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What if the exchange didn't actually hold the BTC but only had a line in the database with an "IOU xBTC"? Maybe at this point the exchange had used its stored B
by simias 9y ago
What if the exchange didn't actually hold the BTC but only had a line in the database with an "IOU xBTC"? Maybe at this point the exchange had used its stored BTC to speculate on an other market and attempt to increase its profets. Maybe they bought Ether or gold or Microsoft stock.
Normally it doesn't matter as long as the exchange is capable of sending you back the coins when you claim them but in case of a fork they'd have to buy two coins instead.
- jncraton 9y agoThat's certainly a possibility. I was working from the assumption that Coinbase actually held BTC totaling the sum of all users account balances. Given the highly volatile nature of BTC and the nature of the BTC community (e.g. the conventional wisdom was to pull all funds from exchanges prior to the fork occurring), it seems quite irresponsible to not be holding funds as BTC. I'm aware that exchanges in the past have behaved very irresponsibly, but I'm hoping that Coinbase is the exception here as a well known US-based company.