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Yeah that's how all centralized crypto exchanges do it

by unwoundmouse 5y ago

CSSer 5y ago
What if there's a run on the exchange?
- ChainOfFools 5y ago
  they suddenly have a 'technical issue' and suspend trading until it is 'fixed.' sometimes its never fixed and the exchange founder mysteriously disappears to Thailand or dies, or claims to start an orphanage in india. sometimes all three.
- wmf 5y ago
  If the blockchain gets backed up it would take a few days to get money in/out of exchanges.
- beiller 5y ago
  I don't think there can theoretically be a run on the exchange because in theory all the deposits are there, in the exchange, in theory, unlike a bank which only had a fraction of the deposited money in reserve. A run on a crypto exchange would be great for them considering they usually charge a withdrawal fee.
  - CyberDildonics 5y ago
    Those aren't withdrawal fees, those are transaction fees for the network. Most cryptocurrencies cost next to nothing for each transaction, while bitcoin and ethereum cost from $20 - $60 USD for the average transaction.
    - beiller 5y ago
      No I'm not confusing it. My exchange and all other exchanges charge a fee to withdrawal money. Its usually quite large.
      - CyberDildonics 5y ago
        Again, that fee is not something the exchange is charging you. The fee doesn't go to them. If it is bitcoin or ethereum there are very high fees for each transaction. The exchange is showing you those fees in your native currency. They aren't getting that money, it is going to the miners.
        beiller 5y ago
        No you still are misunderstanding what I'm saying. The text on the exchange for me is like "We charge 0.05% fee on all withdrawals NOT INCLUDING the transaction fee to send to your wallet".
        CyberDildonics 5y ago
        If you are not talking about the spread between exchanging two currencies, that should be a GIANT red flag to not use that exchange.
- smabie 5y ago
  They pause withdrawals while they get their coins out of cold storage. Or if the exchange isn't fully collateralized, it's a scam and goes under.
- boc 5y ago
  Just in case you aren't catching on here, cryptocurrencies are not the future. They are just digital tulips - beautiful to look at and comprehend, but separate from any meaningful contribution to the economic system. You can still get rich from them by hyping and selling them before people catch on more broadly. Civilization works because of laws that are interpreted by courts and norms which are broadly accepted but not often checked/enforced. Crypto is trying to create a "trustless" future where you do not need society to coordinate and regulate. Our modern financial system needs that squishiness/trust which you get from the legal system to operate at full capacity. Picture the suspension of a car. In our modern financial world, the legal system and regulatory institutions serve as the shocks and struts of your car. It allows you to drive fast while not having to worry about every imperfection on the road. Cryptocurency is like driving a car where your wheels are attached directly to the axel - yes it's perfectly efficient and there's nothing between you and the road, but that also means you have to be exceptionally careful where you are driving, and you can't do it fast. There's a reason all cars come with suspensions.

Yeah that's how all centralized crypto exchanges do it

CSSer 5y ago

What if there's a run on the exchange?

ChainOfFools 5y ago
they suddenly have a 'technical issue' and suspend trading until it is 'fixed.' sometimes its never fixed and the exchange founder mysteriously disappears to Thailand or dies, or claims to start an orphanage in india. sometimes all three.
wmf 5y ago
If the blockchain gets backed up it would take a few days to get money in/out of exchanges.
beiller 5y ago
I don't think there can theoretically be a run on the exchange because in theory all the deposits are there, in the exchange, in theory, unlike a bank which only had a fraction of the deposited money in reserve. A run on a crypto exchange would be great for them considering they usually charge a withdrawal fee.
- CyberDildonics 5y ago
  Those aren't withdrawal fees, those are transaction fees for the network. Most cryptocurrencies cost next to nothing for each transaction, while bitcoin and ethereum cost from $20 - $60 USD for the average transaction.
  - beiller 5y ago
    No I'm not confusing it. My exchange and all other exchanges charge a fee to withdrawal money. Its usually quite large.
    - CyberDildonics 5y ago
      Again, that fee is not something the exchange is charging you. The fee doesn't go to them. If it is bitcoin or ethereum there are very high fees for each transaction. The exchange is showing you those fees in your native currency. They aren't getting that money, it is going to the miners.
      - beiller 5y ago
        No you still are misunderstanding what I'm saying. The text on the exchange for me is like "We charge 0.05% fee on all withdrawals NOT INCLUDING the transaction fee to send to your wallet".
        CyberDildonics 5y ago
        If you are not talking about the spread between exchanging two currencies, that should be a GIANT red flag to not use that exchange.
smabie 5y ago
They pause withdrawals while they get their coins out of cold storage. Or if the exchange isn't fully collateralized, it's a scam and goes under.
boc 5y ago
Just in case you aren't catching on here, cryptocurrencies are not the future. They are just digital tulips - beautiful to look at and comprehend, but separate from any meaningful contribution to the economic system. You can still get rich from them by hyping and selling them before people catch on more broadly. Civilization works because of laws that are interpreted by courts and norms which are broadly accepted but not often checked/enforced. Crypto is trying to create a "trustless" future where you do not need society to coordinate and regulate. Our modern financial system needs that squishiness/trust which you get from the legal system to operate at full capacity. Picture the suspension of a car. In our modern financial world, the legal system and regulatory institutions serve as the shocks and struts of your car. It allows you to drive fast while not having to worry about every imperfection on the road. Cryptocurency is like driving a car where your wheels are attached directly to the axel - yes it's perfectly efficient and there's nothing between you and the road, but that also means you have to be exceptionally careful where you are driving, and you can't do it fast. There's a reason all cars come with suspensions.