We're talking about a regulated exchange, which needs to have their AUDITS in order. This means, they need to have RESERVES in both crypto (bitcoin) and fiat. The theorem I gave is just as it is, theory to proof an argument. With a backlog as they have, I imagine it will take a lot of time, hence money. So if liabilities > assets without having enough in reserves, they are in trouble.
Do you really think Bitstamp can in infinity swap bitcoins for fiat? Where do they sell their bitcoins to fiat to without having it on their own (worst case, let's say)? You imagine buyers always pay in fiat, you're wrong. A lot of active people have bitcoins for free or for sub $10 that are bailing out for some now. If there are no more new people depositing fiat, how are you suppose to pay out all the withdrawals. Let's say Bitstamp has $100 million in reserves and $1000 is requested to withdraw. You get my point?
You don't make any sense.
Let's start with the facts. Bitstamp has no leverage nor margin trading (only secretly for a happy few in beta, apparently).
So how does Bitstamp work? Pretty basic: people bring their stuff (crypto, fiat) IN, Bitstamp allows people to REASSIGN properties, like "this bitcoin has been moved from X to Y, while this amount of fiat was moved from Y to X", and that IS ALL THEY DO.
Nothing is created, only reassigned.
Again, it has no leverage and no margin, nothing is created, only properties are reassigned. Margin, leverage, tethers, yeah that's true, but that applies to Bitfinex, Kraken & some others, not Bitstamp.
It does not matter if Satoshi comes in and sells his free Bitcoins. It does not matter a single bit. Satoshi comes in, adds 1 million BTCs to Bitstamp, and manages to sell them. The FIAT that Satoshi gets, comes from another user, who came in with his FIAT, and now goes out with his BTCs. Bitstamp didn't create anything, it only reassigned some user's FIAT to Satoshi, and Satoshi's BTC's to some user.
So, IF Bitstamp is going bankrupt, it can only be 2 possibilities:
1. they don't have the BTC's they were supposed to have. How? Hacking, or shady business where Bitstamp would be selling BTCs created out of thin air. That'd be pure fraud.
2. fraud again, if they disappear with everyone's fiat.
People pay Bitstamp thousands per month, can you imagine how many millions/month they make? They are the exchange with the highest fees. They can't lose money other than by frauding. Especially right now, they make a lot of money out of this crash. It's when people aren't trading that they don't make money.
A pure exchange's model can't lose money unless, again, fraud or hacking occured.
If Bitstamp happens to have been selling BTC's that they don't own, then it's fraud, they aren't supposed to do that, it's nowhere in the model of this business, unlike what you seem to think. That's leverage & margin trading, but they don't do this.
You say that Bitstamp "swaps their own Bitcoins for fiat", *where* are they doing this? Where is Bitstamp selling "its own Bitcoins" for fiat exactly?
And I know that normal banks only have to have a reserve of a fraction of people's money. But they're open about that, it's regulated.
What do you think would happen if it was found out that Bitstamp played with people's BTC's or money & lost them? It would be FRAUD, I can't see how they'd get away with it (especially SINCE they aren't regulated). Their "reserve" is what comes in, they aren't supposed to touch it. Why would they touch it anyway? They must be making huge money the legit way, why would they do this?
I have given Bitstamp a few thousands per month, now multiply this by how many users? A few thousands, that's a lot for what's a "simple" website. You can host your website for a few bucks per month. And I've paid THOUSANDS for this simple service. It doesn't even pay for support guys, since (hence this thread) they provide zero support. They must be making A TON of money, especially for the last 3 months.
Bitstamp having been hacked, yeah that's very plausible, as it has already happened. Bitstamp running away with money, same thing, it has already happened for another exchange. That's much more plausible than your theory.
Also, the problems we have with Bitstamp are 1 month old, they can't be related to any crash. This last month has been crazy, while the BTC was stagnating very high, this has been the best month for ALTs, including all those on Bitstamp, they all rised at least 4x.
Seriously, you need to reread all my posts. First of all, I gave the possibilities what might have happened if Bitstamp is insolvent. I gave the reasons for a) being hacked/theft; b) committing fraud; c) on the technical side of finances, not having enough liquidity to pay out all withdrawals
. You need to learn to read that my latest theory is
, I'm worried about the amount of withdrawal complaints from users all over the place and as adults, can we have an open discussion here or not? That being said, due to theory c, the current situation could be exponentially worse, which
be related to what's going on.
It's amazing how many people are cherry picking posts without taking the entire context in consideration and then base their arguments on a house of cards, just like the MSM does, it's unprofessional.
If they're having issues and cannot handle the load, they should hire more employees, especially if their profits exponentially grew and disclose their clients about issues. Communication is key, especially in a 24/7 environment where big money is at stake. They can learn a lot from Kraken. It's simple as that.
