funds into a mutual reserve (multisig) where both exchanges need to sign.
and then while funds are locked in the multisig they can credit each others (mysql database) balance with a set amount.
and then when trading, win or lose to decide who owes who what. and when the winning exchange calls in the debt of the losing exchange and signs off on the multisig.. its time for the losing exchange to shout "hack" because customers funds are now in the pockets of the winning exchange.
2. you can see its happening because everyone knows it takes hours(mainly bitcoin, some fiat)/days(fiat) to deposit into an exchange for customers to arbitrage.. yet the exchanges 'sheep follow' each other within minutes..
its even possible to work out which exchange is sharing reserves (to allow instant arbitraging) just by looking at the price charts history of exchanges and see when a price moves first and then which exchange is first to sheep follow.. if there is a pattern that a certain exchange sheeps follows another certain exchange first. then they obviously have a combined reserve.
3. i agree that exchanges should only use the profits of their trading fee's to take arbitrage oppertunities, but you have to realise that the owners of exchanges are not 'wall street guys', all they see is money sat doing nothing where they feel greedy to put it to use behind closed doors.
im not saying exchanges need 'regulations' to solve this. because regulations wont.. but i do think that exchanges need 'consumer protection' rules to be written up to protect customers funds being mis-used. (if you understand the difference between the purpose of a regulation and a consumer protection, you would understand why we should never push for regulation. and only push for consumer protection)
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
This is a serious problem if exchanges are doing this on a large scale.. The exchanges are not investment funds or "banks" and they offer nothing in return for using the customers funds (in a bank you gain interest in order for the bank to give away your money in loans etc).
Exchanges should always have 100% of customer funds in reservers, no matter what. If they want to speculate they can use the money they get from the trading fees, which are still quite substantial..
Makes me wonder if this behaviour is causing the trading volumes that we are seeing on some alts.
bitcointalk is in serious need of a new board called "bullshit" or to be more polite you can call it "conspiracy theories" and i am sure Sir Alpha_goy and kuawkduck will be the top posters in these boards.
We call them shills around here, and we just add them to the ignore list, because they add no value to discussions on
this forum. Their main goal is to spread misinformation about Bitcoin in an attempt to sabotage the project. So if I were you, I would just ignore their statements and add them to your ignore list. ^smile^
Resistance is futile mortal, centralized you shall remain 
Okay jokes aside, you cannot win against centralization because it runs as deep as your very mind, fighting centralization is like fighting yourself. The world you perceive is merely a reflection of who you are. If you truly wanna be rid of centralization you'll have to dig a whole lot deeper than Bitcoin.
Okay jokes aside, you cannot win against centralization because it runs as deep as your very mind, fighting centralization is like fighting yourself. The world you perceive is merely a reflection of who you are. If you truly wanna be rid of centralization you'll have to dig a whole lot deeper than Bitcoin.
bitcointalk is in serious need of a new board called "bullshit" or to be more polite you can call it "conspiracy theories" and i am sure Sir Alpha_goy and kuawkduck will be the top posters in these boards.
exchanges are not "getting hacked" due to buyers drying up.
but because users throw in their bitcoin (to use as a store) but are only actively trading 1% of the time.
this allows 99% of funds to just sit there. tempting exchange owners (usually basement dwellers, not experienced finex guys) get tempted to use that 99% elsewhere, instead of just leaving it in cold store.
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
its when these background trades go against the exchange, EG a unforseen price spike or dump losing the exchange its reserves. they then try to back peddle and double down to recoup the losses until they are at a point where they are upto 50% loss and know they cant recover, that they declare a hack months after the actual losses were made.
so dont worry about the potential of the supply-demand drying up. all that happens is a stagnant price.. but the real loss is background trading without customer consent (fractional reserves) that you have to worry about
some exchanges already do it.
behind the scenes they share keys with each other so they all have partial control of multisigs(via bitgo). so say poloniex and bitfinex shared keys, they would both see and know who had what and be in full control of when it would move. this would allow bitfinex to be "credited" with a balance on poloniex and poloniex to be "credited" with a balance on bitfinex.
we all know it has happened. (bitinstant was the middle guy between btc-e<->mtgox in 2012) bitfinex admitted they had reserves in mtgox. and all these new 'sidechains" are based on allowing backdoor reserve accounting between the exchanges (sidechain: liquid)
but because users throw in their bitcoin (to use as a store) but are only actively trading 1% of the time.
this allows 99% of funds to just sit there. tempting exchange owners (usually basement dwellers, not experienced finex guys) get tempted to use that 99% elsewhere, instead of just leaving it in cold store.
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
its when these background trades go against the exchange, EG a unforseen price spike or dump losing the exchange its reserves. they then try to back peddle and double down to recoup the losses until they are at a point where they are upto 50% loss and know they cant recover, that they declare a hack months after the actual losses were made.
so dont worry about the potential of the supply-demand drying up. all that happens is a stagnant price.. but the real loss is background trading without customer consent (fractional reserves) that you have to worry about
some exchanges already do it.
behind the scenes they share keys with each other so they all have partial control of multisigs(via bitgo). so say poloniex and bitfinex shared keys, they would both see and know who had what and be in full control of when it would move. this would allow bitfinex to be "credited" with a balance on poloniex and poloniex to be "credited" with a balance on bitfinex.
we all know it has happened. (bitinstant was the middle guy between btc-e<->mtgox in 2012) bitfinex admitted they had reserves in mtgox. and all these new 'sidechains" are based on allowing backdoor reserve accounting between the exchanges (sidechain: liquid)
What you said is 99% correct, This is the main reason of exchanges of getting hacked , when a exchange is running good with good volume of trading and they are earning good then why will they do want to close their exchange, This is the main reason behind story of the exchanges going for scam as they are in loss by playing with the customer bitcoins.
This is not only the bitcoin exchanges problem, even in fiat currency their are so many stock market brokers who are doing this type of mistake using the stock of the customers who have kept for long term investment, playing with their stock and when they are facing loss and cannot be recovered they just vanish or start to say that their server got hacked or other bullshit theory.
So Bitcoin still has long term story, but what you are telling is also one point that keeping hole investment in bitcoin is also risky that is why i use bitcoin 50% of my earning to fiat currency convert and keep it safe.
exchanges are not "getting hacked" due to buyers drying up.
but because users throw in their bitcoin (to use as a store) but are only actively trading 1% of the time.
this allows 99% of funds to just sit there. tempting exchange owners (usually basement dwellers, not experienced finex guys) get tempted to use that 99% elsewhere, instead of just leaving it in cold store.
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
its when these background trades go against the exchange, EG a unforseen price spike or dump losing the exchange its reserves. they then try to back peddle and double down to recoup the losses until they are at a point where they are upto 50% loss and know they cant recover, that they declare a hack months after the actual losses were made.
so dont worry about the potential of the supply-demand drying up. all that happens is a stagnant price.. but the real loss is background trading without customer consent (fractional reserves, technically abusing reserves) that you have to worry about
some exchanges already do it.
behind the scenes they share keys with each other so they all have partial control of multisigs(via bitgo). so say poloniex and bitfinex shared keys, they would both see and know who had what and be in full control of when it would move. this would allow bitfinex to be "credited" with a balance on poloniex and poloniex to be "credited" with a balance on bitfinex.
we all know it has happened. (bitinstant was the middle guy between btc-e<->mtgox in 2012) bitfinex admitted they had reserves in mtgox. and all these new 'sidechains" are based on allowing backdoor reserve accounting between the exchanges (sidechain: liquid)
but because users throw in their bitcoin (to use as a store) but are only actively trading 1% of the time.
this allows 99% of funds to just sit there. tempting exchange owners (usually basement dwellers, not experienced finex guys) get tempted to use that 99% elsewhere, instead of just leaving it in cold store.
bitfinex admitted half their reserves were used in mtgox in 2013, which should not happen, no exchange should be background trading with peoples funds behind their back.
its when these background trades go against the exchange, EG a unforseen price spike or dump losing the exchange its reserves. they then try to back peddle and double down to recoup the losses until they are at a point where they are upto 50% loss and know they cant recover, that they declare a hack months after the actual losses were made.
so dont worry about the potential of the supply-demand drying up. all that happens is a stagnant price.. but the real loss is background trading without customer consent (fractional reserves, technically abusing reserves) that you have to worry about
some exchanges already do it.
behind the scenes they share keys with each other so they all have partial control of multisigs(via bitgo). so say poloniex and bitfinex shared keys, they would both see and know who had what and be in full control of when it would move. this would allow bitfinex to be "credited" with a balance on poloniex and poloniex to be "credited" with a balance on bitfinex.
we all know it has happened. (bitinstant was the middle guy between btc-e<->mtgox in 2012) bitfinex admitted they had reserves in mtgox. and all these new 'sidechains" are based on allowing backdoor reserve accounting between the exchanges (sidechain: liquid)
I do not see your prediction to happen, the economy of bitcoin is doing great and it was just some of the exchanges that are being hacked. They can always improve their security because it is a big money that is entrusted to them, as long as there is not negative thing that will happen with bitcoin as a whole, we can see this survive in the future.
What are you talking about. I am not sure what you are stating, for I do not see this happening let alone being an issue? please explain yourself more in simple terms, for we all are not into all the terms of bitcoin and do not all understand what you are implying here.
The day that the liquidation pools dry up on the centralized exchanges will be a sad day for Bitcoin bag holders.
No longer will you be able to get out of Bitcoin and flee to a safe haven.
It could be temporary it could last longer than you think.
Do you want to take that chance and get locked up in the void holding a virtual bag of thinly ordered contracts?
The germs are going to get cleaned out.
It will not last like this if you continue to allow the centralized bubble makers to run things.
You must grab hold of the reigns and kick them out before they pull you into the quick sand with them.
They will steal your air if you let them.
https://www.youtube.com/watch?v=EfkNvOOiZ_8
No longer will you be able to get out of Bitcoin and flee to a safe haven.
It could be temporary it could last longer than you think.
Do you want to take that chance and get locked up in the void holding a virtual bag of thinly ordered contracts?
The germs are going to get cleaned out.
It will not last like this if you continue to allow the centralized bubble makers to run things.
You must grab hold of the reigns and kick them out before they pull you into the quick sand with them.
They will steal your air if you let them.
https://www.youtube.com/watch?v=EfkNvOOiZ_8
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