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This feels a lot like how a credit crunch happens with regular money. "Coins you own keys to = Coins in some online wallet = coins on exchanges = coins you len
by ryloric 4y ago
This feels a lot like how a credit crunch happens with regular money.
"Coins you own keys to = Coins in some online wallet = coins on exchanges = coins you lent out for interest" is the assumption everyone makes. They're all different types of assets but normal market conditions create the illusion they're all one and the same. There's 1 <-> 1 exchange possible, you can easily move coins from an exchange to your wallet, so they must be the same right? No.
When shit hits the fan, all those links break down and then there's no convertibility. Only what you really own is what you own.
With normal money, atleast there's Fed so they can actually do something about it and stop the links from breaking down completely, here there's no backstop.
- jacquesm 4y agoAnd if the funds are held in a regular account the Fed or other local institution like that will likely make you whole up to a point (usually $100K or thereabouts). As soon as you go unregulated that is no longer the case.