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by gamblor956
2562 days ago
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Miners have to sell their coin to remain profitable. No, they don't. They just have to sell a notation in their database that a coin is owed to someone. This is what MtGox did, and it's what Coinbase still does. The trick is to maintain just enough coin to be able to transfer out coins on request (as MtGox tried to do), or to just claim that it will take a few days to process the transaction (as Coinbase does). Binance, which has most of its funds auditable on various blockchains. A company owned by Binance audited Binance's books. And posted the results of the audit online...but not the underlying data. This is useful from the POV of conducting a third-party audit... |
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Miners do not custody funds. Large miners that control a farm can't run on empty, they need to pay for space, hardware, and electricity - they need to sell through crypto through a brokerage to end users to make a profit. The brokerage (e.g. Coinbase) may then custody those funds on behalf of brokerage users, but the miner no longer has it.
Mining pools directly pay out the pool contributors in crypto who then themselves decide to either save or spend.
There are some "cloud mining" services but they don't account for a lot of power and most end users play with them at a loss.
A brokerage does not own or generate new coin, it simply holds it on behalf of users and enables exchanges between users via the market.
"[Coinbase] claim that it will take a few days to process the transaction" -> This is very vague. When you withdraw crypto it generally happens near instantly. If you're talking about a purchase which involves processing a fiat withdrawal from a bank, that's not the same thing.
Re: Binance, you can audit it yourself at addresses like this: https://www.blockchain.com/btc/address/34xp4vRoCGJym3xR7yCVP...