Bitcoin as the world's biggest game of hot potato: https://prestonbyrne.com/2017/11/26/the-bear-case-for-crypto-part-ii-fractional-reserve-marmot/ … @prestonjbyrne
Liquidity crunch catalyzed by any disruption in the price would cause a bank run.
-
-
What will happen is, to avoid their assets being tied up indefinitely (ala Gox), account holders will try to move their BTC off-exchange. The entire Bitcoin network, which is saturated, can only serve ~3 transactions per second worldwide.
Show this thread -
This means that an exodus from one exchange, in addition to spooking account holders at every other exchange, will make it pretty difficult to move BTC in or out of another exchange.
Show this thread -
Your rational action, as an account-holder of a non-imperiled exchange, is to a) immediately request a wire (yes, a wire) of your USD and b) bid as high as possible for a transaction to exfiltrate your BTC.
Show this thread -
This turns non-imperiled exchanges into imperiled exchanges, quickly. The technical term is "contagion" and the way to avoid it is *drumroll* "temporarily freeze withdraws."
Show this thread
End of conversation
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.