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Could you share why you think it would impact the price of Bitcoin? With a market cap of 186 billion dollars, and a daily volume of 10 billion I couldn't see ho

by user9182031 9y ago

Could you share why you think it would impact the price of Bitcoin? With a market cap of 186 billion dollars, and a daily volume of 10 billion I couldn't see how it'd have that much of an impact.

dumbfounder 9y ago
Because it makes it seem like exchanges are not trustworthy places to keep your crypto, and for basic users a lot of people just keep their crypto there. Fear, no matter how how misplaced, can cause markets to sway heavily.
- trey-jones 9y ago
  Exchanges are not a trustworthy place to keep your crypt. I think that is accepted. What does it have to do with the value of the thing?
  - tn_ 9y ago
    Bruh if it's accepted then why did people just lose over a half a billion $ storing their cryptocurrency in one.
    - ht85 9y ago
      Why do people drink and drive?
    - sincerely 9y ago
      I don't hold a lot of crypto or anything but one of the most repeated sentiments in communities, guides etc is "don't store money in an exchange". People do it, just like people sometimes buy drugs on DNMs without using PGP encryption, and /usually/ it doesn't end badly for them, but the worst-case scenario (exchange hacked or exit scams and arrest respectively) is pretty bad.
      - vkou 9y ago
        The worst-case scenario of losing access to your personal wallet is pretty bad, too.
  - dumbfounder 9y ago
    Imagine you have 2 sets of keys to your house and if you lose both then your house is not yours anymore. That's what keeping your money outside an exchange seems like to me. Exchanges are easy and familiar to people. If there was some secure way to do password recovery that was built into the currency that might be a game changer. That might be impossible by definition, not sure.
    - icebraining 9y ago
      I think you definitively could make something like Keybase on Bitcoin, by using multiple third-party institutions (chosen by the user) as a fallback. When sending coins to your storage address, you'd say "anyone can use this money if they have this private key OR if they get a digitally-signed certificate from 3 out of 4 of these keys (A, B, C, D)". Those keys could belong to different institutions (or persons) that would declare they vouch for your identity. Then if you lost your key, you'd go to each of them to get your certificate signed and could then use the coins again. -- Of course, this means that if those institutions colluded, or all got hacked, you could still lose your coins, but it'd be harder than just keeping them in an exchange.
      - KMag 9y ago
        Too bad Bitcoin uses ECDSA instead of Ed25519 (or any other signature algorithm supporting threshold signatures). With threshold signatures, you don't even need something in the wallet saying "any N of the following M", you could just give secret shares to those M parties, and any N of them could collaborate to sign something using your single public key.
        glitch003 9y ago
        You could just do that anyway by running Shamir's Secret Sharing Scheme on a Bitcoin private key, splitting the key into M parts where any N of M parts can be combined to recover the original private key.
        9y ago
  - Obi_Juan_Kenobi 9y ago
    I can't believe this is downvoted; this has been a mantra in the cryptocurrency community for years. If you don't control your private keys, you don't control the coin. Traders take a risk in putting funds, fiat or otherwise, on an exchange. Many use domestic exchanges that have higher fees in an attempt to mitigate this risk. They are all well aware, but see the reward to be worth it.
tn_ 9y ago
The reason why fiat currencies are main-stream is because there's trust. People trust they can deposit and withdraw their money to and from banks w/ some semblance of protection and have transactions with little friction. News like this signals that you really shouldn't trust any crypto-currency exchange yet (just browse r/coinbase and people are waiting 1+ month to receive funds) , and I'll see a headline like the above and it's not surprising.
- kirillseva 9y ago
  That's because people should stop using centralized exchanges that don't have their funds insured, and should instead investigate using decentralized exchanges. Cross-blockchain ones are currently being developed, with OmiseGO and KyberNetwork competing to be the first to launch. On Ethereum this ecosystem is much more developed, and you can choose between EtherDelta, IDEX, 0xProject and Radex. These exchanges eliminate counterparty risk because you control your funds at all times. They essentially act as matchmakers between those creating buy/sell orders and those who fill them.
  - davidcbc 9y ago
    You have to be able to explain this in a way that normal people are going to understand and care about. Whenever issues with cryptocurrency come up the true believers trip over themselves to post how it will all be solved if everyone just does this one additional thing nobody outside of the community understands, or if you just use this other cryptocurrency that solves this problem (but probably has other problems that are solved by this third cryptocurrency).
  - optimuspaul 9y ago
    What is a decentralized exchange? Why would I want to put my money into something "decentralized" when my bank does a fine job? Cryptocurrencies are complicated and nonsensical at times. I have yet to see anything in this space that makes me actually think it's the future of anything. It's far too risky.
    - 9y ago
frgtpsswrdlame 9y ago
Because it's a great illustration of the hidden risks in holding cryptocurrency.
rhapsodic 9y ago
>Could you share why you think it would impact the price of Bitcoin? With a market cap of 186 billion dollars, and a daily volume of 10 billion I couldn't see how it'd have that much of an impact. When hundreds of millions of dollars worth can disappear in the blink of an eye like that, it adds a new element of risk aside from the risk of normal price drops. So it only stands to reason that investors would factor that into the value they place on bitcoin and the price would go down. Have you ever noticed that currencies issued by corrupt and/or unstable governments tend to be worth little relative to the currencies of stable, well-governed countries?
- buttcoinslol 9y ago
  The coins didn't disappear, they just changed hands.
  - rhapsodic 9y ago
    >The coins didn't disappear, they just changed hands. To the crime victim, they just disappeared. Owning bitcoin is a very risky proposition for those who aren't extremely savvy in protecting themselves from thieves.

Could you share why you think it would impact the price of Bitcoin? With a market cap of 186 billion dollars, and a daily volume of 10 billion I couldn't see how it'd have that much of an impact.

dumbfounder 9y ago

Because it makes it seem like exchanges are not trustworthy places to keep your crypto, and for basic users a lot of people just keep their crypto there. Fear, no matter how how misplaced, can cause markets to sway heavily.

trey-jones 9y ago
Exchanges are not a trustworthy place to keep your crypt. I think that is accepted. What does it have to do with the value of the thing?
- tn_ 9y ago
  Bruh if it's accepted then why did people just lose over a half a billion $ storing their cryptocurrency in one.
  - ht85 9y ago
    Why do people drink and drive?
  - sincerely 9y ago
    I don't hold a lot of crypto or anything but one of the most repeated sentiments in communities, guides etc is "don't store money in an exchange". People do it, just like people sometimes buy drugs on DNMs without using PGP encryption, and /usually/ it doesn't end badly for them, but the worst-case scenario (exchange hacked or exit scams and arrest respectively) is pretty bad.
    - vkou 9y ago
      The worst-case scenario of losing access to your personal wallet is pretty bad, too.
- dumbfounder 9y ago
  Imagine you have 2 sets of keys to your house and if you lose both then your house is not yours anymore. That's what keeping your money outside an exchange seems like to me. Exchanges are easy and familiar to people. If there was some secure way to do password recovery that was built into the currency that might be a game changer. That might be impossible by definition, not sure.
  - icebraining 9y ago
    I think you definitively could make something like Keybase on Bitcoin, by using multiple third-party institutions (chosen by the user) as a fallback. When sending coins to your storage address, you'd say "anyone can use this money if they have this private key OR if they get a digitally-signed certificate from 3 out of 4 of these keys (A, B, C, D)". Those keys could belong to different institutions (or persons) that would declare they vouch for your identity. Then if you lost your key, you'd go to each of them to get your certificate signed and could then use the coins again. -- Of course, this means that if those institutions colluded, or all got hacked, you could still lose your coins, but it'd be harder than just keeping them in an exchange.
    - KMag 9y ago
      Too bad Bitcoin uses ECDSA instead of Ed25519 (or any other signature algorithm supporting threshold signatures). With threshold signatures, you don't even need something in the wallet saying "any N of the following M", you could just give secret shares to those M parties, and any N of them could collaborate to sign something using your single public key.
      - glitch003 9y ago
        You could just do that anyway by running Shamir's Secret Sharing Scheme on a Bitcoin private key, splitting the key into M parts where any N of M parts can be combined to recover the original private key.
        9y ago
- Obi_Juan_Kenobi 9y ago
  I can't believe this is downvoted; this has been a mantra in the cryptocurrency community for years. If you don't control your private keys, you don't control the coin. Traders take a risk in putting funds, fiat or otherwise, on an exchange. Many use domestic exchanges that have higher fees in an attempt to mitigate this risk. They are all well aware, but see the reward to be worth it.

tn_ 9y ago

The reason why fiat currencies are main-stream is because there's trust. People trust they can deposit and withdraw their money to and from banks w/ some semblance of protection and have transactions with little friction. News like this signals that you really shouldn't trust any crypto-currency exchange yet (just browse r/coinbase and people are waiting 1+ month to receive funds) , and I'll see a headline like the above and it's not surprising.

kirillseva 9y ago
That's because people should stop using centralized exchanges that don't have their funds insured, and should instead investigate using decentralized exchanges. Cross-blockchain ones are currently being developed, with OmiseGO and KyberNetwork competing to be the first to launch. On Ethereum this ecosystem is much more developed, and you can choose between EtherDelta, IDEX, 0xProject and Radex. These exchanges eliminate counterparty risk because you control your funds at all times. They essentially act as matchmakers between those creating buy/sell orders and those who fill them.
- davidcbc 9y ago
  You have to be able to explain this in a way that normal people are going to understand and care about. Whenever issues with cryptocurrency come up the true believers trip over themselves to post how it will all be solved if everyone just does this one additional thing nobody outside of the community understands, or if you just use this other cryptocurrency that solves this problem (but probably has other problems that are solved by this third cryptocurrency).
- optimuspaul 9y ago
  What is a decentralized exchange? Why would I want to put my money into something "decentralized" when my bank does a fine job? Cryptocurrencies are complicated and nonsensical at times. I have yet to see anything in this space that makes me actually think it's the future of anything. It's far too risky.
  - 9y ago

frgtpsswrdlame 9y ago

Because it's a great illustration of the hidden risks in holding cryptocurrency.

rhapsodic 9y ago

>Could you share why you think it would impact the price of Bitcoin? With a market cap of 186 billion dollars, and a daily volume of 10 billion I couldn't see how it'd have that much of an impact. When hundreds of millions of dollars worth can disappear in the blink of an eye like that, it adds a new element of risk aside from the risk of normal price drops. So it only stands to reason that investors would factor that into the value they place on bitcoin and the price would go down. Have you ever noticed that currencies issued by corrupt and/or unstable governments tend to be worth little relative to the currencies of stable, well-governed countries?

buttcoinslol 9y ago
The coins didn't disappear, they just changed hands.
- rhapsodic 9y ago
  >The coins didn't disappear, they just changed hands. To the crime victim, they just disappeared. Owning bitcoin is a very risky proposition for those who aren't extremely savvy in protecting themselves from thieves.