[ad_1]
Bitcoin celebrated its tenth birthday on 3 January and, in commemoration of this milestone, the first Proof of Keys event was held. Organized by Trace Mayer, a crypt investor and a podcast host, he invited cryptocurrency traders to withdraw their holdings from cryptographic exchanges, in order to promote decentralization and monetary independence on which Satoshi's vision was founded Nakamoto for Bitcoin.
However, apparently as positive as his message, in the days before the event was claimed on social media that several exchanges – particularly HitBTC – had apparently frozen accounts and prevented users from withdrawing their funds.
These are serious charges, but while raising questions about who really owns the money exchanged through large exchanges, the issue could be more complicated than HitBTC detractors believed. For one, exchanges have the record of withdrawing withdrawals and freezing accounts as part of their normal business, so it's not sure that HitBTC or any other exchange specifically opposed Proof of Keys and tried to prevent Bitcoin reclamation. And secondly, it is worth pointing out that Proof of Keys is not a basic event, guided by the community. Rather, it is an initiative led by entrepreneur Trace Mayer, who appears to be an investor in Armory, a producer of cryptocurrency that obviously has a financial interest in people who bring their coins out of trade. As such, his claims of widespread account blocks should perhaps be treated with skepticism.
charges
The suspicion that HitBTC is blocking accounts and withdrawals due to Proof of Keys has emerged on Reddit and Twitter. On HitBTC's subreddit, most of the current posts were made by users who complained that they had not been able to withdraw their cryptography. For example, on 1 January, Reddit users' pedals wrote that HitBTC "does not allow withdrawal, even for [my] accounts that have passed KYC ", while other users have reported similar problems, as well as claiming that the exchange is fraudulent in general.
Not surprisingly, these reports provoked a noisy reaction from those organizing and supporting the Proof of Keys event. On 2 January, Trace Mayer known on Twitter that a "friend" was informed by HitBTC that "Withdrawals are temporarily disabled on your account", which leads him to suggest that "@hitbtc failed #ProofOfKeys".
Likewise, John McAfee – who also has a financial interest in a crypt portfolio (Bitfi, who was paid to approve) – was quick to vent his spleen against the exchange. he he wrote on Twitter:
I've warned everyone more than a dozen times. Do not register. Do not use Withdtaw your funds. I was wiped out for calling HitBT like a corrupt bug. Shit hard You have six months notice to withdraw your funds. Do not ask me to help you now. Https: //t.co/Ls9mzpUSbz
– John McAfee (@officialmcafee) 2 January 2019
Further complicating the issue, Trace Mayer reported Testing of Keys "failures" at Coinbase, Poloniex, Bitfinex and Purse.io (a guarantee deposit service and an online market, rather than an exchange). However, there is not much online that can confirm widespread problems (at least not on the HitBTC scale).
For example, in the Coinbase subreddit, there is currently a post from someone confused about why a 72-hour quarantine on levies has been imposed on them, yet there is nothing else from period before and after the Keys Test which would suggest something unusual or unpleasant. The same applies to the subreddits Poloniex, Bitfinex and Purse.io, although in each of these it was difficult to find even one complaint (there was a complaint on a frozen Purse.io account, but this was more a problem with an Amazon purchase compared to a specific withdrawal issue).
And indeed, when it comes to the original claim, HitBTC informed Cointelegraph that there is no connection between the day of the Key Test and account suspensions. Spokesman Peter Swen said the frozen withdrawals are the result of internal security measures related to KYC (Know Your Customer) and AML (Anti-Money Laundering) procedures.
"These temporary and safety-related freezes are a direct consequence of our international KYC and AML measures, these rules exist and apply to us and to everyone, 24 hours a day, 365 days a year."
A history of withdrawal problems
It is therefore difficult to support a narrative that exchanges in general deliberately subvert Proof of Keys or are unable to handle the absolute number of withdrawals (there is also no evidence of how popular the event was). And even though it would appear from the social media that HitBTC has had a relatively high number of blocked withdrawals, it is indeed difficult to prove that it has deliberately decided to oppose the event. Not only because it explicitly denies a connection, but also because it already has an imperfect reputation when it comes to withdrawals.
For example, HitBTC has a three out of five rating on Trustpilot, with 34 percent of its ratings as a star. Many of the negative reviewers (dating back to months before Proof of Keys) have complained about not being able to withdraw funds, although HitBTC's response to this review site reveals that they are strenuously denying these problems. Equally puzzling, there are a number of negative reviews of the exchange on encrypted news and review sites, such as 99 Bitcoin and CoinSutra, with expert reviewers on both sites that explicitly refer to difficulties in receding.
In other words, HitBTC has always reported problems with withdrawals, so it seems unlikely that the problems reported now are the result of the Proof of Keys day stymie attempt. Rather, withdrawal problems are more likely to have shifted more to public opinion as a result of the attention that surrounds Proof of Keys, which has led to the impression that there has been a sudden increase in account and withdrawal suspensions. The above reviews – many of which have many months – suggest that there has not been a significant increase, even though it would have been possible to state that HitBTC has effectively "failed" the Keys Test, ie in the strict sense of failure let at least some of its users withdraw their coins.
Conflict of interest
While the problems of HitBTC must be highlighted, some of the spotlight should also be shining on the day Proof of Keys. Its organizer, Trace Mayer, is a key investor in Armory, which, as stated above, provides an open source cryptocurrency portfolio. In 2013, it raised $ 600,000 in initial funding, with this loan "driven" by Mayer, according to a statement released by Armory Technologies at the time. It has, therefore, a significant interest in seeing the portfolios like Armory succeed, something that would probably be possible only if the cryptic dealers and keepers got rid of their dependence on such exchanges as HitBTC (and Coinbase, Poloniex and Bitfinex).
And what would be a good way to encourage people to abandon exchanges in favor of portfolios like Armory? That's right, you guessed it: some kind of event that is based on the interest in Genesis Block Day and that actually involves pushing people to get their cryptography from trading and putting it in Armory and other portfolios. In fact, it is this motivation that gave birth to Proof of Keys, which, consequently, now emerges as a subtly masked marketing event disguised as a community-led initiative.
And it is in this context that Mayer's recent attempts to frame Coinbase, Poloniex and Bitfinex with the same brush of HitBTC should be framed. Without much evidence, his recent tweets have implied that these exchanges – which, because of their popularity, are symbolic of all centralized exchanges – have consciously blocked the withdrawals, with the additional implication that they oppose the fact that their clients have ownership of their coins and have sovereignty over their money. Regardless of how true this statement is, Mayer would certainly benefit if it was widely believed, given its initial investment in the Armory.
Centralized exchanges and market distortions
Nevertheless, the Proof of Keys event raises an important issue that has often been wiped out by the cryptic community: centralized exchanges are really compatible with decentralized currencies that, at least in theory, are destined to be new and radical just because they promise make large financial organizations obsolete?
"Centralized exchanges are an anathema for the concept of peer-to-peer exchange," says Dr. Mervyn Maistry, CEO and co-founder of Konfidio, an incubator based in Berlin for decentralized and blockchain-based platforms. "Like most centralization, it can make the investment more convenient, but centralized control also means the possibility of centralized corruption." Trade in custody is all but safe, unchanging, or traceable. "
Of course, up until now the rise of cryptography has been almost completely dependent on trade, without which Bitcoin would never have risen to $ 19,000 by the end of 2017.
However, it is likely that the existence of large cryptographic exchanges is introducing the types of price and market distortions that Bitcoin and other cryptos should have avoided.
To cite the most obvious example, a research published in June by the University of Texas found that 50% of Bitcoin's 2017 price rise was the result of commercial manipulation on the Bitfinex stock exchange and they used Tether's stablecoin. Since this manipulation has also been responsible for 64% of the increase in other large cryptocurrencies, this research offers an in-depth view of how exchanges, because they have so much market power, can distort the price of Bitcoin and other tokens, even if these were created with the aim of avoiding distortions. Maistry adds, speaking to Cointelegraph via email:
"In the unregulated space of cryptographic exchanges, there is a certainty of 100% corruption, which is exactly the same as centralized exchanges in the traditional world, it is a hundred percent certainty that somewhere, someone is engaged in corrupt ".
There have been allegations that other major markets have manipulated cryptographic markets, and while those allegations have not been proven, they join Proof of Keys to highlight the often opaque nature of cryptographic exchanges and the questionable need for cryptocurrency holders to become more independent how they manage and exchange their coins. With the gradual emergence of atomic exchanges and decentralized exchanges, such independence is bound to become increasingly possible in the future. But for now, it seems that centralized exchanges will remain popular, even with events like Proof of Keys that drive us to leave them.
Trace Mayer was asked for a comment but did not respond at the time of the press.
[ad_2]Source link
