Post
Topic
Board Economics
Re: How can a centralised exchange prove they won't run away with your money?
by
wangxinxi
on 24/10/2014, 16:14:40 UTC
In the absolute end they can't and even if it could be proven, they'd still be vulnerable to hacks, people need to learn to stop storing their money online and use a cold wallet.

In the traditional finance world, withdrawals are all processed manually. Although it takes a lot of effort and time, it's secure. Traditional exchanges are also being hacked everyday, but they seldom go bankrupted because of the hacks.

I don't know how many bitcoin exchanges failed because their creators ran away, but I guess most exchanges' failure was due to automatic withdrawals. People say MtGox's failure was due to some technical issues of Bitcoin. But surely there are still other issues within either Bitcoin or the exchanges' trading systems. If MtGox manually checked their withdrawals, they wouldn't fail. And to me, if existing exchanges do not check withdrawals, many of them will also fail sooner or later due to some other technical issues.

So, maybe bitcoin exchanges should follow the same approach adopted by the traditional finance world and check user withdrawals manually?