Bitcoin Forum

so how do we know that crypto exchngers dont sell us the coins what they dont exisit?

and how do we know those big funds who bought or pretinding to buy or sell some big ammounts of cryptocurrency `?
how do we know they dont lie us ?

By avoiding trading shitcoins in shit exchanges. When you buy bitcoin from an exchange like Binance or Kraken, then there is a good level of confidence that you actually bought real bitcoins. The next step would be to withdraw them to an address whose private keys or backup seed phrases you have access to. If those Bitcoin's haven't hit your bitcoin address, they are technically not yours.

The Good thing about bitcoin is that everything concerning transactions is viewable through bitcoin blockchain explorers. If a company claims that they bought and hold 10,000 BTC, then they should be able to prove that they own such an amount by providing the address that hold the bitcoins and sign a message for you to confirm by use of a blockchain explorer.

You deal with a reputable exchange when buying a coin/token so that you will be ascertained that you are buying a real value product. There are some exchanges that if engaged with them, you are buying coins/token that has no real value or usage and most often disappear from market with 2 years. Binance, Huobi, Bittrex, Coinbase has proving to be listing a reliable projects that have passed a test of time.

We can buy cryptocurrencies that are listed on reputable exchanges such as Coinbase, Gemini, Binance, Houbi, Okex ...
or other exchanges with a large enough volume.
We cannot tell if the funds are buying cryptocurrencies but we can track the flow of money on the bitcoin blockchain.
A company that buys real cryptocurrency they can tell us by making their address public.

You can simply check coinmarketcap if the Coin/Token/Crypto exists. Soon, as you progress more in engaging to crypto community, you'll learn what's a real crypto and what's not. Crypto exchangers that supports coins/token exchange are mostly shits and were only promoted by those scammers. There are numerous events back then that exchangers supported token and their token address to be exchanged on real crypto yet it wouldn't work unless there would be some buy order on the market. Also, if your really wanted to know more about such topic, better try browsing on trading discussion, as you've seemed to be interested in how trading works.
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I think that's not what he wanted to ask. He's asking whether or not those exchange are trading "real" coins and have the assets to back it up, or just arbitrary ticker.

IMO everything is verifiable on the blockchain, which is why some bot like Whale Alert can label an address as "Kucoin Hot Wallet", "Binance Cold Wallet", etc. On top of that, as long as you can still withdraw your coins from that exchange I think that's fine. If you still feel nervous while you do that, then use DEX or make P2P deals.

I think that the best indicator is that the exchange is old/established and nobody complained they cannot withdraw their coins from the exchange (to their own wallets).


You cannot really know who is trading what amounts. There are plenty of exchanges and an entity can spread the orders between them.
If you buy/sell it doesn't matter if you use a reputable exchange, see your first question. Most exchanges match the funds between buyer and seller, so if they didn't deposit they cannot trade.

A much better question is who is holding how much. And there some are probably lying (like the story that USDT is properly backed) and some are probably telling the truth (Square), but only 3rd party proper audit can tell the truth.

It is practically impossible to understand if the bitcoin you purchase exists in the first place as exchanges can replicate the orderbook with fake volume. However, large exchanges (Binance, Kraken, Coinbase etc) are using market makers, and market makers make sure that there is enough liquidity on a token / cryptocurrency. Exchanges must quite oftern perform Audits and they must keep an up to date bookeeping that makes it easy to find out what is happening (assuming someone would investigate an exchange)...

That being said, if an altcoin / cryptocurrency exchange has no market maker and reports high volume, quite possibly it is faking it. (yes, both a token and an exchange must have a liquidity provider.) CoinMarketCap and other such cryptocurrency data CAN NOT BE FULLY TRUSTED, because to some extend they are "trusting" the token owners and small exchanges which at some extend have no power to work with market makers for healthy orderbooks. Altcoins exchanges can manipulate their volume by faking their orderbook.

The best thing to do, is to search for "market makers/liquidity providers for cryptocurrencies" and which exchanges they are working with.

If an exchange or altcoin is not working with a market maker, then quite possibly it is faking its volume. Market makers exist in order to provide liquidity.

In the stock market, from what I know (please someone correct me if I am wrong) it is required by law to have a liquidity provider. This rule might have not yet applied to cryptocurrency exchanges, but it is a no brainer if you want a healthy orderbook. Otherwise you risk pump and dumps, big spreads etc. You can find out which token has no market maker by checking its spread. For example a token that has a buy order at 100 satoshi, and a sell order at 900 satoshi, quite possibly has no liquidity provider.

If you do not know what a liquidity provider / market maker does, I suggest you google it as it is quite interested topic in order to understand a bit more about how markets work.

PS: My background comes from Operations and Business Development with an exchange and an online broker. I have recently started a Bitcoin cashback service that rewards users for shopping online with well known brands such as Booking.com, Aliexpress, Zaful, Alibaba etc. I would appreciate a feedback on our website https://www.liquigate.com  (https://www.liquigate.com)and mobile app, and if anyone is interested in helping out, do email me at support@liquigate.com

Thank you in advance
Denis

That is called fractional reserve exchanges. On these exchanges it is assumed that most people will not cash out at the same time and continue trading instead. Using this method exchanges can artificially expand their trading volume by printing fake coins and also profits by collecting additional fees. The main problem here is that such exchanges are insolvent by default, if demand for real coins increases, it leads to collapse and bankruptcy of the exchange. In other words, if any exchange is run on fractional reserve system, it is insolvent therefore a scam exchange. Users should always remember the motto "Not your keys, not your coins." to avoid being scammed by these fractional reserve exchanges.

There is a very informative thread on the matter you want to investigate. Is from a while ago but I haven't seen a better explanation so far.
https://bitcointalk.org/index.php?topic=945881.0
Of course it's a matter of trust whether you believe or not to the fact that the exchange you are using will live up to its obligations.
Never forget: if you don't control the keys, then you have no coins.
If I was you I would take some time to study all this.

Nicely said, +1 on this!

unfortunately that is not a good indicator because unless everyone makes a withdrawal we have no way of knowing whether the exchange is lying or not.
but the more important thing to remember in this case is that the coins that someone buys on an exchange is not bought from the exchange, it is bought from other people (aka the other traders). the only thing exchanges fake is their volume and in some cases their solvency which can only be seen if everyone made a withdrawal.

Whosoever buys coins from an exchange should not keep them in there for long periods of time.

You need to send it to a safe location! A wallet whose keys you do have.

At the same time you don't have to actually use a exchange that would be this suspicious, therefore I believe  if you have to ask such questions, you have to think about using good one's.

Check the review of the website before using it and make sure that you are using something reliable, something which many people trusts.

Even if you have to pay a little more fee I believe security is the prime importance.

Simple, don't do business with no-namers in the scene and take your business on somewhere reputable. Dealing with centralized exchanges require a small amount of trust that they won't fuck you over with non-existent coins that they just alter within their systems without you knowing it. That's why one should not fully trust exchanges no matter how big they get since there is still a slim amount of chance that they will do something fishy on your account and you can't do jack shit since they hold the receipts. Even the best exchanges sometimes have their faults, and even established ones tend to do some shitty things too on a small-scale, so it's not entirely safe IMO.

While using reliable/decentralized exchanges fits as an answer perfectly, sometimes it may be a trusted exchange selling virtual Bitcoins. That's right, virtual virtual currency. :)

For example, I would avoid purchasing BTC on platforms that only give you non-withdrawable Bitcoin on paper like purchasing Gold stocks. You don't actually end up owning Bitcoin on there - it's just you paying the price for something they don't truly sell, if that makes sense.

Back when the immigrant crisis was a thing in Europe, banks selling gold have been hoarded by people trying to physically withdraw their owned gold - and that is a very big issue. I'd rather own it physically than virtually, the same way I'd rather own Bitcoin in my own wallet rather than a number on a random "reliable" website.

Edit: Revolut (https://community.revolut.com/t/send-bitcoin-eth-ltc-to-and-from-revolut/18427) may be one of these reliable platforms selling non-withdrawable Bitcoin. The link sends you back to a 2017 forum post though, so the information may be outdated.

Who, exchanges? Oh, there are lots of exchanges doing what is known as wash trading (https://www.investopedia.com/terms/w/washtrading.asp), faking their volumes.

How do you know who bought what? Well, you just don't. But you don't know if Gold's market activity is 100% legit either - and I can assure you it isn't.

You are very mistaken if you think sites like coinmarketcap care about what they list on their platform. This includes exchanges they list. Besides, we all remember how many top exchanges and top altcoins in coinmarketcap have gone down, scammed and ran away.
Dont be fooled by these things ever or you'll end up losing your money just like so many others did.

The coins we have on the exchange are not really our coins because we don't have full control over these coins. It is very risky to keep all the assets we have on an exchange, but the quality of the exchange is also a guarantee that our assets are safe. Examples such as binance. The case of Binance that was hacked made Binance even more vigilant and the security level was improved again.

Do not entrust all owned assets to an exchange that is not clear about its reputation. Reputation is very important so that nothing bad happens in the future.

If you register on a reputable exchange, buy some BTC with fiat and then withdraw it to your crypto wallet, you'll definitely know the coins exist when they appear in your wallet. Use reputable exchanges, wallets and cryptocurrencies, and you'll avoid scam. And if you mean fake trading volumes that exchanges report, this is way harder to check and is unfortunately a serious problem. I don't trust the reported volumes after the scandals that occurred, but it's fine to choose exchanges based on other things like the number of active users and, most importantly, reputation.

You can avoid that by registering on the reputable exchanges such as binance, bittrex, poloniex, and don't use the unknown exchanges or the new exchanges because we don't know how good that exchange serves their members.
You can check the coins at coingecko or coinmarketcap to find where the coin is listed, so you can choose a reputable exchange to buy the coin.
We don't know who the person who buys the coin with big funds because if you check on the order queue, we don't know if that order is from one person or two people.
As long as you can buy on the reputable exchanges, you don't have to worry about scam because the reputable exchanges will always take care of their reputation.
You don't have to worry about the negative things because you can prevent that by always selecting the reputable exchange, and no need to be afraid.
You should remember that you don't need to use big money to buy the coin if you are not sure about the exchange.

Crypto exchange site operate as traditional banks but we have a situation where some exchange site are accused of scam and fake trade volume and to avoid such trading site you have to choose dron the top reputable exchange site

Firstly, you using an exchange site or an exchanger (a person who buy and sell through p2p or on this forum) have to start with you grusting the exchange site or exchanger and to know they actually don't lie you have to check their review and feedbacks but I will advise you not to use exchange site that is not listed on CMC of coingecko cause there are fake exchange site that can also fake review.

If you worry about that certain issues that exchanges might be selling you a coin that has no certain value or haven't that existed, then you better get to engage into well-known and reputable exchanges to clear out all your worries you have in mind. Those insecurities you have comes from having a trust issue with regards to what the exchanges have been doing all along. So cut out such worries you do have in mind, you do better engage only into trusted and reputable exchanges to feel your security and safety that the coin you purchase do intended to have a value and not a certain shitcoin.

Doing research and analysis of the coins that we are going to buy are things that must be done, because this can prevent us from buying
coins that are of no value. We should also use reputable exchanges, so that we are not fooled by the coins that these exchanges promote.
Usually exchanges that are popular and have a good reputation will only promote profitable projects. Because they want to keep their
reputation in good.

1. Choose reputable exchanges
Ensure that you choose the reputable exchanges, no matter what the exchange. But of course, every exchange has its own reputation. You may seek the most reputable one in your country to get the best one and easily withdrawing your coins into fiat through your bank account. Alternatively, you need also to choose reputable exchanges globally. the exchanges such as Binance, Kucoin, Kraken, Coinbase, OKEx, are some of those that are reputable.

2. Exchanges that list the token/coins exactly
Well, if the coins or tokens are in the top rank and shown in CMC or Coingecko or other crypto trackers, it may be found easily on the reputable big exchanges. But, if it is a new coin that has been listed in certain small exchanges, you must be careful to buy it. For, we do not know whether it is going to be shitcoin or not.

There are crypto explorers where we can see the history of the funds. however, if it is about in exchanges, we can believe in the exchange. And as long as we can sell or by what we want and it is fluent, we do not need to think about the funds.
But we may be roe careful if we buy the coin P2P, it may be risky.

I don't even know that there are such fake coins bought  sometimes.
Just avoid treading too far in those exchange that aren't that known and probably you would feel comfortable enough to buy more.
Check its reputation globally, because I am pretty sure that exchange with fake reviews exist and they could be reviewing through Youtube videos or any sorts of paid articles.
You can't just tell a fake exchange by looking at the site with the naked eye, OP.

Firstly you shouldn't patronize just newly launched exchanges that doesn't have a reputation in the community. These newly launched exchanges are the ones that could pull off such stunt and still go away with it. For the older exchanges although I'm not backing them to not be capable of doing these but due to the fact they won't want to risk lossing the trust they have already gained, they won't and if circumstances was to focused them (like lack of funds) they would turn to other means (like insurance) for funds.

Confirming if you have the coins you just bought is in your possession and not mere false balance is quite easy, you can try withdrawing and if it goes through then you're safe. Be very careful though as doing your due diligence before buying any coin to avoid buying a coin the wallet is under maintenance is vital. This maintenance technique is widely used by exchanges to slow down the withdrawal rate of the coins they don't have the volume at the moment.

You can easily observe this on smaller exchanges like mercatox but on a large scale if you buy from well known exchanges with trading volume, the possiblity of falling victims to the scheme is very rare.

Very important thing to do is always pay attentions with every information about the coin that you are planning to invest your money, Doing a good DYOR is the best answer.

Never to invest without proper knowledge, you are just completely risking your money if you'll do this type of investment.

Keep away from any unknown project and unknown exchange that will help you to avoid
buying those suspected scam coins.

I am convinced that exchanges lie to us by all indicators! From the trading volume to the availability of coins that provide these volumes!
By the way, not so long ago the Proof Of Keys (https://www.proofofkeys.com/) campaign was invented! It's a pity that not everyone supports it... I think that if all users started to withdraw their coins from the exchanges, they would just not have enough for everyone!

Right now I would like to give you a warning don't entertain those shitcoin because most of them are not become successful as the bitcoin but we cannot avoid them to create a lot of coin.

But if you want to support them go a head we will not stop you but again right now we are giving you our statement and opinions to avoid them and also save your money.

If you think at the first place its scam please avoid.

This is simple, If you want to completely avoid this kind of problem, just don't go to the unknown crypto exchanges. rather read some tips from trusted sources where you can buy some altcoins that have some real volumes and cryptoexchanges that have some real users. Because if you just blindly choose exchanges from the internet, you might fall to the trap of the scammers where they will beautify their sites to make it look real and will fool you to buy their fake volumes shit coins.

You will not know, only that exchange know what is real happening behind . Unless exchange share it publicly which is they will not allow to happen and  they will not share any sensitive information they have to public it's for security of its users. that was more  important to them than listening to a one person's opinion .
If you think the exchange is lying to you then never use that exchange any more.

You should be more careful in choosing crypto exchanges, we must check the exchange, starting from the exchange history, the menus that are on the exchange if there are things that suspect we better leave the exchange, if we are in doubt it's better to use an exchange that is  public or exchanges that people often use such as Binance, IDEX, Latoken, CoinBene and others.

Simple way to judge an exchange site that it's trusted or scam, one can simply check the volume of trades.even someone is pretending it will get caught very easily.Additionally, google it and find the partners.It will help you to be sure that this is a trusted exchanger or not.

proof of keys is good but whos paying the transfering coins out of exchanger fee? we pay  so to prooof that exchnger is correct i have to pay that shiet from my pocket? 

 >:(

To verify that you need to search the exchanger in coinmarket cap. The fake exchanges always have a low capitalization or they aren't even listed on the site. So, that's the right way to know if you can trust on the exchange, and it's important to search for some information about the exchange on this forum, that way if someone get's scammed then they will report it here and give a warning to other users.

And about the coins that don't exist, that's a weird question, you can't buy something that doesn't exist but you can buy something that doesn't have value for other users. So, my advice is; if you want to invest in altcoins then go for the popular ones and avoid tokens and shitcoins.

Checking the volume doesn't guarantee the required information to prove an exchange isn't a scam as the trading volume can be easily manipulated. Even on big and we'll trusted exchanges, some close observation and you'll see some bot like trading activity of smaller fraction of coins been sold or bought. Trusting the rating site still doesn't help as some rely on the information the exchange provides and could be liable to manipulation to favor some exchange of their choosen.

Before the acquisition of coinmarketcap, although Binance was one of the most trusted exchange and still had a high volume of trade still, it wasn't at the peak when it came to ranking but some days after the acquisition, some new features were introduced and obviously it favour the rating of the Binance exchange.

As I have earlier mentioned, apart from the fact of not investing in any coin just because it's listed on an exchange, you can occasionally try withdrawing your coins kept on exchange for trading purpose in attempt to confirm if those coins displaying in your account are actually withdrawal.

It's better to take a few surveys before trading your coins. I frequently use coinmarketcap to check whether the coins are genuine or counterfeit.
A large portion of the trading stage is a scam, so you must be cautious.
Maintain a strategic distance from those coins whom you're not very much aware these are the shits coins.
Attempt to pull back your coins to your own wallet accounts, on the off chance that it gives you an error; at that point, it will be a scam or fake one.

I think if you choose to buy bitcoin in a trusted exchanges ,then you do not have to worry. Just be worried if you are using fake or scam exchange to buy bitcoin because it will surely send you a wrong coins. It's easy to know if they sent a right coin because after the transaction, you will be able to see it in your own wallet address.

Of course you must pay the commission yourself! Convert all your assets to bitcoin and send it to your personal wallet... However, this is not convenient to do if you have a margin position... So it seems to me that all users will never withdraw funds from the stock exchanges until they face the deception of their own experience!

If we are talking about reputable exchange platforms.
Like any company, exchange platforms have Accountants that create Profit and Loss Statements like every company, audits and to make these reports, the records that verify it are necessary. There are also laws that regulate the operation of exchange platforms. I had never had an idea like this sincerely.
I totally disagree with this thought.

The awaareness will also come first to the users. We are joining, signing up with reputable exchange. That means they will not risk thwir reputations and be transparent enough to show us if the coins are existing or not.


I wonder where these doubtful questions came from? In the first place, why would a particular exchange exposed who brought  big funds to their site? Perhaps you are aware of decentralized exchanges. If you are on doubt, just choose established and trusted crypto exchanges. Those who are chosen most of the traders so, you'll find out if it is worth to use that exchange or not.

Many ways to know the cryptocurrency exchange you can go to coinmarket to check what that your coins is good to sell or not.
You can buy a coins using small funds if you dont trust that coins. Don't put all your money if have a doubt in that cryptocurrency. Just to be safe don't put all the money in one basket.

I would say that you should make sure that the exchange you are about to trade has
1: a lisence to operate
2: auditors like Deloitte, PWC etc are actually auditing them regularly....
3: who their CTO also plays a huge role in terms of tech and how good they are....

Of course you should choose exchanges that are popular and have a good reputation, after that you should buying potential coins,
don't buy shitcoins. Because trusted exchanges like Binance, Kraken, Okex, Huobi, Bittrex and Coinbase will not cheat by providing
coins that don't exist. To prove exchanges do own a large amount of Bitcoin, and prove they are not lying. We can trace the Bitcoin
addresses of the exchanges, because the blockchain network is transparent.

why will they list that coin at the first place if that coin is fake or dont exist ? they inspect it first and they provide rules that those only the coins can enter on thier exchange . shitcoins do have a value to so i dont consider them a coin that dont exist .

for your second question , is that a volume your refering to ? even the top exchanges are also suspected before to have a fake volume on some of the coins that they list . i think exchangers them selves cant monitor that easily . they dont lie because its not thier fault  but except maybe to the fake exchange because fake volume isnt the only thing that they can do  .

Exchanges list coins because they make a profit (and a good one) out of listing fees and because this listing will attract the community of that particular coin which "speculates" a potential for that particular... altcoin...

However, my not financial advice would be the following:

It is no coincidence that all institutions and hedge funds are actually paying attention to Bitcoin and consider the other altcoins as speculative assets that do not worth a thing...

The logic is the following (please correct me if I am wrong or you think there is something that I am missing)

The main thing altcoins are trying to compete with, is speed of delivering a transaction, believing that Bitcoin is slow so they are better... But Bitcoin is not even competing for the fastest transaction, it is competing with stores of value assets (such as gold).... This means, that altcoins are actually competing against VISA, Paypal, Maestro etc... and do you know why VISA Maestro etc laughed on the thread of cryptos? Because no user (including you and me) will use crypto for the day-to-day transactions and instead will prefer the current system which actually works just fine. It is FAST, reliable, protected from malware etc.

The problem with the current system, therefore, is not the speed, but the limitless supply of money. Bitcoin fixes this by having a fixed supply.

Why altcoins are considered shitcoins?

1: For a token to succeed in having value, there needs to be LIQUIDITY. (EXAMPLE: why there is not much trading on land? Because the market is IL-IQUID, meaning that though it has value, it is hard to sell land as there are not many buyers and it takes time....)

2: For a token to succeed, it needs to solve an actual problem... What problem are altcoins solving when:

SOV -> Bitcoin, Gold, Silver etc
TXSPEED -> VISA, MAESTRO, PayPal

So name it ICO, DeFI, IEO or whatever, unless they actually solve a REAL problem, I doubt we will see any of them succeeding.

PS: Blockchain is the next big thing, but it can be used without issuing a token.

Actually an exchange is a place of buying and selling bitcoin, so definitely there is no fake bitcoin in the market circulation, people might have earned it by trading or purchased it using their debit card from fiat currency, so there's no way a fake coin could be purchased on exchange. Moreover, if its actually fake, blockchain has an explorer that reveals all bitcoin balance shown on the address which makes every transactions to be transparent, easy and accessible.

And also beware of exchange that lied to investors, some provides fake volume and liquidity which were proven to be faked at last, so if you really want a good exchange that won't give a lie about them, you could consider binance, huobi, okex and other top exchange as directed by coinmarketcap.

What the use meant is how do we know that the Bitcoin we are buying in the exchange actually exists....

For example, when you purchase Bitcoin in XXXXXXXX exchange, how do you know if you have been credited a number (a simple number in their database) OR a real Bitcoin (1.00000000 bits)...

Essentially who is to say that they are not faking the existence of Bitcoin in their exchange in order to increase the volume... And you make a point, we have block explorers for that, but with so many addresses an exchange has it is difficult to calculate if you do not have access to their ledger...

Short story, there is no way to be sure, UNLESS they are being Audited frequently....

Before working on any exchange you have to have a good idea about that exchange. If you do not have a good idea about that exchange then you may face loss. You will invest money in the exchange all your life, if you do not have a good idea about that exchange  That would be the ultimate nonsense for you.  If you see anything suspicious on an exchange, be sure to discard it immediately.  Finally I have a suggestion for you to use the reputable exchange.  Such as Binance, Houbi Global, Coinbase, Bitrex etc.

I agree with that... My non-financial advice would be to actually never trade... Though there might be some fundamental analysis that works, trading is very risky and the market is unpredictable.

But yes if you are to trade, use a reputable exchange but make sure that someone has performed an Audit... An exchange with no license is dodgy.

Don't understand what you mean because if buying and selling bitcoin is done at least it is a pair of usd so, if there is no supply and demand on the exchange, I think we will know clearly if it is lacking or not available. If you sell or buy it individually I think it is a risk apart from that, why are we still doing individual transactions while there are so many exchanges out there that there are even local exchanges which I think would be more efficient.