They need to have your money before they can execute a trade from you, otherwise they're opening themselves up for significant fraud. If it's trade-then-send, I could sell some bitcoin, then wait a few minutes to see whether the price went up or down before I send them. If the price went up, just refuse to send the bitcoin, and execute a new sale at the higher price.
You can certainly put money in right before you execute a trade, and pull it back out right after. But that introduces significant lag, up to an hour for bitcoin, depending on how many confirmations you wait for, and several days for USD.
That said, I don't understand why people keep significant balances in these places. Keep a small amount to trade with and save the rest yourself!
That said, I don't understand why people keep significant balances in these places. Keep a small amount to trade with and save the rest yourself!
Yeah, that's what I mean.
You can certainly put money in right before you execute a trade, and pull it back out right after. But that introduces significant lag, up to an hour for bitcoin, depending on how many confirmations you wait for, and several days for USD.
Thanks, that's definitely something to consider. I can see it being very inconvenient, though I still agree that the idea of keeping a balance larger than your trade volume in a service like this is hard to fathom.
I can only guess that people have become so used to solid financial institutions that present little risk for deposited money. Even non-FDIC institutions, like stock brokerages, usually have extremely low risk for deposited cash. If you're thinking like that, why not let them hold onto it? It's less effort. Of course, we see the answer to "why not?" here.
You can certainly put money in right before you execute a trade, and pull it back out right after. But that introduces significant lag, up to an hour for bitcoin, depending on how many confirmations you wait for, and several days for USD.
That said, I don't understand why people keep significant balances in these places. Keep a small amount to trade with and save the rest yourself!