7 ms·

The problem might be different here, but all the exchanges I have used have ended up dead, and I consider myself very lucky not to have lost everything I had.

by Renaud 4y ago

The problem might be different here, but all the exchanges I have used have ended up dead, and I consider myself very lucky not to have lost everything I had. First there was MtGox where I happily sold BTC and then waited weeks for a bank transfer that never came. I was lucky to be able to re-purchase some of the BTC (at a loss) and transfer them out. That was just a few weeks before MtGox fell. Then there was ANX/ANXPro. Everything was fine for a while. Over time, they ceased trading and at some point app and website stopped being functional. I had left some crypto there, at time it wasn't worth much. I panicked once the value shoot up and I couldn't find a way to recover them. Fortunately, I had chosen ANX because they were local. I went to the listed address there in person, expecting it to be closed. I found the place, it was nondescript, no sign, no-one in sight. I was shaking when I pressed the bell and a guard came to answer. Fortunately, the company was still running in some fashion. There was a counter and I was able to transact my crypto out. Had I not been local, I would have probably lost it all. Then there was FTX... I traded cautiously last year for a little while, never leaving too much for too long, then decided that crypto was all too nerve-wracking for me and sold everything I had. Probably the best thing I ever did. I have friends who lost big in the FTX debacle and will probably never recover a dime. The morale of the story is that I wouldn't trust ANY exchange. They move so much money that the temptation is too great not to use it for something else. Despite claims, I don't trust any to have the structure and oversight necessary to avoid misusing funds that don't belong to them.

aborsy 4y ago
Can’t you use an exchange, keeping your money offline (eg, in an hardware wallet) and just authorize the required amount out and in, in real time?
- pjc50 4y ago
  Not in "real time": blockchain settlement has to wait for a block. And you incur on-network transaction fees plus whatever fee the exchange imposes for transfers out. (Besides, many people are "day trading" on these exchanges because it's a form of addictive gambling) Oh and then there's "staking": https://ftx.com/staking https://ftx.com/staking which encourages people to keep tokens on the exchange by pretending to pay them interest rates. And offering various other multi-level-marketing incentives. I see "Free Daily ERC20/ETH Withdrawals : NaN" on that page, which is fun.
- WeylandYutani 4y ago
  Actually using crypto is ridiculously complicated compared to a SEPA transfer from your bank account or a shares trade in an app. People like the path of least resistance which is why everyone uses exchanges- it's easier than using your own cold wallet. Exchanges for good or ill has made crypto accessible to the masses.
  - Ekaros 4y ago
    It is funny that solution to problems of crypto is exactly the thing they were invented to fight against.
    - lupire 4y ago
      Because crypto doesn't work yet (which is OK, it's new and experimental), but people want to pretend is does. Same as as these people people building allegedly quantum computers but where the real work is done by classical computers.
      - Tesl 4y ago
        It's not new it's nearly fifteen years old. Why are you still pretending it's new????
      - irae 4y ago
        Nope. Crypto does work. Day trading is a problem of the old system that requires the old system tech to work. Assets should be valued for their properties and for their scarcity (amongst other things), and not by trend waves amplified by day trade and/or even bigger waves of chained margin calls. There are some advantages of day trading, yes, but it is mostly noise and IMO it is very good that "real crypto" can't operate "fast enough" for those who practice it.
- meltedcapacitor 4y ago
  You can, but it's impractical (operationally and in tx costs) as it requires a live bot to constantly adjust margin between the exchange and the self-custody wallet, due to the way typical crypto trading products work: at max margin, the chance of liquidation is too high, not so much because of liquidation itself (that can be risk managed and averaged out) but due to the enormous implied fees associated with liquidations. Example pricing: bet 5 at max leverage, lose 2 due to market movements, the account is zeroed aka liquidation fee of 3.
xroche 4y ago
> The morale of the story is that I wouldn't trust ANY exchange Or, more generally, don't trust unregulated financial businesses and/or operating in shady offshore countries. FTX was both unregulated and based in Bahamas.
- SnowHill9902 4y ago
  Nassau is one of the least shady places with over 340 sunny days per year.
  - 01acheru 4y ago
    A lot of sun means a lot of shade ;)
  - MarcoZavala 4y ago
sam_goody 4y ago
Or, maybe your magic touch makes them go blow up. Consider that *you* might be the problem.. ;) (Like Robert Lincoln, who witnessed 3 presidential assassinations. I bet he was persona non grata by their successor.)
bombcar 4y ago
The moral of the story is leave when Renaud does.
lupire 4y ago
TradFi says "in the long run, we're all dead" CryptoFi says "in the short run, we're all dead so exfiltrate the funds before everyone notices"
ur-whale 4y ago
>all the exchanges I have used have ended up dead, The fact that MtGox was run by a bozo was obvious from the day Karpeles gave his first interview. Hinsight is 20/20, but the very same could be said from the FTX crew. See this for what I mean: https://www.youtube.com/watch?v=zTFhnpf-IE0 https://www.youtube.com/watch?v=zTFhnpf-IE0 I've been using Bitstamp since 2013 ... they're still here and ticking along nicely. They were hacked once in their entire history and they swallowed the loss and customers were made whole. Also: in spite of me liking Bitstamp, I've never left any amounts on there, be it cash or crypto for more than a couple of days. What is the point of owning crypto if you're going to leave it on an exchange? By doing that, you're basically eliminating the one key characteristic of the medium that no other financial instrument has, save perhaps gold buried in a hole in the forest. Repeat after me: Not Your Keys, Not Your Coins.

by Renaud 4y ago

aborsy 4y ago

Can’t you use an exchange, keeping your money offline (eg, in an hardware wallet) and just authorize the required amount out and in, in real time?

pjc50 4y ago
Not in "real time": blockchain settlement has to wait for a block. And you incur on-network transaction fees plus whatever fee the exchange imposes for transfers out. (Besides, many people are "day trading" on these exchanges because it's a form of addictive gambling) Oh and then there's "staking": https://ftx.com/staking https://ftx.com/staking which encourages people to keep tokens on the exchange by pretending to pay them interest rates. And offering various other multi-level-marketing incentives. I see "Free Daily ERC20/ETH Withdrawals : NaN" on that page, which is fun.
WeylandYutani 4y ago
Actually using crypto is ridiculously complicated compared to a SEPA transfer from your bank account or a shares trade in an app. People like the path of least resistance which is why everyone uses exchanges- it's easier than using your own cold wallet. Exchanges for good or ill has made crypto accessible to the masses.
- Ekaros 4y ago
  It is funny that solution to problems of crypto is exactly the thing they were invented to fight against.
  - lupire 4y ago
    Because crypto doesn't work yet (which is OK, it's new and experimental), but people want to pretend is does. Same as as these people people building allegedly quantum computers but where the real work is done by classical computers.
    - Tesl 4y ago
      It's not new it's nearly fifteen years old. Why are you still pretending it's new????
    - irae 4y ago
      Nope. Crypto does work. Day trading is a problem of the old system that requires the old system tech to work. Assets should be valued for their properties and for their scarcity (amongst other things), and not by trend waves amplified by day trade and/or even bigger waves of chained margin calls. There are some advantages of day trading, yes, but it is mostly noise and IMO it is very good that "real crypto" can't operate "fast enough" for those who practice it.
meltedcapacitor 4y ago
You can, but it's impractical (operationally and in tx costs) as it requires a live bot to constantly adjust margin between the exchange and the self-custody wallet, due to the way typical crypto trading products work: at max margin, the chance of liquidation is too high, not so much because of liquidation itself (that can be risk managed and averaged out) but due to the enormous implied fees associated with liquidations. Example pricing: bet 5 at max leverage, lose 2 due to market movements, the account is zeroed aka liquidation fee of 3.

xroche 4y ago

> The morale of the story is that I wouldn't trust ANY exchange Or, more generally, don't trust unregulated financial businesses and/or operating in shady offshore countries. FTX was both unregulated and based in Bahamas.

SnowHill9902 4y ago
Nassau is one of the least shady places with over 340 sunny days per year.
- 01acheru 4y ago
  A lot of sun means a lot of shade ;)
- MarcoZavala 4y ago

sam_goody 4y ago

Or, maybe your magic touch makes them go blow up. Consider that *you* might be the problem.. ;) (Like Robert Lincoln, who witnessed 3 presidential assassinations. I bet he was persona non grata by their successor.)

bombcar 4y ago

The moral of the story is leave when Renaud does.

lupire 4y ago

TradFi says "in the long run, we're all dead" CryptoFi says "in the short run, we're all dead so exfiltrate the funds before everyone notices"

ur-whale 4y ago

>all the exchanges I have used have ended up dead, The fact that MtGox was run by a bozo was obvious from the day Karpeles gave his first interview. Hinsight is 20/20, but the very same could be said from the FTX crew. See this for what I mean: https://www.youtube.com/watch?v=zTFhnpf-IE0 https://www.youtube.com/watch?v=zTFhnpf-IE0 I've been using Bitstamp since 2013 ... they're still here and ticking along nicely. They were hacked once in their entire history and they swallowed the loss and customers were made whole. Also: in spite of me liking Bitstamp, I've never left any amounts on there, be it cash or crypto for more than a couple of days. What is the point of owning crypto if you're going to leave it on an exchange? By doing that, you're basically eliminating the one key characteristic of the medium that no other financial instrument has, save perhaps gold buried in a hole in the forest. Repeat after me: Not Your Keys, Not Your Coins.