3 ms·

... dont keep your money at exchanges?

by broolstoryco 13y ago

sillysaurus3 13y ago
Hard to do until gas and apartments can be paid for with BTC in most cities.
- scintill76 13y ago
  Then keep your BTC on an exchange for as little time as possible. Deposit right before selling, withdraw right after buying. In my experience, Coinbase credits the BTC within minutes of sending to a Coinbase address, so exchange rate fluctuations while waiting for confirmations shouldn't even be as big of a problem, as it may be for other exchanges. (If outside US or otherwise unable to use Coinbase, that may be a bigger problem.)
  - sillysaurus3 13y ago
    When you sell BTC on Coinbase, it takes anywhere from two days to two weeks for Coinbase to actually pay you. If they get into dire financial straits like Mt. Gox, then this period will gradually widen to become many months, and then some payments will stop going through altogether. So you'll have sold your N bitcoin and they'll have lost it. I guess this problem is unavoidable short of using lots of different exchanges. Maybe there just needs to be more than one Coinbase.
    - scintill76 13y ago
      You could try cash transactions on localbitcoins if you're worried about bank delays. You'll probably pay a premium for it though, and introduce new risks of being mugged or something. The problem for exchanges especially (maybe to a lesser extent for "brokers" like Coinbase) is that they _need_ exclusive access to your bitcoins, to ensure there's no way for you to take them before they can give them to the other party in a trade. I don't see any way around this, short of exchanges trusting users to deliver bitcoins after the trade. Even with multisignature/escrow systems, there is the risk the user double-spends the coins at the same time they make a trade. (And if the exchange is able to take back the cash, or withhold it until the bitcoin transaction is confirmed, there's probably not a fair way in general to reverse the trade, is there?)
      - kylebrown 13y ago
        > The problem for exchanges especially (maybe to a lesser extent for "brokers" like Coinbase) is that they _need_ exclusive access to your bitcoins, to ensure there's no way for you to take them before they can give them to the other party in a trade. The decentralized order books in Ripple show this is solved. We don't need a central authority to match trades, no more than we need a central authority to prevent double-spends. When you post an offer to trade XRP for snapswapUSD on ripple, the XRP remains 100% in your control (until someone takes your offer and a trade is matched). Ripple shows how trade matching can be implemented as a decentralized cryptographic "contract". Of course, this won't work with bitcoin as the native currency until somebody implements trade matching as a bitcoin contract (and exchanges like bitstamp issue bitstampUSD as colored bitcoins). And even then, there's still the fact that bitstampUSD is centrally issued and could all turn worthless the moment Bitstamp stopped redeeming it. And that has another solution (coins which track fiat-price in a decentralized prediction market).
    - wmf 13y ago
      If they get into dire financial straits like Mt. Gox, then this period will gradually widen to become many months When that kind of situation happens, people need to take the hint and stop using the service.

... dont keep your money at exchanges?

sillysaurus3 13y ago

Hard to do until gas and apartments can be paid for with BTC in most cities.

scintill76 13y ago
Then keep your BTC on an exchange for as little time as possible. Deposit right before selling, withdraw right after buying. In my experience, Coinbase credits the BTC within minutes of sending to a Coinbase address, so exchange rate fluctuations while waiting for confirmations shouldn't even be as big of a problem, as it may be for other exchanges. (If outside US or otherwise unable to use Coinbase, that may be a bigger problem.)
- sillysaurus3 13y ago
  When you sell BTC on Coinbase, it takes anywhere from two days to two weeks for Coinbase to actually pay you. If they get into dire financial straits like Mt. Gox, then this period will gradually widen to become many months, and then some payments will stop going through altogether. So you'll have sold your N bitcoin and they'll have lost it. I guess this problem is unavoidable short of using lots of different exchanges. Maybe there just needs to be more than one Coinbase.
  - scintill76 13y ago
    You could try cash transactions on localbitcoins if you're worried about bank delays. You'll probably pay a premium for it though, and introduce new risks of being mugged or something. The problem for exchanges especially (maybe to a lesser extent for "brokers" like Coinbase) is that they _need_ exclusive access to your bitcoins, to ensure there's no way for you to take them before they can give them to the other party in a trade. I don't see any way around this, short of exchanges trusting users to deliver bitcoins after the trade. Even with multisignature/escrow systems, there is the risk the user double-spends the coins at the same time they make a trade. (And if the exchange is able to take back the cash, or withhold it until the bitcoin transaction is confirmed, there's probably not a fair way in general to reverse the trade, is there?)
    - kylebrown 13y ago
      > The problem for exchanges especially (maybe to a lesser extent for "brokers" like Coinbase) is that they _need_ exclusive access to your bitcoins, to ensure there's no way for you to take them before they can give them to the other party in a trade. The decentralized order books in Ripple show this is solved. We don't need a central authority to match trades, no more than we need a central authority to prevent double-spends. When you post an offer to trade XRP for snapswapUSD on ripple, the XRP remains 100% in your control (until someone takes your offer and a trade is matched). Ripple shows how trade matching can be implemented as a decentralized cryptographic "contract". Of course, this won't work with bitcoin as the native currency until somebody implements trade matching as a bitcoin contract (and exchanges like bitstamp issue bitstampUSD as colored bitcoins). And even then, there's still the fact that bitstampUSD is centrally issued and could all turn worthless the moment Bitstamp stopped redeeming it. And that has another solution (coins which track fiat-price in a decentralized prediction market).
  - wmf 13y ago
    If they get into dire financial straits like Mt. Gox, then this period will gradually widen to become many months When that kind of situation happens, people need to take the hint and stop using the service.