DaveF (OP)
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August 13, 2022, 12:31:49 PM |
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Had an interesting conversation last night about Strike's new Visa card: https://bitcointalk.org/index.php?topic=5409623.0Some basic info: 1) Strike does not operate in NY 2) The person I was talking to is not in NY or any other area that Strike does not operate. The conversation was more about LN then anything else, but they basically said: "Strike, is not a offshore crap exchange, and they TRY to make it look like they are a real financially stable company. But, if they can't be bothered getting a bitlicense in NY then either they are not as stable as they claim to be or they are doing something funky that they don't want others to see or they are much smaller then they are showing to be or any combination of the above. No way would I trust an company that claims to have all this backing and support and does not want to operate in NY. They have something to hide" Now the above is obviously not 100% verbatim what was said, but he did bring up an interesting point. Taking everything else off the table, do people think more regulations / scrutiny of places give people a more secure feeling about them then those that don't. If there were 2 major players say DaveExcange 1 and DaveExchnange 2 the 1st operated in most states / countries the 2nd was avoiding the ones that required more licensing and financial checks. But outside of that they were both around for years had a good reputation and so on. Would you feel safer using one over the other? And the fact that the other one did not operate in places that had more extensive checks / regulations make you less likely to use it? I'm in NY so I don't get a vote here so to speak, I just never really heard people wanting it before but after sleeping on it I do see the appeal. -Dave
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LoyceV
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August 14, 2022, 08:56:51 AM |
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Would you feel safer using one over the other? It depends. Let's take banks for example: I don't trust them, but they're regulated and government guarantees they'll pay back deposits up to €100,000 if they go bankrupt. That government guarantee means it doesn't really matter if the bank is stable or not. As a consumer, that's easy, and I already know I have no privacy with banks anyway. If there were 2 major players say DaveExcange 1 and DaveExchnange 2 the 1st operated in most states / countries the 2nd was avoiding the ones that required more licensing and financial checks. But outside of that they were both around for years had a good reputation and so on. Would you feel safer using one over the other? I wouldn't trust an exchange that can't spell "Exchange", so both are disqualified.Jokes aside: I do use regulated exchanges that have been around for years, and I feel pretty safe doing so. I'd love to see a totally anonymous exchange with only a .onion domain and a very good reputation, but unfortunately I don't know any of those. The "less regulated" exchanges I know usually don't have a very good reputation, and worse, many anonymous exchange sites still ask people for their documents, which makes them much worse than the regulated exchange.
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August 14, 2022, 09:14:47 AM |
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If there were 2 major players say DaveExcange 1 and DaveExchnange 2 the 1st operated in most states / countries the 2nd was avoiding the ones that required more licensing and financial checks. But outside of that they were both around for years had a good reputation and so on.
It will be like Coinbase versus Binance, one that you know where it operates and where it is located and the other one operates either from Malta or Bahamas or somewhere where CZ seems fit to run. Which answers the second row of questions about feeling safer and usage as a simple poll between the two of them here will probably come with 99% for Binance as it's SAFU! I'm pretty sure an overall majority of users don't care about that, they've never read the ToS, they actually don't know anything about the company before depositing money but they go with the wave. As for myself, I won't trust any exchange no matter the licenses it has with more than a few bucks and I still feel uneasiness when I'm forced to send a larger sum to exchange to either sell or buy coins, a feeling that goes away only when the coins are in my pocket and yeah when the fiat is in my bank account as at least that's, as Loycev covered. The money or coins on an exchange are not covered by anything, no matter the age and the reputation.
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o_e_l_e_o
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August 14, 2022, 10:04:48 AM |
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I'm probably the wrong person to answer here since I would never actually use either centralized platform, but putting that aside for a minute then I'm choosing Exchange 1. If I use a centralized exchange or platform to hold my bitcoin, issue me a card, and convert my bitcoin on the fly so I can use my card to pay in fiat, then I know that: - 1) I am entirely dependent on that platform for the security of all my coins, and if the platform goes bankrupt, scams, makes bad loans, has questionable employees, etc., then I will lose all my coins
- 2) I will have to complete KYC and therefore I am trusting that platform not to leak or sell my information
- 3) I will have absolutely zero financial privacy from that platform
Given that that is the starting point of using any such platform, then I would obviously choose the one which had passed the more stringent checks and obtained the more strict licenses. No point giving up all the benefits of decentralization and yet receiving none of the benefits of fiat bank regulation/insurance/etc. Just look at how that turned out for Celsius, Voyager, and others.
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DaveF (OP)
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August 14, 2022, 11:39:50 AM Last edit: August 14, 2022, 11:51:04 AM by DaveF |
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So, expanding the question a bit. Do you think the 'larger well known' exchanges that don't go for the more stringent checks are lazy, or are they lying about something or something else? I know I said above I don't get a vote, but I would put it under lying about financial stability. I think a lot of these places like to brag how much they do / how large they are and it's not 100% true. I wouldn't trust an exchange that can't spell "Exchange", so both are disqualified.
Which does bring up an interesting point about technology. Every once in a while it does not work like it's supposed to. So, I guess having a more regulated / insured place may actually be good. I extensively rely on my web browser to let me know when I have misspellings; I can't access here directly from a lot of clients so I am usually remotely on my home or office machine, so it can be a little tough to spell / grammar check with my eyes so to speak due to the screen size downsizing. But a red squiggly line under words is very obvious. However, every once in a while spell check takes a quick vacation. -Dave
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Lucius
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August 14, 2022, 02:08:36 PM |
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The conversation was more about LN then anything else, but they basically said:
"Strike, is not a offshore crap exchange, and they TRY to make it look like they are a real financially stable company. But, if they can't be bothered getting a bitlicense in NY then either they are not as stable as they claim to be or they are doing something funky that they don't want others to see or they are much smaller then they are showing to be or any combination of the above. No way would I trust an company that claims to have all this backing and support and does not want to operate in NY. They have something to hide"
As for the license in NY, it seems to me that they have very strict requirements and that many crypto companies avoid them, so I don't see why Stike would be an exception in that case, considering that they are not only available in NY and Hawaii when it comes to US. I don't think this is a reason to distrust a company in the sense that that company is hiding something or that it is more risky than other similar companies. Now the above is obviously not 100% verbatim what was said, but he did bring up an interesting point. Taking everything else off the table, do people think more regulations / scrutiny of places give people a more secure feeling about them then those that don't.
Of course, the average person mostly bases his trust in someone or something in relation to how far the laws of a country support it in the sense that they say it is good or safe. If the central bank and various financial agencies in a country have an extremely negative attitude towards Bitcoin, this is largely reflected in the majority of people when it comes to their attitude towards Bitcoin. If there were 2 major players say DaveExcange 1 and DaveExchnange 2 the 1st operated in most states / countries the 2nd was avoiding the ones that required more licensing and financial checks. But outside of that they were both around for years had a good reputation and so on. Would you feel safer using one over the other? And the fact that the other one did not operate in places that had more extensive checks / regulations make you less likely to use it?
I'm in NY so I don't get a vote here so to speak, I just never really heard people wanting it before but after sleeping on it I do see the appeal.
-Dave
If both exchanges were similar in what they offer (fees, liquidity, KYC), it would be logical to choose the one that can meet higher standards. in the sense that this exchange is safer from possible hacking and that they have insurance with which they can indemnify clients in the event of the same.
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NotATether
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August 15, 2022, 07:45:23 AM |
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Actually I feel that too much regulation is enroaching.
For example, exchanges are required to have a certain amount of regulation, but some go a bit too far and willingly sell you out to devs for some innocent-looking action such as failing KYC, or even without your knowledge under the guise of "suspicious behavior" (you know which one I'm referring to).
With that logic, pretty much everyone whose not 100% normal has some kind of "suspicious behavior".
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August 15, 2022, 10:14:21 AM |
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The other thing that banks appear to do when encroached by too much regulation is either expand on compliance (which then gets aggressive on KYC, leading up to high incidence of false positives) -- think of PayPal when it was teething in regulations or in jurisdictions where they weren't sure of their footing: constant blocks, account freezes, to the point it was pointless as an instant online payment method.
And in the case of exchanges who probably can't afford or justify compliance expansion, then the obvious route is de-risking -- think of them just closing customer accounts or refusing certain transactions on blanket red flags.
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webtricks
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August 15, 2022, 02:04:15 PM |
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So, expanding the question a bit. Do you think the 'larger well known' exchanges that don't go for the more stringent checks are lazy, or are they lying about something or something else? I know I said above I don't get a vote, but I would put it under lying about financial stability. I think a lot of these places like to brag how much they do / how large they are and it's not 100% true.
The question is highly subjective depending upon the location of the user. I am from India and as of now, there is no specific law for the crypto exchanges here. They are working in the status of ambiguity, fulfilling the general rules laid down by the central bank for the companies involved in financial services. So, for me the reputation and user-trustworthiness play more importance than number of license or pan-US approval in determining the genuinity of the exchange. I am fine using the international exchanges working from the small-island countries or not providing services in certain locations to avoid stringent regulations as long as I know that they are not explicitly illegal in my country and users put great trust in those.
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DireWolfM14
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It's a fascinating question, and timely in a sense. The question can really be distilled to simply this: "Do you trust financial institutions more than government regulators?" Obviously that's a loaded question that requires some background before it can be answered; i.e. which financial institution, and which government? The government of the most successful country on the planet is nothing but a collection of people who are all subject to corruption and hunger for power. Even if there are regulations in place to curb corruption, there are plenty of opportunities for the corrupt to cheat the system. Do I trust banks? Yes, I do. Why? Because they're existence is focused on one thing; making money. No matter how they advertise their service, no matter what incentives they offer their clients, no matter how many free pens they've given me their reason for existence is transparent. Pure and simple. Do I trust governments? No, I don't. Why? For the very same reasons; their goals aren't known, they are not transparent, and their regulations are often meant to serve a purpose other than what they claim. When was the last time a government regulation actually affected a cause as it was advertised? It's been my experience that the more regulations a government puts in place to "protect the people" the more likely those regulation will actually protect said government's authority and income. Now, having said all that; what way to choose when the banks and the governments are in cahoots? It's a complicated world we live in.
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o_e_l_e_o
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So, expanding the question a bit. Do you think the 'larger well known' exchanges that don't go for the more stringent checks are lazy, or are they lying about something or something else? Exchanges want to make money. They do that by attracting more customers. The more places they operate in, the more customers they can attract. So to choose not to operate in some jurisdictions they must have come to the conclusion that either 1) it would cost them more (time, money, effort, staffing, infrastructure, etc.) to meet all the regulations required than they would gain back from users in that jurisdiction, or 2) they cannot comply with the necessary regulations at all. Number 1 is fine - lots of companies don't operate in lots of places for this exact reason. Number 2 is less fine, and suggests that at best there is something they are doing which is less than ideal, and at worst outright illegal in that jurisdiction. Do I trust governments? No, I don't. I don't either for most things. But I also trust FDIC insurance on a fiat bank a whole lot more than I trust some random two bit crypto exchange. Now, having said all that; what way to choose when the banks and the governments are in cahoots? That's easy! You choose bitcoin. ![Wink](https://bitcointalk.org/Smileys/default/wink.gif)
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DireWolfM14
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August 15, 2022, 05:53:13 PM |
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Now, having said all that; what way to choose when the banks and the governments are in cahoots? That's easy! You choose bitcoin. ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) I was going to end that post with "Be your own bank," but it just sounded so cliché. ![Grin](https://bitcointalk.org/Smileys/default/grin.gif)
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Darker45
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August 17, 2022, 03:08:20 AM |
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If there were 2 major players say DaveExcange 1 and DaveExchnange 2 the 1st operated in most states / countries the 2nd was avoiding the ones that required more licensing and financial checks. But outside of that they were both around for years had a good reputation and so on. Would you feel safer using one over the other? And the fact that the other one did not operate in places that had more extensive checks / regulations make you less likely to use it? I might think that it's not really a big deal and would user either of the two. After all, both of them were around for years and has built a good reputation. But if I'm residing in a particular state/country where only one of them is licensed, I'd immediately go for whichever is available. The key word here is avoiding. But it does not immediately mean that the avoiding exchange is hiding something. Avoidance doesn't automatically signify skeletons in the closet; it could simply mean doing away with all those regulatory hassles. If I were an exchange myself, I think I'd be satisfied operating in some states/countries that are more open and avoid unnecessary headaches in complying extensive requirements from other states/countries. To hell with them!
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DaveF (OP)
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August 17, 2022, 11:47:21 AM |
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... If I were an exchange myself, I think I'd be satisfied operating in some states/countries that are more open and avoid unnecessary headaches in complying extensive requirements from other states/countries. To hell with them!
That's not good business. Good business is looking at doing something and seeing if the time & effort & expense is going to generate more money then not doing it. If you are going to do things based 'to hell with them' you will fail. Because sooner or later everyone will do something that will annoy you. As a consumer I could be one of your better customers and sooner or later I will do something to piss you off / cost you time or extra effort or money. Do you drop me as a customer because of that? The ONLY answer in business should be only if that the time, effort, money is more then me being a customer has generated and will generate. -Dave
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Darker45
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August 18, 2022, 03:05:34 AM |
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... If I were an exchange myself, I think I'd be satisfied operating in some states/countries that are more open and avoid unnecessary headaches in complying extensive requirements from other states/countries. To hell with them!
That's not good business. Good business is looking at doing something and seeing if the time & effort & expense is going to generate more money then not doing it. If you are going to do things based 'to hell with them' you will fail. Because sooner or later everyone will do something that will annoy you. As a consumer I could be one of your better customers and sooner or later I will do something to piss you off / cost you time or extra effort or money. Do you drop me as a customer because of that? The ONLY answer in business should be only if that the time, effort, money is more then me being a customer has generated and will generate. -Dave My point is that I'm willing to do business, exert effort, expand it, comply with regulatory bodies, and so on, but if there are certain countries which are too hard to please and require too much, I'd be more than willing to let go of that prospect and focus my money and effort somewhere else. Look at Binance, the most licensed crypto exchange in the world. I guess they're also the most investigated and also the most that is ordered to stop operating. It seems they try to negotiate but if the other party is too stern, they pack up and leave, go to other countries and strike a deal. In terms of business, it oftentimes takes two to tango. Too tight regulatory policies would discourage and keep investors away. Instead of them trying to comply, they'd rather not. So the authorities will have to loosen up a bit and attract them.
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August 18, 2022, 12:48:11 PM |
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If there were 2 major players say DaveExcange 1 and DaveExchnange 2 the 1st operated in most states / countries the 2nd was avoiding the ones that required more licensing and financial checks. But outside of that they were both around for years had a good reputation and so on. Would you feel safer using one over the other? And the fact that the other one did not operate in places that had more extensive checks / regulations make you less likely to use it?
In this case, all things being equal, I would choose the least regulated. Let's take banks for example: I don't trust them, but they're regulated and government guarantees they'll pay back deposits up to €100,000 if they go bankrupt. That government guarantee means it doesn't really matter if the bank is stable or not.
In certain countries this guarantee serves the same purpose as WC paper, because if a major bank were to fail, governments would not have the funds to pay everyone. Although I suppose that at EU level if that were to happen some maneuver would be to put accounting entries for such amounts with restrictions on withdrawals and transfers. Do I trust banks? Yes, I do. Why? Because they're existence is focused on one thing; making money. No matter how they advertise their service, no matter what incentives they offer their clients, no matter how many free pens they've given me their reason for existence is transparent. Pure and simple.
I don't trust them, but I try to adapt to their game. Do I trust governments? No, I don't. Why? For the very same reasons; their goals aren't known, they are not transparent, and their regulations are often meant to serve a purpose other than what they claim. When was the last time a government regulation actually affected a cause as it was advertised?
Well, I'll tell you a few. The most recent one that comes to my mind is the regulations on gambling, and the obligation for licensed houses to offer responsible gambling features. Does anyone believe that the gambling industry would regulate itself in a way that would be beneficial to society if the authorities were not on its back? I don't think so, and in general I am not very much in favor of regulations and taxes, which usually go hand in hand. But going back a little further, not too far in historical times, the regulations that banned child labor or those that legalized the right to strike seem to me to be good examples.
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DaveF (OP)
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August 18, 2022, 02:16:15 PM |
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Let's take banks for example: I don't trust them, but they're regulated and government guarantees they'll pay back deposits up to €100,000 if they go bankrupt. That government guarantee means it doesn't really matter if the bank is stable or not.
In certain countries this guarantee serves the same purpose as WC paper, because if a major bank were to fail, governments would not have the funds to pay everyone. Although I suppose that at EU level if that were to happen some maneuver would be to put accounting entries for such amounts with restrictions on withdrawals and transfers. Which does bring up the point of differences in regulations. Here the FDIC does make sure the bank is stable to some degree. Which is why many times they will step in and close a bank that to outsiders DOES look like all is well and they have enough financial backing. But in reality it was all smoke and mirrors. If enough major banks fail then yes it would be a shitshow, but if Chase / BoA / Citi and so on all started to implode at once there is probably something bigger going on. Keep in mind that even in the 2008 meltdown nobody lost insured money. IIRC there were people elsewhere whos banking insurance did not cover all losses. -Dave
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LoyceV
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August 19, 2022, 06:55:02 AM |
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In certain countries this guarantee serves the same purpose as WC paper, because if a major bank were to fail, governments would not have the funds to pay everyone. Although I suppose that at EU level if that were to happen some maneuver would be to put accounting entries for such amounts with restrictions on withdrawals and transfers. I assume it will be the same as the bailouts: if tax payers can't pay for it, government debt will just go up and printer goes BRRR. That just means the value of your fiat drops more, but you'll get back the same amount. Which does bring up the point of differences in regulations. Here the FDIC does make sure the bank is stable to some degree. Which is why many times they will step in and close a bank that to outsiders DOES look like all is well and they have enough financial backing. But in reality it was all smoke and mirrors. If enough major banks fail then yes it would be a shitshow, but if Chase / BoA / Citi and so on all started to implode at once there is probably something bigger going on. Keep in mind that even in the 2008 meltdown nobody lost insured money. That makes me think the "insured amounts" aren't there to protect citizens, it's meant to protect the banks. Without that guarantee, banks wouldn't be trusted.
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dkbit98
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August 19, 2022, 08:30:49 PM |
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Which does bring up the point of differences in regulations. Here the FDIC does make sure the bank is stable to some degree. Which is why many times they will step in and close a bank that to outsiders DOES look like all is well and they have enough financial backing. But in reality it was all smoke and mirrors. If enough major banks fail then yes it would be a shitshow,
Something like that already happened not long ago in 2008 but they had bailout, that is like putting dead patient on ventilator and keeping him alive artificially. They won't and can't keep doing things like this anymore, so it's just a matter of them for history to repeat itself but with much worse results. I assume it will be the same as the bailouts: if tax payers can't pay for it, government debt will just go up and printer goes BRRR. That just means the value of your fiat drops more, but you'll get back the same amount. Or they will just take away all your property. Combination of money printing, huge inflation or hyperinflation and rising prices will make paying taxes, debt and everything else much harder for regular people. I don't know why else would IRS hire 87000 new IRS agents and teach them to user deadly force ![Tongue](https://bitcointalk.org/Smileys/default/tongue.gif)
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LoyceV
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August 19, 2022, 09:20:35 PM |
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I assume it will be the same as the bailouts: if tax payers can't pay for it, government debt will just go up and printer goes BRRR. That just means the value of your fiat drops more, but you'll get back the same amount. Or they will just take away all your property. They did a bail-in in Cyprus in 2013. People complained, so I don't think they'll do that again. Instead, they just went full BRRR and now take much more money through inflation than they ever could from a bail-in. Combination of money printing, huge inflation or hyperinflation and rising prices will make paying taxes, debt and everything else much harder for regular people. It more and more feels like fiat money itself is a scam.
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