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Why does it seem that all exchanges have issues getting money out to hard currency? Is that a real issue everywhere or do we just see the complains, and most n

Why does it seem that all exchanges have issues getting money out to hard currency? Is that a real issue everywhere or do we just see the complains, and most normal cryptocurrency investors people do not have issues?

stefano 9y ago
My guess is that there is very little real liquidity in the market, and most of the value is just paper gains that can't be fully realised, i.e. a single person can fully liquidate to dollars, but if everyone does it, many people will end up holding the bag. When someone tries to cash out, exchanges might need for someone to put some money back in to avoid a liquidity crisis. I believe this is especially true for tether-based exchanges, which Coinbase is not. Then again, this is just my guess and I can't provide anything to back it up. Maybe it's just due to a buggy cowboy-driven codebase and awful customer service. Time will tell. If it's a liquidity issue, exchanges will eventually go belly up, if it's a codebase/customer service problem, they might get to a point where it's actually fixed and things just work.
- freejulian 9y ago
  I know several people, including myself, who have cashed out 6 figure sums. Never any problem. Just need to use a reputable exchange like Gemini.
- bagacrap 9y ago
  Obviously, if everyone decides to sell anything at the same time the price of it will drop substantially.
  - JumpCrisscross 9y ago
    > if everyone decides to sell anything at the same time the price of it will drop substantially Except whole companies sell at a premium to the sum of their parts [1]. [1] https://www.investopedia.com/terms/a/acquisitionpremium.asp https://www.investopedia.com/terms/a/acquisitionpremium.asp
burningion 9y ago
I went to a few talks by the Coinbase team last year, and they talked a bit about why hard currency transfers can take so long. Basically, all ACH transfers work via a FTP system. Your bank uploads a transactions file at the end of the day. That transaction file is then sent to a server that then connects to a central bank. The next day, that central bank does an FTP transfer to the other bank's system, balancing out the transfer. This process can take 3-5 business days. But, once the money has been "transferred", it can still be rolled back for up to 90 days after the transaction has happened. This makes it really difficult to say when you've "received" the money for real. It gets extra scary when the money on one side can't be rolled back at all (ie the cryptocurrency). I'm sure at the scale Coinbase is working at, they're running into terrifying numbers, and want to stay as covered as possible. The customers don't really understand the time scales of traditional banking, and here we are. The interface between the two makes for some "interesting" edge cases.
- hyder_m29 9y ago
  Here's a neat set of 4-part article explaining the workings of ACH from a developer's perspective. https://engineering.gusto.com/how-ach-works-a-developer-perspective-part-1/ https://engineering.gusto.com/how-ach-works-a-developer-pers...
- tinokid 9y ago
  For ten years I've been able to place a ACH transfer at one bank by 6 pm and have it available in my other bank by 8 am the following morning. It has never taken "3-5 business days". Anyone claiming there are large inherent delays in that setup is full of baloney. Yes there are some dispute/reversal windows that I have never had experience with, but if you are just transferring money between your own accounts this should not be a serious issue.
  - segmondy 9y ago
    Typically takes a day but you forgot that there are very small banks. How long it takes to show up in your account has nothing to do with how fast the Feds transferred it to the receiving bank but how automated and fast the receiving bank deposits it in your account. There are also times when it takes longer, weekends and bank holidays can extend that time
Moter8 9y ago
Haven't had any significant delays (as in, deposits or withdrawals taking more than 4 bank days) in the SEPA zone with Coinbase/GDAX and Kraken. These delays seem to be caused by the slow US (or international wire?) system.

stefano 9y ago

My guess is that there is very little real liquidity in the market, and most of the value is just paper gains that can't be fully realised, i.e. a single person can fully liquidate to dollars, but if everyone does it, many people will end up holding the bag. When someone tries to cash out, exchanges might need for someone to put some money back in to avoid a liquidity crisis. I believe this is especially true for tether-based exchanges, which Coinbase is not. Then again, this is just my guess and I can't provide anything to back it up. Maybe it's just due to a buggy cowboy-driven codebase and awful customer service. Time will tell. If it's a liquidity issue, exchanges will eventually go belly up, if it's a codebase/customer service problem, they might get to a point where it's actually fixed and things just work.

freejulian 9y ago
I know several people, including myself, who have cashed out 6 figure sums. Never any problem. Just need to use a reputable exchange like Gemini.
bagacrap 9y ago
Obviously, if everyone decides to sell anything at the same time the price of it will drop substantially.
- JumpCrisscross 9y ago
  > if everyone decides to sell anything at the same time the price of it will drop substantially Except whole companies sell at a premium to the sum of their parts [1]. [1] https://www.investopedia.com/terms/a/acquisitionpremium.asp https://www.investopedia.com/terms/a/acquisitionpremium.asp

burningion 9y ago

I went to a few talks by the Coinbase team last year, and they talked a bit about why hard currency transfers can take so long. Basically, all ACH transfers work via a FTP system. Your bank uploads a transactions file at the end of the day. That transaction file is then sent to a server that then connects to a central bank. The next day, that central bank does an FTP transfer to the other bank's system, balancing out the transfer. This process can take 3-5 business days. But, once the money has been "transferred", it can still be rolled back for up to 90 days after the transaction has happened. This makes it really difficult to say when you've "received" the money for real. It gets extra scary when the money on one side can't be rolled back at all (ie the cryptocurrency). I'm sure at the scale Coinbase is working at, they're running into terrifying numbers, and want to stay as covered as possible. The customers don't really understand the time scales of traditional banking, and here we are. The interface between the two makes for some "interesting" edge cases.

hyder_m29 9y ago
Here's a neat set of 4-part article explaining the workings of ACH from a developer's perspective. https://engineering.gusto.com/how-ach-works-a-developer-perspective-part-1/ https://engineering.gusto.com/how-ach-works-a-developer-pers...
tinokid 9y ago
For ten years I've been able to place a ACH transfer at one bank by 6 pm and have it available in my other bank by 8 am the following morning. It has never taken "3-5 business days". Anyone claiming there are large inherent delays in that setup is full of baloney. Yes there are some dispute/reversal windows that I have never had experience with, but if you are just transferring money between your own accounts this should not be a serious issue.
- segmondy 9y ago
  Typically takes a day but you forgot that there are very small banks. How long it takes to show up in your account has nothing to do with how fast the Feds transferred it to the receiving bank but how automated and fast the receiving bank deposits it in your account. There are also times when it takes longer, weekends and bank holidays can extend that time

Moter8 9y ago

Haven't had any significant delays (as in, deposits or withdrawals taking more than 4 bank days) in the SEPA zone with Coinbase/GDAX and Kraken. These delays seem to be caused by the slow US (or international wire?) system.