Author Topic: too many bts in centralized exchanges. Danger!  (Read 5906 times)

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Offline mf-tzo

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too many bts in centralized exchanges. Danger!
« on: March 09, 2016, 03:22:14 pm »
Please consider withdrawing your bts from external exchanges if you do not intend to sell them.. More than 30% of BTS are in the top two exchanges. This is very dangerous and if something goes wrong with any of these exchanges you can kiss goodbye your bts investment forever.

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

Offline Empirical1.2

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Re: too many bts in centralized exchanges. Danger!
« Reply #1 on: March 09, 2016, 03:26:16 pm »
Please consider withdrawing your bts from external exchanges if you do not intend to sell them.. More than 30% of BTS are in the top two exchanges. This is very dangerous and if something goes wrong with any of these exchanges you can kiss goodbye your bts investment forever.

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

Many POS/DPOS coins have POS rewards which encourage people to keep their coins in their respective wallets and off the exchanges earning the reward in what is a fairly circular cost.

The 2% dilution to BitAsset yield proposal is a form of POS rewards which shareholders can earn by removing their BTS from exchanges and yield harvesting BitAssets. https://bitsharestalk.org/index.php/topic,21597.0.html

Therefore besides many other positive benefits listed in the OP, that proposal would rapidly remove a lot of BTS from centralized exchanges for a fairly circular and very low by POS staking standards, cost and so help make BTS more secure.

(It's hard to be a DEX when as you say you are extremely exposed to CEX risk)
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Offline Akado

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Re: too many bts in centralized exchanges. Danger!
« Reply #2 on: March 09, 2016, 03:26:42 pm »
A good amount should be from traders, which don't really care about bts so...
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Offline tbone

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Re: too many bts in centralized exchanges. Danger!
« Reply #3 on: March 09, 2016, 03:28:37 pm »
Please consider withdrawing your bts from external exchanges if you do not intend to sell them.. More than 30% of BTS are in the top two exchanges. This is very dangerous and if something goes wrong with any of these exchanges you can kiss goodbye your bts investment forever.

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

If we offer yield during the bootstrapping phase, it will encourage many people to move their BTS off the centralized exchanges and onto the DEX and many good things will result.  If you think that is important, I hope you will get behind [member=32211]Empirical1.2[/member]'s idea.

https://bitsharestalk.org/index.php/topic,21597.msg284481.html#msg284481

Offline yvv

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Re: too many bts in centralized exchanges. Danger!
« Reply #4 on: March 09, 2016, 03:49:53 pm »

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

If you want to sell your bts, why not to do it on DEX?

Offline Empirical1.2

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Re: too many bts in centralized exchanges. Danger!
« Reply #5 on: March 09, 2016, 04:00:20 pm »
Danger to those holding them there, for others it could have a nice deflationary effect

When they get dumped on the market by whoever has access to them?
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Offline cube

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Re: too many bts in centralized exchanges. Danger!
« Reply #6 on: March 09, 2016, 04:06:58 pm »
Please consider withdrawing your bts from external exchanges if you do not intend to sell them.. More than 30% of BTS are in the top two exchanges. This is very dangerous and if something goes wrong with any of these exchanges you can kiss goodbye your bts investment forever.

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

If we offer yield during the bootstrapping phase, it will encourage many people to move their BTS off the centralized exchanges and onto the DEX and many good things will result.  If you think that is important, I hope you will get behind [member=32211]Empirical1.2[/member]'s idea.

https://bitsharestalk.org/index.php/topic,21597.msg284481.html#msg284481

What would stop the centralised exchanges from distributing its earned yields to their bts users, if they choose to do so?
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Offline mf-tzo

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Re: too many bts in centralized exchanges. Danger!
« Reply #7 on: March 09, 2016, 04:16:12 pm »

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

If you want to sell your bts, why not to do it on DEX?

Because unfortunately there is no liquidity on the DEX..So I can understand why people want to trade on centralized exchanges.

I don't understand why they prefer to keep them there idle instead of their wallet and only transfer amounts they want to sell or (margin trade long/short). Maybe this is happening with bitcoin as well..I don't know since I never had any bitcoins..But I would think that bitcoiners only send their bitcoins to exchanges to trade for a couple of hours/days before they turn to fiat and vice versa. Do they actually leave their bitcoins idle on external exchanges? If that is the case then..I have nothing to say more on that..if that is the case then we deserve as humans to lose our funds from exchanges that get hacked, the same way banks steal depositors funds when they bail in etc etc..

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Re: too many bts in centralized exchanges. Danger!
« Reply #8 on: March 09, 2016, 04:19:25 pm »
Easier to use interface is needed before we start seeing people pull coins off centralized exchanges. Market makers on the dex along with the interface for the win.

Offline Akado

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Re: too many bts in centralized exchanges. Danger!
« Reply #9 on: March 09, 2016, 04:21:01 pm »
Please consider withdrawing your bts from external exchanges if you do not intend to sell them.. More than 30% of BTS are in the top two exchanges. This is very dangerous and if something goes wrong with any of these exchanges you can kiss goodbye your bts investment forever.

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

If we offer yield during the bootstrapping phase, it will encourage many people to move their BTS off the centralized exchanges and onto the DEX and many good things will result.  If you think that is important, I hope you will get behind [member=32211]Empirical1.2[/member]'s idea.

https://bitsharestalk.org/index.php/topic,21597.msg284481.html#msg284481

What would stop the centralised exchanges from distributing its earned yields to their bts users, if they choose to do so?

We could offer yield to non exchange accounts to attract people to the dex
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Offline Empirical1.2

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Re: too many bts in centralized exchanges. Danger!
« Reply #10 on: March 09, 2016, 04:25:30 pm »
Please consider withdrawing your bts from external exchanges if you do not intend to sell them.. More than 30% of BTS are in the top two exchanges. This is very dangerous and if something goes wrong with any of these exchanges you can kiss goodbye your bts investment forever.

If you do not sell your bts, why not just held them in your wallet and be the king to your castle?

If we offer yield during the bootstrapping phase, it will encourage many people to move their BTS off the centralized exchanges and onto the DEX and many good things will result.  If you think that is important, I hope you will get behind [member=32211]Empirical1.2[/member]'s idea.

https://bitsharestalk.org/index.php/topic,21597.msg284481.html#msg284481

What would stop the centralised exchanges from distributing its earned yields to their bts users, if they choose to do so?

AFAIK, they currently don't do this with other forms of POS rewards as it's not part of their business model. Yield harvesting is more complicated too and some also argue it carries some risk & management/maintenance requirements if you want to maximise your gain, which might put them off and also might make it something they couldn't get away with engaging in if customers hadn't explicitly given them permission. At the very worst case, if they did do this they would create millions of BitUSD,  which at least has the benefit of making BTS the USD crypto market leader by size.

We could offer yield to non exchange accounts to attract people to the dex

If it ever became an issue perhaps that could be a possibility too.
« Last Edit: March 09, 2016, 04:32:45 pm by Empirical1.2 »
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Offline xh3

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Re: too many bts in centralized exchanges. Danger!
« Reply #11 on: March 09, 2016, 04:49:48 pm »
A good amount should be from traders, which don't really care about bts so...

Traders are important to the health of an asset,  and are a very literal breed.  If BTS is to collect traders from the centralized exchanges, it must provide a very literal reason for why they should trade there.  I would say that this provides a great opportunity for someone to code a virtual centralized exchange.  Also it might end up being good if there's a major heist because this would add intangible value to BTS' abilities, and provide a great opportunity for BTS bulls to get  way longer.

Offline lil_jay890

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Re: too many bts in centralized exchanges. Danger!
« Reply #12 on: March 10, 2016, 12:35:38 am »
The problem with taking your money off the exchange and trading on the Dex, is the possibility of losing money due to the complicated nature of placing trades. This is especially relevant for shorting.

Right now the odds of losing all your money on a centralized exchange due to hacking  is far lower than losing a big chunk on the Dex due to complexity, user errors, and bugs.  Also there is no chance of fund recovery on the Dex if a bug causes you to lose money.

The longer that polo and all the other CExs stay secured, the better their practices will get and the less useful our Dex becomes.

I've day traded for 10 years and I would never trade on our Dex in its current form.  It doesn't have the most basic tools that traders need.

Offline well.attenuated

Re: too many bts in centralized exchanges. Danger!
« Reply #13 on: March 10, 2016, 12:57:36 am »
 +5%
This is like asking "why do people leave their money in Banks? There is a chance the bank could fold. Therefore everyone should cash out into cryto and or cash"
User error risks are currently more likely than the centralized risk proposed by the OP.

Also, most of the BTS in accounts on the exchanges are just waiting for the opportunity to unload it.  I have some EXP on Poloniex but no EXP wallet. I have no intention of transferring it out because I don't want it. I have a predetermined price I will trade it back for BTC and withdraw that.  For many traders it is not worth trying to setup a wallet for every currency you want to trade, download a blockchain, become comfortable with the interface etc.  Add to that a buggy complicated interface and it is understandable that many traders want to just keep their BTS on exchanges while they are in a position.

The problem with taking your money off the exchange and trading on the Dex, is the possibility of losing money due to the complicated nature of placing trades. This is especially relevant for shorting.

Right now the odds of losing all your money on a centralized exchange due to hacking  is far lower than losing a big chunk on the Dex due to complexity, user errors, and bugs.  Also there is no chance of fund recovery on the Dex if a bug causes you to lose money.

The longer that polo and all the other CExs stay secured, the better their practices will get and the less useful our Dex becomes.

I've day traded for 10 years and I would never trade on our Dex in its current form.  It doesn't have the most basic tools that traders need.
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Offline yvv

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Re: too many bts in centralized exchanges. Danger!
« Reply #14 on: March 10, 2016, 01:39:24 am »
I've day traded for 10 years and I would never trade on our Dex in its current form.  It doesn't have the most basic tools that traders need.

You have to shout out loud, which exactly tools you need as a trader. We all should listen.