Jeronimus
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February 28, 2014, 11:49:14 PM
Last edit: March 01, 2014, 01:01:25 AM by Jeronimus |
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So we knew the owner of MtGox and his company's location exactly with all addresses etc.
Did that stop Karpeles from goxxxing us?
No.
Most likely, it certainly did not stop the US gov from pressuring Mark to succumb and hand over the BTC, then later desperately operating a fractional reserve, doing all kinds of shady things to get back some funds so the fractional reserve has enough of a fraction to keep operating.
Bitstamp we also know a few bits of the CEO and the location. But it did not stop them from freezing withdrawals some time ago, leaving everyone hanging in there without additional info.
Remember when the bitstamp price shoot over MtGox price for some time? Yep... that was exactly back then. Just like MtGox delaying withdrawals having an effect on the BTC price on gox, so did the maneuver Stamp pulled have an effect on the BTC price on Stamp, to the point where people trusted goxBTC/USD more than stampBTC/USD
Shortly after that, stamp pulled another two maneuvers, where the price would crash down, their service being unavailable to sell.
Again shortly after, when the price would rocket back up, they AGAIN had their service unavailable.
They got people to panic sell once they reopened, and later when it shoot up again, they got them to panic buy, after not allowing them to sell at the top, neither buy at the bottom, as they simply closed the service, most likely just pretending it was a DDoS
This to me screams manipulation.
If BTC-e can stand up working under DDoS, why cannot bistamp which has even more funds/volume?
So what do we learn of the gox?
In the bitcoin world, where any exchange at any time can claim they got "hacked" or some criminal somehow got hold of their keys to the cold storage, having the info of the owners + location of the exchange, won't protect you from them dry looting you.
It certainly won't protect the exchange from the US gov or other gov dry looting it.
So what exactly does protect us?
The only thing that protects us is the exchanges making way more money having their business run perfectly long term, than just running with the money.
This was in particular true for gox which had 80-90% of the market back then and has ever since looked like they are trying to ruin their own business deliberately.
This can only mean two things. Either the US gov stole their coins or they were paid assassins to harm BTC or a mix of the two.
If the exchanges wanted to make something on top, they could abuse the exchange powers and trade on their own behalf at zero fees or do some shady arbitrage by conspiring with another exchange or creating a second exchange they would pretend they are not related to.
So there is basically ZERO motive for the exchange to run with your money as they can extract way more of you using other means, including just operating the exchange in a honorable way.
BTC-e is swimming in money and bitcoins with very high volumes in the past. They certainly made back all the bitcoins and USD stored on the exchange already twice.
Why would they want to run with the money when they can profit much more from just operating the exchange properly?
The only reason we might lose our deposits would be for some governments to track them and shut them down which is what could happen to any other exchange as well. In fact, it is more likely to happen to any other exchange rather than btc-e as they can reopen being anonymous, while others will be shut for good.
edit: OR, as i mentioned above, the operators being motivated to harm BTC.
Satoshi nakamoto decided to remain anonymous for good reasons as well, not because he was shy of the public.
Is any exchange 100% safe?
NO exchange is 100% safe.
Especially not since no exchange EXCEPT btc-e has made a clear statement that they are NOT operating a fractional reserve and that all funds deposited in the exchange are fully backed up by real BTC/USD.
No audits made yet, even though audits won't protect us from what Karpeles pulled as they can simply claim they were hacked or scammed or lost their key or US gov took em and they are not allowed to talk etc.
The audits if frequent however, will certainly make it harder to pull such stunts in a believable way.
The ONLY safe storage for your coins is a cold wallet you created offline and know how to safely extract funds of into your hot wallet you use to buy stuff with.
One of the best devices coming out to make this easy for average joe to handle is the TREZOR device (at least as long as they stay true to their specifications)
So is everyone having their BTC on an exchange an idiot?
No, they are not. The majority is well aware of the high risks, which however comes with high rewards too if you know what you are doing. It's a calculated risk, and many have already quadruplet their initial investment, allowing them to pull out the initial investment while having 3x the initial investment still on the exchange.
While they are not doing it for altruistic reasons, this actually helps BTC gain value, allowing people to quickly interchange their BTC for FIAT if they choose to, as well as other businesses that do not want to keep BTC only, as it is not as widely accepted at the moment as needed for such businesses to operate solely on BTC.
Even the speculation itself gives BTC value as people are interested in investing in BTC just for that gamble that also includes some social factor.
Without the speculators, noone would be able to interchange BTC for USD/EUR/etc. Holders certainly do not do exchanges. Simply investing and holding the BTC does not work if noone sells.
So the speculators do in fact help this ecosystem, even if it is greed that propels their actions in most cases.
The speculators are shoving their own grave however, since their doings help make BTC more widely accepted, and soon enough, no one will need to interchange BTC for FIAT anymore, the price stabilizing in the process and there not being enough profit to be made for speculators anymore.
The exchanges will then operate on their own behalf and do their own trades, as only at zero fees exchanging BTC/USD will grant some profits still.
to finalize...
So reading the above you understand why some risk takers that are important for the BTC ecosystem choose to put their money into less than safe exchanges.
The only thing those speculators can do, is to guesstimate the risks of the exchanges available to them. It certainly would not be a good thing if all speculators had their funds in just one exchange that could gox us.
There should be at least 5-10 medium to large sized exchanges to make sure that when one goes down, not everything is lost.
It turns out, it is a good thing that not everyone trusts the same exchange.
..the end
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