4 ms·
95% of the BTC aren't online, by their admission, which means 95% of the BTC might not even bet there. They could be using a 5% fractional reserve banking metho
by chisleu 11y ago
95% of the BTC aren't online, by their admission, which means 95% of the BTC might not even bet there. They could be using a 5% fractional reserve banking method and we wouldn't know unless everyone withdraws for a few days or so.
- brink 11y ago99.5%
- ikeboy 11y agoThat's every exchange, pretty much. Even if 100% of BTC are online, you usually have no way of verifying that. Cold wallets are considered essential for security, though.
- imaginenore 11y agoVerifying whether someone has bitcoins or not is trivial - all they have to do is sign a message with the wallet's private key. That functionality is included in the standard wallet software.
- ikeboy 11y agoYes, but most exchanges don't do that. The ones that do can do it with cold storage as well; it's orthogonal to where they are stored.
- kens 11y agoWhat do you mean by "fractional reserve"? I get the impression that the Bitcoin world means something different by that term than the banking world. Edit: I think some people are confusing fractional reserve (where reserves are less than deposits due to loans) with insolvency (where assets are less than liabilities). MtGox's problem was insolvency, not fractional reserve.
- ikeboy 11y agoThey mean that the company holds less bitcoins than the sum of their deposits. See MtGox for an example of when that went horribly wrong.