A few Fridays ago, as I sat in the lounge at New York’s JFK airport waiting for my (delayed) flight back to Hong Kong, I decided to move around some bitcoin.
Why? Well, since we started writing about bitcoin and cryptocurrencies, we’ve been inundated with “how to” questions from our readers. And as I’ve been trading these new forms of value for many months now, I’ve been working on putting together a very simple guide showing readers, step-by-step, how to buy, move and store bitcoin and other digital currencies.
That’s why I was making this particular transfer. I was documenting the process of moving four bitcoin from my trading exchange account to a new separate wallet I had just set up. (A wallet is where you store your bitcoin. An exchange is simply where you trade bitcoin and other cryptocurrencies).
At the time, one bitcoin was worth around US$2,100. So the total value of the transfer was a little under US$8,500.
I put in the transfer request, confirmed the transaction by clicking on a confirmation link sent to me in an email by the exchange, and then I waited…
Usually, a simple bitcoin transaction takes a few minutes, maybe more. It’s not instantaneous (one of the biggest misconceptions about bitcoin is that transactions happen at once). But after an hour there was no sign of the bitcoin in the new wallet I had just documented setting up.
I re-checked my account at the exchange. Sure enough, the four bitcoin had been removed from my balance… but in the transaction ledger, it simply read “awaiting approval”.
I got on the flight and thought nothing of it. It wouldn’t take long for this “approval” to go through.
But when I checked on Monday morning back in the office, nothing had changed. The exchange was still showing “awaiting approval”. Whose approval? It was not clear.
The exchange I was using in this instance is called Poloniex. Operated out of the U.S., it’s the largest cryptocurrency exchange. In the past 24 hours alone, the exchange executed over US$620 million in trading volume. That’s nearly three times the US$235 million of the second-largest exchange, Kraken.
“It’s like a ‘GPS’ for the stock market…”
You may never get another opportunity like this one. It could be as simple as ‘inputting’ the right stocks and letting the momentum guide you to the biggest profits of your life. By the time this is done, you could be up 2,400% or more on your money.
Intrigued? Wait till you see it
So, I raised a support ticket (reported the problem to the exchange) asking what was going on. (Note: there’s no phone number for support, no email, no instant chat box. You can only raise a ticket with your problem and leave it with the exchange support staff.)
Days passed. And then a week. Still nothing. Nobody responded to my support ticket. There was absolutely nothing I could do. The transaction simply said “awaiting approval”. In the meantime, the bitcoin was completely frozen.
I had a little more cryptocurrency in my account which I could trade, but I didn’t want to try to transfer that in case the dreaded “awaiting approval” issue cropped up again.
Why you should never leave your bitcoin at an exchange
I recently reminded readers that if your bitcoin is at an exchange then you don’t own it – they do.
That’s why I keep nearly all of my bitcoin offline, in what’s called “cold storage”. This is a piece of hardware where you store the bitcoin. I keep a little “fun money” at the exchange for trading.
But ironically, it was the process of documenting taking money off the exchange for our readers that triggered this whole process.
In the end, it took TEN DAYS for the transaction to ultimately be canceled, and the bitcoin returned to my exchange account.
It’s a great reminder that with cryptocurrencies, you don’t enjoy the kind of “investor protections” you might be accustomed to with banks and brokerages.
In this case, there was nobody to call and nobody to complain to. Nothing. I just had to wait.
But fortunately, by the time those four bitcoin were finally transferred out of my exchange account (successfully) into cold storage, they were worth another US$2,800.