Watch Vlog #74: Why Poloniex keeps stopping withdrawals and deposits (theory) + Trying out D-tube for the first time. video on DTube
I'm typing this directly into the D-tube Editor. Not sure yet what will happen.
Why Poloniex keeps stopping withdrawals and deposits (theory)
This theory is from user @crypto-investor and was brought to my attention by a user called @orionschariot in one of his replies to my posts. I rewrote it to make it even simpler.
When you send Bitcoin to Poloniex it will generate a separate deposit Bitcoin address for you linked to your Poloniex account. Sending your BTC to that address identifies the BTC as yours. If you make a mistake in the deposit address the Bitcoin is lost. Simple.
With STEEM its different. Poloniex can't generate a specific STEEM address for you. You have to send your STEEM to the Poloniex STEEM account and add a memo description to identify the STEEM as yours. Now when users make a mistake in the memo field Poloniex will still receive the STEEM in their wallet. (unlike Bitcoin) but they don't know who it belongs to.
Figuring this out is not impossible but takes time. We have a lot of crypto beginners on Steemit so I can imagine this happens often.
It explains why they would just shut down STEEM deposits and withdrawals for a while to sort it.
I talk about it more in my blog (starts @1:55)
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