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Reminder that cliches are cliche for a reason: not your keys, not your crypto

PragmaticPulp 5y ago
Its cliche, but it doesn’t really mean that crypto.com or any other crypto exchange isn’t on the hook for stolen funds. Crypto doesn’t mean regulation doesn’t apply or that companies are free from liability. Obviously you can’t squeeze blood from a stone if someone were to steal most of the funds from a crypto exchange (Mt. Gox comes to mind) But in the real world, if you use a crypto exchange in a reasonable location (e.g. US exchange adhering to US laws) then small thefts like this are going to be reimbursed one way or another. Now if the entire exchange and their cold wallets were stolen somehow, it would be game over.
- croon 5y ago
  So in the real world when using a regulated crypto exchange, what's the point of a blockchain other than asset speculation (which can also be done through traditional trading instruments at this point)?
  - PragmaticPulp 5y ago
    You could argue that it allows people to send funds in ways that are faster than some other current options. But that’s about it. It’s basically another game to play with new financial assets printed out of thin air.
    - imtringued 5y ago
      When you think about it, liquidity is the source of speculation. This is because liquidity is the ability to quickly trade your thing for other things. Lending money via a certificate of deposit reduces liquidity because you are locking up your funds. Lending via demand deposits increases liquidity because the original deposit and the loan are both available to be spent immediately. Spending money on physical things is very time consuming. First you must pick what you want to buy among billions of product choices that are available to you. Even if you buy something, it takes time to drive to the store or for it to be delivered. The real world is quite illiquid which means that fiat currency is less volatile and has greater stability than Bitcoin. Now there are two exceptions. Trading money vs financial assets and money vs other money. In the financial sector you are trading liquidity for liquidity. Buying an iPhone and selling it takes time. Buying Bitcoin and selling it does not. It can happen as quickly as technology allows it. This inevitably leads to speculation because it is possible to instantly react to any other transaction. Someone buys Bitcoin? Buy more! Someone sells Bitcoin? Sell! To be more specific, the problem isn't liquidity itself but excessive amounts of liquidity that go way beyond what the real economy needs. This is a huge problem with fiat currency but it's also a problem with Bitcoin because the "Bitcoin economy" is absolutely tiny.
  - smokey_circles 5y ago
    Good question. I only wanna add that traditional trading instruments suck and are not fun to scale. Highly centralized points of failure with truly mind numbing consequences that are difficult to predict and respond to. I've worked on forex systems and when the feeds get iffy things get real uncomfortable, real fast. Blockchains could, maybe, provide an interesting global platform for fintech to migrate cross-border stuff to. That stuff is not reliable, the engineers are just hella talented
  - 5560675260 5y ago
    It similar to what SWIFT is to banking system.
  - snotrockets 5y ago
    You need to send money to the hackers who ransomware'd your network. They don't accept SWIFT.
davidwparker 5y ago
They also said they've reimbursed all funds. So if you were hacked personally, you would be out money here, vs keeping it on their exchange where you would be made whole again.
- smokey_circles 5y ago
  That's not a fair comparison though. An exchange is a fat, juicy target. I am not
tsimionescu 5y ago
Yes, and apparently this allowed all those attacked not to lose a single penny.
curiousllama 5y ago
And thank god for that. Very happy to be a luddite with have exposure to the rise in crypto prices without the risk of getting it stolen.

Its cliche, but it doesn’t really mean that crypto.com or any other crypto exchange isn’t on the hook for stolen funds. Crypto doesn’t mean regulation doesn’t apply or that companies are free from liability. Obviously you can’t squeeze blood from a stone if someone were to steal most of the funds from a crypto exchange (Mt. Gox comes to mind) But in the real world, if you use a crypto exchange in a reasonable location (e.g. US exchange adhering to US laws) then small thefts like this are going to be reimbursed one way or another. Now if the entire exchange and their cold wallets were stolen somehow, it would be game over.

croon 5y ago
So in the real world when using a regulated crypto exchange, what's the point of a blockchain other than asset speculation (which can also be done through traditional trading instruments at this point)?
- PragmaticPulp 5y ago
  You could argue that it allows people to send funds in ways that are faster than some other current options. But that’s about it. It’s basically another game to play with new financial assets printed out of thin air.
  - imtringued 5y ago
    When you think about it, liquidity is the source of speculation. This is because liquidity is the ability to quickly trade your thing for other things. Lending money via a certificate of deposit reduces liquidity because you are locking up your funds. Lending via demand deposits increases liquidity because the original deposit and the loan are both available to be spent immediately. Spending money on physical things is very time consuming. First you must pick what you want to buy among billions of product choices that are available to you. Even if you buy something, it takes time to drive to the store or for it to be delivered. The real world is quite illiquid which means that fiat currency is less volatile and has greater stability than Bitcoin. Now there are two exceptions. Trading money vs financial assets and money vs other money. In the financial sector you are trading liquidity for liquidity. Buying an iPhone and selling it takes time. Buying Bitcoin and selling it does not. It can happen as quickly as technology allows it. This inevitably leads to speculation because it is possible to instantly react to any other transaction. Someone buys Bitcoin? Buy more! Someone sells Bitcoin? Sell! To be more specific, the problem isn't liquidity itself but excessive amounts of liquidity that go way beyond what the real economy needs. This is a huge problem with fiat currency but it's also a problem with Bitcoin because the "Bitcoin economy" is absolutely tiny.
- smokey_circles 5y ago
  Good question. I only wanna add that traditional trading instruments suck and are not fun to scale. Highly centralized points of failure with truly mind numbing consequences that are difficult to predict and respond to. I've worked on forex systems and when the feeds get iffy things get real uncomfortable, real fast. Blockchains could, maybe, provide an interesting global platform for fintech to migrate cross-border stuff to. That stuff is not reliable, the engineers are just hella talented
- 5560675260 5y ago
  It similar to what SWIFT is to banking system.
- snotrockets 5y ago
  You need to send money to the hackers who ransomware'd your network. They don't accept SWIFT.

davidwparker 5y ago

They also said they've reimbursed all funds. So if you were hacked personally, you would be out money here, vs keeping it on their exchange where you would be made whole again.

smokey_circles 5y ago
That's not a fair comparison though. An exchange is a fat, juicy target. I am not

tsimionescu 5y ago

Yes, and apparently this allowed all those attacked not to lose a single penny.

curiousllama 5y ago

And thank god for that. Very happy to be a luddite with have exposure to the rise in crypto prices without the risk of getting it stolen.