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Comment by infotogivenm | Hacker News Reader

Correct. Anytime an exchange becomes insolvent, some number of people end up losing everything - just by trying to onboard their money into the system (even if they plant to move it to hardware wallet ASAP). By your own admission, there is often even a mandatory waiting period here.

The point being: “good. not your keys not your coins” is not an appropriate response to exchange insolvency, and further makes you sound like a complete asshat. “just avoid the insolvency window!” is better advice (edit to add an explicit “/s” on this last sentence. Dunno what is with these downvotes).

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I think the key point here is that the insolvency window is not an obvious thing to avoid, however you can always check to see if you have the keys, regardless of the state of the exchange. So without considering the insolvency of the exchange, if you don’t have the keys, a user shouldn’t think they have singular access to those coins. For this reason, I don’t think it makes you an asshat to assert that if you don’t have the keys you don’t have the coins. It’s meant to be a warning of something to avoid. Also how do you propose one avoid the insolvency window? It’s something that’s defined post-action, whereas evaluating ownership of the keys can be accomplished at any time.

I 100% agree with you that this is what OP intended.

My point is it’s a base trivialization of the facts, and regardless of whether you use your own wallet or not exchange insolvency is a viable risk to users of the ecosystem. There is nothing “good” about it, and further making broad generalizations like this about financial victims that are not 100% correct is, indeed, asshat-ery. But the latter is merely an opinion and precludes how one treats others.

> Also how do you propose one avoid the insolvency window?

I do not propose it can be addressed, but maybe someone else has ideas.

I don't think you have a good point. There are two separate things at play here.

The first is having an organisation that can't be trusted hold "your" coins for a long period of time. It is a bad idea because you could hold the coins yourself (that is, there is a less-bad alternative).

The second is buying coins from that same organisation. This may not be a bad idea, because the risks involved in the short transaction may be very low, and you may not have a better alternative.

Yes, correct analysis.

Again, my point is that regardless of whether either of these things is a “good idea” or “bad idea”, it is not fair to call exchange insolvency a good thing; *one* reason here being that the second “thing” “has to exist” for the ecosystem to work.

I really did not expect this to be so controversial a point, but I suppose I haven’t done the best job expressing it.

It was somewhat difficult to engage with your comment because it felt kind of like it was strawmanning.

But I think the reality is you just misunderstood the original comment. The original comment was saying that it was good that people were withdrawing their crypto, not that it was good that any particular exchange had become insolvent. Only after I read your edited original comment did I realise that this is what happened.

When a crypto exchange fails I always say "That was unsurprising. Remember to hold your own coins." A lot of other people say similar things.

I do not say "This is a good thing. I'm sure that now that Failed_Exchange_1001 has failed people will finally learn to hold their own coins." I don't think I've heard many people suggest that.

Jesus, this is exactly what happened. I swear I clicked the headline, but somehow ended up on a tab about “Coinlist halting withdrawals”, not “Coinbase having withdrawals”. No wonder I felt like I was in the twilight zone.

Well. looks at the dozens of comments in this thread. My bad.

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