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I mean, the exchanges aren't selling, sure, but it is a market... so when you sell your bitcoin someone is putting up cash to buy it. I mean unless I don't unde

I mean, the exchanges aren't selling, sure, but it is a market... so when you sell your bitcoin someone is putting up cash to buy it. I mean unless I don't understand how these exchanges are functioning. I have no idea why it takes a few days to process, however. I don't think the fact that it can take a little while to "process" sells is because it's a ponzi scheme though, that seems like a bit of a jump. I mean plain old ACH transfers take a few days, does that mean that ACH is a ponzi scheme?

kristopolous 9y ago
I'm not claiming any of them are. On the contrary, I'm saying there's a risk that some of them could be partially operating like this and if they were, you wouldn't be able to tell. This is high risk. No kidding.
- spelunker 9y ago
  I guess. They could also be inventing the buy side entirely and just taking people's money. They also could be Nigerian princes who just really need my SSN to access their family inheritance. I still don't think selling "taking a few days" necessarily is evidence that there is a ponzi scheme going on, though. When I sell equities in my Schwab account, it takes two days to access the cash. I'm pretty certain Schwab isn't running a ponzi scheme.
  - kristopolous 9y ago
    The idea is unlike having coins in a personal wallet, on an exchange you effectively just have a claim card placed with a central authority. It's put trust and centralization back into the system. The claim card only needs to be satisfied when claims are made. Detaching the claim from the asset and then reattaching when claims are made IS how the exchanges work fundamentally. Having 100% of the liabilities here is certainly possible but if you had only 20% of them, there'd be effectively no difference unless there's a market panic. And when/if that happens, I bet that not all 124 or so exchanges have 100% of their liabilities on hand at the same time as the panic.

kristopolous 9y ago

I'm not claiming any of them are. On the contrary, I'm saying there's a risk that some of them could be partially operating like this and if they were, you wouldn't be able to tell. This is high risk. No kidding.

spelunker 9y ago
I guess. They could also be inventing the buy side entirely and just taking people's money. They also could be Nigerian princes who just really need my SSN to access their family inheritance. I still don't think selling "taking a few days" necessarily is evidence that there is a ponzi scheme going on, though. When I sell equities in my Schwab account, it takes two days to access the cash. I'm pretty certain Schwab isn't running a ponzi scheme.
- kristopolous 9y ago
  The idea is unlike having coins in a personal wallet, on an exchange you effectively just have a claim card placed with a central authority. It's put trust and centralization back into the system. The claim card only needs to be satisfied when claims are made. Detaching the claim from the asset and then reattaching when claims are made IS how the exchanges work fundamentally. Having 100% of the liabilities here is certainly possible but if you had only 20% of them, there'd be effectively no difference unless there's a market panic. And when/if that happens, I bet that not all 124 or so exchanges have 100% of their liabilities on hand at the same time as the panic.