I am new to all of this. Only in June I first found out about blockchains and bitcoin.
What attracted me the most were the words: Blockchain solves the issue of trust.
“Today we often use third parties to solve the problem of trust”. You know that feeling when you walk into a bank and wait for the teller or call creditcard callcenter. They might help but they are so boring. They might offer you protection but the price is they want to control you. Cryptocurrencies will set you free and make you anonymous.
I dived in. I set up wallets and purchased my coins and market was up and all is good.
Until a few days ago, when I transferred some Ethereum to Bitfinex. Ethereum never reached the wallet.
Apart from being angry, I put a ticket to Bitfinex and I research forums about the problem etc.
Then I realised: Ethereum blockchain have not solved the issue of my trust in Bitfinex. That what I am doing is looking for the third party to help, to resolve the problem. The system did not work. Ether transactions are nonreversable and my money is nowhere in etherland. I so want to call my bank or Paypal, or write a post on the forum… anyone???
Feline, I am going to put on my big girl pants and step up to the plate to offer my support as a fellow crypto member in the spirit of what Ivan is trying to achieve: a community where you are not alone in the crypto space.
I am sorry to hear that you have lost money.
It must be very frustrating to find out that this space is rife with Accidents, Mistakes, Theft, and Ineptitude, especially when it involves a thing that many of us work so hard for and have so little of.
I cannot fix your situation but the best advice I can give you is to remember that the internet right now is the wild, wild west and in the crypto space there are no sherifs but everyone owns a gun.
I believe that crypto developers (who are currently working furiously to even create this space) will eventually create some controls to reduce the amount of AMTI above. It is important to remember though that crypto inherently does not want to be controlled so in the end we are all responsible for our own money.
Feline, you have control of the outcome of this situation: You have a choice to make.
You can choose to take this hit, stay in the space and strengthen your personal arsenal via education, by identifying what went wrong so that it does not happen again or wait until controls are built into the space reducing the amount of AMTI that I spoke of.
Either way, whatever choice you make, Feline, I wish you well.
Thanks Jepb100,
I think your post confirms that question of trust has not been solved by the blockchain.
Bitfinex issued me with a wallet address, I send ETH to this wallet address. Etherscan.io shows that ETH has arrived. Bitfinex has problems and cannot credit my wallet. I cannot reverse the transaction, only Bitfinex can manually release the ETH.
So if this contract did not execute and I cannot reverse the transaction,
what is the point? I must be not understanding something about Ethereum.
Maybe there is a coin or chain where wallet always belongs to the user but can assign addresses for various exchanges or suppliers and wallet owner can reverse the transaction. Does that make sense.
That does suck. I’m sorry that happened.
Sending to exchanges does entail risk. You are sending to a wallet for which you do not control the private key, the exchange does. This is counter to the ideal of full decentralization that blockchain appeals to in general. That’s why decentralized exchanges are going to be important. But for now if you want to trade on an exchange, it is best to first send a small amount to an exchange wallet first to make sure the wallet receives coin. Then you can send the rest of what you want to trade. If you want to hodl your investment for more than a few days it’s best to transfer them back from the exchange to your private wallet. I hope Bitfinex figures out this issue for you!
Best,
Brady
PS - @ivan did a video that is helpful on learning some basics of storing your coins and the risks involved…
@Feline I know exactly how you feel as this exact same thing happened to me I sent 1.06 ETH to Poloniex which never materialised in my Poloniex ETH wallet. I logged a support ticket nearly 90 days ago and still had no response.
I lay the blame with the exchange, who unfortunately is a 3rd party in this system. Since that happened I have not trusted exchanges any more than I have to. I still fully trust and believe in the future of blockchain technology though. The exchange is only a 3rd party agent using the blockchain they are not part of the blockchain itself. I could not fathom any possibility of funds being transferred from 1 private wallet to another going wrong as long as the address is entered perfectly, and the transfer fee is sufficient.
I am confused on how cryptocurrencies will work in a real world . Again I am asking about security and trust. Ethereum supposed to compete with Visa or Paypal or a bank transfer. But if we make Credit Card payment to Bitfinex or Poloniex, or any shop, I would be able to get my money back. Based on this experience it would be silly for any big shop like Amazon to allow payments by cryptocurrencies. Because Amazon will control private key and there will be noone to protect the customer.
True, though cryptos are not yet a finished product, it is still early days. I must admit people who have experiences like ours could easily be put off. TenX is what I believe will be the bridge we need from cryptos to the real world. Its a visa card that is accepted anywhere visa is accepted including Amazon etc. but it deductes your crypto wallet directly. It converts your crypto to fiat in real time and pays the merchant in their native currency but deducts your crypto balance rather than your bank account.
Yes I think cryptos are still a way off mass real world use but the whole point behind them is that they are a very good store of value. BTC has a finite supply of 21,000,000 fiat does not have a finite supply. The bank or government can create as much as they like and give it a fancy name like quantative easing. If you hold say $10,000 in your bank and the central bank decided to add another 10% to the money supply, which they have done over the last few years in many countries. Your $10,000 is worth 10% less, it is still nominally worth $10,000 but it’s purchasing power is reduced. That if theft no matter how you dress it up.
Gold is a great example of this. 1oz of gold would today buy you an expensive suit, shoes etc. 1oz in Roman times would also buy you a fine toga and sandals fit for a senator. The value of gold in the long term has not diminished. Fiat has, I am sure most people earn much more than $10,000 a year today. Even just 200 years ago you would have been very rich to have $10,000.
BTC could be seen as a digital gold, when we get 21,0000,000 you can’t create more, thus preserving their value. BTC is also much easier to use than gold as it can be split into tiny units and send anywhere in the world as easy as an email.
Yes we lost money to a 3rd party agent who is a user of BTC/ETH etc. and visa would have refunded this to us. There will likely be future mechanisms set up to facilitate this. Exchanges based on smart contracts perhaps. We could have lost cash in the same way we lost out ETH if we had given it to an unscrupulous trader at a market, the point is to get the word out and the comminty will react by not using that trader/exchange thus disincentivising this mal-practice.
If you were to use cryptos in the real world, you would need to control your own private key, or at least one of your private keys (in a multi-sig situation). So in your example, Amazon would not control private key of your wallet, just their own.
Back to the problem you first discussed, the need to trust exchanges. Actually this has been identified as a problem as is something a lot of people are working on right now to try and solve. Basically people are working on the idea of decentralized exchanges.
In fact, the very exchange you mentioned Bitfinex is working on one right now and it is called Ethfinex. Here is a list of decentralized exchanges that will be built on the ethereum platform:
- Ethfinex - https://www.bitfinex.com/ethfinex
- RadarRelay - https://radarrelay.com/
- The0cean - https://the0cean.com/
- Kyber Network - https://kyber.network/
These are all ethereum based decentralized exchanges. The first 3 are built on a protocol called 0x (ZRX) and the last one is a recently completed high profile ICO that has its own protocol (the founder is a pretty well known developer in the blockchain sphere).
I’m actually very excited about all these exchanges and what they mean for the future. It sucks that you lost money, hopefully bitfinex can help you recover it. But you definitely have a brighter future to look forward to IMO.
Decentralised exchanges is exactly what we need! Its not surprising that it’s currently the centralised element (exchanges) of this overall decentralised system that is causing the biggest trust problems.
I’d also like to append the Blocknet - https://blocknet.co/ - to Rigario’s list of decentralized exchanges above 