• Forum has been upgraded, all links, images, etc are as they were. Please see Official Announcements for more information

Exchange Advice for Newbies

fible1

Well-known member
Dash Core Group
Masternode Owner/Operator
Trading Safely on Bitcoin and Altcoin Markets: Advice From the Trenches



First let me introduce myself, my name is Pablo, I have been working in and around virtual currency for about ten years. I have been an active trader on several cryptocoin markets off an on for about 3-4 years.



Rules for Safe Trading:



1. Be cautious, be very, very cautious: You are not paranoid enough, people out there really want to steal your money.



2. Don't assume exchanges will act in your (the customers') interests, they are companies, not NGO's, they're in it to make money and many of them will walk all over you to make a buck, or save a buck. But there are some good indicators to tell the good from the bad.



3. Stay away from any exchange that offers to pay you dividends, interest, etc. just for holding your money. It either means your money is being used outside the exchange environment, which it should not be, or it’s a straight up scam. You have to be careful to differentiate an investment, where you assume risk for equity in a company with a business model, to the pseudo gambling of handing your money off to a third party with vague (and sometimes elaborate) promises of steady returns. To be safe you should generally stay away from both.



4. Customer service is your second indicator: The first thing that comes to mind when I think of Mt. Gox's customer service is “does not give a shit”. I could regale you with stories of how deeply Mt. Gox could not give a shit, way, way before it collapsed. You could hit them up with a ticket on your funds not arriving after 20 days and they would send you a canned answer, absolutely cold and basically “we'll get to it when we get to it, so fuck off.”



The reason customer service is so important is because it tells you two things: the style of the founder, and how well funded the exchange is. If the founder runs a customer centric company (as it should be), customer service will tend to be helpful, they will know that their jobs depend on your satisfaction. If customer services first job, however, is to deflect customers from the exchanges' mismanagement or incompetence, it will be clear to you from your first interaction. A support agent has to develop a thick skin when he is deflecting angry customers all day. It will show. My advice is that before you start trading anywhere, you drop support a question or two, depending on how fast they get back to you and how much room they leave for questions, you can learn a lot.



Customer service also tells you something about how well funded an exchange is. The more available customer service is, the more likely it is you are dealing with a well funded venture. Be suspicious of canned emails with references to “the wiki” or “the FAQ”. Yes, these have their place in the conversation, but the more a customer services agent talks to you like a human being, the more likely it is you are dealing with a reputable and well funded company. Because good customer service isn't cheap, and good customer service agents tend not to work for shady outfits. Working as a rep for a shady outfit wears an agent down mentally and physically, so the good ones tend not to stay, hence why bad businesses tend to have bad customer service reps.



5. Ask around, don't be afraid to look stupid: Although I have been trading at Cryptsy and Bitstamp for several years, I periodically drop the question on Bitcointalk: “Does anyone recommend Bitstamp? Anyone have a bad experience with Cryptsy?” And here I can learn a lot; depending on what feedback I am getting and what I know about this exchange from my research thus far.



Then I google “Exchange X Scam”. You have to keep an eye on the date of results, a lot will be old complaints, logically more recent ones should carry more weight, but you will pick up valuable tidbits here. People who get scammed tend to spread the word far and wide.



6. Speed: Do test buys. Deposit small amounts of currency into the exchange. If this is your first time there, it's worth the trouble to test how long it takes deposits to credit or be withdrawn. If it takes a day for them to process a 0.2 BTC withdrawal, you certainly wont want to trade 20 BTC there. A good exchange will be able to handle an influx of deposits and withdrawals with relative grace. Many people don't take that into consideration because Gox got us old timers used to waiting a month or more for deposits to credit and days to cash out BTC; don't stand for it, if you can't cash out it's either incompetence or lack of funds, not worth it either way.



The biggest red flag in this step, assuming you did it correctly, is when your wires take more than a business week to credit. An exchange should have a dedicated team working on wires, and now a days most international wires credit in 24-48 hours, there is no reason for them to hold your money for more than 6 business days; otherwise you are really giving the exchange an interest free loan, and that should make you worried.



7. Who? Where?: Knowing where the exchange is located is important, there are certain countries where if you send money and get scammed, you really have nothing much you can do about it due to the current state of their regulatory environments.

Advice: Avoid Russian and Chinese exchanges at all costs.
The risks outweigh any benefits when you take into account the legal system there and your non-existent options for recovery in the case of fraud or failure.


One of the key facts you need to learn before you try our an exchange is who owns it and where is the owner physically in day to day business. That bears clearing up, it doesn't really matter where the exchange is incorporated, most are incorporated in tax havens, etc. but know who the owner is, his real name and general location are important, because if he makes that information public, he clearly believes that his exchange is here to stay. Exchanges with secret owners should be a big red flag; stay away.



Just to recap, location is important, know who runs the show. Google “exchange owners name” and see what comes up.



8. NEVER KEEP FUNDS ON AN EXCHANGE LONG TERM. I think this is pretty self-explanatory and this comes from people acting like cryptocoin exchanges are banks. They are not banks, most of them are high risk environments, treat exchanges like crack dens, bring only the cash you need and take it out as soon as you have completed your business.



If you follow these steps you will have a good chance of not getting scammed, happy trading!
 
Last edited by a moderator:
Nice!

My list:
0. First things first: when you send your funds to some address you do not have private key to - it's not your funds anymore. :eek:
1-7. Act according to #0: do not trust anyone too much and get funds back asap when you done trading.
Concerned about time / transfer fees? They mean nothing if you compare them to complete loss of funds.
:grin:
 
Excellent advice! Thanks for this post. should be a sticky.

Yup!

I withdrew all my DRK from Mintpal just hours before the big kabooom. I loved that exhange... Just some trading coins, but boy am I happy I am paranoid.
 
Excellent advice! Thanks for this post. should be a sticky.

Yup!

I withdrew all my DRK from Mintpal just hours before the big kabooom. I loved that exhange... Just some trading coins, but boy am I happy I am paranoid.

Wow, you're really lucky you got out!

Mintpal had all the hallmarks of a good exchange, I was actually about to use it (signed up and everything), except that when I googled the CEO (forget his name) there was just too much negative info.

Anyway, goes to show you are never paranoid enough :).

Pablo.
 
Excellent advice! Thanks for this post. should be a sticky.

Yup!

I withdrew all my DRK from Mintpal just hours before the big kabooom. I loved that exhange... Just some trading coins, but boy am I happy I am paranoid.
I was with MintPal as well and loved it. I got out as well before the crap happened.
 
Excellent advice! Thanks for this post. should be a sticky.

Yup!

I withdrew all my DRK from Mintpal just hours before the big kabooom. I loved that exhange... Just some trading coins, but boy am I happy I am paranoid.
I got out as soon as word came out it was being sold. Glad my spidey senses told me to abort that exchange. I liked it too...

Wow, you're really lucky you got out!

Mintpal had all the hallmarks of a good exchange, I was actually about to use it (signed up and everything), except that when I googled the CEO (forget his name) there was just too much negative info.

Anyway, goes to show you are never paranoid enough :).

Pablo.
The original CEO or the one that took over?

The golden rule of trading is never trust somebody with more money than you are willing to throw away, but of course we always push that amount. In the end, you gotta use something to trade, so pick the most secure, not necessarily the cheapest.
 
Trading Safely on Bitcoin and Altcoin Markets: Advice From the Trenches


First let me introduce myself, my name is Pablo, I have been working in and around virtual currency for about ten years. I have been an active trader on several cryptocoin markets off an on for about 3-4 years.


Rules for Safe Trading:


1. Be suspicious, be very, very suspicious: You are not paranoid enough, people out there really want to steal your money.


2. Don't assume exchanges will act in your (the customers') interests, they are companies, not NGO's, they're in it to make money and many of them will walk all over you to make a buck, or save a buck. But there are some good indicators to tell the good from the bad.


3. Customer service is your first indicator: The first thing that comes to mind when I think of Mt. Gox's customer service is “does not give a shit”. I could regale you with stories of how deeply Mt. Gox could not give a shit, way, way before it collapsed. You could hit them up with a ticket on your funds not arriving after 20 days and they would send you a canned answer, absolutely cold and basically “we'll get to it when we get to it, so fuck off.”


The reason customer service is so important is because it tells you two things: the style of the founder, and how well funded the exchange is. If the founder runs a customer centric company (as it should be), customer service will tend to be helpful, they will know that their jobs depend on your satisfaction. If customer services first job, however, is to deflect customers from the exchanges' mismanagement or incompetence, it will be clear to you from your first interaction. A support agent has to develop a thick skin when he is deflecting angry customers all day. It will show. My advice is that before you start trading anywhere, you drop support a question or two, depending on how fast they get back to you and how much room they leave for questions, you can learn a lot.


Customer service also tells you something about how well funded an exchange is. The more available customer service is, the more likely it is you are dealing with a well funded venture. Be suspicious of canned emails with references to “the wiki” or “the FAQ”. Yes, these have their place in the conversation, but the more a customer services agent talks to you like a human being, the more likely it is you are dealing with a reputable and well funded company. Because good customer service isn't cheap, and good customer service agents tend not to work for shady outfits. Working as a rep for a shady outfit wears an agent down mentally and physically, so the good ones tend not to stay, hence why bad businesses tend to have bad customer service reps.


4. Ask around, don't be afraid to look stupid: Although I have been trading at Cryptsy and Bitstamp for several years, I periodically drop the question on Bitcointalk: “Does anyone recommend Bitstamp? Anyone have a bad experience with Cryptsy?” And here I can learn a lot. Cryptsy used to get a lot of bad reviews based on their speed of deposit and withdrawal, lately however, consensus seems to be they've taken it up a notch, that's a good thing if you plan to drop your hard earned money there.


Then I google “Exchange X Scam”. You have to keep an eye on the date of results, a lot will be old complaints, logically more recent ones should carry more weight, but you will pick up valuable tidbits here. People who get scammed tend to spread the word far and wide.


5. Speed: Do test buys. Deposit small amounts of currency into the exchange. If this is your first time there, it's worth the trouble to test how long it takes deposits to credit or be withdrawn. If it takes a day for them to process a 0.2 BTC withdrawal, you certainly wont want to trade 20 BTC there. A good exchange will be able to handle an influx of deposits and withdrawals with relative grace. Many people don't take that into consideration because Gox got us old timers used to waiting a month or more for deposits to credit and days to cash out BTC; don't stand for it, if you can't cash out it's either incompetence or lack of funds, not worth it either way.


The biggest red flag in this step, assuming you did it correctly, is when your wires take more than a business week to credit. An exchange should have a dedicated team working on wires, and now a days most international wires credit in 24-48 hours, there is no reason for them to hold your money for more than 6 business days; otherwise you are really giving the exchange an interest free loan, and that should make you worried.


6. Who? Where?: Knowing where the exchange is located is important, it's not a deal breaker, but there are certain countries where if you send money and get scammed, you really have nothing much you can do about it; Nigeria, China, etc. I'm not saying that an exchange located in one of these countries is a deal breaker, I am saying it is a red flag.


One of the key facts you need to learn before you try our an exchange is who owns it and where is the owner physically in day to day business. That bears clearing up, it doesn't really matter where the exchange is incorporated, most are incorporated in tax havens, etc. but know who the owner is, his real name and general location are important, because if he makes that information public, he clearly believes that his exchange is here to stay. Exchanges with secret owners should be a big red flag; stay away.


Just to recap, location is important but not a deal breaker, but know who runs the show is. Google “exchange owners name” and see what comes up.


7. NEVER KEEP FUNDS ON AN EXCHANGE LONG TERM. I think this is pretty self-explanatory and this comes from people acting like cryptocoin exchanges are banks. They are not banks, most of them are high risk environments, treat exchanges like crack dens, bring only the cash you need and take it out as soon as you have completed your business.


If you follow these steps you will have a good chance of not getting scammed, happy trading!
Could I also add, if it seems to good to be true, its not true. High return interest rates, ha, don't fall for this one. Cloud mining, oh be very careful.
 
Trading Safely on Bitcoin and Altcoin Markets: Advice From the Trenches


First let me introduce myself, my name is Pablo, I have been working in and around virtual currency for about ten years. I have been an active trader on several cryptocoin markets off an on for about 3-4 years.


Rules for Safe Trading:


1. Be suspicious, be very, very suspicious: You are not paranoid enough, people out there really want to steal your money.


2. Don't assume exchanges will act in your (the customers') interests, they are companies, not NGO's, they're in it to make money and many of them will walk all over you to make a buck, or save a buck. But there are some good indicators to tell the good from the bad.


3. Customer service is your first indicator: The first thing that comes to mind when I think of Mt. Gox's customer service is “does not give a shit”. I could regale you with stories of how deeply Mt. Gox could not give a shit, way, way before it collapsed. You could hit them up with a ticket on your funds not arriving after 20 days and they would send you a canned answer, absolutely cold and basically “we'll get to it when we get to it, so fuck off.”


The reason customer service is so important is because it tells you two things: the style of the founder, and how well funded the exchange is. If the founder runs a customer centric company (as it should be), customer service will tend to be helpful, they will know that their jobs depend on your satisfaction. If customer services first job, however, is to deflect customers from the exchanges' mismanagement or incompetence, it will be clear to you from your first interaction. A support agent has to develop a thick skin when he is deflecting angry customers all day. It will show. My advice is that before you start trading anywhere, you drop support a question or two, depending on how fast they get back to you and how much room they leave for questions, you can learn a lot.


Customer service also tells you something about how well funded an exchange is. The more available customer service is, the more likely it is you are dealing with a well funded venture. Be suspicious of canned emails with references to “the wiki” or “the FAQ”. Yes, these have their place in the conversation, but the more a customer services agent talks to you like a human being, the more likely it is you are dealing with a reputable and well funded company. Because good customer service isn't cheap, and good customer service agents tend not to work for shady outfits. Working as a rep for a shady outfit wears an agent down mentally and physically, so the good ones tend not to stay, hence why bad businesses tend to have bad customer service reps.


4. Ask around, don't be afraid to look stupid: Although I have been trading at Cryptsy and Bitstamp for several years, I periodically drop the question on Bitcointalk: “Does anyone recommend Bitstamp? Anyone have a bad experience with Cryptsy?” And here I can learn a lot. Cryptsy used to get a lot of bad reviews based on their speed of deposit and withdrawal, lately however, consensus seems to be they've taken it up a notch, that's a good thing if you plan to drop your hard earned money there.


Then I google “Exchange X Scam”. You have to keep an eye on the date of results, a lot will be old complaints, logically more recent ones should carry more weight, but you will pick up valuable tidbits here. People who get scammed tend to spread the word far and wide.


5. Speed: Do test buys. Deposit small amounts of currency into the exchange. If this is your first time there, it's worth the trouble to test how long it takes deposits to credit or be withdrawn. If it takes a day for them to process a 0.2 BTC withdrawal, you certainly wont want to trade 20 BTC there. A good exchange will be able to handle an influx of deposits and withdrawals with relative grace. Many people don't take that into consideration because Gox got us old timers used to waiting a month or more for deposits to credit and days to cash out BTC; don't stand for it, if you can't cash out it's either incompetence or lack of funds, not worth it either way.


The biggest red flag in this step, assuming you did it correctly, is when your wires take more than a business week to credit. An exchange should have a dedicated team working on wires, and now a days most international wires credit in 24-48 hours, there is no reason for them to hold your money for more than 6 business days; otherwise you are really giving the exchange an interest free loan, and that should make you worried.


6. Who? Where?: Knowing where the exchange is located is important, it's not a deal breaker, but there are certain countries where if you send money and get scammed, you really have nothing much you can do about it; Nigeria, China, etc. I'm not saying that an exchange located in one of these countries is a deal breaker, I am saying it is a red flag.


One of the key facts you need to learn before you try our an exchange is who owns it and where is the owner physically in day to day business. That bears clearing up, it doesn't really matter where the exchange is incorporated, most are incorporated in tax havens, etc. but know who the owner is, his real name and general location are important, because if he makes that information public, he clearly believes that his exchange is here to stay. Exchanges with secret owners should be a big red flag; stay away.


Just to recap, location is important but not a deal breaker, but know who runs the show is. Google “exchange owners name” and see what comes up.


7. NEVER KEEP FUNDS ON AN EXCHANGE LONG TERM. I think this is pretty self-explanatory and this comes from people acting like cryptocoin exchanges are banks. They are not banks, most of them are high risk environments, treat exchanges like crack dens, bring only the cash you need and take it out as soon as you have completed your business.


If you follow these steps you will have a good chance of not getting scammed, happy trading!
BTW, great topic.
 
Wow, you're really lucky you got out!

Mintpal had all the hallmarks of a good exchange, I was actually about to use it (signed up and everything), except that when I googled the CEO (forget his name) there was just too much negative info.

Anyway, goes to show you are never paranoid enough :).

Pablo.
His name was Alex Green, I was lucky this tiem as I don`t trade at all, I was goxed....but not mintpalled uffff.... lessons cost and I did mine ....
 
Could I also add, if it seems to good to be true, its not true. High return interest rates, ha, don't fall for this one. Cloud mining, oh be very careful.

Please keep the ideas coming, I'll be adding to the list as people come up with more stuff.
 
Trading Safely on Bitcoin and Altcoin Markets: Advice From the Trenches



First let me introduce myself, my name is Pablo, I have been working in and around virtual currency for about ten years. I have been an active trader on several cryptocoin markets off an on for about 3-4 years.



Rules for Safe Trading:



1. Be cautious, be very, very cautious: You are not paranoid enough, people out there really want to steal your money.



2. Don't assume exchanges will act in your (the customers') interests, they are companies, not NGO's, they're in it to make money and many of them will walk all over you to make a buck, or save a buck. But there are some good indicators to tell the good from the bad.



3. Stay away from any exchange that offers to pay you dividends, interest, etc. just for holding your money. It either means your money is being used outside the exchange environment, which it should not be, or it’s a straight up scam. You have to be careful to differentiate an investment, where you assume risk for equity in a company with a business model, to the pseudo gambling of handing your money off to a third party with vague (and sometimes elaborate) promises of steady returns. To be safe you should generally stay away from both.



4. Customer service is your second indicator: The first thing that comes to mind when I think of Mt. Gox's customer service is “does not give a shit”. I could regale you with stories of how deeply Mt. Gox could not give a shit, way, way before it collapsed. You could hit them up with a ticket on your funds not arriving after 20 days and they would send you a canned answer, absolutely cold and basically “we'll get to it when we get to it, so fuck off.”



The reason customer service is so important is because it tells you two things: the style of the founder, and how well funded the exchange is. If the founder runs a customer centric company (as it should be), customer service will tend to be helpful, they will know that their jobs depend on your satisfaction. If customer services first job, however, is to deflect customers from the exchanges' mismanagement or incompetence, it will be clear to you from your first interaction. A support agent has to develop a thick skin when he is deflecting angry customers all day. It will show. My advice is that before you start trading anywhere, you drop support a question or two, depending on how fast they get back to you and how much room they leave for questions, you can learn a lot.



Customer service also tells you something about how well funded an exchange is. The more available customer service is, the more likely it is you are dealing with a well funded venture. Be suspicious of canned emails with references to “the wiki” or “the FAQ”. Yes, these have their place in the conversation, but the more a customer services agent talks to you like a human being, the more likely it is you are dealing with a reputable and well funded company. Because good customer service isn't cheap, and good customer service agents tend not to work for shady outfits. Working as a rep for a shady outfit wears an agent down mentally and physically, so the good ones tend not to stay, hence why bad businesses tend to have bad customer service reps.



5. Ask around, don't be afraid to look stupid: Although I have been trading at Cryptsy and Bitstamp for several years, I periodically drop the question on Bitcointalk: “Does anyone recommend Bitstamp? Anyone have a bad experience with Cryptsy?” And here I can learn a lot. Cryptsy used to get a lot of bad reviews based on their speed of deposit and withdrawal, lately however, consensus seems to be they've taken it up a notch, that's a good thing if you plan to drop your hard earned money there.



Then I google “Exchange X Scam”. You have to keep an eye on the date of results, a lot will be old complaints, logically more recent ones should carry more weight, but you will pick up valuable tidbits here. People who get scammed tend to spread the word far and wide.



6. Speed: Do test buys. Deposit small amounts of currency into the exchange. If this is your first time there, it's worth the trouble to test how long it takes deposits to credit or be withdrawn. If it takes a day for them to process a 0.2 BTC withdrawal, you certainly wont want to trade 20 BTC there. A good exchange will be able to handle an influx of deposits and withdrawals with relative grace. Many people don't take that into consideration because Gox got us old timers used to waiting a month or more for deposits to credit and days to cash out BTC; don't stand for it, if you can't cash out it's either incompetence or lack of funds, not worth it either way.



The biggest red flag in this step, assuming you did it correctly, is when your wires take more than a business week to credit. An exchange should have a dedicated team working on wires, and now a days most international wires credit in 24-48 hours, there is no reason for them to hold your money for more than 6 business days; otherwise you are really giving the exchange an interest free loan, and that should make you worried.



7. Who? Where?: Knowing where the exchange is located is important, it's not a deal breaker, but there are certain countries where if you send money and get scammed, you really have nothing much you can do about it; Nigeria, China, Russia, etc. I'm not saying that an exchange located in one of these countries is a deal breaker, but I myself do not trade in exchanges which are located in countries like the ones mentioned.


One of the key facts you need to learn before you try our an exchange is who owns it and where is the owner physically in day to day business. That bears clearing up, it doesn't really matter where the exchange is incorporated, most are incorporated in tax havens, etc. but know who the owner is, his real name and general location are important, because if he makes that information public, he clearly believes that his exchange is here to stay. Exchanges with secret owners should be a big red flag; stay away.



Just to recap, location is important but not a deal breaker, but know who runs the show is. Google “exchange owners name” and see what comes up.



8. NEVER KEEP FUNDS ON AN EXCHANGE LONG TERM. I think this is pretty self-explanatory and this comes from people acting like cryptocoin exchanges are banks. They are not banks, most of them are high risk environments, treat exchanges like crack dens, bring only the cash you need and take it out as soon as you have completed your business.



If you follow these steps you will have a good chance of not getting scammed, happy trading!
Thanks for the advice
 
http://www.coindesk.com/btc-e-us-do...al&utm_source=twitter.com&utm_campaign=buffer

As I did with Mt. Gox on the Butter-Bot thread a couple of years back, I would like to call it and say BTC-E won't be around this time next year, probably much sooner.

Pablo.

Thanks for the level headed advice from a seasoned trader, I wonder when/if true decentralized exchanges come online, over night there will be multitudes of exchanges suddenly struck down with 'technical problems' never to reappear again!
 
Thanks for the level headed advice from a seasoned trader, I wonder when/if true decentralized exchanges come online, over night there will be multitudes of exchanges suddenly struck down with 'technical problems' never to reappear again!

Hey :),
Thanks, glad to be useful.

I have my own concerns about decentralized exchanges, as they are conceived now, in terms of risk for buyers vis a vis possible payment methods which are not bank wires. But that's for another conversation.

I really feel like we have a good thing starting with third generation exchanges such as Coinbase and other well funded, venture backed exchanges. Unfortunately these have tended to be U.S. based only. It's the fly by night ones (which are most of them) which we need to watch out for. This is clearly a hurdle that needs to be crossed prior to mass adoption.

I am still hoping someone will create a Dash exchange for the community.

Pablo.
 
Current Chinese and Russian exchanges:

I try to maintain objectivity when it comes to where an exchange operates but the recent smoke signals coming out of OKCoin and BTC-E suggest that perhaps this view needs to be re-examined. As Roger Ver (Bitcoin Jesus) has exposed this past week, quite convincingly; OKCoin was caught in market manipulation, audit fraud, and forgery, at the very least. And now BTC-E is delaying USD withdrawals by weeks.

Given the number of offshore (Non-US) exchanges that have collapsed in the past years, we have to consider that the current state of regulation in some of these environments, and particularly the lack of accountability through a corrupt justice system in certain developing nations, make exchanges in countries like these ones that we should avoid at all costs.

Lack of accountability and oversight is probably the main reason Ver is waging this war on OKCoin in the public forum first as opposed to just suing them in China.

Also, given no one knows who owns BTC-E or even their real structure, I am rather surprised people ever wired money there, but I am not surprised by their recent banking woes. It was a matter of time before someone came down on them. You can't move that much money without a certain degree of organizational transparency.

Who pays in both these scenarios? Users.

We need our exchanges to be established in mature regulatory environments, or at least in those where a judicial framework exists for foreign parties to recover losses in the event of failure.

Advice: Avoid Russian and Chinese exchanges at all costs. The risks outweigh any benefits when you take into account the legal system there and your non-existent options for recovery in the case of fraud or failure.

That's my two cents, hope someone finds it useful.

Pablo.

Full Disclosure: I trade at Bitstamp, formerly traded at Coinbase,
 
Last edited by a moderator:
Current Chinese and Russian exchanges:
Advice: Avoid Russian and Chinese exchanges at all costs. The risks outweigh any benefits when you take into account the legal system there and your non-existent options for recovery in the case of fraud or failure.
,

Greed will always out way caution and if there is exchange arbitrage to be taken advantage of, it will be had. That was a crazy situation near the end of Gox where the price of bitcoins was completely different to anywhere else because people could not get money out but they could get bitcoins out, I could see that scenerio happening again.
(In fact Mintpal had some erratic low but brief darkcoin prices before they vaporized, not sure if that was a carrot to get people to deposit or merely incompetence but it was a tell to my mind that something bad could happen)
 
Greed will always out way caution and if there is exchange arbitrage to be taken advantage of, it will be had. That was a crazy situation near the end of Gox where the price of bitcoins was completely different to anywhere else because people could not get money out but they could get bitcoins out, I could see that scenerio happening again.
(In fact Mintpal had some erratic low but brief darkcoin prices before they vaporized, not sure if that was a carrot to get people to deposit or merely incompetence but it was a tell to my mind that something bad could happen)

Very valid points. The Gox thing was weird, I remember, at the very end, key people buying Gox BTC at a discount on the theory the exchange would re-open; some prominent Bitcoiners got burned there. On the other hand, it's hard to feel sorry for the whales who kept 1000+ BTC on Gox when Mark Karpeles was clearly incompetent. And that was obvious to anyone looking right around the second time they got hacked.

Pablo.
 
Back
Top