pooya87
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March 01, 2015, 03:48:58 AM |
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Threads like these are the reason I don't read these boards that much anymore soo many misinformed and uneducated people, reading threads like these gives a me a sort of nasty brain freeze that ends up in a migraine The price us learned people must pay for bitcoin to become mainstream   exactly. recently i have been seeing a lot of posts on bitcoin failing, it is doomed and shit like that. but in fact i think it is another wave of mass manipulation of price |
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lucasjkr
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March 01, 2015, 04:27:02 AM |
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Wow. If that's the thing that worries you, Bitcoin is fine...
Not to say that Exchanges won't be hacked, now or in the future...
But as Bitcoin continues its existance, companies handling other peoples Bitcoins will be more and more regulated.... Banking might not be the best model to name, so lets say Stock Brokerages... They typically hold billions and billions of other peoples cash and investments, and there isn't really a fear that they're going to close up shop and steal all of their customers assets...
That said; I am absolutely opposed to the idea of wallet services or storing ones coins on exhanges. Bitcoin seems like it's perfect to do away with that form of middle man, so I'm always surprised that so many people do, or that so many people expect that other would... Yes, if you need to buy or sell, by all means, transfer to an exchange, do your transaction, but then transfer the proceeds to a bank or wallet under your own control.
I do suppose that there is a problem that Bitcoin exchanges have that brokerages don't have - rogue employees; a rogue employee of a brokerage can transfer shares, yes, but as soon assomone notices that happened, they can be transferred back. Likewise for cash - bankers etc can wire their customers funds to outside accounts, but A) the transaction would be immediately linked to them or their login and B) the owner of the receiving account can be identified with relative ease.
Bitcoin does away with those protections... Supposing coins in a hot wallet aren't stored in multi-sig addresses, a rogue employee at a Bitcoin exchange could pretty easily step in and transfer the hot wallet elsewhere... Private keys and the blockchain don't require any identifiers from a user, so if someone happened to have access to the private key, coins could be sent without there being a direct link to who actually initiated the transaction. And figuring out the owner of the receiving address could be next to impossible.
But, these are all issues today, which is specifically why I don't think storing coins with another party is appropriate. And probably why the bitcoin exchanges, even in the future, could face a daunting challenge in trying to get affordable insurance coverage...
If you ever do have a million dollars in bitcoins, now or in the future, and needed to use an exchange... Or just wanted to leave them there, I'd hope you'd shop around and not leave them at a place like cryptsy... or even BTC-E, as solid as they seem, and having been responsible stewards of their users funds for years now, it's still difficult for me to feel comfortable leaving big balances there without knowing who the operators are. I'd end up opting for a U.S. based entity, where the ownerhsip is known and there is a strong rule of law... Not like that helps if coins get stolen and the exchange doesn't have enough reserved to repay, but one would think that a future scammer would realize the woes he could face here and would avoid setting up shop in the U.S. in the first place...
To circle back, though... Nothing you say doesn't already apply right now. As more and more wealth is stored on the blockchain, though, hopefully those that acquire it will have the know how to secure their coins themselves... paper wallets, offline machines, etc, or at least will trust their fortunes to the exchanges whose operators are least likely to be malicious actors...
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tss
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March 01, 2015, 06:18:41 AM |
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markets and thieves will go down. the bitcoin they take will still exist and be redistributed again and again until people learn not to trust their coin to third party. very simple.
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sidhujag
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March 01, 2015, 06:21:08 AM |
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First of all I would like to start this off by stating that I am a believer in the possibility of the success of Bitcoin. This may seem like a contradiction with the title of the thread but it is not. This is because the possibility of success is very low due to the reasons which I am going to describe. At the moment bitcoin is 250$ and has been there for quite a while. Exchanges such as cryptsy, poloniex, btc-e, ect. exist to exchange btc to usd and btc to other alt coins. Circle and coinbase exchange btc to usd and are currently common way to receive USD from BTC. That is a brief summary of the current ecosystem.
Now let us imagine that bitcoin reaches "the moon" as is often wished for in the Bitcoin community. Let us imagine that one BTC is worth 1 million dollars. It is commonly accepted that these exchanges, cryptsy, poloniex, btc-e, circle, coinbase, ect. are for profit. They are not running their businesses out of altruism, but for profit. If one bitcoin is worth one million dollars, how is it remotely imaginable that these exchanges will not just run off with the coins? Even more if I have one btc at one million dollars, I will have to go through some sort of intermediary to receive my USD. This intermediary will run off with the coin because of its massive value.
The issue is a facet of human nature, greed. One bitcoin would not even have to reach 1 million usd for the above scenario to become a reality. How high does btc have to go? The 1k mark was enough for mt gox, 2k...would there still be trust? Would they all run off with the BTC? Ok how about 40k?
This is the problem of bitcoin. People steal. Especially when it is irreversible.
Thats not a bitcoin problem.. You need to expand your mind a bit.. All of those businesses will be phased out for decentralized exchanges such as the ones bitshares provides.. In short they cant run away because they wont exist |
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NiceSoft12
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March 01, 2015, 09:06:22 AM |
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OP mentioned Circle. Isn't Circle insured? So if you lose your BTC's with them you are guaranteed to get it back up to $100,000 or something?
I'm saying Circle would just run off with all the btc they had if the price exploded. By your logic today's large banks should just run off with everyone's fiat funds, the bankers disappearing to some small Caribbean island or something after some plastic surgery. There is more profit to be made simply staying in business (especially if bitcoin grows so greatly), than in a one-off crime. Not to mention the risk (given the permanence of blockchain records, absolutely untraceable mixing of huge quantities would be a challenge) that they will eventually be tracked down and caught. This By your logic, the large vaults would just run off with peoples valuable possessions. "Hey, diamonds are valuable, we're going to run off with people's gems in the safe" |
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NiceSoft12
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March 01, 2015, 09:07:19 AM |
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and banks and companies that hold people's possessions can pull inside jobs as well, just like bitcoin exchanges.
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havecoch
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March 01, 2015, 09:34:28 AM |
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Cannot Succeed ? isn't it already succeeding ? the price doesn't need to keep increasing for it to succeed. Adoption is, which is very good right now.
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holdembot
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March 01, 2015, 09:45:54 AM |
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Biggest flaw with your example of $1million per BTC is that you keep stating trading 1BTC and having too much exposure for that $1million on an exchange or wherever.
If BTC go to the moon and reach $1million per BTC, people would simply revert to trading lower decimal satoshis to accompany their own risk exposure all the way down to 1 single satoshi if the price go so high as you hinted.
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PolarPoint
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March 01, 2015, 09:54:13 AM |
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First of all I would like to start this off by stating that I am a believer in the possibility of the success of Bitcoin. This may seem like a contradiction with the title of the thread but it is not. This is because the possibility of success is very low due to the reasons which I am going to describe.
The success of bitcoin do not depend on the price of bitcoin. It can be successful when price is $100 or $1000 per piece, the key element is price stability. |
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OpenOcean
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March 01, 2015, 10:21:39 AM |
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If all exchanges ran off with the bitcoin people entrusted them with, then the value of bitcoin would plummet quickly and the thieves would be burning their own profits.
All of this can be avoided if you move your funds off of an exchange as soon as you receive them, which bitcoin allows you to do, and which you should be doing to cold store said funds.
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Sheldor333
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March 01, 2015, 10:25:52 AM |
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Why don't banks run off with all the money they have? I think it is worth to them more in the long run to have something of that value and if you are reliable you will get more profit because more people will come to you.
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Daniel91
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March 01, 2015, 10:50:42 AM |
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First of all I would like to start this off by stating that I am a believer in the possibility of the success of Bitcoin. This may seem like a contradiction with the title of the thread but it is not. This is because the possibility of success is very low due to the reasons which I am going to describe.
The success of bitcoin do not depend on the price of bitcoin. It can be successful when price is $100 or $1000 per piece, the key element is price stability. I don't agree with you. For many people BTC is just another investment and if they see just falling prices of bitcoin for long time, they will give up from it and move to other ''big'' opportunities out there. Without many users bitcoin will never become attractive for ''big'' merchants and eventually other virtual currencies will replace BTC. |
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LordSonjai
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March 01, 2015, 06:27:57 PM |
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First of all I would like to start this off by stating that I am a believer in the possibility of the success of Bitcoin. This may seem like a contradiction with the title of the thread but it is not. This is because the possibility of success is very low due to the reasons which I am going to describe.
The success of bitcoin do not depend on the price of bitcoin. It can be successful when price is $100 or $1000 per piece, the key element is price stability. I don't agree with you. For many people BTC is just another investment and if they see just falling prices of bitcoin for long time, they will give up from it and move to other ''big'' opportunities out there. Without many users bitcoin will never become attractive for ''big'' merchants and eventually other virtual currencies will replace BTC. speak for yourself. |
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jeffhuys
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March 01, 2015, 07:20:09 PM |
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The answer: decentralized exchanges.  |
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lucasjkr
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March 01, 2015, 07:46:14 PM |
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The answer: decentralized exchanges. "Decentralized" is the buzzword of the day, especially insofar as Bitcoin goes. In the real world, though, it losses it's applicability. Sure, someone could build a decentralized crypto--to--crypto exchange. Maybe. Even then, I'd have lots of questions, but there's no point in rattling them off until someone actually creates one. But a decentralized Bitcoin to fiat exchanges? Impossible. The global financial system won't accommodate that. There will need to be a bank account or many bank accounts. Cash balances held. Wires sent and received. Which means there needs to be a person or company that owns and manages those accounts. Decentralized could work in theory for a fully virtual currency, but once you have to handle fiat currency, the decentralized idea falls apart. |
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jeffhuys
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March 01, 2015, 07:54:54 PM |
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The answer: decentralized exchanges. "Decentralized" is the buzzword of the day, especially insofar as Bitcoin goes. In the real world, though, it losses it's applicability. Sure, someone could build a decentralized crypto--to--crypto exchange. Maybe. Even then, I'd have lots of questions, but there's no point in rattling them off until someone actually creates one. But a decentralized Bitcoin to fiat exchanges? Impossible. The global financial system won't accommodate that. There will need to be a bank account or many bank accounts. Cash balances held. Wires sent and received. Which means there needs to be a person or company that owns and manages those accounts. Decentralized could work in theory for a fully virtual currency, but once you have to handle fiat currency, the decentralized idea falls apart. I see what you mean. There are still a lot of questions to be answered but like you said, all at its own pace. By the way, the link in your signature is broken. |
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