Trust and transparency in crypto?

[ianhope327]

Dear Friends,

I am working on a startup idea focused on trust and transparency within financial institutions and would love to hear your thoughts and insights. Our goal is to determine how can we truly trust the financial institution that hold our money, specifically around the crypto market but broadly around all financial institutions. While these questions center around crypto, please answer it whether you know crypto at all or bank with any digital banking institutions.

Specifically, I am hoping to solve the problem of whether we accelerate the building of trust with a company and its customers using a technology platform. Your help here would be immensely useful.

Product Survey Introduction
Trust is hard to build and can be lost instantly. Really, the only way for an institution to be “trusted” is to be around for a really long time or be the “biggest” but we all know that being the biggest in the industry such as Silicon Valley Bank, Lehmans, Enron, in crypto FTX/Binance/Quadriga/MtGox, does not mean they are trustworthy. So how do we know who we can trust when even our biggest institutions have let us down? The status quo has not changed despite the failures of multiple industries we’ve seen in the past few years. How do we hold these financial institutions accountable for their actions?
We’re a small stealth startup passionate to change the status quo and are looking to solve the problem of trust in the crypto space. What we hope to build is a product that can help companies who are truly authentic, to build trust with users in a meaningful way, and conversely, a way for users to validate and authenticate a company’s on and off-chain activities as legitimate.

We want to figure out what information you use to determine how to trust financial institutions that are holding your money. While everything on the blockchain is 100% transparent, there are many things that operate outside the blockchain in Crypto (Fiat transactions, daily operations etc) that create incentive for bad actors to cheat (i.e FTX using client funds to cover trading losses).

We are trying to conduct user research to understand if the product we’re building will solve the problem of trust and transparency in the financial industry and really need your help!

Please fill out the google survey here:
https://docs.google.com/forms/d/e/1FAIpQLSf8aVTYmAHx0qJYhR1Wt5bQf5zSnQXtWI73C2El1N8lz1Kd5Q/viewform?usp=sf_link

Thank you for all your help and support!
Sincerely,
Ian

[Tuske.Network]

This should be moved elsewhere

[AB de Royse777]

The only reason to use any of the exchange (centralized) is just because they served my needs and nothing went wrong. There are no passion, no love or anything else for any of these centralized exchanges. I filled up the form but it seems not all the questions and the answers are synced. When you are asking by addressing "them" it's really confusion who are them.

[Pmalek]

Our goal is to determine how can we truly trust the financial institution that hold our money, specifically around the crypto market but broadly around all financial institutions.

We can't! That's why we have Bitcoin. Those are two different worlds. Traditional finance requires absolute control, and is susceptible to fraud and manipulation. Not to mention the dangers of centralizing data and money under one roof. With Bitcoin, everyone controls their own fate, and I don't have to trust you to do the right thing. If you mess something up on your end, it doesn't affect me or the money I control.

[hugeblack]

Without ads and paid campaigns, whatever the service is good, you will not have a large customer base, so you must have a good marketing team. Above all, you need to make your exchange works, an easy UI while ensuring the safety of customer money, liquidity, and answering all their questions, so at first you should focus on:

 - Easy interface.
 - Customer funds safety and liquidty.
 - Support team speed.

After time and gain customer base, you should focus on

 - Customer funds safety.
 - advertisements.
 - The speed of the support team response.

[UmerIdrees]

The only reason to use any of the exchange (centralized) is just because they served my needs and nothing went wrong. There are no passion, no love or anything else for any of these centralized exchanges. I filled up the form but it seems not all the questions and the answers are synced. When you are asking by addressing "them" it's really confusion who are them.

In other words, we should only use centralzied exchange for trading purpose and as soon as the trading is finished, the free up funds should be moved to the decentralzied wallet. No matter how good the exchnage is, there is also a risk of single point of failure and one can lose everything store in the centralized exchange as soon as the exchange go offline or disables withdrawal for whatever reason. We have withness the FTX exchange and after that we should be even more care.

I didn't fill up that google form as i do not feel any reaosn to do so. If the OP is looking to find any thing good in the centralzied exchnage for long term crypto holding, then i am afraid this is a wrong approach.

[Vod]

In other words, we should only use centralzied exchange for trading purpose and as soon as the trading is finished, the free up funds should be moved to the decentralzied wallet.

That is the recommended best practice, but most users will not do that.  Kind of like leaving the house with your gun unholstered, scanning the horizon for adversaries.   If you have to take such extreme steps for such an off chance, is it worth it?    I'd rather put as much coin there as I can afford to lose, and forget about it / enjoy my life.

[AB de Royse777]

This should be moved elsewhere

I missed it. You seem knowledgeable :-D. Good thing!

In other words, we should only use centralzied exchange for trading purpose and as soon as the trading is finished, the free up funds should be moved to the decentralzied wallet.

Your own wallet where you have your own custody. Other day, I met a person who lost his crypto in an exchange while he moved the coins for trading. Usually he does not keep crypto in exchanges. Lesson is, when your luck is hard, you can lose the funds you moved in the exchange only for a quick trade.

[Z-tight]

We want to figure out what information you use to determine how to trust financial institutions that are holding your money.

I'm sorry, but when we use BTC we use it in a trustless manner, we do not have to trust any financial institution and allow any of them to hold our money, not your keys is not your coins. If you give a financial institution your money, you give the power to lose it in fractional reserve scam, or to confiscate it and ask you for extra verification at anytime, etc. If you use BTC, you should hold your money only in your self custody.

[peter0425]

I'm sorry, but when we use BTC we use it in a trustless manner, we do not have to trust any financial institution and allow any of them to hold our money, not your keys is not your coins. If you give a financial institution your money, you give the power to lose it in fractional reserve scam, or to confiscate it and ask you for extra verification at anytime, etc. If you use BTC, you should hold your money only in your self custody.

Well that was really the main purpose of bitcoin, right?

For us to use money without the help of any third party. Sadly many people seem to be not as confident when there is no authority looming behind their backs. People think that without an institution controlling something then it is no longer trustworthy. But those institutions may be even more harmful as there’s too much going on internally for you to notice.

[Maus0728]

It's really difficult to do transparency in financial institutions because there's bound to be some confidential stuff and private matters that's needed to be addressed and I think that what you're trying to do is going to be really difficult and will definitely be met with a lot of resistance, it's definitely not something you'd want in your project especially for a start up, people will conspire against you after all. Plus, bitcoin is already doing all of that with the addition of pseudonymity so it's difficult to be excited about your stuff.

[ianhope327]

Thank you all for your input. Here’s what I've gathered:

1. Distrust in centralized exchanges (CEX) and traditional finance platforms.
2. Use CEX for trade execution certainty, but prefer decentralized exchanges (DEX) when possible. Best practice: transfer funds to your own wallet after using CEX, though many don’t follow this.
3. Blockchain and DEX eliminate intermediaries, yet people still seek intermediaries for trust, which often fail.
4. Trusted and transparent financial institutions are rare or non-existent for most people.

CEX appeals to non-advanced crypto users for easier onboarding, trading, and better support. Are there any CEX that you believe build trust and safety effectively, or is this still lacking today?