Quote from: Biomech on March 04, 2014, 01:13:40 PM

Quote from: negritaman on March 04, 2014, 01:02:21 PM

Quote from: Biomech on March 04, 2014, 12:53:59 PM

Quote from: Warren on March 04, 2014, 12:13:09 PM

Kudos for being transparent about the problems with your exchange. I know that some people doubted you at first when the XCP was stolen, but that turned out to not be your fault. Now when it actually is the fault of your exchange you are immediately holding your hand up. That takes courage and shows your integrity!

I agree with all the previous posters here who have suggested that you sell some shares of your exchange instead of dramatically raising the fees across the board.

I know that a lot of people don't like https://cryptostocks.com/ but I think that has more to do with the projects/companies that are listed there than the actual exchange itself. It would be an easy and quick way to raise the money needed to re-pay what was stolen, and your users wouldn't be forced to take a loss.

Raising the fees to 1,5% is only going to hurt the exchange IMO, even if it's temporary. Perhaps you could increase them 50% from the current level, but increasing them to 1,5% is really a lot!

I have another suggestion.

It's kind of depending on if you follow through with the idea of doing an IPO or not, but I think it's something worth considering if you do.

How about raising enough money to create an "insurance fund" that will be available for those users who are willing to accept a slightly higher trading fee than uninsured users?

You would keep this fund in cold storage and it would be completely transparent on the blockchain for everyone to verify. It would only be used to reimburse those accounts that had paid the higher trading fee in case of another hack of the exchange. By making it voluntary it doesn't hurt anyone who doesn't want to pay the extra fee, and as the income from the insurance premiums increase so will the level of insurance. This will make Poloniex the first exchange where user funds are insured. Perhaps you could even make the funds on that cold storage account multisignature with 2 trusted members from the community, that way anyone who doubts your integrity will feel a lot safer as well...

I know that I would certainly be willing to pay a slightly higher fee to sleep a little better knowing that even if you are hacked again at least I will get reimbursed, and I'm sure there are a lot of sad MtGox users who feel the same way.

I'm embarrassed to admit that the second I saw something about Poloniex being hacked I immediately attempted a withdrawal of my BTC from there. Roll Eyes

They are now "stuck in limbo" but I assume that they will show back up again once you have reversed the attempted transactions?

This is a truly great idea. I could only offer one expansion. Rather than making it internal, perhaps a group of us could put together an insurance package and market it to exchanges and such. Then it's completely third party, eliminating one layer of trust.

the shills are rife today else i am in the land of mindless fckwits

Next you will be suggesting derivatives on the insurance losses ffs

I ain't no fuckin' shill. The closest I come is my sig, and I do business with those people.

Insurance is not a scam. REGULATED insurance IS. I'm getting old, so I remember when it wasn't regulated on automobile insurance. As soon as they bought some senators to "save money for responsible people" the rates rose over 5 times.

But insurance in and of itself is a good idea. It mitigates risk, and in so doing promotes trade. An exchange that had deposit insurance from a reputable and transparent insurance agency would attract more business than one that don't.

If such instruments do not appear in the crypto world, it will have its growth stunted. If we want mainstream adoption, then there are things like insurance houses and loan companies that will have to exist.

What I don't want to see is such entities being regulated by governments, because that will kill the coin in short order. You'll have taxes and regulations and oversight and ad nauseam. But a few insurance pools? That's a whole 'nother animal. So long as the insurance is voluntary, either paid by the exchange holder or the individual investor, then it's not only not a problem, it should encourage trade. Yes, there is some moral hazard there, but we need some risk takers to build the economy. As big as it's gotten, bitcoin is still small potatoes compared to most fiat currencies. We can build on the good models and ditch the bad ones. Some things are inherent to markets, and risk mitigation is one of them. Given the public ledger, it's unlikely that an insurance agent could take the bag and run. Any such company would have to identify themselves to the public, or only fools would pay. This would garner a level of accountability and trust that's sorely needed in the public exchanges.

I take it back bud, but when I see those promoting mechanisms that smack of fractional reserve abuse I get a bit hot under the collar.

IF an exchange is serious they will make sure there is a rain day fund to cover this sort of thing, they could even use it as a promotional positive aspect and list the insurance fund in an open manner but should there be situation of two tier trading where some given a leg up because of circumstance ( ie existing wealth in fiat ) while others actually have to mine for value then I would not be recommending that and would not like to see it be implemented.

All central banks run a policy of issuing debt not credit and they are subject to terminal failure by design, if you charge someone to print notes for them, where does the value come from to pay the debt if you need to pay fee's to access the paper to pay it off. We are better off thinking up new mechanisms that enable us to retain control of what we have worked for than to just change the symbol in front of the digits and its business usual.

http://perfecteconomy.com/wp/

How it could be applied to crypto is anyones guess but here is a better way than fractional reserve, I know Mike personally and although his people skills could do with a polish the concept is sound.

We need less lawyers, tax collectors, accountants, solicitors, notaries ect and a hell of a lot more trust and respect for each other else whats the point ?

negritaman

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