Posted on 11/09/2022 12:45:00 PM PST by C19fan
Cryptocurrencies have tumbled in a wild 72-hour market panic over the near-collapse of one of the world's biggest digital assets exchanges and a hostile takeover by its larger competitor sparked by a public squabble between rival billionaires.
(Excerpt) Read more at dailymail.co.uk ...
This incident shows once again cryptocurrencies is pure speculation and gambling
Just imagine if an EMP hits.
> Never heard of an “exchange” before that somehow collapses due to a good one bank run.
Well, in these “modern more sophisticated” times, exhanges do things like lend against items stored with them. i.e. they are using somebody else’s property as collateral for loans.
In related news....hoping to buy a good, used 3080 video-card on the cheap.
A crash in the fake currency market. Is that a bad thing?
FR Crypto Ping List!!
It’s not speculation or gambling. But it’s a scam.
Imagine a private party being able to issue currency without any supervision. Even if the person/group doing it if completely honest and above board to start with, how long do you think they can withstand the temptation of taking all the real world money people gave them for the currency and running with it.
There is a reason pure anarchy doesn’t work, police and law enforcement are a necessary evil.
But what it does for crypto traders is things like automatic trading stops when crypto is dropping rapidly, like the SEC does for stopping stock trading or ETF trading when a stock price drops rapidly on NYSE. To me it's a vain attempt at reducing chaos in a market of traders that claim to thrive on chaos. LOL
Of course there are tons of little scam coins out there, but the legit ones (Bitcoin, Etherium, Litecoin, etc.), don’t have “a private party being allowed to issue currency without any supervision.” There are specific algorithms that control the creation and distribution under a fixed process, that is open for all to see.
These exchanges are essentially banks.
You put you money in, and they give you some registered cryptocurrency, that money is in the account of someone who put their currency in, which that person can withdraw at any time. But pretty soon, it’s holding a bunch of people’s cash, which those people can redeem their crypto for at any time.
But what’s to stop the person operating the exchange saying, screw it, shuts everything down and flee with the cash. Because even though the exchange can make a small profit on the transactions, it will never approach how much it can make for the owner if he just takes the money and run.
As the exchange gets bigger, the temptation to take the money and run gets greater. Until it becomes irresistible.
Yeah, but those algorithms are worthless.
Crypto is only worth money on exchanges where you can trade the crypto for money, and those exchanges always end up holding a bunch of money and the person who runs the exchange is always at the risk of absconding with the money.
It could cause margin calls and a larger selloff at some point - but I'm 100% cash again ... waiting for an entry point ...
What you are describing is banking created by the Italians when they lent out other people’s gold kept with them for safekeeping. Now instead of gold it is cryptocurrency with zero intrinsic value.
I am laughing so hard at the thought these exchange owners thought they hit on something new and daring over the old and stolid fractional reserve banking. They just rebranded something that has been around for half a millennia.
I’m totally familiar with FTX because major league baseball allowed uniforms to have one sponsor logo this season: the Nike swash for players’ uniforms, and the FTX logo for umpire uniforms.
Baseball uniforms will trend toward looking like NASCAR racing suits. Next year, FTX’s slot will be open for bidding.
Something like this is just screaming for a modern Antony Trollope to write a novel. One of Trollope’s is “The Way We Live Now” about speculating, dodgy financial practices and panic.
Fake electronic fiat…I’m amazed it is worth anything…
The exchange is where you buy, sell and trade the coins. It may also be a place where people keep their coins e.g. an exchange wallet. I am not familiar with these two platforms but do know CoinBase where you can buy and sell, and also keep the coins in your account (I don’t invest or trade).
Anyway the price might be down because fears if the exchange goes down people will lose access to their coins and money. So they sell to get the cash. It’s happened before with other exchanges where people got scammed and who knows how these exchanges may be leveraging other people’s assets. They are not to my knowledge insured and only lightly regulated unlike stock/commodities exchanges.
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