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Author Topic: Risky to leave fiat currency on an exchange??  (Read 1820 times)
omahapoker
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November 04, 2015, 04:14:47 PM
 #1

Lots of people are posting to never leave their bitcoins on an exchange, like: https://bitcointalk.org/index.php?topic=799399.0

Do fiat money also count, I mean they theoretically have control over your account...
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November 04, 2015, 04:32:59 PM
 #2

in a bankrupty type senario all the bank accounts of the company and associated parties will be frozen

so yes,

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November 04, 2015, 04:37:01 PM
 #3

The whole point of bitcoin is that it allows you have total control over your funds with no need for third party custodians (after the exchange from cash to bitcoin has taken place).  The history of bitcoin is riddled with very sad stories of losses that have significantly impacted many individuals.

When you have a minute give this a read.

List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses
https://bitcointalk.org/index.php?topic=576337.msg6289796#msg6289796

Yes this was early day when there were a lot of inexperienced, sketchy and outright criminal operators, but it will continue to occur.   
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November 04, 2015, 04:38:30 PM
 #4

It's always a risk, but to be honest, you never own your fiat unless you have the cash literally under your mattress. Every fiat money on a bank (including your personal bank account) is a bunch of 0's and 1's outside your control that will get used at will by banks to gamble with. The only thing that is truly yours is Bitcoin in your personal wallet.

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November 04, 2015, 04:44:45 PM
 #5

the worst thing is the way some countries also prey on companies and individuals when they see weakness or possible financial

and accounting infringements, the exchange/company may not even be at fault yet in an industry wide liquidity crisis it could find itself  a target

in a rapidly changing legal and political environment than what it was used to,

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November 04, 2015, 05:19:45 PM
 #6

Lots of people are posting to never leave their bitcoins on an exchange, like: https://bitcointalk.org/index.php?topic=799399.0

Do fiat money also count, I mean they theoretically have control over your account...

Those of us who lost money when the Bitfloor and MtGox exchanges failed tend to be cynical of exchanges. It's best to keep Bitcoin in a cold storage wallet and dollars in a FDIC insured bank (or the equivalent where you live). Established and insured U.S. exchanges like Coinbase are probably pretty safe though. I'm just sick of losing money so I don't risk it.


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LiteCoinGuy
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November 04, 2015, 05:26:17 PM
 #7

Lots of people are posting to never leave their bitcoins on an exchange, like: https://bitcointalk.org/index.php?topic=799399.0

Do fiat money also count, I mean they theoretically have control over your account...

yes. but it is less risky than in 2012/2013. today we have Coinbase, Xapo and some other regulated and well funded exchanges.

but again: i would not recommend to leave money/coins there  Wink

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November 04, 2015, 05:30:03 PM
 #8

Lots of people are posting to never leave their bitcoins on an exchange, like: https://bitcointalk.org/index.php?topic=799399.0

Do fiat money also count, I mean they theoretically have control over your account...

It depends what exchange you are using.  I feel confident using coinbase for example, and holding some coins there, and now they have a wallet option for $ as well.

A place like btc-e however, well I never was sucessful transferring fiat in the first place, only used btc/ltc there.  And I would NOT feel safe leaving anything there for any period of time...
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November 04, 2015, 05:31:48 PM
 #9

Lots of people are posting to never leave their bitcoins on an exchange, like: https://bitcointalk.org/index.php?topic=799399.0

Do fiat money also count, I mean they theoretically have control over your account...

yes. but it is less risky than in 2012/2013. today we have Coinbase, Xapo and some other regulated and well funded exchanges.

but again: i would not recommend to leave money/coins there  Wink

tax payer bailout comes to mind

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anthonycamp
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November 04, 2015, 05:33:01 PM
 #10

yes of course i used to use the poloniex and now i got a multibitHD wallet for it fiat i leave into bank

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November 04, 2015, 05:41:52 PM
 #11

usually there should be insurance for fiat at least because they are covered by your bank

i feel more safe to leave fiat in an exchange than bitcoin
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November 04, 2015, 05:58:25 PM
 #12

Lots of people are posting to never leave their bitcoins on an exchange, like: https://bitcointalk.org/index.php?topic=799399.0

Do fiat money also count, I mean they theoretically have control over your account...

They both (bitcoin and fiat) a value in real life and can be used to buy/sell things , a user of an exchange should be logically a bitcoiner ... so  he shouldn't keep his funds as he should always control his funds (that's the rule) so he withdraw .

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November 04, 2015, 08:34:32 PM
 #13

usually there should be insurance for fiat at least because they are covered by your bank

i feel more safe to leave fiat in an exchange than bitcoin

Except for the US exchanges Coinbase, Gemini, and I think Circle, this insurance doesn't exist anywhere else. So it's pretty much the same are your funds going to be in bitcoins or in Fiat money.
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November 04, 2015, 08:35:41 PM
 #14

Yes, this would count because you are not i ncontrol of the money which makes this happen.
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November 04, 2015, 10:56:52 PM
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Yeah, my goal is to clear out my exchange BTC (or fiat) back to accounts I control as often as possible. 
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November 04, 2015, 11:39:08 PM
 #16

in a bankrupty type senario all the bank accounts of the company and associated parties will be frozen

so yes,

This will what the problem will be. However I have heard that during a recent exchange crash, they were able to give back all the altcoins, so I am not sure, if fiat would also be refundable. But the company could easily claim bankcrupt and not give back a penny.

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November 05, 2015, 10:27:47 AM
 #17

It's always a risk, but to be honest, you never own your fiat unless you have the cash literally under your mattress. Every fiat money on a bank (including your personal bank account) is a bunch of 0's and 1's outside your control that will get used at will by banks to gamble with. The only thing that is truly yours is Bitcoin in your personal wallet.
True. Getting your Bitcoins converted to $$$ and storing it in a safe place is probably the safest way to know you have the money in reality. There seems to be a lot of confusion regarding Bitcoin properties and their transactions till now.
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November 05, 2015, 10:35:21 AM
 #18

The whole point of bitcoin is that it allows you have total control over your funds with no need for third party custodians (after the exchange from cash to bitcoin has taken place).  The history of bitcoin is riddled with very sad stories of losses that have significantly impacted many individuals.

When you have a minute give this a read.

List of Major Bitcoin Heists, Thefts, Hacks, Scams, and Losses
https://bitcointalk.org/index.php?topic=576337.msg6289796#msg6289796

Yes this was early day when there were a lot of inexperienced, sketchy and outright criminal operators, but it will continue to occur.  


This is why gbianchi (https://bitcointalk.org/index.php?action=profile;u=140582) wrote this article about
BTC Exchanges: their functioning and their way of using a fractional-reserve

https://bitcointalk.org/index.php?topic=945881.0

It's really worth a read and I do think this should be a sticky post somewhere.
I want to stress again what you said: the whole point is to be on top of our own money.

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November 06, 2015, 06:30:53 PM
 #19

I think it's not wise to store large amounts of cash on exchanges. Only keep amounts that you are trading with.

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November 06, 2015, 06:52:46 PM
 #20

for me personally, i don't leave fiat nor bitcoins in my exchange account. especially after all the drama we have seen with exchanges. that's why bitonic for me works perfectly fine. that's why i don't need exchanges anymore.
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