On: Two of China's Biggest Exchanges Stop Bitcoin Withdrawals

[Phlarp]

> which exchanges are fully cashed up? and which are working with fractional cash reserves?

If an exchange is running a fractional reserve then they aren't an exchange, they are an insolvent fraud.

[jbmorgado → Phlarp]

And you will only know for sure when they finally stop withdrawals all together... just like MtGox did.

[gwern → jbmorgado]

You can know for sure if they fail their cryptographic proof-of-reserve.

Unfortunately, people don't want proof-of-reserve as they flock to exchanges which don't use it, and people always get what they want, good and hard.

[bdcravens → jbmorgado]

It's worth noting that Mt. Gox started with blocking fiat withdrawals first. That was a situation of insolvency; this is the heavy hand of government. Apples and Oranges.

[jbmorgado → bdcravens]

And it is much more limiting to move fiat around than it is to move bitcoin.

If they stoped fiat withdrawal and kept bitcoin withdrawals it would be mostly fine. You would just move the bitcoin to another exchange outside China and do as you please with it.

So it is actually a much bigger deal if a Chinese exchange stops users from moving their bitcoin around. Specially when you are in Europe since you actually stop having any easy means to recover the assets you have there.

Some of us that are in bitcoin for a while still remember how in the end the MtGox bitcoin withdrawals stopped for a week, than that week became a month and then that month became an eternity and the bitcoins deposited there where lost forever to their rightful owners.

https://en.wikipedia.org/wiki/Mt._Gox

[bdcravens → jbmorgado]

> Some of us that are in bitcoin for a while still remember how in the end the MtGox bitcoin withdrawals stopped for a week, than that week became a month and then that month became an eternity and the bitcoins deposited there where lost forever to their rightful owners.

Yes, I've been in Bitcoin since 2011. Before Mt. Gox stopped Bitcoin withdrawals, they stopped fiat (actually a small trickle could leak out). For months, Gox traded at a significant premium (since you could still withdraw Bitcoin during that time)

This situation may be worse, but it has different circumstances and different root causes, so attempting to draw a parallel between the two doesn't provide much value. One was a failed exchange trying desperate measures to attempt survival; the other is a mandated government action.

[Phlarp → jbmorgado]

PBOC doesn't need to stop people from being able to move BTC funds around on the blockchain in a timely / efficient manner-- The miners have done that all by themselves!

Also to address your "rightful owners" claim-- the rightful owner of a bitcoin is the person or company who holds and secures the private key to the wallet that coin is stored in. If you don't have that private key secured you don't own bitcoin, you own some type of bitcoin derivative backed by an exchange.