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Author Topic: Who control our bitcoins? WE do!! ☆ BANK RUN ☆  (Read 4382 times)
erre
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January 21, 2015, 06:16:41 PM
Last edit: January 25, 2015, 10:51:59 AM by erre
 #1

For many users, included me, there are good chanches that the exchangers are acutually doing what banks usually do: operating on fractional reserve.

This is extremely dangerous for bitcoin, besides the price tanking because non-existent bitcoins are currently traded. More than that, letting them to do it invalidate the whole bitcoin concept, a perfect money for an untrusted network.

Bitstamp is constantly refusing to do an audit, also after all the shit that happened. Me and many others do not trust they on their word about not operating on fractional reserve, but they refuse to submit proof because they think they are " too big to fail". They are acting just like a bank, and by all the chanches operating under fractional reserve (maybe, also legally). Let's prove them wrong!

I want to organize a bank run, somebody can help me?



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January 21, 2015, 06:54:30 PM
 #2

For many users, included me, there are good chanches that the exchangers are acutually doing what banks usually do: operating on fractional reserve.

This is extremely dangerous for bitcoin, besides the price tanking because non-existent bitcoins are currently traded. More than that, letting them to do it invalidate the whole bitcoin concept, a perfect money for an untrusted network.

Bitstamp is constantly refusing to do an audit, also after all the shit that happened. Me and many others do not trust they on their word about not operating on fractional reserve, but they refuse to submit proof because they think they are " too big to fail". They are acting just like a bank, and by all the chanches operating under fractional reserve (maybe, also legally). Let's prove them wrong!

I want to organize a bank run, somebody can help me?





If you put your coins on an exchange they aren't your coins anymore because you dont own the private keys, you should have known that.
Putting bitcoin in a centralized exchange was always a bad idea, ideal for scammers. Im not putting a single btc in an exchange until decentralized ones appear.




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erre
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January 21, 2015, 07:22:37 PM
 #3

For many users, included me, there are good chanches that the exchangers are acutually doing what banks usually do: operating on fractional reserve.

This is extremely dangerous for bitcoin, besides the price tanking because non-existent bitcoins are currently traded. More than that, letting them to do it invalidate the whole bitcoin concept, a perfect money for an untrusted network.

Bitstamp is constantly refusing to do an audit, also after all the shit that happened. Me and many others do not trust they on their word about not operating on fractional reserve, but they refuse to submit proof because they think they are " too big to fail". They are acting just like a bank, and by all the chanches operating under fractional reserve (maybe, also legally). Let's prove them wrong!

I want to organize a bank run, somebody can help me?





If you put your coins on an exchange they aren't your coins anymore because you dont own the private keys, you should have known that.
Putting bitcoin in a centralized exchange was always a bad idea, ideal for scammers. Im not putting a single btc in an exchange until decentralized ones appear.

This is a problem, but what really matters is that they can " moltiplicate" my bitcoin. That's operating on fractional reserve, all banks do it, and there are clues that exchangers are doing it too.
Look how they multiplicate the total circulating btc (substitute the word " loan" with " withdraw" ):


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January 23, 2015, 07:14:29 AM
 #4

and certainly investors play an important role as well Smiley
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January 23, 2015, 01:26:50 PM
 #5

we are all waiting for decentralized exchange like open bazar, they should finish this year their job
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January 23, 2015, 02:25:51 PM
 #6

Only a fool would have more than 10% of they're crypto on an exchange.  You should assume at any moment you'll lose all of it.
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January 23, 2015, 02:43:58 PM
 #7

I don't understand why people actually use exchanges, I don't personally use any. Not a single one has my details on. I only trade P2P for my bitcoins the way it was intended. LocalBitcoins, Bitcoin-OTC, real life... 2015 will (I hope) be the year of the launch of P2P Bitcoin exchange platforms. What I mean by this is an web-app style orderbook system like the exchanges we have now, but the trades will be peer-to-peer and no coins will be stored on any crappy little centralised website.

If you don't like it, don't use it. Money talks.
I don't use it, and I don't have to give a fuck about it (until it crashes the price of my coins of course).

EDIT:
Look at some of these upcoming alternatives to your regular bendoverforthegovernment exchanges.
https://bitsquare.io/
http://www.coinffeine.com/

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January 23, 2015, 02:53:30 PM
 #8

Only a fool would have more than 10% of they're crypto on an exchange.  You should assume at any moment you'll lose all of it.

So in your words, whales are fools for having millions worth of value on exchanges...

But you don't mind if they pump Bitcoin 20% higher, right?

Figure out how they achieve that without having much funds on exchanges.

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January 23, 2015, 02:57:51 PM
 #9

Only a fool would have more than 10% of they're crypto on an exchange.  You should assume at any moment you'll lose all of it.

So in your words, whales are fools for having millions worth of value on exchanges...

But you don't mind if they pump Bitcoin 20% higher, right?

Figure out how they achieve that without having much funds on exchanges.

Just because they have milions on the exchange does not mean it is their entire btc holdings. 


Perhaps I should rephrase though, if you have over 10% of your wealth on an exchange you are a moron. 
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January 23, 2015, 03:00:21 PM
 #10

Only a fool would have more than 10% of they're crypto on an exchange.  You should assume at any moment you'll lose all of it.

So in your words, whales are fools for having millions worth of value on exchanges...

But you don't mind if they pump Bitcoin 20% higher, right?

Figure out how they achieve that without having much funds on exchanges.
Read my post above yours. Supply and demand still applies. Price still moves.

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January 23, 2015, 03:43:10 PM
 #11


This is extremely dangerous for bitcoin, besides the price tanking because non-existent bitcoins are currently traded. More than that, letting them to do it invalidate the whole bitcoin concept, a perfect money for an untrusted network.


Not sure what you mean over there because when we trade, even if we get the levarage ratio of 1:20 (for example) the deposit on what we have with them will be used to cover our position. In other words, they will not allow us to lose more than what we pay for. And if the trade went against us, they will force sell or buy on the prevailing price, something similar to margin call.

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January 23, 2015, 04:13:03 PM
 #12


This is extremely dangerous for bitcoin, besides the price tanking because non-existent bitcoins are currently traded. More than that, letting them to do it invalidate the whole bitcoin concept, a perfect money for an untrusted network.


Not sure what you mean over there because when we trade, even if we get the levarage ratio of 1:20 (for example) the deposit on what we have with them will be used to cover our position. In other words, they will not allow us to lose more than what we pay for. And if the trade went against us, they will force sell or buy on the prevailing price, something similar to margin call.

Wrong! this is not leverage, I think that many people here are not getting what I means by fractional reserve

An audit won't be a problem unless they are operating under fractional reserve. If so, THEY ARE CREATING "FAKE" BITCOINS offchain, therefore a part of the bitcoin currently traded on exchangers does not exist.

THIS WOULD GREATLY AFFECT THE PRICE TOO, I specify it because seems that a lot of people only bother about price, because there would be more traded bitcoin than the real amount people want to sell.

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January 23, 2015, 04:16:26 PM
 #13

The people who have done this have immediately been caught out by the Bitcoin community, the thing is, bitcoins have a hard limit of 21 million, if exchanges ever attempted to rig their trade volume to something unrealistic they would immediately get caught, especially if they're dumb enough to post up their numbers.

Be assured that people have already thought of this and are keeping an eye on things, there will be exchanges and companies that certainly try don't get me wrong, but they are very often found out, this is partly why I'm so skeptical of the Bitcoin ETF people keep ranting about for example.
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January 23, 2015, 04:29:57 PM
Last edit: January 23, 2015, 04:53:57 PM by erre
 #14

The people who have done this have immediately been caught out by the Bitcoin community, the thing is, bitcoins have a hard limit of 21 million, if exchanges ever attempted to rig their trade volume to something unrealistic they would immediately get caught, especially if they're dumb enough to post up their numbers.

Be assured that people have already thought of this and are keeping an eye on things, there will be exchanges and companies that certainly try don't get me wrong, but they are very often found out, this is partly why I'm so skeptical of the Bitcoin ETF people keep ranting about for example.

How can people know if bitstamp is operating on let's say 2% fractional reserve, if they refuse to audit?

If bitstamp operate with 102% of the BTC they currently have (" only"  2% fractional reserve) they can use a monetary multiplier  of 2x, so they CAN double the money. They don't need to cash out all this money, i suppose they CAN'T cashout bitcoin, but they can in fiat, if they suppose a small fraction of deposited btc will remain offchain.

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January 23, 2015, 04:39:12 PM
 #15

Exchanges are like banks, they always have the possibility to use FRB. since the fake coins comes from their database, not from the cold storage, an audit of the cold storage will not help

Traditionally, banks using FRB is because they can offer loan to help others using those saving money that seldom moves for decades, and earn interest in the process. But nowadays in developed country, there are seldom some company desperately need loan to eagerly expand business (maybe only bitcoin mining chips company Grin). A bitcoin loan is totally not practical at all, then exchange's only motivation to use FRB is to manipulate the price, but that might create a panic and withdraw, I guess they don't want to start a fire on themselves


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January 23, 2015, 04:58:42 PM
 #16

Exchanges are like banks, they always have the possibility to use FRB. since the fake coins comes from their database, not from the cold storage, an audit of the cold storage will not help

Traditionally, banks using FRB is because they can offer loan to help others using those saving money that seldom moves for decades, and earn interest in the process. But nowadays in developed country, there are seldom some company desperately need loan to eagerly expand business (maybe only bitcoin mining chips company Grin). A bitcoin loan is totally not practical at all, then exchange's only motivation to use FRB is to manipulate the price, but that might create a panic and withdraw, I guess they don't want to start a fire on themselves



That's why we need an audit of ALL the money. All they need is to stop their service for an hour and deposit onchain all the money.

You are right when you say they are not loaning, but.... can't they only sell bitcoins (a very little percentage of their volume) created out of thin air and withdraw fiat?


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January 23, 2015, 05:42:38 PM
 #17

The people who have done this have immediately been caught out by the Bitcoin community, the thing is, bitcoins have a hard limit of 21 million, if exchanges ever attempted to rig their trade volume to something unrealistic they would immediately get caught, especially if they're dumb enough to post up their numbers.

Be assured that people have already thought of this and are keeping an eye on things, there will be exchanges and companies that certainly try don't get me wrong, but they are very often found out, this is partly why I'm so skeptical of the Bitcoin ETF people keep ranting about for example.

How can people know if bitstamp is operating on let's say 2% fractional reserve, if they refuse to audit?

If bitstamp operate with 102% of the BTC they currently have (" only"  2% fractional reserve) they can use a monetary multiplier  of 2x, so they CAN double the money. They don't need to cash out all this money, i suppose they CAN'T cashout bitcoin, but they can in fiat, if they suppose a small fraction of deposited btc will remain offchain.

There won't be exact figures obviously, but it's easy to estimate, for instance, with mt.gox the price was going stupidly high thanks to the now nicknamed 'willy bot' ( Think I got that right ) and a bunch of people had worked out that Bitcoin's price went high because of that trading bot bumping up the price rather than it being because of any legitimate trade volume.

Also, don't forget about the blockchain, even if a company tries hard to hide it's tracks, currency can still flow from one address to another, so in the end it's just a matter of time before it's tracked down.
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January 23, 2015, 06:03:22 PM
 #18

The people who have done this have immediately been caught out by the Bitcoin community, the thing is, bitcoins have a hard limit of 21 million, if exchanges ever attempted to rig their trade volume to something unrealistic they would immediately get caught, especially if they're dumb enough to post up their numbers.

Be assured that people have already thought of this and are keeping an eye on things, there will be exchanges and companies that certainly try don't get me wrong, but they are very often found out, this is partly why I'm so skeptical of the Bitcoin ETF people keep ranting about for example.

How can people know if bitstamp is operating on let's say 2% fractional reserve, if they refuse to audit?

If bitstamp operate with 102% of the BTC they currently have (" only"  2% fractional reserve) they can use a monetary multiplier  of 2x, so they CAN double the money. They don't need to cash out all this money, i suppose they CAN'T cashout bitcoin, but they can in fiat, if they suppose a small fraction of deposited btc will remain offchain.

There won't be exact figures obviously, but it's easy to estimate, for instance, with mt.gox the price was going stupidly high thanks to the now nicknamed 'willy bot' ( Think I got that right ) and a bunch of people had worked out that Bitcoin's price went high because of that trading bot bumping up the price rather than it being because of any legitimate trade volume.

Also, don't forget about the blockchain, even if a company tries hard to hide it's tracks, currency can still flow from one address to another, so in the end it's just a matter of time before it's tracked down.

That's if a company is using the blockchain and not an internal database SUPPOSEDLY backed by btc somewhere on the blockchain.

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January 23, 2015, 07:04:07 PM
 #19

i think will born new trusty bank later
i beieve it willl happened



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January 23, 2015, 08:28:20 PM
 #20

The people who have done this have immediately been caught out by the Bitcoin community, the thing is, bitcoins have a hard limit of 21 million, if exchanges ever attempted to rig their trade volume to something unrealistic they would immediately get caught, especially if they're dumb enough to post up their numbers.

Be assured that people have already thought of this and are keeping an eye on things, there will be exchanges and companies that certainly try don't get me wrong, but they are very often found out, this is partly why I'm so skeptical of the Bitcoin ETF people keep ranting about for example.

How can people know if bitstamp is operating on let's say 2% fractional reserve, if they refuse to audit?

If bitstamp operate with 102% of the BTC they currently have (" only"  2% fractional reserve) they can use a monetary multiplier  of 2x, so they CAN double the money. They don't need to cash out all this money, i suppose they CAN'T cashout bitcoin, but they can in fiat, if they suppose a small fraction of deposited btc will remain offchain.

There won't be exact figures obviously, but it's easy to estimate, for instance, with mt.gox the price was going stupidly high thanks to the now nicknamed 'willy bot' ( Think I got that right ) and a bunch of people had worked out that Bitcoin's price went high because of that trading bot bumping up the price rather than it being because of any legitimate trade volume.

Also, don't forget about the blockchain, even if a company tries hard to hide it's tracks, currency can still flow from one address to another, so in the end it's just a matter of time before it's tracked down.

That's if a company is using the blockchain and not an internal database SUPPOSEDLY backed by btc somewhere on the blockchain.


In order for it to be a legitimate transaction it has to be on the actual blockchain, anything happening in the internal database would be fake and completely meaningless to the cryptocurrency itself. You're completely missing that this was the whole point the blockchain was created, it's a public ledger that people have to use in order to make legitimate transactions.

I think you need to go and do some reading on how the blockchain actually works before running around making doomsday comments like everybody else who doesn't understand cryptocurrencies does.
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