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If BTC is going to survive there needs to be insurance against loss. An FDIC for Crypto. The exchanges take a cut on every transaction, so Poloniex should have
by drakaal 13y ago
If BTC is going to survive there needs to be insurance against loss. An FDIC for Crypto.
The exchanges take a cut on every transaction, so Poloniex should have self insured for the first 3% (or what ever their transaction fee is). After all they made that money on the transaction.
They should carry insurance for the rest.
The 12.3% deducted from everyone's account is "wrong" in my view because Poloniex absorbed none of the loss, and kept its cut of the transaction.
The "right" thing in my eyes is for Poloniex to adjust minus their transaction fees.
-Brandon Wirtz (Not a Poloniex customer)
- PeterisP 13y agoThis is not something that can realistically happen by itself - just as for 'traditional' banking, it would happen only because government regulation would force it to happen.
- spiralpolitik 13y agoA better solution would be for the Bitcoin Foundation (or some other entity) to certify exchanges and online wallets as being compliant with a well defined code of practice and audit them regularly. Consumers could look for the mark as indicating that the exchange is a well run outfit rather than a bunch of cowboys.
- eropple 13y agoThat doesn't solve the problem, though: how do you trust that they're able to do a good audit? (I don't have to trust that my bank can, because my accounts are insured by something that rhymes with "duvvermint".)
- gnaritas 13y agoThen you end up with what happened with the housing market in 08, ratings agencies rubber stamping things for profit. Why should I trust what they say?
- wmf 13y agoHow much would such insurance cost? More than the money deposited?
- drakaal 13y agoHard to say. I don't know enough about the current economics of exchanges. A Currency exchange would typically not be a bank. They would have a lot more in transactions than they would have cash on hand. $4M in transactions on $500k cash on hand. They would have little ability to lose a customers money because the customer would have to be in the store when it was robbed. A bank would not have all of its money in a place that could be robbed, so they don't have 100% risk (or 12.3%). So for a bank the insurance is about .2% of transactions. For BTC it would likely be closer to 3% because the systems are audited.