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Good! You should not keep cryptocurrencies on an exchange. We have been saying this since the early 2010s. Ten years, minimum. This is exactly the point of c

by throwaway22032 4y ago

Good! You should not keep cryptocurrencies on an exchange. We have been saying this since the early 2010s. Ten years, minimum. This is exactly the point of cryptocurrency. If you're not doing that, you're messing about with IOUs.

nly 4y ago
You realize much of the billions of crypto at these exchanges belong to market makers and quanty hedge funds at this point right? Their capital is there because they use instantaneous electronic trading venues to make money. Most of them would rather trade on swap than have to settle in cash. And they couldnt give a shit if they're trading Bitcoin or magic beans. They don't care about the Blockchain.
- throwaway22032 4y ago
  Then they might lose a ton of money, because they didn't understand what they were buying. Want to buy a Ferrari? Buy a Ferrari. Not a photo of one, not an "NFT", not red paint and some axles, and not a promise that someone has it in their garage - the real thing. IOUs are the entire problem cryptocurrencies aim to solve. You can trade without giving a third party full access to your funds. Hedge funds should _demand_ this.
  - nly 4y ago
    You seem to be missing the point. If you want to trade crypto in a 10 microsecond window then the exchange, or a trusted broker, needs to be a custodian of your crypto. What you're suggesting just doesn't fly. This is why the regulated markets brokers have to stump up collateral and we have clearing houses. You can buy Facebook shares in a microsecond but it takes days to settle and become yours. During that time, you're at risk. Likewise with crypto, even if you settled every few hours on the Blockchain (hideously expensive), there is still a risk window.
    - jrm4 4y ago
      Yes. Treating crypto like a high velocity stock exchange gets you exactly the same thing that you get from a high velocity stock exchange; aka a system that just generally screws little guys.
      - PaulHoule 4y ago
        It's actually a system that screws (some of) the big guys. The "little guy" enjoys very low commissions and market orders with bid/ask spreads less than they ever were. Market makers are happy to give cheap liquidity to "uninformed" traders whose trades don't move markets. (People on Robinhood get very good access if they want to trade sensibly; I wouldn't blame the market makers primarily that many of them use stock trading as a substitute for sports betting.) If you like trading limit orders on the theory that odds are very good you can set a limit 1% below the current price and get a fill thanks to Brownian motion, they are going to outtrade you because they've got answers to the risk that a limit order sometimes fills not because of Brownian motion but because the market is moving sharply in one direction and you don't. Market makers do not want to trade with large traders who know something that not everybody knows and whose trades may be a harbinger of market moves that will go against the market makers. Market makers want to make those traders pay through the nose for liquidity and that is why large trainers are always complaining that "the prices I see aren't for real."
        jrm4 4y ago
        Absolutely, I was mentioning the whole thing in a summary kind of way. I'm definitely aware that power can shift greatly -- but it does seem to, on balance, extract money from little guys to big guys, even if the identity of the big guys sometimes changes.
    - throwaway22032 4y ago
      Yes, you cannot, in the general case, securely trade cryptocurrencies with 10 microsecond timing without accepting huge counterparty risk. If you want to park your car on the side of a free flowing motorway you are at risk. You can do it, but it's dangerous. People get hit all of the time. It might be more convenient to check your map. It might be faster. But you really probably should get off at the next exit or find a rest area and take that theoretical efficiency hit, cause it works most of the time until it doesn't. This is a demonstration of that risk. It's not the first, likely it isn't even the 100th.
  - skinnymuch 4y ago
    They understand what they’re doing. They are trading a “security”. They aren’t trying to buy a Ferrari. They are trying to make as much money as possible in whatever “security” is available to make money on.
  - TrainedMonkey 4y ago
    Going with your analogy, big crypto players are trading lots of Ferraris each day. Withdrawing and depositing cash for each Ferrari purchase would take significantly longer than the trade itself. If only there was some financial engineering that could make this easier...
- favflam 4y ago
  I wonder if their trading models include credit risk.
arcticbull 4y ago
> This is exactly the point of cryptocurrency. Yes but it's also got serious "this is the year of the Linux desktop" vibes. If there's one thing exchanges and this collapse have proven it's that normies could not care less about managing their own keys because, and this is true, managing your own keys at home is risky and sucks - intentionally. Saying that everyone should have a birdbath with a Ledger under it is tantamount to admitting this whole model is only for a few anarchocaptialist libertarian nutbags, los narcostrafficantes and folks trying to make ransomware payments - while the normies should just stick to tradfi.
- throwaway22032 4y ago
  I'm really quite happy with Linux. If it somehow became more like Windows I would use an alternative.
  - arcticbull 4y ago
    I'm confident that's true, but there's a reason it enjoys 2.5% market share. [1] That's kind of my point. The things that make it attractive to you make it a non-starter to the normies. [1] https://en.wikipedia.org/wiki/Usage_share_of_operating_systems https://en.wikipedia.org/wiki/Usage_share_of_operating_syste...
    - HaZeust 4y ago
      And just as widespread normie adoption increases crypto prices, widespread normie adoption increases Linux use cases and interoperability.
      - arcticbull 4y ago
        Yep, exactly.
tarsinge 4y ago
> This is exactly the point of cryptocurrency. This is not the point for a lot of users for which crypto is synonymous with trading tokens on an exchange.
idiotsecant 4y ago
Not your keys not your crypto.
- AmVess 4y ago
  Truth in simplicity.

nly 4y ago

You realize much of the billions of crypto at these exchanges belong to market makers and quanty hedge funds at this point right? Their capital is there because they use instantaneous electronic trading venues to make money. Most of them would rather trade on swap than have to settle in cash. And they couldnt give a shit if they're trading Bitcoin or magic beans. They don't care about the Blockchain.

throwaway22032 4y ago
Then they might lose a ton of money, because they didn't understand what they were buying. Want to buy a Ferrari? Buy a Ferrari. Not a photo of one, not an "NFT", not red paint and some axles, and not a promise that someone has it in their garage - the real thing. IOUs are the entire problem cryptocurrencies aim to solve. You can trade without giving a third party full access to your funds. Hedge funds should _demand_ this.
- nly 4y ago
  You seem to be missing the point. If you want to trade crypto in a 10 microsecond window then the exchange, or a trusted broker, needs to be a custodian of your crypto. What you're suggesting just doesn't fly. This is why the regulated markets brokers have to stump up collateral and we have clearing houses. You can buy Facebook shares in a microsecond but it takes days to settle and become yours. During that time, you're at risk. Likewise with crypto, even if you settled every few hours on the Blockchain (hideously expensive), there is still a risk window.
  - jrm4 4y ago
    Yes. Treating crypto like a high velocity stock exchange gets you exactly the same thing that you get from a high velocity stock exchange; aka a system that just generally screws little guys.
    - PaulHoule 4y ago
      It's actually a system that screws (some of) the big guys. The "little guy" enjoys very low commissions and market orders with bid/ask spreads less than they ever were. Market makers are happy to give cheap liquidity to "uninformed" traders whose trades don't move markets. (People on Robinhood get very good access if they want to trade sensibly; I wouldn't blame the market makers primarily that many of them use stock trading as a substitute for sports betting.) If you like trading limit orders on the theory that odds are very good you can set a limit 1% below the current price and get a fill thanks to Brownian motion, they are going to outtrade you because they've got answers to the risk that a limit order sometimes fills not because of Brownian motion but because the market is moving sharply in one direction and you don't. Market makers do not want to trade with large traders who know something that not everybody knows and whose trades may be a harbinger of market moves that will go against the market makers. Market makers want to make those traders pay through the nose for liquidity and that is why large trainers are always complaining that "the prices I see aren't for real."
      - jrm4 4y ago
        Absolutely, I was mentioning the whole thing in a summary kind of way. I'm definitely aware that power can shift greatly -- but it does seem to, on balance, extract money from little guys to big guys, even if the identity of the big guys sometimes changes.
  - throwaway22032 4y ago
    Yes, you cannot, in the general case, securely trade cryptocurrencies with 10 microsecond timing without accepting huge counterparty risk. If you want to park your car on the side of a free flowing motorway you are at risk. You can do it, but it's dangerous. People get hit all of the time. It might be more convenient to check your map. It might be faster. But you really probably should get off at the next exit or find a rest area and take that theoretical efficiency hit, cause it works most of the time until it doesn't. This is a demonstration of that risk. It's not the first, likely it isn't even the 100th.
- skinnymuch 4y ago
  They understand what they’re doing. They are trading a “security”. They aren’t trying to buy a Ferrari. They are trying to make as much money as possible in whatever “security” is available to make money on.
- TrainedMonkey 4y ago
  Going with your analogy, big crypto players are trading lots of Ferraris each day. Withdrawing and depositing cash for each Ferrari purchase would take significantly longer than the trade itself. If only there was some financial engineering that could make this easier...
favflam 4y ago
I wonder if their trading models include credit risk.

arcticbull 4y ago

> This is exactly the point of cryptocurrency. Yes but it's also got serious "this is the year of the Linux desktop" vibes. If there's one thing exchanges and this collapse have proven it's that normies could not care less about managing their own keys because, and this is true, managing your own keys at home is risky and sucks - intentionally. Saying that everyone should have a birdbath with a Ledger under it is tantamount to admitting this whole model is only for a few anarchocaptialist libertarian nutbags, los narcostrafficantes and folks trying to make ransomware payments - while the normies should just stick to tradfi.

throwaway22032 4y ago
I'm really quite happy with Linux. If it somehow became more like Windows I would use an alternative.
- arcticbull 4y ago
  I'm confident that's true, but there's a reason it enjoys 2.5% market share. [1] That's kind of my point. The things that make it attractive to you make it a non-starter to the normies. [1] https://en.wikipedia.org/wiki/Usage_share_of_operating_systems https://en.wikipedia.org/wiki/Usage_share_of_operating_syste...
  - HaZeust 4y ago
    And just as widespread normie adoption increases crypto prices, widespread normie adoption increases Linux use cases and interoperability.
    - arcticbull 4y ago
      Yep, exactly.

tarsinge 4y ago

> This is exactly the point of cryptocurrency. This is not the point for a lot of users for which crypto is synonymous with trading tokens on an exchange.

idiotsecant 4y ago

Not your keys not your crypto.

AmVess 4y ago
Truth in simplicity.