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Many Cryptopia wallets locked

Posted: Sat Nov 19, 2016 8:18 am
by Steve Sokolowski
Some exchanges enforce a policy called "locked wallets" or "maintenance mode," a practice we consider unethical because of its misleading implementation. When these exchanges need to take a coin offline, for example to upgrade a daemon, the wallet is "locked" instead of the market being disabled. Coins can be bought and sold, but they can't be deposited and withdrawln. The result is a market in paper currency that has no blockchain value until the wallet is unlocked. Sometimes, wallets are never unlocked, causing a loss of all money in the exchange.

Cryptopia has locked about half of its wallets in the past week. Our software detects locked wallets and disables mining, payouts, and trading in those coins until the wallets are unlocked. In the case that the coin is available for trading at another exchange, we perform our trading there instead and do not disable the coin. Exchanges with locked wallets are displayed as having no sell orders available in the "coin status" chart.

Unfortunately, Cryptopia offers many coins that are unavailable anywhere else, so the wallet locking has cut profits across the board at all pools during the past week. Unlike what many surmised, A4 adoption is not yet the cause of the decline. We can expect profitability to rise 20% or more once wallets unlock (if they ever do).

Chris has heard that other pools are promising high payouts by mining coins with locked wallets, on the assumption that the wallets will unlock someday, similar to how Zpool mined coins at Cryptsy pricing in December 2014 when withdrawals there were disabled before Cryptsy failed. Even if they do unlock, the number of backlogged coins is likely to cause a large crash to owners of those coins.

As we did then, we only mine what we can definitely pay, and always post our current profitability on our homepage. We apologize for this issue, and hopefully Cryptopia will unlock its wallets soon so that we can return to even higher profitability!

Re: Many Cryptopia wallets locked

Posted: Sat Nov 19, 2016 11:11 am
by excelerator
Thanks for the transparency and guidance.

Re: Many Cryptopia wallets locked

Posted: Sat Nov 19, 2016 6:33 pm
by vinylwasp
Yes, thanks Steve, nice to hear that we can expect a bumb in profits once Cryptopia sort out the underlying issue.

Re: Many Cryptopia wallets locked

Posted: Sun Nov 20, 2016 2:26 am
by ltc2084
Thanks for the clear and seemingly very reasonable actions. Glad you guys track the intricacies.