p2pbucks (OP)
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August 16, 2014, 02:41:48 AM Last edit: August 16, 2014, 02:52:23 AM by p2pbucks |
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Hey guys, I wrote an article about "Fraudulent trading in Chinese exchanges " on 8/14 < http://weibo.com/3487056872/BifU0r6re > which gained tons of replies from chinese bitcoin community. In short : Now Chinese exchanges really have big portion on whole global trading volume (about 80%). But they don't have proof of 100% reserve.As matter of fact , they are faking many "virtual bitcoins" in their trading system and selling them to players, that's the main reason why bitcoin price is keep dropping like a stone. We need to boycott these exchanges. Any ideas ? Bitcoin Exchanges Trading Volume Distribution(24hr)ref: Pie chart: http://p2pbucks.com/altcoin/pie.phpFraudulent trading in Chinese exchanges: http://p2pbucks.com/?p=12021
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Bitcoin addresses contain a checksum, so it is very unlikely that mistyping an address will cause you to lose money.
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Brewins
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August 16, 2014, 02:49:01 AM |
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Since when the facts are kwown? Anything that correlates the fall time(around august 12) to the alleged lack of funds of the chinese exchanges? And I cant see your article, when I go to the page, I got nothing but a blank page Hope we don't see a Gox with steroids event cause of the chinese exchanges
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bigasic
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August 16, 2014, 02:54:37 AM |
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Too bad I dont read chinese, but wont it eventually work its way out, when they can move those coins to another exchange? im assuming that they can trade and sell amongst themselves, but once it hits the blockchain it will be seen as a double spend or something?
I dont know how to prevent it. We couldn't prevent mt.gox and we knew something was fishy with them for months. I guess what someone can do is try to move their coins from the chinese exchanges to bitstamp and see what happens. or do I have it wrong?
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bigasic
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August 16, 2014, 02:56:08 AM |
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So you are saying that the chinese exchanges are selling coins that they do not have, correct?
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p2pbucks (OP)
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August 16, 2014, 03:01:08 AM |
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So you are saying that the chinese exchanges are selling coins that they do not have, correct?
Yes, that's what i mean . (Really hope you can read chinese . ) We call for that many times , but many of them still refuse to show their proof of reserves . Now we try to persuade users to withdraw from these exchanges , but i doubt whether it's working
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lyth0s
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August 16, 2014, 03:02:14 AM |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
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p2pbucks (OP)
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August 16, 2014, 03:07:25 AM Last edit: August 16, 2014, 03:24:06 AM by p2pbucks |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar financial product )on their platform . This strategy really works on many greedy guys . AND , many Chinese players are new to crypto they don't know how to withdraw bitcoins to onchain-wallet ( blockchain.info ,qt .etc) ,onchain-wallets are too difficult for them . So , they put their bitcoins on trading platform . I know it sounds ridiculous but it's true .
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lyth0s
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August 16, 2014, 03:13:25 AM |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar finance product )on their platform . This strategy really works on many greedy guys . Does Okcoin or huobi offer interest? (I doubt it) If not, then it must just be some smaller exchanges which would count for only very little fake trades.
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p2pbucks (OP)
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August 16, 2014, 03:15:39 AM |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar finance product )on their platform . This strategy really works on many greedy guys . Does Okcoin or huobi offer interest? (I doubt it) If not, then it must just be some smaller exchanges which would count for only very little fake trades. Yes , they offer interest . OK has bishengbi project , huobi has bitvc.com
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lyth0s
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August 16, 2014, 03:20:50 AM |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar finance product )on their platform . This strategy really works on many greedy guys . Does Okcoin or huobi offer interest? (I doubt it) If not, then it must just be some smaller exchanges which would count for only very little fake trades. Yes , they offer interest . OK has bishengbi project , huobi has bitvc.com Hm... Can you show me the link (so I can have it translated online) where okcoin and huobi state that their deposits (on their exchange) are given interest? I also though Huobi was a fee-free exchange, so I have no idea how they could possibly afford that.
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gog1
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August 16, 2014, 03:23:02 AM |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar finance product )on their platform . This strategy really works on many greedy guys . Does Okcoin or huobi offer interest? (I doubt it) If not, then it must just be some smaller exchanges which would count for only very little fake trades. Yes , they offer interest . OK has bishengbi project , huobi has bitvc.com Hm... Can you show me the link (so I can have it translated online) where okcoin and huobi state that their deposits (on their exchange) are given interest? I also though Huobi was a fee-free exchange, so I have no idea how they could possibly afford that. I thought Huobi does charge a fee for shorting.
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Skoupi
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August 16, 2014, 03:25:28 AM |
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Faking trading volume is one thing and "virtual bitcoins" being bought by actual users is another. I hope.
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haploid23
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August 16, 2014, 03:25:52 AM Last edit: August 16, 2014, 03:47:56 AM by haploid23 |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar financial product )on their platform . This strategy really works on many greedy guys . AND , many Chinese players are new to crypto they don't know how to withdraw bitcoins to onchain-wallet ( blockchain.info ,qt .etc) ,onchain-wallets are too difficult for them . So , they put their bitcoins on trading platform . I know it sounds ridiculous but it's true . Even if they offer interest, you withdraw the coins, then within a few minutes, deposit back. Those few minutes that the coins are off the exchange is meaningless in terms of lost interest, however it does prove that they have the coins. Of course, everyone would have to do it relatively the same time for this to actulally work. Can't read Chinese either, and google translate sucks. So how did you come to the conclusion that they're trading with coins they don't have?
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p2pbucks (OP)
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August 16, 2014, 03:37:43 AM |
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Even if they offer interest, you with draw the coins, then within a few minutes, deposit back. Those few minutes that the coins are off the exchange is meaningless in terms of lost interest, however it does prove that they have the coins. Of course, everyone would have to do it relatively the same time for this to actulally work. Can't read Chinese either, and google translate sucks. So how did you come to the conclusion that they're trading with coins they don't have?
It should be a large amount withdraw at the same time , a small amount of withdrawing doesn't make sense. Can't read Chinese either, and google translate sucks. So how did you come to the conclusion that they're trading with coins they don't have?
They must provide proof of 100% reserve .
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lihuajkl
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August 16, 2014, 03:42:57 AM |
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So you are saying that the chinese exchanges are selling coins that they do not have, correct?
Yes, that's what i mean . (Really hope you can read chinese . ) We call for that many times , but many of them still refuse to show their proof of reserves . Now we try to persuade users to withdraw from these exchanges , but i doubt whether it's working Even they show their proof of reserves, it is still difficult for us to see how many deposit and withdrawal, whether they match! If they plan to do something wrong, they will find a way. So we‘d better go away from this type of exchange.
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haploid23
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August 16, 2014, 03:50:13 AM |
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They must provide proof of 100% reserve .
Yes but not showing how much they have in their internal wallets doesn't mean they don't have it. So did you come to the conclusion that they're giving out "fake" btc just because they don't publicly show their wallets? Again, I can't read Chinese, so it would be nice if you also provided an English synopsis to the article. Or maybe someone can translate (better than google).
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jabo38
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mining is so 2012-2013
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August 16, 2014, 03:56:37 AM |
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I am on record going months back saying that I think the Chinese exchanges are cheating, creating fake sells and fake volumes, and operating on bitcoins (and litecoins) that don't exist and it was just a matter of time before they got slammed and a crash followed.
I think it can get much worse than this too.
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p2pbucks (OP)
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August 16, 2014, 04:12:25 AM |
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Yes but not showing how much they have in their internal wallets doesn't mean they don't have it. So did you come to the conclusion that they're giving out "fake" btc just because they don't publicly show their wallets?
To get 100% complete convincing proof you must investigate their backend servers and databases .But look at the bitcoin volume chart in 24hr & litecoin trading volume in recent three days , these exchanges are highly suspicious . And they refuse to provide proof of reserve even many chinese users ask them to. (check weibo in first post) So what we should do ?
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fryarminer
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August 16, 2014, 04:31:44 AM |
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If people thought that chinese exchanges were selling them non-existent coins, the way to quickly find out if its true or not is for people to pull their BTC off of the exchanges and see if all the sudden they run into "technical difficulties" and stop withdrawls.
Why they reluctant to withdraw ? because the situation is some of them provide interest of storing bitcoins by lending and borrowing (or some similar financial product )on their platform . This strategy really works on many greedy guys . AND , many Chinese players are new to crypto they don't know how to withdraw bitcoins to onchain-wallet ( blockchain.info ,qt .etc) ,onchain-wallets are too difficult for them . So , they put their bitcoins on trading platform . I know it sounds ridiculous but it's true . Once you get into lending and borrowing you fabricate coin that isn't there, just the same as a bank lends and borrows money that doesn't exist.
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Gargulan
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August 16, 2014, 04:37:27 AM |
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So you are saying that the chinese exchanges are selling coins that they do not have, correct?
If this is true, they are doing quite well considering the price has dropped quite a bit. They can buy back the coin at lower or possibly much lower price.
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sly5am
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August 16, 2014, 04:39:40 AM |
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Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious
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btcguys
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August 16, 2014, 04:53:42 AM |
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Now i have concerns and I want to know how good are Bitstamp, coinsetter and BTC-e
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zedicus
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CryptoTalk.Org - Get Paid for every Post!
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August 16, 2014, 05:06:04 AM |
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Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious
There are legitimate reasons to not give out their cold storage addresses, one of which being that if you can figure out how much total BTC they have on deposit, then if you know how much they have in cold storage then you know how much they have in their hot wallet, potentially making them a target for an attack. The fact that chinese exchanges do not charge trading fees certainly makes it look like they are somehow bilking BTC from their customers as it makes little sense as to how they are making their money.
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halfawake
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August 16, 2014, 05:30:57 AM |
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Yeah, this does seem like a legit reason for the big drop in price. And China doesn't have anywhere near the kind of regulations that exist in the USA and Europe around these sort of things, so I'd be surprised if they crack down on it. These exchanges are bringing down the whole bitcoin economy, it's quite a shame imho.
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BTC: 13kJEpqhkW5MnQhWLvum7N5v8LbTAhzeWj
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rapport
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August 16, 2014, 06:39:07 AM |
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If the Chinese exchanges have to acquire btc then this could push the price up
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mercistheman
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August 16, 2014, 06:49:55 AM |
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Perfect time to buy
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Sheldor333
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August 16, 2014, 02:58:58 PM |
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There is always a possibility of exchanges faking of what they really have and using it to cheat so they would earn more money. But if there was a way to know what each exchange has that would be easier to find out and maybe it would avert some of them from doing it.
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iarsenaux
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August 17, 2014, 06:12:21 AM |
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If the Chinese exchanges have to acquire btc then this could push the price up
i doubt it will happen that way. What if they took the same path with Gox? Filing bancruptcy since they don't have enough holdings to cover everything. Then price will go the opposite side.
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NUD
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August 18, 2014, 12:51:42 PM |
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Fractional reserves are still likely to be a problem for cryptocurrencies in the same manner that it is a problem for monopoly money. The difference is that it is much easier to prove you are solvent. People should get into the habit of checking their financial institutions independently.
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@NUDTeam NEaaHBhhjaTK36mYiSvPGjSjThDWN5gXgM
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Beliathon
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August 18, 2014, 01:08:45 PM |
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Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious
The fact that chinese exchanges do not charge trading fees certainly makes it look like they are somehow bilking BTC from their customers as it makes little sense as to how they are making their money. Bingo. Anytime you can't figure out how a capitalist is making a profit, or their business model doesn't add up.... run.
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percocet
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August 18, 2014, 02:10:18 PM |
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The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...
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dlowings
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August 18, 2014, 02:16:13 PM |
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I've said this all along… People who do not have and use a local wallet and put their trust in these exchanges are going to get hurt in a big way down the road just like the people of MtGox.
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BTC donations welcome:- 1BrersvQubEKt4m2hBXDNvU1B4RiYe6J4i - Feel free to visit wiki.chainminer.com for free hardware listings, and mining info. - IRC on freenode #wiki.chainminer.com
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speculationator3000
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August 18, 2014, 03:22:55 PM |
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Perfect time to buy I bought my first Bitcoins yesterday, and I do not like how it has turned out today... What do you more experienced guys say? Will it ever get back over $550 or more? Bought at $475.... I am quite a Bitcoin newbie, but thought it would be funny to try out, and I believe it is to be used in the future ( I hope at least )
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cointalent
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August 18, 2014, 03:30:53 PM |
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Is there a way to prove that they don't have the funds to back up the coin they are selling? If there is indeed "virtual" coins being sold this could be a major problem, wouldn't that make Bitcoin more of a ponzi scheme rather than a currency?
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wasserman99
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August 19, 2014, 04:14:10 AM |
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Simply contact them and ask for the cold storage wallet address to check it yourself. why would they deny you that address? Then get suspicious
The fact that chinese exchanges do not charge trading fees certainly makes it look like they are somehow bilking BTC from their customers as it makes little sense as to how they are making their money. Bingo. Anytime you can't figure out how a capitalist is making a profit, or their business model doesn't add up.... run. This is probably true, however my question would be, how does this affect the price of bitcoin elsewhere? If exchange operators have already spent customer funds then the prices have already been affected. If the exchanges can only cover 90% for example of customer deposits, then they can simply force their customers to withdraw 90% of their balance into a wallet they control and take a loss on the other 10%, customers would not necessarily want to sell what they have left.
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SunBin
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August 19, 2014, 04:16:56 AM |
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The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...
If the volume is real, that will mean China alone have more than 50% of the daily trading volume on bitcoin. This can't possibly be right.
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derpinheimer
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August 19, 2014, 04:25:42 AM |
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The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...
If the volume is real, that will mean China alone have more than 50% of the daily trading volume on bitcoin. This can't possibly be right. Its not that odd. I dont think its all real volume (Bots, low fees, etc), but they are still really large exchanges.
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nextblast
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August 19, 2014, 12:38:59 PM |
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The massive volumes on OKCoin and Huobi sure look suspicious, especially when compared to BTC-e and Bitstamp who've been around a lot longer...
If the volume is real, that will mean China alone have more than 50% of the daily trading volume on bitcoin. This can't possibly be right. AFAIK, BTCChina has real volumn, but Huobi's and OKCoin's volumn are both fake to some extent.
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