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Once a huge exchanger like Bitfinex fails, there will be a run on exchangers. Nowhere is safe. Never keep coins with an exchange, even if your uncle is the CEO.

by aviv 9y ago

cperciva 9y ago
Serious question (I wasn't paying attention at the time): What happened to other exchanges after MtGox collapsed? Did they also see "bank runs"?
- hisabness 9y ago
  Depends on your perspective. Prices dropped significantly because people started to prefer dollars to some extent. Several of the large exchanges that existed back then are still around, however, and others were acquired. Examples of those still around: Coinbase, Bitstamp, Bitfinex, Kraken. Sure I'm missing others. I mention the above only to say it didn't feel like a true bank run to me at the time. People were still able to get in and out, but prices were certainly depressed. And several of the exchanges survived.
- bfuller 9y ago
  there was a huge spread between the price of bitcoin on the exchanges. i also distinctly remember people sending money to mt gox LONG after every mention of them on the internet was followed by angry people calling them a scam.
- aviv 9y ago
  Today's ecosystem is different in many ways. The next big exchange failure, especially it one in the US, will have a cascading effect.
fbdjskajxb 9y ago
Seems like exchanges should be fine as long as their books balance. Even in a “run” you would just have delays waiting for cash outs to process, they would go through eventually.
- stefano 9y ago
  > as long as their books balance This is a really strong assumption that I wouldn't bet on.
  - saalweachter 9y ago
    There is a certain irony to companies built to profit off a distributed public ledger having accounting problems.
- rhino369 9y ago
  I'd also be worried that any exchange that used tether, would realize their jig is up, and just run away with all the coin.
mikevm 9y ago
Bitfinex was already hacked: https://medium.com/@bitfinexed/bitfinex-never-repaid-their-tokens-bitfinex-started-a-ponzi-scheme-86a9291add29 https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t... https://en.wikipedia.org/wiki/Bitfinex_hack https://en.wikipedia.org/wiki/Bitfinex_hack
- bdcravens 9y ago
  hacked != failed

Once a huge exchanger like Bitfinex fails, there will be a run on exchangers. Nowhere is safe. Never keep coins with an exchange, even if your uncle is the CEO.

by aviv 9y ago

Once a huge exchanger like Bitfinex fails, there will be a run on exchangers. Nowhere is safe. Never keep coins with an exchange, even if your uncle is the CEO.

cperciva 9y ago

Serious question (I wasn't paying attention at the time): What happened to other exchanges after MtGox collapsed? Did they also see "bank runs"?

hisabness 9y ago
Depends on your perspective. Prices dropped significantly because people started to prefer dollars to some extent. Several of the large exchanges that existed back then are still around, however, and others were acquired. Examples of those still around: Coinbase, Bitstamp, Bitfinex, Kraken. Sure I'm missing others. I mention the above only to say it didn't feel like a true bank run to me at the time. People were still able to get in and out, but prices were certainly depressed. And several of the exchanges survived.
bfuller 9y ago
there was a huge spread between the price of bitcoin on the exchanges. i also distinctly remember people sending money to mt gox LONG after every mention of them on the internet was followed by angry people calling them a scam.
aviv 9y ago
Today's ecosystem is different in many ways. The next big exchange failure, especially it one in the US, will have a cascading effect.

fbdjskajxb 9y ago

Seems like exchanges should be fine as long as their books balance. Even in a “run” you would just have delays waiting for cash outs to process, they would go through eventually.

stefano 9y ago
> as long as their books balance This is a really strong assumption that I wouldn't bet on.
- saalweachter 9y ago
  There is a certain irony to companies built to profit off a distributed public ledger having accounting problems.
rhino369 9y ago
I'd also be worried that any exchange that used tether, would realize their jig is up, and just run away with all the coin.

mikevm 9y ago

Bitfinex was already hacked: https://medium.com/@bitfinexed/bitfinex-never-repaid-their-tokens-bitfinex-started-a-ponzi-scheme-86a9291add29 https://medium.com/@bitfinexed/bitfinex-never-repaid-their-t... https://en.wikipedia.org/wiki/Bitfinex_hack https://en.wikipedia.org/wiki/Bitfinex_hack

bdcravens 9y ago
hacked != failed