Fake Bitcoin.

[AlphaEther]

Anyone can create a token named 'Bitcoin' on a blockchain like Ethereum or BNB using smart contracts. But that's a different kind of scam. But the fake Bitcoin that I want to talk about, is actually created by some exchanges themselves!

Let me tell you. Bitcoin has a limited supply - only 21 million. Moreover, with the rise in popularity of BTC and the fear of hacking on various exchanges, more people than ever have started keeping Bitcoins in their wallets. As a result, the amount of BTC deposited in the exchanges is decreasing every day. Everyone knows that BTC is the most popular trading pair with any other crypto. But if the exchange doesn't have bitcoins, their business will go downhill.

That's why some exchanges have created their own coins with the same value as real Bitcoins by placing stablecoin collateral with bitcoin equivalents! Since exchanges do not immediately add crypto trading on their platforms to the blockchain, this leverage is difficult or almost impossible to capture. Because, common users don't understand anything.

But what is there to worry if the daily activities of the users are not disrupted? Of course there is. Exchanges that make fake bitcoins are really weak exchanges! And, trading in such an exchange is very risky! Therefore, it is better to do most of the transactions on the top exchanges according to the exchange rating on the Coinmarketcap site!

[Doan9269]

There have been so many copycats of bitcoin and we have loads of them on centralized exchanges, when you look at their logo, it has little resemblance to that of bitcoin but i think only newbies are prone to fall a victim on wrong intended coin, some has their name branded eith a blend of bitcoin in it, but for the experienced users, they will always know the difference and identify the fake ones, that's why we strongly recommend the use of bitcoin only supported hardware wallets for the storage of our coins than using compromising centralized exchanges loaded with plenty shittys.

[Marvelman]

I suppose it's possible, but that would be a very risky move for exchanges. I mean, if an exchange starts "printing" bitcoins that it doesn't have coverage for, what happens if all its clients start withdrawing bitcoins to their private wallets?

[Z-tight]

I mean, if an exchange starts "printing" bitcoins that it doesn't have coverage for, what happens if all its clients start withdrawing bitcoins to their private wallets?

Bitcoin cannot be printed, it isn't fiat, miners mine bitcoin and that is how new bitcoins are created. Clients can't withdraw clones or copycats of the bitcoin name to their private bitcoin wallets because the chains or network are different and can't work together, for example you cannot withdraw a wrapped bitcoin (wbtc) to your bitcoin wallet, it isn't bitcoin.

[Hispo]

I mean, if an exchange starts "printing" bitcoins that it doesn't have coverage for, what happens if all its clients start withdrawing bitcoins to their private wallets?

Bitcoin cannot be printed, it isn't fiat, miners mine bitcoin and that is how new bitcoins are created. Clients can't withdraw clones or copycats of the bitcoin name to their private bitcoin wallets because the chains or network are different and can't work together, for example you cannot withdraw a wrapped bitcoin (wbtc) to your bitcoin wallet, it isn't bitcoin.

Correct, besides due to the transparent nature of the Bitcoin blockchain it is possible to know how many Bitcoins each address holds.
An exchange could not claim or lie about having a sustantial quantity of Bitcoins because they would have no way to proof ownership of any address holding actual Bitcoins.

It is similar to what happens to Faketoshi, claiming to own some especific addresses but not being able to sign a message, if an exchange cannot sign a message from their alleged addresses, then they have no control over those coins, as simple as that.

[franky1]

during the luna fiasco.. we seen binance have many customers trying to get out of luna ,, and then into bitcoin.. BUT binance didnt want to approve most bitcoin withdrawals. instead they pushed people into moving their binance bitcoin "balance" through their sidechain to other exchanges like coinbase to then withdraw

this is because coinbase held the real bitcoin in custodial reserves when creating the matched pegged bitcoin on the sidechain months/years prior.. so although people moved "value" from coinbase to binance months/years ago via the sidechain. where binance had the sidechain 'value' they did not have he reciprocal custodianised reserve bitcoin of that peg

imagine if one day. coinbase just stopped supporting the side chain.. just decided one day it no longer recognises that network..
boom
people on binance are stuck with balance they can never claim back because coinbase is no longer listening to that network.

[Marvelman]

I mean, if an exchange starts "printing" bitcoins that it doesn't have coverage for, what happens if all its clients start withdrawing bitcoins to their private wallets?

Bitcoin cannot be printed, it isn't fiat, miners mine bitcoin and that is how new bitcoins are created. Clients can't withdraw clones or copycats of the bitcoin name to their private bitcoin wallets because the chains or network are different and can't work together, for example you cannot withdraw a wrapped bitcoin (wbtc) to your bitcoin wallet, it isn't bitcoin.

Yes, I know that. But the OP asked about fake bitcoins that exchanges supposedly create with the same value as real Bitcoins. I assumed that he was not referring to wrapped bitcoin but to the fake volume of coins on exchanges internally. That's why I said it would be a risky business for an exchange because they don't have enough real bitcoin to cover that volume.

[Agbe]

Anyone can create a token named 'Bitcoin' on a blockchain like Ethereum or BNB using smart contracts. But that's a different kind of scam. But the fake Bitcoin that I want to talk about, is actually created by some exchanges themselves!

Let me tell you. Bitcoin has a limited supply - only 21 million. Moreover, with the rise in popularity of BTC and the fear of hacking on various exchanges, more people than ever have started keeping Bitcoins in their wallets. As a result, the amount of BTC deposited in the exchanges is decreasing every day. Everyone knows that BTC is the most popular trading pair with any other crypto. But if the exchange doesn't have bitcoins, their business will go downhill.

That's why some exchanges have created their own coins with the same value as real Bitcoins by placing stablecoin collateral with bitcoin equivalents! Since exchanges do not immediately add crypto trading on their platforms to the blockchain, this leverage is difficult or almost impossible to capture. Because, common users don't understand anything.

But what is there to worry if the daily activities of the users are not disrupted? Of course there is. Exchanges that make fake bitcoins are really weak exchanges! And, trading in such an exchange is very risky! Therefore, it is better to do most of the transactions on the top exchanges according to the exchange rating on the Coinmarketcap site!

Yes, it is possible for exchanges to create fake bitcoin but the question is that, will that fake bitcoin enter another person wallet when it is sent to the receive? because in any transaction process there must be a sender and receiver who receive the coin in his or her wallet with the total figure written in it but i don't think the fake bitcoin can be seen in the recipient end or wallet. therefore, dealing with such scammers should be cautioned. the 21 million btc is a very big amount of money so for that number to be absorb by the users because of fear keeping it in their wallets might not possible because, the users who keep the btc in their wallets must eat, wear clothes and do other necessary needs in the society, so people must do exchange everyday day and every night. Most people rely only on bitcoin for survival as it is. the 21 million is always in circulation. the day when bitcoin stopped moving or in circulation, there will a very big problem in the whole world. Warning be careful  with your transactions always.

[romero121]

Scams are common in the cryptomarket. The exchange itself getting into such act is really worse. Earlier I came across a scam in which a team worked to trap people and helping them buy bitcoin at low price. The Bitcoin gets displayed on the wallet that is being developed by them. Here we won't be able to make a transaction amd later the people understood. By the time the person who trapped might've gone to some corner of the world.

[milewilda]

I mean, if an exchange starts "printing" bitcoins that it doesn't have coverage for, what happens if all its clients start withdrawing bitcoins to their private wallets?

Bitcoin cannot be printed, it isn't fiat, miners mine bitcoin and that is how new bitcoins are created. Clients can't withdraw clones or copycats of the bitcoin name to their private bitcoin wallets because the chains or network are different and can't work together, for example you cannot withdraw a wrapped bitcoin (wbtc) to your bitcoin wallet, it isn't bitcoin.

I have seen many coins that is term Bitcoin which is not actually Bitcoin but a copycat one which is always different from the real Bitcoin. They might use the name Bitcoin but something must be added to it to make it different from the original Bitcoin. If it is possible to create an exact like of the original Bitcoin, scammers might have done that become now but it is not possible and very difficult for them.

Try to look on CMC and hover up on that search button and enter the keyword bitcoin and you would find lots of coins which does have a Bitcoin word on name of it which its never been a new thing.
Lots are trying to make use of the word Bitcoin but using up other blockchains.Dont know on what they do have in mind and trying to believe that it could really get that attention on what Bitcoin
had able to attain? Thats why as a noob then it would be sensible that we should really make some indepth research about Bitcoin.You could eventually point out which one is the original one
by just looking on the numbers.

[uneng]

Can exchanges do this? If they don't own the amount of bitcoins they claim to have, it's a scam. To store bitcoins in cold wallets in order to prevent being hacked it's a security measure, but they must say to customers the exact amount of bitcoins they hold on their wallets, without inflating the numbers. Also, if an user has bitcoins deposited on the platform, they must keep funds in btc, unless there is an investment option available, so the customer has to agree in lending those funds to the platform for a determined period of time for interest.

[coolcoinz]

Could you give us examples of such fake bitcoins? Are you talking about coins with the word bitcoin, like bitcoin gold? Are you talking about coins that use bitcoin to give themselves legitimacy, like luna?
Stablecoins are also fake in a way because you cannot prove that they have collateral and that they're printing because there's a  real demand for their token. They could be printing with no demand and no collateral and we wouldn't even know it's happening.

[sheenshane]

Fake Bitcoin could be in your exchange wallet that you can't withdraw when the exchange platform doesn't have enough amount of Bitcoin on their hot wallet.  Sometimes exchange has a delayed withdrawal, not only on an exchange but possible in the gambling industry too.

Every crypto inside an exchange wallet could be fake, not only Bitcoin.  That's why don't let your coins sleep on exchange because you don't have control over it, remember always "Not your keys, Not your coin".

Even an exchange offers a feature of SAFU (Secure Asset Fund for Users) this is only their marketing strategy, anytime they have to change this feature under their term, so never trust your coin on the exchange.

[AjithBtc]

Could you give us examples of such fake bitcoins? Are you talking about coins with the word bitcoin, like bitcoin gold? Are you talking about coins that use bitcoin to give themselves legitimacy, like luna?
Stablecoins are also fake in a way because you cannot prove that they have collateral and that they're printing because there's a  real demand for their token. They could be printing with no demand and no collateral and we wouldn't even know it's happening.

Yes, I believe op have mentioned about the coins that have got the term bitcoin along. Everything is based on some form of backing, when it comes to altcoins with the term bitcoin. It is a way to get the attention of people who are new to cryptocurrency. They just fall for it considering the low price, and later understand the reality.

[DapanasFruit]

This is kinda scary, actually. We really don't know much the many things that many exchanges are getting into or the schemes they are devising while doing business. The thing is that they are doing this all because up to now there remains no clear, concise and implemented regulations even with big countries...and exchanges can be based anywhere they want to. The only thing we can do is be careful and never leave a big amount of digital assets in exchanges...if you are not planning to sell or convert them immediately.

[mk4]

Remember the proof of keys day? This is one of the main reasons it was created — to potentially expose exchanges that are insolvent.

https://www.proofofkeys.com/

*snip*

Probably shouldn't overthink this as Binance doing something shady(though I'm not saying it's impossible). The disabling of BTC withdrawals was only like an hour if I remember correctly.

[Fundamentals Of]

First, the information or data you can derive from coinmarketcap is not reliable. Does coinmarketcap have a mechanism that would know whether the volume submitted by exchanges upon which ratings and ranks are based are fake or not?

But the simple and straightforward solution to this is to avoid centralized exchanges. Your Bitcoin in custody of exchanges could really be there or not, could be fake or not. So to make sure your Bitcoin is real, keep them in non-custodial wallets.

[Nrcewker]

I suppose it's possible, but that would be a very risky move for exchanges. I mean, if an exchange starts "printing" bitcoins that it doesn't have coverage for, what happens if all its clients start withdrawing bitcoins to their private wallets?

Yup it’s definitely possible, and the OP also mentioned about the same that already few exchanges doing this shaddy thing
I mean not the popular exchanges are doing this, so why the hell you want to trade on these petty scam exchanges?
I know the scams won’t stop, but yes we can avoid it right. I also heard about this same thing few weeks ago. But what what to do regarding this?
It’s better if we keep out support for trading exchanges till Binance and Kucoin.

[nullama]

You don't own any Bitcoins if they're on an exchange.

It's basically an IOU until you actually withdraw them into your own wallet.

You need to make sure that you, and only you, have the private key to the wallet you're receiving Bitcoin.

Some exchanges even have delayed withdrawals. That's for them to ensure they have enough real Bitcoin to pay for everyone. And if they don't have enough, they will just halt withdrawals.

Don't be the one that didn't withdraw their money before it's too late.

[8rch7]

I always avoid crypto that is traded privately and is always closed in the Paramida system, in my opinion it is fake crypto and fake crypto or bitcoin, while legitimate crypto or bitcoin is crypto that is always traded openly, if there are parties claiming to be cryptocurrency developers, but there's a Pyramid scheme behind it all, so you can be sure it's all fake, the main purpose of which is to steal other people's property.