The Failure of Exchnages can never be that of Bitcoin.

[harapan]

I have read, heard close discussions, rumours and rumoured misconceptions and misunderstanding about Bitcoin as it relates with Exchanges.

As we all are aware, the ussge if centralized exchange defeats the whole idea of Bitcoin and perhaps the reason why it was created by Satoshi Nakamoto which is decentralization and self custody. Regardless of how people speak condescendingly to friends and families about backing off from investing in Bitcoin and other cryptocurrencies during the recent FTX collapse.

A bit furious about it summon myself to make this up, that the failure of an exchange can and will never be the failure of Bitcoin.
Satoshi Nakamoto who I believed mined the highest number of Bitcoin has not 1% of those Bitcoin holding's on any of those popular exchanges. That should be enough for every or any sensible human out there to mimick and imitate. I consider it pure cowardice to think that if an exchange fails that Bitcoin will fail, not even the level of crypto scams will crash it nor lead it to stunt growth and adoption. Jim Cramer has been such a stupid influencer pushing people to exit investment in crypto and also to panic sell which is wrong as he said that months behind. A dialogue with people who have seen worst in the bear market and exchange collapse will have you disciplined and leaving exchanges for good, buying the dip in the process as it also an opportunity to accumulate more satoshis.
Below are something's exchange do;

In Reality, Bitcoin is a digital gold and can actually do without exchnages.. they haven't represented Bitcoin from the very beginning, an example is that the first pizza bought with Bitcoin, had no exchange playing any role in that process.

If there were no cryptocurrencies especially Bitcoin, there wouldn't have been an exchange... Centralized Exchnages rose up after the creation of Bitcoin , are they any different from local banks? Making profits is the sole aim.

Since the rise of Centralized Exchnages they have more harm and ruins... From MT. GOX, Quadriss and to thr latest FTX collapse, all they do is put investors in doubt about the continuation of investments in crypto projects, both life savings and retirement plans have been shattered.

The bottom line of this all is that the failure of Centralized Exchnages can never be that of Bitcoin which after every bear market has been tested, the cycle continues, gather sats around and be patient for the bull.

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[fuguebtc]

I don't know where you read that news, but I've never heard of it, bitcoin and exchanges like currencies and banks. A failed bank doesn't mean the currency collapses and neither does bitcoin. I remember we also had a topic about the correlation between bitcoin and exchanges and honestly, bitcoin can work fine even without an exchange, so saying that the collapse of exchanges will drag bitcoin to collapse is the dumbest statement I've ever heard.

[Zaguru12]

so saying that the collapse of exchanges will drag bitcoin to collapse is the dumbest statement I've ever heard.

I think you missed the points OP is actually emphasizing on the facts that Exchanges collapsing doesn’t have effect on bitcoin.
The only thing Exchanges that ends collapsing with huge amounts of peoples fund impacts is the mass adoption of
Bitcoin. Because ones these investors (mostly new ones) loss there funds it discourages them to continue on the path of cryptocurrency because without the in-depth knowledge of bitcoin they take it as same. Another area is the fact that bitcoin haters always attach any crypto scam or fall to it just to wave people against it, most especially the government sponsored news outlets. You will see news heading of exchange collapse as “so so amount of bitcoin was lost due to so and so exchang collapse. This is only an agenda against bitcoin and I feel people teaching others about bitcoin should severely warned them about storing their funds on these CEXs and that it has no connection with bitcoin

[mk4]

Criticizing Bitcoin/crypto because of a centralized exchange failure has always been an idiotic criticism in the first place; always voiced out by ignorant people on social media. Those empty cans have always been the most vocal.

[Oneandpure]

You were mistake when comparison about Bitcoin and centralized exchange failure, there are not any relationship and impact when having trouble with centralized exchange market will make Bitcoin price drop. Honestly, Bitcoin not control by the owner of centralized exchange and have dependent their way keep exist in long term.

Have many exchange collapse last several years and Bitcoin still exist until reached all time high price last two years, when the moment Bitcoin under $10,000 ever have many bigger exchange collapse like Cryptopia, but Bitcoin doesn't have bigger impact and keep existing whatever happening on centralized exchange market. Don't hold or save Bitcoin in centralized exchange but use cold wallet and hardware wallet for saving your Bitcoin.

[franky1]

exchanges have a utility. (a ramp/gateway/bridge) between fiat and crypto..
however USING AS A BANK/CUSTODIAN is the big problem

letting them hold onto your value for more than the day you actually wish to trade/convert. is the risk factor.

the more they get to hoard per day, week.month. the more value hoarded. the more of a temptation it is for the owners or hackers to take


my view is this
if an exchange wants to operate. the exchange owner has to be liable to its customers. that means if share holders of exchanges are profiting from the trades. if there is a bankruptcy or hack. the share holders(as owners) need to pay up to make customers whole again.

they should not be declaring themselves as creditors/debtors whereby they get a X% of assets of a co-mingled value of company collateral.. the customers should be paid back in full first. and IF their is any remainder. then share holders can take that pennies on dollar

but to the point of the fiat world shifting blame to user stupidity and blaming bitcoin. these hacks and bankruptcies happen in the fiat world too.. there is no difference. because the bad practices of crypto leaning businesses are the fault of them doing the same 'lack of fiat security' practices of the fiat world, using fiat law and loopholes

it does not matter what currency is/was/will be using. the end result of these businesses would have been the same result

[harapan]

I don't know where you read that news, but I've never heard of it, bitcoin and exchanges like currencies and banks. A failed bank doesn't mean the currency collapses and neither does bitcoin. I remember we also had a topic about the correlation between bitcoin and exchanges and honestly, bitcoin can work fine even without an exchange, so saying that the collapse of exchanges will drag bitcoin to collapse is the dumbest statement I've ever heard.

I see you didn't take your time reading throughout the whole text there, I'll advice you take your time already to read it.

The faluire of centralized exchange has never been and will never be the downfall of Bitcoin.
It was good to hear and read from users during the FTX collapse saying they handled the entire situations gently despite majority of them  getting bankrupt by Fxt. I would be so disrespectful of me to call you a poor reader so I won't do that.

[kryptqnick]

I completely agree that logically, we cannot blame Bitcoin and it's unfair for Bitcoin to suffer reputational and/or financial losses when a centralized exchange failed. Bitcoin is not a company managing exchanges and exchanges aren't managing Bitcoin either. They are causally unrelated. That being said, not everything works out according to logic.
You know how a GPU can be a bit less common and gaming developers won't optimize their code for it? People will still be less motivated to buy that GPU, even though game devs are at fault. Similarly, if people like exchanges and  exchange fails, they'll feel less motivated to use Bitcoin, even though it's not its fault. I know the analogy isn't perfect, but I think it's okay to make a point. Consequently, the price of Bitcoin without centralized platforms or with failing centralized platforms can still decrease significantly.

[tbct_mt2]

I completely agree that logically, we cannot blame Bitcoin and it's unfair for Bitcoin to suffer reputational and/or financial losses when a centralized exchange failed. Bitcoin is not a company managing exchanges and exchanges aren't managing Bitcoin either. They are causally unrelated.

Bitcoin is only one of cryptocurrencies on a centralized exchange. A collapse of any centralized exchange does not relate to Bitcoin. Bitcoin has its market, has its price and volatility. If a centralized exchange has bad fund management for themselves and for users, they are responsible for bank run, collapse anytime.

They collapse usually not because of Bitcoin but because of tokens. Tokens are more easily to have dumps like Terra $LUNA, $UST, $FTT token from FTX exchange. Who will be able to dump $BTC from $17,000 to $1,700 in 24 hours? I believe we don't see it with Bitcoin nowadays and in future. With altcoins, we see a lot of dumps by panic sells, liquidations, rug pulls.

[albon]

Criticizing Bitcoin/crypto because of a centralized exchange failure has always been an idiotic criticism in the first place; always voiced out by ignorant people on social media. Those empty cans have always been the most vocal.

Yes, this is true, because the main responsible for the failure of any central exchange is the central authority responsible for it and its team. No one can blame Bitcoin for the failure or collapse of the central exchange. This is far from true. Bitcoin is alive even before the emergence of these shit exchanges and after the failure and collapse of many central exchanges, Bitcoin was able to maintain its market value and the confidence of investors in it, because it is indeed digital gold and one of the best safe and reliable currencies over the years. Only ignorant and skeptical people throw these false accusations against Bitcoin due to their lack of knowledge.

[uneng]

It really doesn't make sense to say bitcoin is guilty for the failure of exchanges. Their failure is totally related to their own mistakes when operating their businesses poorly. Sometimes it's due to lack of security and professionalism, which put customers' funds under risk of hacks, and sometimes it's due to the bad intentions of the CEOs themselves, who simply want to play with customers' funds without caring if they will lose it or not, as they know if lost, they can claim the company went bankrupt and still keep the money left through Chapter 11, which works as a legitimation of the scam by the law.

[OgNasty]

Centralized exchanges have a few potential nightmares.  First, you have hacks that steal customer funds.  Then you have KYC leaks that expose people's identity and financial situation.  Finally, you have misuse of customer funds by the exchange themselves, a la FTX.  When you consider all the things that could go wrong with centralized exchanges, and all the ways they use your money to make money without your knowledge or consent, and it seems like you'd be better off taking the responsibility of holding your crypto into your own hands.  This can be scary, but there are ways to protect yourself.  When you put your funds on an exchange, you're trusting a whole lot of individuals to make the right decisions.

[dothebeats]

I don't know where you read that news, but I've never heard of it, bitcoin and exchanges like currencies and banks. A failed bank doesn't mean the currency collapses and neither does bitcoin. I remember we also had a topic about the correlation between bitcoin and exchanges and honestly, bitcoin can work fine even without an exchange, so saying that the collapse of exchanges will drag bitcoin to collapse is the dumbest statement I've ever heard.

Exchanges hold bitcoin and crypto, and if one exchange gets hacked, guess where some of those coins will go?

That's right. It will get sold, leading to collapse in price plus the uncertainty of investors on the severity of the hack. There's also that false impression that the public—and also the uninformed investors—has built over the years that when an exchange gets hacked, bitcoin may also 'be' hacked, which then causes panic sells that affect the price.

You're correct that bitcoin can function without exchanges, but traders and investors cannot really do their thing without exchanges. Bitcoin is only dragged on the issue because it's what's being traded on the exchanges, and it's mainly the target of hacks. Bitcoin doesn't share any of these faults and insecurities of exchanges, but it may seem like it because the price of bitcoin afterwards is what's getting affected unfortunately.

[serjent05]

In Reality, Bitcoin is a digital gold and can actually do without exchnages.. they haven't represented Bitcoin from the very beginning, an example is that the first pizza bought with Bitcoin, had no exchange playing any role in that process.

This will realize if people do not need cash to buy their food.  Or does not need to exchange Bitcoin to fiat currency to gain back the capital to repurchase the goods.  Bitcoin will never be this popular and in demand without exchanges.  Although Bitcoin can really operate without exchanges, but the economy will not continue without these exchanges.  We are still living in a world where fiat currency is needed to pay for all our needs.

Now if you are a retail store and only rely on your business as a source of income, and the majority of your customers use Bitcoin as payment, can you survive if there is no exchange to convert your Bitcoin to fiat currency?

If there were no cryptocurrencies especially Bitcoin, there wouldn't have been an exchange... Centralized Exchnages rose up after the creation of Bitcoin , are they any different from local banks? Making profits is the sole aim.

Exchanges had been around even before Bitcoin is created do not make the misconception that exchanges originate from the creation of Bitcoin.

Since the rise of Centralized Exchnages they have more harm and ruins... From MT. GOX, Quadriss and to thr latest FTX collapse, all they do is put investors in doubt about the continuation of investments in crypto projects, both life savings and retirement plans have been shattered.

This is partly the fault of the investors.  They trust the centralized exchanges too much that they leave their Bitcoin in their platform while many always remind people the "not your keys, not your coins" phrase which means people need to self-custody and not leave their precious Bitcoin on the exchanges but many did not listen.

The bottom line of this all is that the failure of Centralized Exchnages can never be that of Bitcoin which after every bear market has been tested, the cycle continues, gather sats around and be patient for the bull.

I agree on this but I think some of your "pasakalye" (introduction to your thought) is misleading or impractical.

[buwaytress]

Does go without saying though, you don't blame the invention for the failure of the industry it enhanced.

I'm not quoting of course but people (media who then influenced people) blamed the internet for porn, for gambling, for Satanism, etc. Before that, television and video games for violence, serial killing. MTV for killing radio. Rock and roll for the destruction of values.

Go back further and they blamed newspapers and books for the loss of interest in conversation and the outdoors.

Never mind the condescending attitude you get as a Bitcoiner... just don't forget not to be the same to them when your use of a proven form of money helps you break out of one of the many fiat disadvantages.

[romero121]

Bitcoin is developed out of the blockchain technology where the intermediary is eliminated. This makes way for the decentralised functioning of the network. Now the existence of centralized exchanges have taken the intermediary position in some means. In one way the growth of cryptomarket is connected with the contribution from Exchanges. Same time the centralized system failures create negative image for bitcoin among the unknown people. In reality the mistake is the exchange and not the bitcoin.

[BitDane]

Definitely Bitcoin shouldn't be blame on the failure of a company, or lost of investment of any investors.  Bitcoin is created as tool and is not capable of doing such harm.  Anything that creates negative impact are those who are using or taking advantage of the Bitcoin creation.  In short, people behind this failures are the one to be blame since they have the mind to create plans and power to execute them.  Anyone blaming Bitcoin for all those mishaps and losses are just too naive and wanted to blame others instead of blaming himself for the mistakes he had done.

Bitcoin is developed out of the blockchain technology where the intermediary is eliminated. This makes way for the decentralised functioning of the network. Now the existence of centralized exchanges have taken the intermediary position in some means. In one way the growth of cryptomarket is connected with the contribution from Exchanges. Same time the centralized system failures create negative image for bitcoin among the unknown people. In reality the mistake is the exchange and not the bitcoin.

I can blame media and people who have anti-Bitcoin propaganda for that.  Since these people have hidden interests to push the blame on Bitcoin.

The media just because they wanted to sensationalize their news unintentionally guiding people to think that the culprit is Bitcoin on the poor decisions and fraud action of these centralized owner that leads their company to collapse.  The anti-Bitcoin that is always looking for the possibility of connecting Bitcoin to evil works of man.

[hatshepsut93]

In Reality, Bitcoin is a digital gold and can actually do without exchnages.. they haven't represented Bitcoin from the very beginning, an example is that the first pizza bought with Bitcoin, had no exchange playing any role in that process.

Since the rise of Centralized Exchnages they have more harm and ruins... From MT. GOX, Quadriss and to thr latest FTX collapse, all they do is put investors in doubt about the continuation of investments in crypto projects, both life savings and retirement plans have been shattered.

And where would Bitcoin be right now without centralized exchanges? It's limited to 7 transactions per second, while exchanges can have hundreds of trades per second. Bitcoin market as we know it wouldn't exist without exchanges, and millions of people would never buy Bitcoin without the convenience of centralized exchanges. So the price today would likely be below $1,000 and we would have huge problems with transaction fees if all the trades happened on chain.

You can criticize centralized exchanges, but they will not go away until Bitcoin protocol can handle enough transactions to sustain all Bitcoin trading.

[qwertyup23]

I don't know where you read that news, but I've never heard of it, bitcoin and exchanges like currencies and banks. A failed bank doesn't mean the currency collapses and neither does bitcoin. I remember we also had a topic about the correlation between bitcoin and exchanges and honestly, bitcoin can work fine even without an exchange, so saying that the collapse of exchanges will drag bitcoin to collapse is the dumbest statement I've ever heard.

I agree with the metaphor- exchanges were created in order to have some sort of convenience to the usage for the general public. To be honest, without these exchanges, the barrier of entry for a person to earn cryptocurrency can be difficult. That is why we can say that exchanges enable the public to at least earn BTC for the various wallets they offer.

Unfortunately, with convenience comes running the risk of getting scammed. Along with this, lots of exchanges have been numerously hacked and hundreds to thousands of BTCs were stolen in the process.

[sheenshane]

In Reality, Bitcoin is a digital gold and can actually do without exchnages.. they haven't represented Bitcoin from the very beginning, an example is that the first pizza bought with Bitcoin, had no exchange playing any role in that process.

If there were no cryptocurrencies especially Bitcoin, there wouldn't have been an exchange... Centralized Exchnages rose up after the creation of Bitcoin , are they any different from local banks? Making profits is the sole aim.

But to be honest, those centralized exchanges bring convenience for most people or Bitcoin users.
There's a benefit but the problem is that it's a mistake made by the centralized exchange that could also have an effect on Bitcoin's reputation and also of course on the price.  Exchange acted as a middleman per transaction when there was trade and to protect people against fraud and this centralized exchange was raised.

There's nothing wrong with me if we will use a centralized exchange as long as never store your coin on exchange for a long time.
They also contributed an awareness of Bitcoin among the people and criticizing failure doesn't make sense to me but instead, learn from this mistake and never leave your crypto to them.