[HN Gopher] Coinbase S-1
___________________________________________________________________
Coinbase S-1
Author : kacy
Score : 546 points
Date : 2021-02-25 12:40 UTC (10 hours ago)
(HTM) web link (www.sec.gov)
(TXT) w3m dump (www.sec.gov)
| diebeforei485 wrote:
| So, how long is the employee lockup period?
| lucasverra wrote:
| I do ask myself if a 100B valuation on public listing is the
| start of mainstream crypto.
|
| Plus the direct listing is a giant middle finger to traditional
| banking and overall establishment, right?
|
| Like : Here are the new rules this new internet will be playing
| by. Direct, decentralized. Adapt or die?
| globular-toast wrote:
| Coinbase play within the rules of the current establishment.
| nunchuck wrote:
| And at the same time, they're influencing history. For better
| or worse, I guess we'll have to see.
| appplemac wrote:
| Agreed, I personally view them as a bridge between the
| traditional brokerage model that more traditional investors
| can understand and use, and the crypto world that is looking
| to be separate from the traditional model.
| lucasverra wrote:
| Direct listing is kinda novel, nah ?
| Xixi wrote:
| Slack and Spotify went the direct listing route, but indeed
| it's pretty rare compared to IPOs.
| thefounder wrote:
| Not really
| PragmaticPulp wrote:
| > Plus the direct listing is a giant middle finger to
| traditional banking and overall establishment, right?
|
| Despite the narrative, Bitcoin isn't really competing with
| traditional banking at all. It's additive. It has become
| another asset for banks to sell to people, collecting
| relatively high exchange fees in both directions on the trade.
|
| This is more of an indication that Coinbase _is_ now a
| traditional establishment banking institution. They're also
| very centralized, given that they're on the short list of
| exchanges and most users prefer to have Coinbase keep their
| coins instead of withdrawing to the Blockchain (for additional
| fees, which go to increasingly centralized miners).
|
| Coinbase took the risk by being the first big entrant, but
| other big banks would be more than happy to sell you Bitcoin
| (for a fee, naturally) if they didn't think it posed a large
| legal risk to the rest of their business. Coinbase has the
| benefit of not having another banking business, so they can go
| all-in on it.
|
| Coinbase is the institution now. If crypto buy/sell becomes
| mainstream and the legal risk becomes smaller over time, other
| institutions will gladly sell you Bitcoin as part of their
| product lineup. If history is any indication, this will drive
| trading fees to $0, destroying Coinbase's current source of
| profit and unique position in the market. It will be
| interesting to see what they do to stay relevant as exchange
| fees dwindle.
| Kye wrote:
| If history is any guide, the start will come from the ruins
| when this boom crashes. First movers almost always get swept up
| in and crushed under the early part of the adoption curve.
| zrail wrote:
| They still hired Goldman and Citi to advise on the listing.
| mritchie712 wrote:
| yes, little middle finger at best.
| purple_ferret wrote:
| crypto is already mainstream
| asasidh wrote:
| Satoshi Nakamoto (page 1)
| pmurt7 wrote:
| I have tried to use Coinbase this past month to buy some ETH.
| Worst customer support I have ever seen in my life.
|
| Have a look at Reddit to see what's going on with this company:
|
| https://www.reddit.com/r/CoinBase/new/
|
| It's not ok to brag about your business when many of your
| customers are in deep emotional stress because you mess with
| their money.
| swiley wrote:
| As a former customer of mtgox and someone who hung out in
| #bitcoin-otc on freenode half a decade ago: they're still
| better than most of the exchanges.
| quickthrower2 wrote:
| Hardly a glowing recommendation
| josefresco wrote:
| You'll find the same situation over at Binance. All of these
| exchanges (even Robinhood who just updated a ticket I opened
| weeks ago) buckled under the load of the increased
| participation.
| nunchuck wrote:
| Long time customer of CB. I had a great experience thus far,
| but haven't been active on them in the last 18 months. Tried to
| get a family member signed up, their account funded, and some
| trading accomplished. Phew! The customer support has gone down
| hill in the form of 4 to 5 days to respond, and when the
| response finally arrived it was wholly inadequate to solve the
| issue, which would require a us to reply, triggering another 5
| day wait. They were also not very friendly/human in their
| communications.
|
| Tried Gemini, and it was night and day. Same day or next day
| responses. Friendly communication. Concise answers. Quickly
| established account, got it funded within 24 hours, and
| executed a trade. Family member is pleased.
| [deleted]
| DSingularity wrote:
| They define hodl in the S1. Amazing times.
| mancerayder wrote:
| Is BTC still a hedge if it's 50k+? I don't know whether it's a
| good speculation or one to hedge _against_. I 've avoided it all
| this time and with banks and corps getting on board, I feel left
| out.
| simonmales wrote:
| Off-topic: Does anywhere exist where one can read a slightly
| better formatted version of S-1 documents?
| alex-wallish wrote:
| I'm working on this. Will post on hn soon.
| didip wrote:
| Transaction revenue increased $633.2 million, or 137%, for the
| year ended December 31, 2020 compared to the year ended December
| 31, 2019 primarily due to a 142% year over year increase in
| Trading Volume.
|
| Subscription and services revenue increased $25.0 million, or
| 126%, for the year ended December 31, 2020 as compared to the
| year ended December 31, 2019.
|
| Wow, $1B transaction revenue and $44M subscription revenue. These
| guys are making a lot of money for a pure digital product.
| azinman2 wrote:
| So almost all of the comments here are about bitcoin generally.
| While that's not totally surprising, does anyone have any insight
| on whether or not this S1 reveals interesting data that might
| inform the public about investing in coin base (eg why they filed
| an S1)?
| carlineng wrote:
| From "Use of Proceeds" on p78:
|
| "To the extent any registered stockholder chooses to sell
| shares of our Class A common stock covered by this prospectus,
| we will not receive any proceeds from any such sales of our
| Class A common stock."
|
| This is a direct listing, so I think its primarily a liquidity
| event for investors and employees.
| richardwhiuk wrote:
| That's standard surely? They will be issuing new stock which
| they will receive sales?
| carlineng wrote:
| In a Direct Listing, the company does not issue new shares.
| This doesn't mean they can't in the future, but it's just
| not part of the company's initial listing on the public
| markets.
| ttul wrote:
| Their growth rate is staggering, and they are enormously
| profitable. I was most stunned by the gross margins. They spend
| so little to make so much. It illustrates how feverish the
| crypto investing world is.
| baby wrote:
| It might also illustrate how little workforce you need to
| integrate with many crypto networks.
| hntrader wrote:
| It also illustrates the lack of competition due to US
| regulations preventing foreign exchanges (many of them
| signficiantly larger and cheaper than Coinbase) from serving
| US customers.
|
| Very few people outside the US trade on Coinbase because they
| have monopoly margins.
| atomicnumber3 wrote:
| I worked for a prop firm that briefly did a foray into _coin
| trading.
|
| Coinbase's trading fees are *_outrageous** compared to what
| we're used to in the world of normal equity/option/future/fx
| trading. Literally 100x+ what we're used to paying. You have
| to do absolutely enormous volume before they'll give you
| anywhere near a sane rate.
|
| I'm not surprised they're printing money.
| baby wrote:
| Yeah their rates are outrageous.
| ayewo wrote:
| > Coinbase's trading fees are outrageous compared to what
| we're used to in the world of normal
| equity/option/future/fx trading.
|
| I'm guessing their fees draw heavy inspiration from price
| skimming [0] (which is used heavily by AWS), as it allows
| them to maximize revenue while consumer demand is high in
| cryptocurrencies.
|
| 0: https://www.investopedia.com/terms/p/priceskimming.asp
| hankchinaski wrote:
| in a gold rush sell shovels
| buryat wrote:
| numbers are very good, $1.27B revenue with $322M net income for
| 2020
| carlineng wrote:
| Trading volume of "Other Crypto Assets" (non-BTC/ETH/LTC) made up
| 44% of revenue in 2020, which they attribute to DeFi crypto
| assets. I wonder how 13% of their assets drives 44% of their
| revenue? The section on Applications talks about DeFi as peer-to-
| peer financial agreements, which implies there's some underlying
| economic activity going on, as opposed to just speculation, but I
| haven't been able to find anything else that digs deeper into
| that piece.
| quickthrower2 wrote:
| People gamble more on shit coins but hold on to BTC and ETH
| dustinmoris wrote:
| I wouldn't be surprised, and by that I mean I actually believe,
| that organisations like Coinbase are directly manipulating the
| price of BTC in order to create a big hype and excitement before
| their IPO.
| ignoramous wrote:
| Market manipulation is nothing new but with crypto,
| manipulation is inevitable and unavoidable, partly due to it
| being born on the Internet.
|
| In fact, the way crypto works, I can only see Coinbase' (and
| other companies in this space) valuation going up, because for
| all the hype, crypto is still in the very nascent stages of the
| adoption curve. A lot is left to be figured out, and that's
| part of the reason why skeptics and proponents disagree so
| vehemently. Thus far, the skeptics have been losing, and in my
| opinion, would continue to.
| ConcernedCoder wrote:
| Well the bubble is official now... hang on everyone!
| efitz wrote:
| Coinbase' customer support is crap. You van only get someone on
| the phone if your account is compromised; anything else goes to
| email, and they respond when they get around to it. Also their
| email verification system for transfers fails frequently causing
| transfers to be canceled. Pretty convenient way for them to keep
| your money. I am biased but I'm pretty unhappy with coinbase
| right now.
| u678u wrote:
| I thought that the point of crypto is low fees? Nice that crypto
| has a $~1T market cap. But just one broker is going to have a
| market cap of one tenth of that. Makes no sense.
| Tenoke wrote:
| >but just one broker is going to have a market cap of one tenth
| of that. Makes no sense.
|
| Especially given that this one exchange itself has only 11% of
| the top exchange's volume[0].
|
| On the other hand, it's not as easy for institutional money to
| get into crypto directly as it is to buy Coinbase stock.
| Additionally, Coinbase is (likely) a less volatile investment
| in the future of the whole crypto market rather than picking
| specific winners.
|
| 0.https://www.coingecko.com/en/exchanges
| ketamine__ wrote:
| The market cap of crypto is much larger than 1B. It's at least
| 1 trillion.
| u678u wrote:
| You're right, I've updated.
| CamelCaseName wrote:
| Clearly a typo given the following sentence...
| ketamine__ wrote:
| It wasn't clear to me......
| sebastien_bois wrote:
| Wonder why the first picture with an app shows BTC going down,
| with the actual price covered up.
| ipnon wrote:
| Coinbase is critical to the widespread adoption of crypto because
| it acts as a bridge between everything-is-regulated and anything-
| goes. Cryptocurrencies are only bound by the rules of the
| programs that run them, but they exist in the "real world" where
| powerful states have guns and nukes and can pass laws that would
| make using cryptocurrencies too risky for the general public,
| even if it would still be technically feasible. Coinbase is
| clearly the leader in this bridge-space and I suspect this IPO
| will go nicely.
| tfang17 wrote:
| Biggest surprise on the S1: CPO who joined exactly 1 year ago was
| given 2M shares, currently valued at $750M.
| thundergolfer wrote:
| Snowflake's CEO, Frank Slootman, made a similarly insane amount
| of money on IPO after being at the company for 18 months. I
| think he got given what became over $1 billion worth.
| fshbbdssbbgdd wrote:
| If these execs with fancy credentials make investors trust
| the company more, and then the investors give the company an
| eleven-figure valuation, it's not hard to argue the execs
| contributed 1% of the share price. It's a better deal than
| the SPACs, where the big name gets 5% of the equity for doing
| nothing.
| anonu wrote:
| Love reading the risk factors section. First thought: how can a
| lay person possibly understood the risks as laid out here?
|
| Also they view this as a major risk: *the identification of
| Satoshi Nakamoto, the pseudonymous person or persons who
| developed Bitcoin, or the transfer of Satoshi's Bitcoins;
|
| Second thought, what an incredible business and growth.
|
| 1.14bn in revenue on 193bn in trading volume: thats 60bps on
| every dollar traded. These are insane fees ripe for disruption.
| justapassenger wrote:
| > 1.14bn in revenue on 193bn in trading volume: thats 60bps on
| every dollar traded. These are insane fees ripe for disruption.
|
| They know really well, that best business during gold rush is
| to sell shovels.
| missedthecue wrote:
| Wouldn't that be more applicable to the GPU manufacturers?
| Coinbase is basically a bank.
| cco wrote:
| "Sell shovels or be the bank that the miner sells their
| gold to" is a bit wordy, but yes, you're correct.
| justapassenger wrote:
| Mining is a small, niche part of crypto craziness. Real
| action is in trading.
| Cthulhu_ wrote:
| Those too, but Coinbase will generate pretty constant
| revenue (depending on trading volume) while GPU
| manufacturers have the additional expense and risk of R&D,
| production and distribution.
|
| Not to diminish Coinbase's work of course, they're dealing
| with a ton of international regulation. Their trade is
| probably more a legal one than a software engineering one.
| ketamine__ wrote:
| Satoshi is dead. It was Hal Finney. The coins aren't moving.
| dabeeeenster wrote:
| I don't quite understand what the risk to coinbase is if
| Satoshi is alive/identified? Do they think he has a hack or
| something?!
| tristanj wrote:
| Satoshi's wallets have 1.1 million bitcoins, which are worth
| $56.4 billion at today's price. That would place Satoshi
| Nakamoto among the 25 wealthiest people on the planet.
| skrebbel wrote:
| My pet theory is that all those bitcoins are lost forever,
| just Satoshi performance tuning the miner he'd hacked
| together with perl one night and letting it run for a few
| hours. Close terminal, poof, everything gone. Who cares,
| can mine more later. Bedtime!
|
| (disclaimer, I know nothing about bitcoin, there's likely
| 100 reasons why this makes no technical sense)
| lvs wrote:
| The question is why that fact alone would affect the value
| of this company's shares. Just identifying him doesn't mean
| he'd liquidate.
| jki275 wrote:
| It's not just knowing who he is -- if he's identified he
| might decide to move those coins. If he did that, it
| could affect the price. I'm not sure anyone knows what
| the exact impact of that would be.
|
| I don't personally believe Satoshi was an actual person,
| and don't believe he'll ever be identified. Most likely
| the keys to those early blocks have been destroyed, and
| most people wouldn't do that unless there was an
| institutional reason for it.
| PragmaticPulp wrote:
| Risk factors don't mean "this will definitely happen". It
| means this is a known risk for the system underpinning
| their profits.
|
| A more likely scenario is that the keys to those coins
| are compromised, somehow, given their unbelievably high
| value.
| azinman2 wrote:
| I'm surprised someone doesn't spent 10B in computation to
| brute force those keys.
| meetups323 wrote:
| ~50B in the account at current valuation, if Satoshi
| starts liquidating the value goes down dramatically; if
| it gets out that it isn't actually Satoshi acting, the
| value goes down even more (OMG if the creator of bitcoin
| can get hacked I can get hacked, this is a terrible
| investment, I'm out).
|
| I don't think it'd be possible to recoup the investment,
| but if you have a strong argument otherwise I'm sure some
| billionaire/nation-state investors would love to hear it.
| anonymousab wrote:
| > Just identifying him doesn't mean he'd liquidate
|
| True, but it is not a super unlikely outcome either.
| Identification alone could also result in a loss of trust
| in the system of Satoshi turned out to be, say, a
| government.
|
| Could go the opposite way too. It's an unknown that is
| worth calling out.
| simias wrote:
| It's still a huge known unknown for Bitcoin. What is
| Satoshi was linked to a shady organization, or something
| the general public wouldn't want to support for instance?
| Imagine if Satoshi turned out to be an avatar for the
| American, Russian or Chinese government for instance,
| that would both give them a huge leverage on the
| blockchain and mean that they'd benefit hugely from
| widespread adoption of the cryptocurrency.
|
| In turn that could motivate other governments to heavily
| regulate bitcoin as they'd see it as a foreign-controlled
| currency.
|
| That's just fiction, but that's the point, nobody knows
| for sure who or what Satoshi Nakamoto is, and that's a
| risk.
| purple_ferret wrote:
| They understand how little inflow actually moves the market.
| The bigger the market gets, the more likely Satoshi could
| cripple it.
| fidrelity wrote:
| If Satoshi is identified he might also still be alive.
|
| This means that Satoshi's BTC (~1mio.) are potentially liquid
| which would mean a gigantic influx of fresh bitcoins.
|
| It's quite plausible that any movement of these old wallets
| would crash the Bitcoin price for quite a while.
| WanderPanda wrote:
| In the end 1mio btc is just a days swing, right? Should not
| change much in the long term
| jcims wrote:
| This seems strange to me. Relative to the doubling that has
| recently happened, why would 5% of the total number of
| bitcoins suddenly moving have any drastic impact on price?
| XorNot wrote:
| It's actually a lot worse then that: if _anyone_ gets
| access to Satoshi 's private wallets (i.e. via finding the
| keys printed out on paper in a personal effects safe or
| something) then those coins could move.
|
| There's no way to absolutely sure that the keys are gone
| and inaccessible permanently.
| devoutsalsa wrote:
| I'm not gonna lie. If I had 56 billion USD worth of
| Bitcoin, it'd be interesting to put them all up for sale,
| all at once, just to see what happens.
| jcims wrote:
| I'm a complete n00b so this is coming from a place of
| ignorance, why is that such a factor in the current
| price? Someone is sitting on $50B in a $1T market, who
| cares?
| Ekaros wrote:
| Because it is not actually a 1T market. If Satoshi's
| coins aren't on market they really aren't part of cap.
| Thus we are talking about 950B market... And then count
| out rest of "lost" coins and actual market cap start to
| shrink and that 50B is starting to be much bigger
| thing...
|
| Yes theoretically it is 1T, but practically much lower...
| saberdancer wrote:
| Unlike stocks where price is usually influenced by future
| dividend you can extract from the stock (profit), Bitcoin
| is more like gold.
|
| Imagine if suddenly someone found 100 000 metric tons of
| gold and wanted to sell fast. It would saturate the
| market and the price would plummet.
|
| Same would happen if Satoshi wanted to quickly sell 50
| billion of coins.
| Cthulhu_ wrote:
| Yeah, but if Satoshi - or anyone - finds the keys again
| (I'm fairly sure the keys are lost tbh), I doubt they
| would try and move it in one go.
|
| Also, again I'm no expert but, I think the mere news of
| the BTC moving from that wallet would have much more of
| an impact on the BTC price than the BTC ending up on the
| market.
|
| The crypto market is highly irrational and influenced
| more by memes than straight supply and demand. I'm
| confident that the crypto news sites are all owned by
| people holding crypto. If I had a ton of money and a lot
| more to gain, I too would invest in paying or setting up
| media outlets to try and direct the price upwards even
| further.
|
| I mean I'm fairly sure that's market manipulation, but
| it's only a crime if it can be traced back to me AND if
| crypto is considered an investment product, beholden to
| market manipulation laws.
|
| I mean if I put a haunted plant on sale on ebay and pay a
| bit of money for the media to report on it, and some
| schmuck comes by to buy it for $10K instead of its real
| value of $10, does that make me guilty of market
| manipulation? I mean the answer is yes, but is there a
| punishment for that?
| colinmhayes wrote:
| Bitcoin is on a public ledger. If any of the coins in
| Satoshi's wallet moved the market would get spoked of the
| possibility that they could all move.
| shawabawa3 wrote:
| selling $50B doesn't move the market from $1T to $950B
|
| $1T is the market cap when each bitcoin is trading at
| ~$52k, but if $50B were sold over a short period of time,
| it would likely drop the price to $25k or less as the buy
| orders would all get eaten up
| jcims wrote:
| That totally makes sense. But the comments I was replying
| to made it sound (to me) like it was going to be some
| long-term disruptor. $25k was the all time high just a
| couple of months ago. If it dipped to that because
| someone unloaded Satoshi's cache wouldn't everyone that
| already had a buy just double down? Seems like it would
| recover almost instantaneously.
| nmca wrote:
| He has many, many BTC and if they move the market will shit
| the bed.
| base698 wrote:
| Satoshi's water has billions worth of bitcoins. If they moved
| and were sold suddenly it could move the price.
| jsemrau wrote:
| Marc Andreesen ?
| Tenoke wrote:
| >These are insane fees ripe for disruption.
|
| The disruption is already well underway. The only thing that
| slowed down DEX's eating of a bigger part of the market share
| is the current high fees on Ethereum.
| swiley wrote:
| Is there a plan to deal with the high gas prices?
| Tenoke wrote:
| Yes, ETH 2.0 is coming in 2022 (unless it gets delayed).
| There's one proposal for July that might help a little and
| more transactions are moving to L2 chains (LRC, Matic)
| where you pay the high fees only on exit/entering the L2
| but can do transactions there for cheap.
|
| Outside of ETH, BSC (Binance's smart chain, the exchange
| with 9x Coinbase's volume) already has lower fees but the
| chain is controlled by binance (its 'stock' is the token
| BNB valued at 40b currently, possibly a good investment)
| and has an influx of projects due to low fees and easy ETH-
| BSC migration. There are some other competitors with active
| smart chains but less projects and many are waiting on
| ADA's smart chain in early Q2 as well as on some other
| competitors that (might) solve that and other problems.
|
| ADA (built by an ETH co-founder) specifically solves some
| of smart contract's current gripes by allowing you to build
| them in functional languages like Haskell, while being the
| most decentralized option which might be of interest here.
| jki275 wrote:
| To be clear, ADA doesn't have a smart contract platform
| yet. I believe that's part of the update that is coming
| in a couple of days. They've been building towards that
| for several years and have done a lot of great work in
| the space.
|
| Tezos is quite a bit ahead of ADA in that particular
| respect as they have smart contracts already.
|
| I don't believe ETH2 will ever show up, but who knows.
|
| Full disclosure, I've got holdings in both ADA and XTZ.
| flixic wrote:
| Well, if Ethereum 2.0 "never shows up", that's $5.3B
| locked in a contract[0] that "will never do anything". I
| think $5.3B is sufficient motivation to get it released.
|
| [0]: https://etherscan.io/address/0x00000000219ab540356cb
| b839cbe0...
| jki275 wrote:
| But it's not. Not really.
|
| That's the same as claiming that the "market cap" of a
| cryptocurrency has some meaning. It really doesn't.
|
| Both of those statements assume that somehow every ETH
| coin ever minted can be sold for the asking price right
| now. That's an obviously laughable assumption.
| Tenoke wrote:
| >To be clear, ADA doesn't have a smart contract platform
| yet.
|
| Yes, as I said it is planned to come in early Q2. What
| comes tomorrow is a necessary step in that direction -
| the introduction of tokens on the ADA network. For what
| is worth, I see little reason to doubt that their smart
| launch will go well - I used their playground and looked
| at the activity in the testnet and it all seems to be
| going as planned.
|
| The bigger question is whether enough projects will
| move/launch there.
| jki275 wrote:
| I'm pretty confident they'll do it right.
|
| For those who don't know, the founder of IOHK (which
| created ADA) is one of the co-founders of ETH.
|
| I'm confident in his ethics and his ability. I'm not so
| confident in the ethics of the ETH project anymore.
|
| -edited above since I get rate limited every time I post
| more than two posts in a day, read the following as a
| response to the post calling me a liar below:
|
| Ok, I edited to take out the reference to when he left
| since apparently I made a mistake on the dates -- I
| thought he was still in the ETH foundation when that
| happened.
|
| However, he was one of the few voices calling for the ETH
| foundation _not_ to hard fork to just roll back the DAO
| hack. The ETH foundation did what was expedient for them
| financially, and ignored the core tenet of
| cryptocurrency.
|
| Fact remains, ETH was an immature cryptocurrency, run by
| immature people, who made immature mistakes. He was one
| of the few who called them out over it.
|
| You can see what he has done over the years since with
| IOHK to bring maturity to the space. I think the results
| with ADA speak for themselves.
| pa7x1 wrote:
| This is absolutely untrue. Charles Hoskinson left the
| Ethereum Foundation in June 2014. The DAO hack occurred
| in June 2016.
|
| He left because he wanted the Ethereum Foundation to be a
| for-profit while the rest of founders were looking to
| make it a non-profit foundation. This is by his own
| account, the other side of the story doesn't look as good
| for him but I have no idea what happened so I give him
| the benefit of the doubt.
| user-the-name wrote:
| It's been coming "in a year" since 2014.
| Tenoke wrote:
| While I don't deny and made sure to include the 'unless
| it gets delayed' part, they are much further along now.
|
| The majority of ETH 2 is live and more and more ETH is
| locked to it (~12% right now) so the current 2022
| estimate is a bit more realistic than past ones (though,
| of course it can keep being delayed).
| flixic wrote:
| So I've been hearing this "being the most decentralized
| option" about Cardano in less reputable sources (aka
| YouTube comments) than HN. Can you expand on that? From
| what I'm seeing, Cardano has 1 912 pools[0] that can
| produce blocks, which is less than 11 586 on Ethereum[1]
| and much less than 100 000 validators on Ethereum 2.0[2].
| Sure, many validators are controlled by same people, but
| there's a much easier barrier to entry for new
| validators.
|
| [0]: https://adapools.org
|
| [1]: https://www.ethernodes.org
|
| [2]: https://launchpad.ethereum.org
| Tenoke wrote:
| Okay, admittedly it's not quite there yet but by the end
| of march 100% of blocks will be produced by independent
| stake pool operators. The number of current pools is
| somewhat misleading - switching between them is
| frictionless, more will keep being added, and there are
| rules in place so they can't grow too much (staking
| rewards decrease quickly) and the average # of ADA per
| wallet is dropping (<100k/wallet average now).
|
| I should've really said the most decentralized
| _alternative_ option but even in terms of biggest holders
| ETH is more top heavy (many controlled by the same people
| as you said).
|
| > but there's a much easier barrier to entry for new
| validators.
|
| Is it? The minimum to run a validator is 32 ETH[0] while
| there isn't even a minimum for ADA. 4 GB of RAM and 1 GB
| bandwidth[1] (for ADA) isn't much of a deterrent either.
|
| 0. https://ethereum.org/en/eth2/staking
|
| 1. https://forum.cardano.org/t/a-guide-to-becoming-a-
| stake-pool...
| flixic wrote:
| > there are rules in place so they can't grow too much
| (staking rewards decrease quickly)
|
| I think this refers to the k factor, that puts the "soft
| limit" on decentralization. This I see as a barrier to
| entry: Ethereum 2.0 is 32ETH and that's it. Cardano has
| no monetary fee, but has eventual competition between
| pools, which is variable, likely ongoing cost. Barrier to
| entry is less defined, and could at some point grow
| beyond dollar value of 32 ETH (to become a competitive
| pool). Whereas Ethereum 2.0 will always stay a constant
| 32 ETH, no matter how many validators exist.
| Tenoke wrote:
| There might be competition between pools but also costs
| for them to grow beyond a point which benefits
| decentralization - the issue at hand.
|
| What does it matter here if they have a harder time when
| none of them are incentivized to even grow to 1%? Even if
| they do grow, there's plenty of incentive for stakers to
| move to new ones on the spot. This might mean that e.g.
| pools will increase their costs due to the risk and
| stakers will earn a bit less but they still won't grow
| beyond a point.
| Tepix wrote:
| You can use Pangolin, a Uniswap clone that runs on
| Avalanche (wich offers EVM compatibility so you can just
| use Metamask).
| technotony wrote:
| Switch to Solana?
| PragmaticPulp wrote:
| Coinbase is the retail on and off ramp for crypto. DEXs don't
| solve that.
| Bedon292 wrote:
| DEX's are certainly nice, but at least for the time being if
| you have any significant volume of trading the the actual
| swap fees on the DEX will eat more of your gains than a
| centralized exchange will. Before factoring in Ethereum gas
| prices. Somewhere like Uniswap (most popular DEX on Ethereum)
| takes 0.3% of every trade plus price impact issues. At $50k
| volume, maker fees on Coinbase Pro are 0.15%, and your limit
| order may not fill but it won't have a huge slippage either.
|
| I think ETH2.0 or some other network certainly might make
| DEX's even more popular, but if those swap fees don't come
| down the centralized exchanges still have a financial benefit
| to some users. I imagine if they do come down and volume goes
| up, it lowers the low volume fees on places like Coinbase,
| which would be nice.
| Tenoke wrote:
| They are still in their early stage, but for smaller
| traders (if it wasn't for fees on ETH, but e.g. on BSC)
| it's already worth it more than normal Coinbase (3% +
| deposit/withdraw fees) or low-volume Coinbase Pro (0.5%).
| Of course, Binance gives you 0.075-0.1% which they don't
| beat.
|
| The bigger benefit for the time being is that it allows you
| to trade pairs that aren't even yet on exchanges (Coinbase
| is famously slow to add anything, and still doesn't even
| have multiple top 10 projects). There is also nothing
| stopping DEXs from partially lowering the fees in the
| future as the technology stabilizes.
|
| Of course, I don't expect them to eat all of CEX's business
| but an increasing portion of it and it is a pretty
| significant disruption.
| Bedon292 wrote:
| Yes Binance.us has better fees, but CB has the benefit of
| scale $1.3B in BTC/USD vs just $55M on Binance.us. And I
| think CB is riding on that a lot. There is still tons of
| room for disruption there, just think a large number of
| folks trust CB for now. More so than any other exchange
| available in the US. And its way simpler to use it then
| going a lot deeper, so at least its a gateway for people
| to get started.
|
| The main ones they are missing right now, to my
| observation, are Cardano and Polkadot, which they seem to
| be very slow on the uptake of. I guess you could say
| Tether, but understand why they don't have it. And same
| with Ripple. But I don't think those are a "slow" thing,
| that's a conscious decision with reasoning behind it.
|
| I think it will take quite some time to do any
| significant disruption though. At least until there is a
| good easy place to be. BSC is hard to get in to from the
| US, at least from what research I have done, and I am
| willing to put far mor research into it than a 'normal'
| person would be.
| Tenoke wrote:
| I was more comparing it to Binance.com which has 9x more
| volume than Coinbase, not the Binance.us gimped version.
| For what is worth, Kraken (available in the US) also has
| smaller fees, more parings at 55% of Coinbase's volume.
|
| Hopefully the US loosens up and doesn't continue paving
| everything for Coinbase while the major options available
| elsewhere are closed off.
|
| >And same with Ripple
|
| They had XRP, they just removed it, presumably because
| they wanted everything to be as clean as possible for the
| IPO.
| Bedon292 wrote:
| Right, I was just focusing on US access where Coinbase
| focuses on. And sadly Binance.com is not (easily)
| accessible from the US. And yeah, Kraken seems to be a
| better option from that standpoint, just have not built
| the level of trust that Coinbase has yet. Certainly can
| get there. And that extra liquidity helps with order
| execution at times.
|
| US definitely has a long way to go with crypto in
| general, on both the access and tax side of things. I
| hope things will improve, but honestly not sure they will
| any time soon.
|
| And yeah, the XRP side of things was definitely to cover
| themselves, and not want to be in that potential mess. I
| think that is a reason for not having Tether too, it
| comes with historic baggage even if those issues aren't
| present anymore. USDC makes sense to limit their own
| risks, even though Tether is still more popular overall.
|
| What sucks is how much influence they have on overall
| markets. When they back something and have financial
| interest in it, and add it to their exchange but not its
| competitors. I would love to see it more open to other
| ones faster, but not sure it will be.
| PaulWaldman wrote:
| > These are insane fees ripe for disruption.
|
| Wouldn't this just cause Coinbase to lower their fees like any
| ofther commodity? Alternatively, they could also be in the
| position to offer differentiated services.
|
| This seems analogous to any other brokerage services. This will
| likely play out like when discount brokerages arrived on the
| personal investment secene.
|
| The more I think about it, the more this feels like traditional
| banking/investing.
| TedDoesntTalk wrote:
| > These are insane fees ripe for disruption.
|
| No other exchange today has my trust, I don't care if they
| compete on fees. When your btc is at real risk of they by an
| exchange, trust is everything. There is no FDIC insurance for
| exchanges.
|
| Now if Chase were to do BTC exchange at better rates... i would
| probably switch.
| gruez wrote:
| >There is no FDIC insurance for exchanges.
|
| https://support.gemini.com/hc/en-
| us/articles/205823016-Are-m...
|
| >U.S. dollars in your Gemini Account are eligible for FDIC
| insurance, subject to applicable limitations. Please see the
| FDIC Insurance section of our User Agreement for more
| information.
| runako wrote:
| This is exactly the risk. Once regulators are comfortable
| that "crypto trading for retail investors" is acceptable as a
| product, then what stops the big exchanges and brokerages
| from entering the space and competing the fees down to zero?
| dehrmann wrote:
| My fear is that there are interesting attacks you can do if you
| control a lot the miner pool, DDOoS it, hack it, are a
| government that gets access to it, etc. that would destroy
| confidence in Bitcoin, and it only becomes a bigger and bigger
| target. Sure, there are others that have mitigated these
| concerns, but it's the poster child.
| ignoramous wrote:
| > _These are insane fees ripe for disruption._
|
| To think that coinbase started with a no-fee model:
|
| _Coinbase will make money more like an exchange down the road,
| 0.5% to convert money into our out of bitcoin, but once you
| have your money in bitcoin there are no transaction fees (it
| mentions this on the homepage, but admittedly it 's still a bit
| confusing)..._
|
| _It would be much easier to just say "no fees" - this is
| simple and shows a clear benefit of using bitcoin. If you have
| to explain to people that "sometimes there are fees, but they
| are a lot lower, etc" it loses some of it's punch. Right now we
| can do zero fees and transactions still get confirmed. In the
| future we may be able to do it by eating the cost and have this
| be a cost of doing business, but that is a decision for
| later."_
|
| https://news.ycombinator.com/item?id=4206265
| beaner wrote:
| You're conflating things. When they say "transaction fees"
| here, they're referring to blockchain network fees (which
| they previously covered for users, before network
| congestion), not buy/sell fees, which they have always
| charged.
| mr_sturd wrote:
| Though they _used_ to take no fees from market makers.
| ericpauley wrote:
| Yep, the market maker fee was added after the beginning
| of 2018.
| pk_kinetic wrote:
| Maybe with some public accountability they can finally solve the
| issue of their servers "going down" every time there is a rush to
| sell.
| webwielder2 wrote:
| So setting aside the merits of Coinbase as a business or the
| philosoeconomic significance of cryptocurrency, should I buy
| Coinbase stock? I want to make easy money by buying stock. Think
| it'll go up after it's listed?
| vmception wrote:
| Its a tech company that makes money. The market wants more of
| those. Yes.
| xoralkindi wrote:
| Someone on here once said decentralized systems tend to end up
| centralized, this will be my goto example. A p2p system of
| exchanging digital tokens end up centralized around the a bank.
| tcoff91 wrote:
| There are so many other options than coinbase for fiat <->
| crypto exchange. How is crypto centralized around coinbase?
| Hell if you really want to be a true cryptopunk you can use
| bisq for decentralized crypto <-> fiat exchange.
| quickthrower2 wrote:
| Do they have a moat? What's to stop 100 other US exchanges
| popping up?
| arnaudsm wrote:
| Many have forgotten why we used cryptocurrencies in the first
| place. The original promise of cryptocurrency was to become
| independent from banks.
|
| In the end CoinBase (like every exchange) is a great product, but
| just a bank. It's centralized, hackable, has economies of scale,
| etc.
| MrMan wrote:
| Can you explain how a currency or hard asset replaces a bank?
| fny wrote:
| You are still independent from central banks, which in this
| environment, is far more important.
| PragmaticPulp wrote:
| > Many have forgotten why we used cryptocurrencies in the first
| place
|
| I think the speculators know exactly what they're doing. They
| want a speculative instrument and they don't want a currency
| that people spend (creating sell pressure), so thats what these
| services have evolved to provide.
|
| Bitcoin's lack of fundamentals is the key to the narrative that
| it has unlimited upside. If you can remove all of the
| fundamentals, no one can argued that it's overpriced.
| Robotbeat wrote:
| Gresham's Law.
| scsilver wrote:
| You still have your solutions, now the vast majority of other
| users have solutions they can trust and hold within a legal
| system they have to trust.
|
| Banks provide professional money movement, I dont see a problem
| having an insurance backed entitity managing my lively hood, I
| call an insured plumber instead of plumbing myself.
| pjc50 wrote:
| It turns out that people value independence from banks far less
| than "massive asset price inflation" for assets that they
| happen to hold.
| [deleted]
| xadhominemx wrote:
| > We have forgotten why we used cryptocurrencies in the first
| place. The original promise of cryptocurrency was to become
| independent from banks.
|
| Who is "we"? Outside of criminal enterprises, no one has ever
| used Bitcoin for anything other than speculation and the
| occasional novelty purchase.
| nightski wrote:
| Have to be honest, I have a small portion of my portfolio
| (1-3%) in Bitcoin simply as a hedge against inflation. It's
| neither speculative nor novelty and has replaced a portion of
| what would typically be bond holdings. It seems companies and
| major asset holders are now considering the same.
| pvarangot wrote:
| I started like that, then it jumped, I recovered my cost
| basis plus expected inflation for years and taxes, and now
| it's more like 8/10% of my portfolio but I'm not touching
| it and I'll just see what happens. It was "free money"
| after all.
|
| It's the second time I'm doing this, the first time I had
| to spend the money on moving but those were mostly mined
| coins.
| a2tech wrote:
| We hate the central banks! We're going to take away the power
| from them and the government! _slight inconveniences, fraud
| happens_ We need a place to store our coin and help securely
| move it! _recreates central banks with even less regulation and
| security_ Profit!
| ceejayoz wrote:
| I once saw crytpocurrency described as "speedrunning the
| evolution of the modern financial system".
| lvs wrote:
| With more carbon dioxide.
| fnord77 wrote:
| in reverse. the evolution of the modern financial system is
| less and less friction for each transaction, lower costs.
|
| crypto: more friction, slower transactions, higher
| transaction costs. And wicked exchange volatility.
|
| Plus no way to expand or contract the supply to prevent
| economic shocks.
|
| I like my fiat and central banks, thank you very much.
| koonsolo wrote:
| I'm in EU, you in US? Send me $50.000 in the weekend
| through your bank. Let's see how fast it goes.
|
| I'll send you any amount you want with Nano: <1 second
| transaction, 0 fee.
|
| Try to beat that!
| notahacker wrote:
| Feel free to send me as much nano as you like, but I'm
| pretty sure that since I can't actually buy things I want
| with nano, the process of linking a crypto gateway to my
| bank account wouldn't be quicker and cheaper than waiting
| for funds from Transferwise or similar to clear.
| koonsolo wrote:
| That's like saying email was bad since none of the people
| you know have an email address.
|
| Just wait and see which solution will come on top.
| notahacker wrote:
| I'm sure people compared Cuecat to email too. Turned out
| the problem wasn't "lack of adoption _yet_ ".
|
| I mean, you could also send me fee-free payments direct
| from your bank with rapid settlement if I had a Euro bank
| account. I don't, but the reason isn't because I can't
| but because I don't need or want to hold non-domestic
| currency - exactly the same reason why I and most of my
| fellow countrymen who _do_ have Euro bank accounts don 't
| hold nano. The hurdle is reluctance to adopt universal
| international currency, not a technical shortcoming of
| Target2 settlement.
| ceejayoz wrote:
| It'll presumably take more than one second to convert it
| to a usable currency, i.e. Euros.
|
| How often do you need $50k without being able to wait a
| business day?
| koonsolo wrote:
| Ok, then send me a $0.001 micro transaction. Same deal.
| ceejayoz wrote:
| How are you going to convert $0.001 to Euros?
|
| Why is receiving $0.001 a matter of urgency that can't
| wait until tomorrow?
| koonsolo wrote:
| Funny how this conversation started how crypto is slow
| and expensive, and now turned into slow and expensive is
| OK :P.
|
| In a crypto world, you don't need to convert to Euros.
| Are we in a crypto world yet? No. Will we live in crypto
| world in the future? Maybe, when it's faster and cheaper
| ;).
| ceejayoz wrote:
| It's a bit of both.
|
| For the _common_ transactions people make, crypto is both
| slow and expensive. I can Zelle someone instantly, for
| free. In the EU, Australia, etc., bank-to-bank transfers
| are similarly instant. I don 't know that Bitcoin etc.
| ever get to totally free in this fashion, and it's
| probably 99.9% of most people's money transfer usage.
|
| For the uncommon transactions - like the $50k
| international transfer you mention - slow tends to be OK,
| and it's likely gonna have some expense either way.
|
| Short version: In contrived scenarios, Bitcoin may come
| out on top, but that's not likely to convince many
| people.
| yazaddaruvala wrote:
| How many "common transactions" do people use "money" for?
|
| All "common transactions" use credit (even when you use a
| debit card). The banks approve transactions quickly, but
| reconcile those transactions slowly.
|
| It'll be the same for any crypto that takes off but needs
| to reconcile slowly.
| pwm wrote:
| > Why is receiving $0.001 a matter of urgency that can't
| wait until tomorrow?
|
| I'm not making a value judgement whether this is utopian
| or dystopian but imagine streaming money. Instead of
| paying for the use of something in advance and in coarse-
| grained chunks (driving through a tunnel, running on a
| treadmill in a gym, watching netflix, parking somewhere,
| etc...) you'd instead stream money throughout usage. On-
| demand with continuous settlement for the duration.
| pcthrowaway wrote:
| > more friction, slower transactions, higher transaction
| costs.
|
| Bitcoin, sure. Plenty of other cryptocurrencies which
| don't have these issues.
|
| Cardano has faster transactions than any monetary
| transfer method (besides cash), with low fees. You also
| get
|
| Bitcoin cash has negligible transactions fees with 10-20
| minute transactions.
|
| Nano has fee-less, near-instant transactions (could
| actually compete with cash for p2p transactions)
| koonsolo wrote:
| Everything you said is true, yet still getting downvoted.
|
| HN doesn't like crypto. Say anything pro crypto (even
| when it's true) and get downvoted.
|
| very sad.
| godelzilla wrote:
| Pretty sure central banks have never intentionally or
| significantly "contracted" their pyramid schemes.
|
| https://www.investopedia.com/articles/investing/051315/wh
| at-...
| bhupy wrote:
| > I like my fiat and central banks, thank you very much.
|
| I do too! But some people don't. And it appears that
| there are now options for everyone, which seems...good?
| grey-area wrote:
| Entirely unregulated markets are not good, they are
| awful, and they can go on for quite a while before
| blowing up, taking the life savings of lots of ordinary
| people with them.
| bhupy wrote:
| I mean, no disagreements that unregulated markets can
| turn out disastrously (and hurt ordinary people).
|
| But regulated currencies can also turn out disastrously
| bad (see: Venezuela, Zimbabwe hyperinflation, Nigeria,
| Argentina). This hurts ordinary people too. There's an
| Argentinian in this very thread that's chimed in with
| their personal experience.
|
| I won't pretend one approach is strictly superior to the
| other, nor am I suggesting that one ought to put 100% of
| their life savings into BTC or US T-bonds, but having
| _options_ allows the ordinary person to hedge. That 's
| the point. Optionality is good, and because BTC isn't
| legal tender (nor will it ever be), nobody is forced to
| use it anyway.
| grey-area wrote:
| Very true some jurisdictions are very risky, I'm just
| sceptical than Bitcoin is a) a viable currency and b) not
| riddled with fraud.
| mirekrusin wrote:
| Cars are not replacement for horses. You have to have
| factories, they break, you need to rely on fuel supply,
| they also pollute and go too fast - they can kill you. I
| like my horses, thank you very much!
| Galanwe wrote:
| > the evolution of the modern financial system is less
| and less friction for each transaction
|
| Still, buying shares of a company is much more "friction"
| than buying coins.
|
| > crypto: more friction
|
| Can you elaborate?
|
| > slower transactions
|
| Huh, even bitcoin will settle with 6 confirmations in an
| hour. Settlement to buy a share or FX is 2/3 days.
|
| > higher transaction costs
|
| Hmm, no.
|
| > And wicked exchange volatility.
|
| Volatility is a property of the underlying currency, not
| to "crypto currencies" in general. The volatility of
| USDTxUSD is zero.
|
| > Plus no way to expand or contract the supply to prevent
| economic shocks.
|
| You are mixing "crypto currency" and "bitcoin".
| spamalot159 wrote:
| You are comparing crypto currencies to stocks. In that
| case what you said is true. But I think the fairer
| comparison is crypto currency to a fiat currency. There
| is more friction involved in using crypto currency to
| make a purchase. It does take longer to processes a
| bitcoin transaction than it would for visa to processes a
| transaction in usd. And the transaction costs for a
| typical transaction are usually higher for bitcoin (maybe
| not all crypto currencies though). I think the fact that
| a lot of people compare crypto currencies to stocks is
| telling that they are not being used for their intended
| purpose.
| Galanwe wrote:
| > You are comparing crypto currencies to stocks. In that
| case what you said is true. > I think the fact that a lot
| of people compare crypto currencies to stocks is telling
| that they are not being used for their intended purpos
|
| Absolutely not. If you take the top 10 crypto currencies
| sorted by marketcap, half of them are actually stock-like
| tokens. It is not a misinterpretation, or a deviation
| from the intended purpose at all. These tokens are
| intended to replace shares of the company, and they have
| rather similar capabilities: by owning them you have
| voting rights, different token (share) classes exist,
| etc.
|
| Honestly, the term "crypto currency" is very misleading,
| most of the tokens issued nowadays are share-like, and
| buying them is just a form of venture funding for these
| startups.
| [deleted]
| eurasiantiger wrote:
| One could get a crypto credit card and spend
| transparently in fiat. No friction involved.
| freeone3000 wrote:
| That's spending a Bitcoin balance, not Bitcoin. You might
| as well hold a Bitcoin index, and sell that. Or sell a
| Satoshi and transfer out the fiat, which is what it is.
| It has nothing to do with the transfer of Bitcoin: the
| same person holds your Bitcoin balance and your
| fractional fiat balance and decides the exchange rate.
| There's no blockchain there.
| charcircuit wrote:
| >more friction, slower transactions, higher transaction
| costs. And wicked exchange volatility.
|
| You are taking a look at the start of the speedrun and
| claiming that it's already over. All of those issues will
| eventually be solved.
|
| >Plus no way to expand or contract the supply
|
| This is simply not true. It is entirely possible to make
| it possible to mint new coins. You can burn coins by
| buying them back and sending them to a wallet owned by no
| one.
| wpietri wrote:
| > All of those issues will eventually be solved.
|
| When does "eventually" arrive? For 12 years I've been
| hearing that all of the problems of cryptocurrency will
| be solved very soon. But merchant adoption peaked years
| ago and has notably declined. Most of the problems are
| still problems. At this point, I'm pretty sure
| "eventually" means what I mean by "soon" as a teen when
| my parents asked me to clean my room. That is, "not now
| and I'd like to keep ignoring the topic please".
| dpflan wrote:
| Ha! Sounds like an interesting perspective: do you perhaps
| have a link to the source?
| ceejayoz wrote:
| Either Reddit or Twitter, years ago. I'm fairly sure they
| were cribbing off someone else at the time.
| benplumley wrote:
| It's not the source of that quote, but it's from the same
| perspective: "Tether" subheading of https://www.bloomberg
| .com/opinion/articles/2021-02-24/the-va...
| bhupy wrote:
| This conflates "Central Banks" with ordinary "banks" that
| hold assets in vaults. The two are comparable in the same way
| that Java is comparable to JavaScript.
|
| The steel-man argument is that the monetary policy of central
| banks can cause hyper-inflation of a fiat currency, and
| holding onto an asset that is immune to that, and potentially
| even being able to transact with that asset is a reliable way
| to break free from the monetary policy of the _central bank_.
| The fact that one may place this transferable asset into a
| centralized institution that we may call a (lower case b)
| "bank" isn't at odds with the aforementioned principle.
|
| Put another way, the dollar doesn't depreciate because of my
| credit union, it depreciates because of the Fed.
| wpietri wrote:
| The distinction between "central bank" and "ordinary bank"
| is only meaningful _because_ of tight regulation and a
| central banking system that constrains ordinary banks.
|
| The whole reason we have a strong central bank is because
| we tried the alternative before and it worked terribly:
| https://en.wikipedia.org/wiki/Wildcat_banking
| bhupy wrote:
| That constraint is only really required because paper
| money can be minted in a way that BTC (or gold) cannot.
| That's why the distinction is relevant in the case of
| cryptocurrency. The overall point is that the ship has
| mostly sailed with regards to whether Bitcoin can be a
| deflationary store of value like gold. The question now
| is who will provide the vaults to hold the new "gold
| bars". These vault providers are not really comparable to
| central banks.
|
| > The whole reason we have a strong central bank is
| because we tried the alternative before and it worked
| terribly
|
| I think there's a strong argument to be made (derived
| from history) that having a purely gold-backed currency
| be the sole and legal tender is bad. That said, there's a
| third option: "porque no los dos?". Do we know for
| certain that there's anything inherently disastrous about
| a society that has BOTH fiat-backed legal tender as a
| hedge against "Wildcat banking" _alongside_ "digital
| gold" backed currency as a hedge against fiat-backed
| legal tender?
|
| I think the answer is "probably not". I'd even go so far
| as to argue that we've already been doing that for the
| last 70-odd years; people still use gold as a hedge
| against the USD. Bitcoin is just digital gold that
| derives value because it's easier to trade Bitcoin for
| bread than gold bars (in theory).
| wpietri wrote:
| I am always entertained by the line of argument that
| goes, "Do we know for certain this new twist will be as
| hugely destructive? If not, what the heck, let's find
| out!"
|
| Personally, I think the burden of proof goes the other
| way. Especially when after 12 years of Bitcoin innovation
| in practice it's so far mainly useful for scams,
| ransomware, market manipulation, money laundering, and
| other kinds of light financial crime. (Plus speculation
| of course, but there were plenty of options for that
| before.) If hobbyists want to speedrun reinventing
| financial regulation that's ok by me, but I'd rather they
| do it without the collateral damage.
|
| That's especially obvious in contrast with actual digital
| money efforts like MPesa, which have real user bases,
| scale perfectly well, and aren't ongoing ecological
| disasters.
| xadhominemx wrote:
| Most money is created by normal banks, not the central
| bank. If you Google "money creation" you will find this
| helpful link: https://en.m.wikipedia.org/wiki/Money_creatio
| n#Role_of_banks...
| bhupy wrote:
| Yes, but that's only possible because of the underlying
| monetary policy, which is controlled by the Fed.
|
| In contrast, there is no way you can do this with (most)
| cryptocurrencies. The monetary policy of Bitcoin is
| dictated by the physical bounds of the proof-of-work
| algorithm. There is absolutely nothing that Coinbase can
| do to "create" more Bitcoin outside of just mining it
| like everyone else.
| lottin wrote:
| You don't understand how commercial banks create money.
| xadhominemx wrote:
| No money creation at banks is not controlled by central
| bank monetary policy. And it's very easy to create new
| crypto assets. Bitcoin has gone from 100% to 60% of
| crypto market cap in the past 5 years - that's 10%
| "inflation"
| koonsolo wrote:
| > No money creation at banks is not controlled by central
| bank monetary policy
|
| There is in fact an upper limit set by the fractional
| reserve. I see US has abolished that limit right now
| (March 2020), but when they would set it to 100%, there
| would be no money multiplying at all.
| bhupy wrote:
| If it is, then that means Coinbase can create new
| "Bitcoin" on demand; which we both know that it cannot
| do.
|
| In your own source, the banks ability to increase money
| supply through the multiplier effect is capped by the
| capital adequacy ratios, which are defined by the Fed. It
| is also an inevitability of any currency that isn't
| backed by an asset. To be clear, I don't have problems
| with the concept of fiat currencies, but we have to be
| honest about what it actually is and how it works, and
| how Bitcoin is different.
| pjc50 wrote:
| It absolutely can, because all exchange users put their
| money in a big pot (the exchange's "cold wallet" and "hot
| wallet") rather than having individual wallets - this
| allows for instant trading. Exchange accounts aren't
| quite like banks but they are like brokerage accounts.
|
| Numerous exchanges have blown up when the wallet got
| stolen from underneath them - but in the gap between the
| theft and the discovery, the users thought they had
| bitcoin when in fact they had a bitcoin _balance_.
| bhupy wrote:
| Okay, but you're talking about a completely different
| thing.
|
| Your Bitcoin balance, as it's shown in Coinbase's UI, is
| very different from your Bitcoin balance as it's
| understood by everyone else on the public blockchain; and
| that too only temporarily. There is nothing that Coinbase
| can do to permanently alter that supply of Bitcoin. That
| is what we're talking about.
|
| In contrast, the permanent US Dollar supply can and is
| permanently altered due to the monetary policy which
| governs it.
| leereeves wrote:
| Even if Bitcoin replaces fiat money, governments will
| find ways to enforce monetary policy, because the power
| to put people in prison trumps any algorithm.
|
| A government absolutely can declare that the correct
| blockchain is _actually_ this other blockchain, or the
| only legal algorithm is now a version of their own
| invention (like the split between Bitcoin and Bitcoin
| Cash, but enforced by law). If the gov wants inflation,
| they can replace the algorithm with one that allows
| inflation, or achieve a similar effect by publishing an
| official root block every year with a portion of all
| holdings transferred to the government.
|
| But they probably wouldn't do that, when it's so much
| easier to simply seize cryptocurrency ("give us your
| private keys or spend thirty years in prison") or heavily
| tax it.
|
| None of this has been done because crypto is still a
| novelty, but if it ever becomes a serious threat to
| government policy, governments will find ways to deal
| with it.
|
| And centralizing Bitcoin in exchanges like Coinbase makes
| this far easier; the government only needs to enforce its
| policy on Coinbase, and Coinbase in turn will enforce it
| on customers.
| tablespoon wrote:
| > A government absolutely can declare that the correct
| blockchain is actually this other blockchain, or the only
| legal algorithm is now a version of their own invention
| (like the split between Bitcoin and Bitcoin Cash, but
| enforced by law).
|
| To that point, I found this blog post pretty interesting:
| https://juraj.bednar.io/en/blog-en/2020/11/12/how-could-
| regu...
|
| tl;dr: Bitcoin mining is mostly done by businesses,
| businesses will choose legal compliance over bitcoin-
| idealism, governments could wrest control of blockchain
| transactions through legal penalties (e.g. blacklist
| certain addresses and make it illegal for miners to
| process transactions from them OR mine blocks based off
| ones with illegal transactions). Economic incentives will
| encourage miners too small for enforcement to conform to
| the regulations. Bitcoin idealists can't do anything
| about it because their hashrate is puny and no one legit
| will deal with their forks.
| jellicle wrote:
| You're still wrong. Any exchange, due to the crazy lax
| regulations in the industry, can do this:
|
| * accept 100 bitcoins for deposit, giving their previous
| owners "100 claims against exchange X" in return
|
| * sell those 100 bitcoins
|
| * the new owners of those 100 bitcoins can roll down to
| exchange X and deposit them and accept 100 claims against
| exchange X in return
|
| * and the exchange can sell those 100 bitcoins once again
|
| Now we've got 100 bitcoins out in the world and 200
| claims against exchange X, and each of these 300 items
| functions identically. They're exposed to all risk of
| gain or loss on the market, they can be traded, sold,
| used to purchase stuff... with the only limitation being
| that not every claim against exchange X can be
| immediately redeemed. But as long as not every person
| tries to redeem their claim at the same time, there are
| no problems.
|
| Exchange X has permanently [until they exit the market]
| increased the usable supply of bitcoins. Nothing prevents
| an exchange from having more than 21 million bitcoins on
| deposit. With large enough exchanges, the banked, usable
| balance of bitcoins could be 100 million coins. 100
| trillion. There is no limit.
| bhupy wrote:
| What you've described is also roughly how gold vs gold
| certificates work. You're correct that an owner of a gold
| certificate doesn't _truly own_ the gold, and are exposed
| to extra risk on account of that. That being said, the
| value of gold has still remained stable /flat (relative
| to USD inflation). Also, every time you buy BTC, you can
| see the underlying transaction on the public block
| explorer. The day that stops being true is the day that
| Coinbase loses customers that consider BTC as a hedge on
| fiat.
|
| You can still transact with Bitcoin using your own
| wallets against other exchanges/vaults. That's the entire
| point, Coinbase, like a (lower case "b") doesn't control
| the supply of Bitcoin, any more than precious metals
| bullions control the supply of gold despite their
| issuance of "gold certificates". Like any (lower case
| "b") bank, Coinbase can engage in bad behavior, and users
| are placing their trust in Coinbase to not do that. But
| those users aren't placing their trust in Coinbase to
| drive the monetary policy of Bitcoin, in the same way
| that the gold hoarder placing their gold bars in a Swiss
| vault doesn't really have to worry about the operator of
| the vault creating gold out of thin air. That fundamental
| fact drives the collective belief in the value of gold;
| as well as Bitcoin.
|
| > * the new owners of those 100 bitcoins can roll down to
| exchange X and deposit them and accept 100 claims against
| exchange X in return
|
| You can't deposit that purchased BTC at another exchange
| unless you cash out of Coinbase, because you don't have
| access to the private key, Coinbase does.
| jellicle wrote:
| You seem confused about what I wrote. Suggest you read it
| again. All you've done is reiterate some Bitcoin dogma
| without attempting to grapple with reality as it presents
| itself to you.
| Kye wrote:
| This sounds like the gold/gold certificate distinction. A
| lot of people who think they own gold as a hedge against
| societal collapse only own it on paper.
| saalweachter wrote:
| Do we have the public reporting to know how many bitcoin
| are currently owned (or maybe _owed_ is a better verb)?
|
| That is, can we add up all of the Bitcoin listed in the
| customer ledgers of all of the exchanges, or is that
| information (the total, not the individual entries) not
| available to auditors?
| virgilp wrote:
| You can't create more bitcoin but you can create more
| USDT and exchange it for bitcoin.
| bhupy wrote:
| That doesn't impact the value of Bitcoin. When you
| exchange USDT for Bitcoin, the loser isn't holders of
| Bitcoin, the loser is (potentially) holders of USDT.
| Exchanging USDT for Bitcoin doesn't create new Bitcoin.
|
| Coinbase, as a marketplace, engages in the exchange of
| (potentially) bad tokens like USDT, as well as tokens
| like BTC that are provably finite. All of this is
| orthogonal to the fact that there is nothing hypocritical
| or internally inconsistent about holding and using
| Bitcoin or Ethereum and using Coinbase.
| rtrdea wrote:
| Coinbase doesn't trade USDT. They have their own USD
| pegged stablecoin called USDC and also trade Dai, which
| is pegged to the USD and is over collateralized
| koonsolo wrote:
| When banks use bitcoin instead of fiat, they could in
| fact create more 'bitcoin' in the same way.
|
| You wouldn't own the bitcoin, just as now you don't own
| the real fiat. There would just be a number on your bank
| account that says how many bitcoin you own, but it's
| multiplied the same way as they do now.
|
| It all comes down to the % of reserve they need to hold.
| virgilp wrote:
| This might very well be what Revolut already does :D (you
| can 'purchase bitcoin' or sell it at the prices they
| determine; but you can't transfer it out of Revolut).
| RobertoG wrote:
| This could be surprising to a lot of people, but modern
| central banks, including the Fed, can't control the
| quantity of money and the interest rate at the same time.
|
| Controlling one means losing the control of the other and
| modern central banks control the interest rate, not the
| quantity of money.
|
| So, the causality is like this: when the economy gets hot,
| more credits are asked by business and households, because
| of that, the interest rate go up. In order to keep the
| interest rate in their choose target, central banks will
| add more money to the system. The Fed doesn't decide the
| quantity of money, the economy does it.
| joubert wrote:
| > it depreciates because of the Fed
|
| The dollar depreciates / appreciates due to various
| economic factors, not just because of actions by the
| Federal Reserve.
|
| https://www.investopedia.com/articles/forex/051115/top-
| econo...
| bhupy wrote:
| I don't think anyone disagrees that there are multiple
| causes of depreciation. The key takeaway from your link
| is that USD value is a combination of (1) Fed policy as
| well as (2) economic growth and corporate profits (or
| lack thereof).
|
| The argument is that (2) is an inevitability of the
| market, whereas (1) is political. Crypto adherents aim to
| solve for (1) and accept the inevitability of (2). And
| deciding to use Coinbase to store (and exchange) your
| crypto is not at odds with that philosophy.
|
| To be clear, I live my entire life on fiat, and most of
| my savings are in traditional financial instruments. What
| I take issue with is the misrepresentation of the case
| for crypto; when it comes to assets like Bitcoin,
| Coinbase is not equivalent to a central bank nor will it
| ever be.
| mumblemumble wrote:
| Not exactly central banks in this case, but we've at least
| made it as far as fractional reserve banking.
|
| Matt Levine covered this well in a recent column[1]. It
| reminds me a bit of the argument for why anarchy probably
| can't work that Robert Nozick laid out in _Anarchy, State and
| Utopia_. In a nutshell, the social forces are such that the
| simple, minimalist way of doing things represents an unstable
| equilibrium point, and the stable equilibrium point is much
| closer to the status quo.
|
| That said, I wouldn't call armchair philosophy or armchair
| financial jurisprudence particularly ironclad. It's hard to
| blame people for wanting to actually try a thing. And it
| hasn't been entirely unsuccessful. While it's true that a lot
| of modern financial system trappings have built up around
| Bitcoin, the currency itself remains nominally independent.
|
| [1]:
| https://www.bloomberg.com/opinion/articles/2021-02-24/the-
| va...
| dang wrote:
| Please don't post snarky dismissals to HN. It's not what this
| site is for and degrades the culture considerably. Since
| entropy already does more than enough of that, we need to
| spend energy going the other way. If you wouldn't mind
| reviewing https://news.ycombinator.com/newsguidelines.html
| and taking the spirit of the site more to heart, we'd be
| grateful.
|
| You can make your substantive points thoughtfully. As far as
| that goes, though, this comment doesn't say anything that the
| parent didn't already say.
| agumonkey wrote:
| I don't know about you guys since the web 2.0 / social
| network boom, I tend to see this 'new' world as an eldorado
| run toward some kind of digital heaven where people will
| enjoy the freedom for a while, while recreating the same
| system (almost) without realizing it. But it will be their
| new system so they'll love it. Childish regression in a
| bubble.
| purple_ferret wrote:
| Well Bitcoin was a huge failure in that regard. What it needed
| was inflation that scaled (to prevent hoarding), and
| ultimately, a way to obfuscate tracking. Imagine thinking
| knowing your dollar spend will be logged for all eternity is a
| more 'decentralized' alternative.
|
| But as with many idealists, Satoshi and his crypto friends
| probably didn't think too hard about the problems outside their
| expertise.
| simias wrote:
| Inflation is the catch 22 though. With a limited supply it
| seems like bitcoin may never successfully become a currency
| due to deflation, but at the same time without the carrot of
| massive gains you probably wouldn't have had any adoption at
| all. Most people owning bitcoin these days do it as a
| speculative investment, hoping that it'll be worth (a lot)
| more one day. It's not for nothing that the rallying cry of
| cryptocurrency zealots everywhere is "HOLD".
|
| I think the root of the issue is that bitcoin was created in
| a vacuum. Some guy didn't start minting euro bills in his
| basement until France and Germany though "hey, we could use
| that". The financial systems already existed, and they
| created the currency to unify pre-existing European
| currencies.
|
| Cryptocurrencies like Bitcoin don't have this institutional
| momentum so they need to reward its users to drive adoption,
| which is self-defeating in the long run because when I spend
| a 20 euro bill I don't think "uh, maybe I should just keep it
| for now, it'll be worth more tomorrow". Actually if anything
| I think the opposite due to inflation.
| swiley wrote:
| There are some services that are just easier to use crypto
| currency to pay for because the maintainers don't want to
| deal with payment providers. The paid version of cheogram
| is a good example. This really was the original idea behind
| bitcoin: dynamically selecting payment providers every ten
| minutes so they become a commodity.
| simias wrote:
| Bitcoin is pretty nice for vendors: no need to integrate
| with third party services with complicated terms and
| regulations, no chargeback etc...
|
| But from the client's perspective it's pretty crappy for
| basically the same reasons. In general if you want to
| impose a new payment system it's really the buying side
| that needs convincing. If tomorrow a significant portion
| of the population wants to buy good and services
| preferably with Bitcoins, that would drive adoption
| massively. Thing is, from a user experience standpoint
| cash and Visa and still vastly more convenient, so the
| vast amount of buyers won't want to bother with
| cryptocurrency at the moment.
| mciancia wrote:
| While coinbase (and other exchanges) is centralised, in what
| way does it mean that idea of bitcoin being decentralised is
| lost? It's still independent from banks (and pretty much
| anyone, as designed). I'm not sure if anyone expected bitcoin
| to succeed without places like coinbase. They still don't
| control (and never will) emission of bitcoin and you still have
| an option to trade it however you like.
| paulie_a wrote:
| There is no "we". I started using it because I can recklessly
| trade it. I see no utility in the current expensive
| implemention
|
| I don't care if it is centralized or not
| treelovinhippie wrote:
| People are idiots. I've met a lot of Ethereum developers who
| are super excited about central bank cryptocurrencies.
| psychlops wrote:
| Cryptocurrencies are protocols, Coinbase is a platform.
|
| https://news.ycombinator.com/item?id=20841059
| vmception wrote:
| The amount of bitcoin on exchanges - including Coinbase - is at
| an all time low.
|
| so really: who cares man.
| backtoyoujim wrote:
| The pro version of coinbase is a tool to exchange crypto
| directly with other people with smaller fees.
|
| I thought that coinbase is more of a store that buys a stock of
| crypto then resells it with huge fee mark up.
| quickthrower2 wrote:
| Weird take. Exchanges are more like a shop. Ideally you don't
| keep the coins on the exchange but in your own wallet after
| purchase
| cactus2093 wrote:
| Don't speak for everyone there, "we" don't all have the same
| reason. I like Bitcoin as a diversification for being a "better
| version of gold" - it has the scarcity and you can physically
| own it but it is much easier to store and send anywhere in the
| world if needed.
|
| These properties also mean that in a pinch, if you live in an
| unstable society or one facing high inflation it can work as an
| alternative financial system.
|
| But I'll never understand the westerners that seem to be almost
| rooting for their own society to collapse just to have another
| reason to use Bitcoin. I don't have any real need to be
| independent from banks, and I am lucky that I live in a pretty
| stable society where that's true.
| arnaudsm wrote:
| I agree, edited "We" as "Many".
| levosmetalo wrote:
| > I like Bitcoin as a diversification for being a "better
| version of gold" - it has the scarcity ...
|
| Why do we repeat the claim of Bitcoin scarcity when we all
| know it's just a promise and nothing more, there is no
| technical limitation?
|
| All it takes to "print" more Bitcoins is for the majority of
| miners to agree to make a fork that will allow for more. And
| that will happen at one point.
|
| As for Gold, good luck trying to mine an infinite amount of
| it.
| elif wrote:
| Your theory is fantasy, and your conclusion that it is
| inevitable is hilarious.
|
| Please do a 2 minute read of the BCH wikipedia page and
| correct your comment.
| uncletammy wrote:
| Just read the BCH wikipedia page. What does BCH have to
| do with increasing the total number of coins?
| Fjolsvith wrote:
| > All it takes to "print" more Bitcoins is for the majority
| of miners to agree to make a fork that will allow for more.
| And that will happen at one point.
|
| Why is this a bad thing? America's founders believed that
| the people could mint their own coins.
| josephwegner wrote:
| It's not intrinsically a bad thing (some may hold that
| opinion, though). However, if you are investing in
| Bitcoin because it is similar to gold in that scarcity is
| a primary attribute, then the ability to mint new
| bitcoins is dangerous.
|
| I'd also posit that "because America does it" is a fairly
| weak argument for many of the claimed benefits of
| Bitcoin. Much of Bitcoin's charter is that it helps move
| away from government-controlled currency. If you think
| America's monetary system is the best option available,
| then Bitcoin likely is not your thing.
| rawtxapp wrote:
| Nothing stops you from changing the 21M cap in the code,
| but you need majority of the network nodes to agree to the
| new rules (aka a hard fork), the miners can't willy nilly
| change the rules of the network.
|
| What you would have at that point isn't Bitcoin, it would
| be probably be called "Bitcoin infinite" or something,
| similar to "Bitcoin cash".
| user-the-name wrote:
| You don't need the nodes to agree on anything. If they
| don't agree, they drop off the network, and form their
| own chain with little to no hashing power, that will
| stagnate and die in short order.
| rawtxapp wrote:
| We have precedence on what happens if nodes/miners try to
| attempt a hard fork, it's called "Bitcoin cash". You
| _need_ majority to agree on the rules, nodes
| /miners/users/exchanges all need to agree on what's
| Bitcoin, that's the whole point of a decentralized
| currency.
|
| If a block size change caused the split into Bitcoin
| cash, you can only imagine what a cap change on Bitcoin
| available will cause, 21M cap is a lot less controversial
| than block sizes.
| user-the-name wrote:
| We do not. With Bitcoin Cash, there was not a majority of
| miners who supported it. That is all that matters.
| Spivak wrote:
| You need a majority of computing power on the network to
| agree to actually do this which is what the parent means.
| yottalove wrote:
| Bitcoin mining power is concentrated in China with about
| eight times the hash rate of number two United States,
| which in turn has a similar hash rate to Russia and
| Kazakhstan. Rounding out the top six, composing more than
| 90% of the total world hash rate, is Malaysia and Iran.
| Do you think these countries share the ideological goals
| of Satoshi Nakamoto's dream?
|
| I have no doubt that a persistent 51% attack by a cartel
| of miners would make Bitcoin liquidity an indefinite hard
| zero for selected "owners" of BTC.
| user-the-name wrote:
| Also, many of the miners in other countries are also
| Chinese.
|
| I don't think the Chinese miners follow any particular
| ideology here other than to extract as much money out of
| the bitcoin market as they can, though.
| user-the-name wrote:
| No, that was the original claim. That you need the miners
| to agree. They are the ones that hold the computing
| power.
|
| The claim I responded to says that in addition to this,
| you also need the majority of the "nodes", which are just
| computers that do no work and just forward transactions.
| This is incorrect, you do not need their help. It is
| easier if you have it, but you do not need it.
| PKop wrote:
| >They are the ones that hold the computing power
|
| If they hold this power to dictate value to the market,
| why don't they do this right now and print infinite money
| for themselves?
|
| It's because they don't actually have this power.
| user-the-name wrote:
| They absolutely and obviously hold that power. It is just
| not in their interests at the moment to rock the boat.
| PKop wrote:
| > You don't need the nodes to agree on anything. If they
| don't agree, they drop off the network
|
| The miners by comparison, drop off the old BTC network
| making difficulty go down and others can now mine BTC.
|
| Certainly miners can make this decision. What they can't
| do is force the market to value the new fork as worth
| anything, while they are burning energy to mine it and
| wasting opportunity cost of abandoning finite BTC.
|
| How is this an actual threat? Doesn't make sense.
| zulln wrote:
| > And that will happen at one point.
|
| Why?
| mindcandy wrote:
| It has already happened dozens of times and no one
| noticed. Probably the only such fork that anyone here has
| heard of is Dogecoin. And, that one only took off as a
| collective running joke.
| user-the-name wrote:
| Probably because the fee market will turn out to be non-
| viable, and bitcoin would collapse without mining
| rewards.
| dools wrote:
| Bitcoin is nothing more than a blockchain ledger of who
| owns Bitcoin
| bdamm wrote:
| Bitcoin definitely includes more than just the ledger.
| Without the miners, there would be no transactions, and
| without the intermediate processors, there would be no
| transaction intake. Without exchanges, there would be no
| value. Bitcoin is clearly a lot more than just the
| ledger.
| dools wrote:
| What you described is just a blockchain implementation.
| blhack wrote:
| And all it takes to "print" more gold is for a majority of
| people using gold to decide that lead painted yellow is, in
| actual fact, gold.
| leetcrew wrote:
| I got some pyrite for sale, great deal at $1600/oz! don't
| miss your chance to get in on the ground floor.
| spamizbad wrote:
| > As for Gold, good luck trying to mine an infinite amount
| of it.
|
| Biggest barrier to more gold is technology. There's a ton
| of it in space.
| kgwgk wrote:
| You don't need to go to space. Gold can be created from
| other elements. It's just a question of tweaking atoms
| after all.
| sdbrown wrote:
| I hadn't thought about that before! Very slick incentive
| structure there...like, build the tech to go to space and
| mine it and become enormously wealthy on Earth (ignoring
| the amount of wealth required to accomplish this).
| PKop wrote:
| >All it takes
|
| Oh just that huh?
|
| The market wouldn't value that new fork on par with finite
| BTC, so those miners would be hurting themselves, and
| burning energy for a worth-less coin.
|
| This action is trivial to consider, so what makes you think
| it has bearing on BTC value? When these miners leave old
| network, hash power & difficulty go down so other miners
| who prefer finite protocol can come in to mine. What's the
| actual threat then?
| thedudeabides5 wrote:
| Actually this isn't the only way.
|
| If financial intermediaries like Coinbase start extending
| credit or engaging in fractional reserve banking, then
| yes, you can "create more Bitcoin."
|
| Just like how in the gold standard, you could still
| create more gold backed dollars by making a mortgage
| loan...
|
| Kind of funny how all these new monetary wizards miss out
| on this simple fact.
| Aunche wrote:
| This is a really dangerous way to create more Bitcoin. If
| the credit markets freeze, then the entire system
| collapses.
| fauigerzigerk wrote:
| I don't think that would necessarily work with bitcoin.
| Fractional reserve banking works because bank deposits
| are fungible legal tender, regardless of what they are
| backed with at any particular moment.
|
| With bitcoin, the only "authority" that confirms who owns
| what is the blockchain. Nobody would have to accept that
| you have made a bitcoin payment just because you
| transferred some bitcoin based credit that is not
| actually bitcoin.
|
| Of course bitcoin derived credit/securities/IOUs can
| work. But it's not the same as bitcoin unless there are
| laws that ban making that distinction in some context.
| MilaM wrote:
| > Fractional reserve banking works because bank deposits
| are fungible legal tender
|
| Actually bank deposits at commercial banks are not legal
| tender. Only banknotes, coins and deposits at the central
| bank are. In most (all?) countries, individuals are not
| able to open accounts with the central bank.
| Interestingly this is not a rule set in stone. Some
| central banks like the Swedish Riksbank [1] are
| investigating the possibility to issue virtual currency
| to individuals which would be a legal tender and an
| alternative to bank deposits.
|
| [1] https://www.riksbank.se/en-gb/payments--cash/e-krona/
| [deleted]
| G3rn0ti wrote:
| That's nonsense. Only miners can create new Bitcoin. What
| Coinbase could do is to issue a financial derivative
| backed by Bitcoin e.g. a "Coinbase Penny" representing a
| 1/1000th of Bitcoins. And then could go on issue more of
| those pennies than actually backed by Bitcoins. But it
| wouldn't be cryptocurrency if it wouldn't run on a
| blockchain. Of course, the "Coinbase Penny" could
| collapse if we people stopped trusting Coinbase. Bitcoin
| wouldn't notice like the gold price does not care whether
| a single US dollar is still backed by 24.057 grams of
| silver like it originally did.
| arcticbull wrote:
| It would work just fine unless there's a run on it. So
| long as HODLers HODL, nobody would ever notice. That's
| the premise of the whole proof of keys business.
| (https://www.proofofkeys.com/)
| cbdumas wrote:
| All these replies telling you this isn't possible are
| amazing. Perhaps they are forgetting that when you hold
| coins at Coinbase that's no different from a bank giving
| you a bank note saying you "own" x amount of gold in
| their vault.
|
| EDIT: I was obviously not the first to say this but it is
| really interesting to watch the crypo space re-invent all
| of modern finance, one piece at a time.
| PragmaticPulp wrote:
| The core Bitcoin holders don't want more coins, so it won't
| happen. Simple as that.
|
| The real elephant in the room is that new crypto currencies
| are being printed left and right. We may have a finite
| number of Bitcoin (in a couple decades) but one look at the
| list of crypto currencies will show that the number of
| crypto coins in general continues to explode at a
| phenomenal rate.
| isoskeles wrote:
| Why do the core Bitcoin holders have much to do with the
| decision? The decision here would be made by the miners,
| right? They have a different set of incentives from
| people who hold BTC. Maybe I'm missing something, I don't
| see how holders and miners have the same interests.
| cactus2093 wrote:
| Honestly maybe it will fork, and maybe that will be a good
| change. We don't exactly know how the dynamics of mining
| will play out in a post-block reward world, maybe it's
| actually better to keep mining at the current block reward
| size indefinitely rather than decrease all the way to zero.
| Very slow fixed inflation is not necessarily that different
| than having a hard cap on supply. Gold is still being mined
| too.
|
| If it forked in a way that completely defeated the limited
| supply and led to rapid inflation then it would massively
| tank in value and miners would lose a lot of money. That's
| a pretty good incentive for them not to destroy it.
|
| As far as bitcoin existential threats go, there are many of
| them - the energy cost, a 51% attack, so much concentration
| of mining in China, etc. Miners mutually colluding to
| destroy their own investments is not at the top of my list
| of worries.
| ascorbic wrote:
| The main point of gold is to be a store of value. Anything as
| volatile as Bitcoin is a terrible choice for a store of
| value.
| Justin_K wrote:
| So when the power goes out or someone looses a hard drive,
| how easy is your bitcoin to transact?
| high_priest wrote:
| Losing a bitcoin is like losing gold. Just that no one will
| be able to find it later, so with lower supply, price
| should rise.
| yazaddaruvala wrote:
| Disclaimer: I have no BTC. I just want to point out the
| current transaction UX is not reliable at all.
|
| I rarely hold any cash on my person and typically pay for
| everything with my iPhone, otherwise with a physical CC. If
| the merchant has no power or a broken machine, I cannot
| make the purchase.
|
| This literally happened to me a few weeks ago while buying
| a slice of pizza ($5 or less). My phone had power so I
| offered to Venmo the owner instead but they said no.
| dgellow wrote:
| Why not buy gold if that's what you want? What is better than
| gold about bitcoin? I never really understood this argument.
| I see some value in bitcoin but it doesn't have the same
| properties as precious metals: bitcoin value is only based on
| faith (so from this point of view it's not too different from
| so-called fiat currencies), there is no natural demand.
|
| If you have gold, silver, platinum, you will always have at
| least some demand from the industry. Even if the majority of
| the current market price is due to speculation you still have
| an actual need for the metal. That's not the case for
| bitcoin. You could have the market losing faith tomorrow and
| it's done, your coins have zero value.
|
| Crypto assets are their own things, it's not helpful to
| associate them to something that has different properties
| such as gold.
| dannyw wrote:
| The industry demand of gold is minuscule. It's a rounding
| error. Buying a $1000 asset with $10 in "intrinsic value"
| is really no different to bitcoin.
|
| Bitcoin can be transferred electronically, and can move
| across borders without being hassled at customs.
| dgellow wrote:
| Where do you get this from? Statista data show way more
| than 10% of demand from the Jewelry and tech industries:
| https://www.statista.com/statistics/274684/global-demand-
| for...
| trident5000 wrote:
| Jewelry is just an extension of speculating on the metal.
| You can make a necklace out of many materials and it will
| function the same.
|
| Cobalt is used more in electronics than gold. The MC is
| not close to the same. Almost 100% of golds value is from
| speculation.
| Aunche wrote:
| Cobalt is also thousands of times of abundant than
| gold...
|
| https://en.wikipedia.org/wiki/Abundance_of_elements_in_Ea
| rth...
| tomjakubowski wrote:
| > You can make a necklace out of many materials and it
| will function the same.
|
| How so? Jewelry's function is to look a certain way.
| trident5000 wrote:
| I can make a necklace look almost exactly like gold but
| out of another material. The slight difference in
| subjective aesthetics does not justify a 1000x+ price
| increase. Its expensive because its a speculation.
| gruez wrote:
| >If you have gold, silver, platinum, you will always have
| at least some demand from the industry. Even if the
| majority of the current market price is due to speculation
| you still have an actual need for the metal. That's not the
| case for bitcoin. You could have the market losing faith
| tomorrow and it's done, your coins have zero value.
|
| Is there a difference between investing in gold (30% "real"
| value, 70% "speculated" value) and investing 30% in copper
| (100% "real" value) plus 70% in bitcoin (100% "speculated"
| value)?
| hungryhobo wrote:
| Volatility?
| miglmj wrote:
| Only that it would have been way more profitable
| pontus wrote:
| This is my thought as well. There's too much crypto-purity
| going around in these discussions and not enough bitcoin-
| pragmatism, I think. Reminds me a lot of the purity games
| that are being played elsewhere online, just instantiated in
| a different context.
| statstutor wrote:
| > rooting for their own society to collapse just to have
| another reason to use Bitcoin.
|
| I view the main value of Bitcoin (or gold, especially paper
| gold) is as a gamble or hedge against currencies collapsing,
| in a situation which leaves Bitcoin (or gold) relatively
| unaffected.
|
| Without doing the formal calculation, I'd guess that Kelly
| criterion will suggest that an average person with an average
| risk profile should hedge 0 on this basis (exactly what the
| vast majority of people have done).
|
| If you've invested more than that, it becomes in your
| personal interest that currencies collapse in precisely that
| way.
| temp8964 wrote:
| Can you "physically own" Bitcoin? Or what does "physically
| own" mean exactly? I kind of understand what "physically own"
| gold means, but not sure it means the same as "physically
| own" Bitcoin.
|
| Getting downvoted on this. I am not complaining about the
| downvotes, but seriously, please enlighten me...
| thinkmassive wrote:
| What users of the Bitcoin network own are private keys.
| These allow you to control corresponding entries on the
| Bitcoin ledger by signing transactions and broadcasting
| them to the Bitcoin network.
|
| Signed transactions can even be shared through other
| channels, to be broadcast at a later time for settlement,
| like a check. This is how the Lightning Network functions.
|
| Keys can be held in many forms, including purely in
| software, digitally inside a hardware secure element, or
| converted to words and printed on paper or metal.
|
| Bitcoin even has basic scripting that allows more complex
| setups, such as only allowing a ledger entry to be updated
| after a certain duration (timelocks) or requiring a quorum
| of signers (multisig), so simply having a corresponding
| private is not always sufficient to immediately spend the
| corresponding funds.
|
| In the past "brain wallets" were popular, where the private
| key is generated from a memorized passphrase. These are a
| bad idea because it's trivial to watch addresses
| corresponding to every entry a password dump, and
| automatically move these funds whether you're the original
| owner or not. I mention this to illustrate how having the
| corresponding private key is necessary to control funds but
| it's not sufficient to prevent someone else from
| controlling the same funds.
|
| On top of all this, most "Bitcoin users" leave "their"
| Bitcoin on exchanges, so what they really own are IOUs
| rather than Bitcoin itself.
|
| Bitcoin "ownership" can be pretty abstract.
| vinay_ys wrote:
| Also almost all governments have KYC/AML/CFT regulations
| that apply to crypto exchanges as well. And governments
| can monitor, control, sanction your bitcoin transactions
| by controlling these exchanges through regulations. When
| the local currency becomes unstable and the local
| government becomes unstable, one should assume access to
| crypto exchanges like coinbase will be very very hard.
| lynx234 wrote:
| this is where decentralized exchanges like Uniswap come
| into play, no KYC, no account
| RestlessMind wrote:
| And how do you move your money to/from a DEX? It still
| needs a regulated exchange like Coinbase to interface
| with Fiat money, no?
| vinay_ys wrote:
| Yes, that's correct. Basically, bitcoin doesn't have
| privacy and is losing self-sovereignty through
| regulation.
| thinkmassive wrote:
| You can sell goods and services locally and accept
| Bitcoin as payment. Craigslist even added a
| "cryptocurrency ok" flag you can set on your posts.
|
| LocalBitcoins enables face to face transfers.
|
| Bisq is a DEX that enables remote exchanges using any
| form of payment, including most centralized payment
| services, and even cash through snail mail.
| thinkmassive wrote:
| You're right, "not your keys, not your coins"
| elif wrote:
| Fair question.
|
| It would be more accurate to say that you can own
| "mathematically guaranteed exclusive control over"
| bitcoins.
|
| and you that can store that mathematical guarantee on any
| number of cheap, readily available physical devices.
|
| You can also elect to destroy the possibility of outside
| knowledge of the secret, leaving the "physical memory chip"
| as the sole means of humanity interacting with those coins.
| felixfbecker wrote:
| All you need is a wallet address, which you can put on a
| USB stick or even print out on a card and store at home.
| codehalo wrote:
| You dont need the wallet address, you need the private
| key. They are not the same.
| WD-42 wrote:
| If you use a local wallet to store your BTC, let's say on a
| HDD, the the magnetic pattern on the disk that makes up the
| bits that represent your coins would be physically owning
| then. They can't be retrieved any other way.
| krb686 wrote:
| As codehalo pointed out, there's no magnetic pattern that
| represents coins on your hard drive. There is a magnetic
| pattern that represents your private key for your wallet
| (if you store it there), which possession of you might
| equate to possession of the coins to since without it
| they can't be used.
|
| Still, access isn't really possession is it. I can lend
| my house key to a friend but they don't possess my house.
| The deed is what really declares me the owner. In the
| case of your coins, it's the consensus of the blockchain.
| Grustaf wrote:
| Bitcoins are like bearer bonds. Unlike houses.
| codehalo wrote:
| Bitcoin is not stored on your HDD, or on a local wallet.
| The "local wallet" simply points (or references) an
| address on the bitcoin blockchain. There are obviously
| more details, but you can do your own research.
| lxgr wrote:
| Isn't this functionally equivalent to the statement
| "(access to) the coins is stored on your HDD" for most
| purposes?
|
| Not all discussions require the highest level of
| technical detail.
| temp8964 wrote:
| Do I still own the BTC if the whole BTC network shuts
| down?
| vinay_ys wrote:
| If you have a $100 currency note in your hand, you can
| spend it as long as there exist someone who believes
| there is a market for $100 bills. Same as with a gold
| coin.
|
| But if you have a $100 in your bank account, there is an
| additional constraint - you can spend it only if your
| bank is alive and functioning correctly and lets you
| specifically (you are not sanctioned/banned) to spend it.
|
| Same is the case with bitcoin for those who store their
| private key on exchanges.
|
| First there should exist a market for it (others who also
| believe bitcoin has value). Then, just like banks, the
| bitcoin exchanges where you escrowed your key have to let
| you spend it through them.
|
| If all exchanges you have access to in your country
| decide to ban you (because your govt told them to) then
| you cannot spend your bitcoin.
|
| In this way, bitcoin and your bank account balance are
| similar and they both are different from hard cash in
| hand or gold coin in hand.
|
| If you hold your private key yourself and run your own
| bitcoin lightweight node to connect to bitcoin network
| and submit your transactions, then you don't need
| exchanges. Even then, others who use exchanges maybe
| blocked from transacting with you through govt sanctions
| etc.
| throw0101a wrote:
| > _But if you have a $100 in your bank account, there is
| an additional constraint - you can spend it only if your
| bank is alive and functioning correctly and lets you
| specifically (you are not sanctioned /banned) to spend
| it._
|
| Given my bank is on the list of "systemically important
| banks", if it goes under/down there's probably more going
| on in the world such that I probably won't be worrying
| about my proverbial $100 too much:
|
| * https://en.wikipedia.org/wiki/List_of_systemically_impo
| rtant...
|
| (And I do have accounts at multiple banks in case of IT
| problems at one bank.)
|
| > _If all exchanges you have access to in your country
| decide to ban you (because your govt told them to) then
| you cannot spend your bitcoin._
|
| Of all the things that I could worry about going wrong in
| my life, these doomsday scenarios are not even in the Top
| 1000. I'm more worried about stubbing my toe than some of
| these currency collapse scenarios that some Bitcoin fans
| come up with.
| G3rn0ti wrote:
| You own your Bitcoin as long as there is at least a
| single node out there storing its Blockchain. But it
| would be the only instance left that could confirm your
| ownership in that doomsday vision of yours.
|
| You can think of Bitcoin as a kind of identity management
| system. The blockchain stores transactions mapping public
| keys to each other and monetary values. As long as you
| remember the private key matching your public key you can
| issue transactions on the blockchain.
|
| Contrary to common belief Bitcoin is not stored on your
| hard drive, they contain only your private keys. The
| monetary units themselves, "UTXOs", are stored on the
| network of Bitcoin nodes distributed all over the world.
| soared wrote:
| It's a comparison to your traditional bank account. At
| chase bank you don't physically own the money in your
| account - it's in a banks database. With Bitcoin you own
| that coin and it's stored in your own digital wallet. Like
| cash v bank account, but Bitcoin is safer and easier to
| store than cash.
| id wrote:
| Your Bitcoin is stored as an unspent transaction output
| (UTXO) in a globally distributed ledger (i.e. a
| database). But for most people the private key that would
| allow them to spend that Bitcoin is not actually in their
| possession - it's owned by Coinbase for example, who are
| acting as a bank and keep yet another database to store
| who owns what.
| arcticbull wrote:
| The keys own the coins, you're ancillary.
| fullshark wrote:
| I like bitcoin cause the price keeps going up. When that
| stops I won't like it so much.
| Judgmentality wrote:
| I'm pretty sure this is 99% of the value of bitcoin for 99%
| of people that hold bitcoin.
| jacurtis wrote:
| I was watching CNBC the other day and they were doing a
| roundtable thing like the sports channels do. Each host
| was shitting on bitcoin about how terrible it is, and how
| millennials are stupid for liking it, and it'll go to
| zero one day, etc. You know the drill.
|
| Then the main host asks who has a position in Bitcoin.
| EVERY SINGLE ONE of the investors that was just shitting
| on Bitcoin 5 seconds earlier admitted that they all have
| substantial stakes in it.
|
| The first guy tried to come up with a technical
| justification for why he is doing it.
|
| The next guy blamed his wife for wanting to get into it
| because all her friends were supposedly talking about it,
| so they bought 10 bitcoin back when it was $9k a share.
|
| The third guy simple said "It keeps going up, so I keep
| putting money in it. As soon as it stops going up I will
| stop putting money in it".
|
| The other 3 people after it basically just said "yeah,
| exactly what the third guy said."
|
| I personally get nervous with Bitcoin. It isn't stable
| which makes it far from a currency. You can't have a
| currency that goes up and down 10% throughout the day.
| Transferring $100 could be $90 or $110 over the course of
| a few hours. That's significant and cannot be ignored. I
| understand the idealistic portion of it too and how it
| gets us closer to a perfect money system, but truthfully
| the only reason we continue to talk about Bitcoin is that
| it continues to go up. I don't have very much faith in
| Bitcoin. But I'll admit I have some and I have been
| riding it up. It makes no sense to me. I am just along
| for the ride.
| [deleted]
| realradicalwash wrote:
| Bitcoin was created with the use case currency in mind and it
| was used like that by the earlier adopters. I think this is
| what OP was pointing at with "Many have forgotten why we used
| cryptocurrencies in the first place" and certainly with the
| qualifier "many", I think OP is correct: That's how we
| initially used Bitcoin and other cryptos.
|
| _Now_ many (most?) people use bitcoin as a store of value.
| But I think this is more out of necessity: Bitcoin as a
| currency is semi-dysfunctional.
|
| > the westerners that seem to be almost rooting for their own
| society to collapse just to have another reason to use
| Bitcoin
|
| I have not met a single person in my life with that
| motivation. However, I have met people who want to see the
| current system collapse, but mainly because it's not working
| for them.
| jacurtis wrote:
| I don't think any westerners want the current money system
| to collapse either. So it is interesting to hear the
| perspective we give to other countries that think we want
| that. Trust me, no one in the US wants to see the current
| economic system collapse.
|
| We have already seen it. We know how it goes.
|
| We saw it in the 1920s. It was horrible. It permanently
| scarred many of our great grandparents, and even left scars
| on our grandparents (because they grew up learning vivid
| horror stories of it). Seriously it was so bad that it took
| multiple generations to recover from.
|
| Then we saw it again to a portion of our financial system
| just a decade ago. Luckily we learned from our mistakes and
| prevented total collapse, but we still saw how vulnerable
| the system is. Everyone here remembers that, it was only a
| decade ago.
|
| No one wants to see the system collapse. I think what
| people are really thinking is they want to create a system
| that theoretically can't collapse. We are aware of how
| fragile our current banking system is. Crypto originally
| sought to create a system that removed the two main
| wildcards in the financial system (the Fed and the Banks).
|
| Now we replaced Wells Fargo with Coinbase. So we aren't
| much closer to our goal. We replaced NASDAQ with Bittrex.
| We replaced the Fed with unregulated ICOs and Miners (if
| that's even a thing anymore).
| hammock wrote:
| > "we" don't all have the same reason. I like Bitcoin as a
| diversification for being a "better version of gold" - it has
| the scarcity and you can physically own it but it is much
| easier to store and send anywhere in the world if needed.
|
| Most people are using bitcoin for this reason today (store of
| value).
|
| What OP was talking about was the _original_ purpose, which
| seems to have been mostly lost.
| dheera wrote:
| Let's be honest -- the _real_ reason a lot of people like
| Bitcoin is because they want to get rich quick. Nobody wants
| to say that here, but most people who own Bitcoin don 't take
| a flying crap about a store of value or decentralization.
| uncletammy wrote:
| > These properties also mean that in a pinch, if you live in
| an unstable society or one facing high inflation it can work
| as an alternative financial system.
|
| At the time of writing this comment, if you want your BTC
| transaction confirmed in the next hour it would cost you ~
| 10USD ( https://bitcoiner.live/ ) .
|
| What planet do you live on where you think a non-negligible
| percentage of people in ANY country, let alone a developing
| one, can afford 10 dollars for each transaction they make?
| That's not even considering the price effect that global
| demand would have on fees. Bitcoin can't even meet the demand
| of the relatively small cult of people worldwide that buy it,
| few of which even move their "assets" off the exchange.
|
| Parasitic investors have strangled cryptocurrency. If you
| think Bitcoin can currently serve any purpose other than
| making rich people more rich, you're a fool. Wake me when
| Tether is dead and people start using crypto as it was
| intended, peer to peer digital cash.
|
| EDIT: I apologize for coming off so harsh. My anger is
| (mostly) not at you. I'm angry at seeing the enormous
| potential bitcoin had to do good in the world go completely
| to waste.
| UShouldBWorking wrote:
| I make payments almost everyday with Peer to Peer Digital
| Cash. Real users and devs moved to other projects like
| Bitcoin Cash, Ethereum and Monero soon after Blockstream
| hijacked the Bitcoin Core GitHub repo.
|
| Bitcoin Core is broken beyond repair but Bitcoin Cash has
| taken its place and the project and community are doing
| great.
| cactus2093 wrote:
| Why are you so set on digital cash? I completely agree,
| Bitcoin is a bad replacement for cash, just like gold
| bullion is.
|
| 10 dollars is a steep confirmation price but if you have a
| life savings of, say, the equivalent of a few hundred or
| thousand USD that you hold in cash and your local currency
| is rapidly inflating making it worthless, btc is an amazing
| life raft that you could put your money into. If you are
| able to migrate and get a high paying job and still have
| family somewhere far away in the world that you want to
| help, $10 fee is not that crazy to send them monthly
| payments that they could then trade for cash or food.
|
| Then there are obviously the side chain solutions,
| lightning network, or even just using exchanges to transfer
| btc to altcoins with faster settling times and lower fees
| if you really do want digital cash.
| entropea wrote:
| The narrative of Bitcoin completely changed from when I
| first got into Bitcoin in 2009-2010. It was supposed to
| be a decentralized currency and people tried to use it
| that way back then. Now, since it has failed to be able
| to scale and handle that, it's suddenly a "gold", a
| "value store" that really has not much of a purpose and
| is being outclassed by coins like Monero and full proof
| of stake coins like Algorand.
| uncletammy wrote:
| > I completely agree, Bitcoin is a bad replacement for
| cash, just like gold bullion is.
|
| It doesn't have to be a bad replacement for cash. It can
| actually be a fantastic replacement for cash if we
| continue building it as one. The fact is, the current BTC
| devs decided bitcoin can't scale before ever even trying.
| They were short-sighted, took VC money to pivot to
| "digital gold", and started spreading the false narrative
| that it never could have worked.
|
| > Why are you so set on digital cash?
|
| Because until bitcoin is useful to regular everyday
| people, there won't be enough buy-in to offset the huge
| exchange rate fluctuations caused by speculators. If that
| doesn't happen then it will only ever be useful to
| speculators.
|
| Your above example scenario makes perfect sense if you're
| a skilled worker from a wealthy country but it's nonsense
| if you're among the remaining 80% of the people on this
| planet. Bitcoin can help EVERYONE if we let it. Luckily
| other coins have picked up the slack.
| xorcist wrote:
| > the current BTC devs decided bitcoin can't scale before
| ever even trying
|
| Please keep the Bitcoin-the-protocol and Bitcoin-the-
| currency separate. The protocol obviously can't "scale"
| to even remotely close to everyday payment systems such
| as Visa or Mastercard.
|
| That much should be evident, and was the subject of
| pretty much every discussion around the protocol about
| ten years ago or so. The basic idea has limits. 10x of a
| tiny number is still a tiny number.
|
| Payments can still be viable in Bitcoin-the-currency
| however. This can be done in a number of ways, from Visa-
| like third parties to decentralized payment networks such
| as Lightning and a number of similar ideas. Settlements
| will always be necessary so there will always be need of
| something like blockchain in distributed systems.
|
| No system where every actor needs to keep a permanent
| record of every transaction of every other actor forever
| can scale to the entire planet. Transactions must be an
| issue _only_ for the parties involved in the transaction,
| and _maybe_ for a third party.
| uncletammy wrote:
| > The protocol obviously can't "scale" to even remotely
| close to everyday payment systems such as Visa or
| Mastercard.
|
| Citation desperately needed
|
| > No system where every actor needs to keep a permanent
| record of every transaction of every other actor forever
| can scale to the entire planet
|
| If the costs associated with keeping these records are
| negligible and all the work is done for you
| electronically by an app on your phone, then yes. It
| absolutely can scale.
|
| > Please keep the Bitcoin-the-protocol and Bitcoin-the-
| currency separate.
|
| I am. Bitcoin is the protocol. BTC is the currency.
| dennis_jeeves wrote:
| Can someone explain to me the technical reason as to why
| it costs $10, when it used to cost pennies (I think)?
|
| Has the proportion of transactions gone up compared to
| the miners?
| tradri wrote:
| It's kinda hard to create a world-class transactions
| system when the philosophy is that the bottleneck should
| be a below-average computer and internet connection.
| uncletammy wrote:
| cactu2093 is exactly right. It's basic supply and demand.
| What their explanation doesn't touch on are the things
| that have affected supply and demand. Here are a few of
| them:
|
| 1. Massive media hype surrounding the price in 2014
| caused everyone and their mom to try and buy bitcoin. The
| original developer (Satoshi) had added short term limit
| on the number of transactions that could be processed in
| a given time (transactions per block) as a short term fix
| for a few bad actors spamming the network. So the network
| was left unable to process the massive increase in demand
| caused by the price hype. This "fix" was stated to be
| temporary but was left in for the reason below.
|
| 2. A handful of new BTC devs ran off the old guard who
| believed the network should scale up with demand. This
| resulted in them intentionally refusing to change the
| software to accommodate yet another round of increased
| demand due to media attention (2016).
|
| 3. Increased regulatory scrutiny made it difficult to
| buy/sell crypto outside of large, regulated exchanges,
| effectively reducing liquidity for those that aren't
| institutional traders and those unwilling to give
| Coinbase a DNA sample just so they can buy crypto. The
| new regulatory and institutional friction killed many of
| the original use cases for bitcoin leaving mostly
| institutional traders left. These traders are unphased by
| high transaction fees, especially since most of their
| trading takes place off-chain on an exchange website.
| samtheprogram wrote:
| If you're sending from an exchange, you're actually
| splitting that fee with multiple people (one transaction
| with multiple recipients including yourself). If you're
| on your own transaction (e.g. sending from a hardware
| wallet), you're going to pay considerably more (closer to
| the tune of $10).
| cactus2093 wrote:
| AFAIU, it's just basic supply and demand. A block is
| mined every 10 minutes and has a fixed size, so you're
| paying for a slot to put your transaction in the block.
| And there actually is no fee listed anywhere that you pay
| and it guarantees you a spot, it's a bit like a stock
| order book where you can offer any fee that you want on
| your transaction and the miners will pick the highest fee
| transactions available to match with. $10 is about the
| average minimum fee size being accepted in blocks atm.
| Ultimately as demand to send transactions goes up, fees
| go up.
| delaaxe wrote:
| The whole point of his comment is that BTC is better viewed
| as store of value rather than a medium of exchange
| jariel wrote:
| Except that BTC is a terrible store of value, possibly
| the last option in a long line of better classical
| options such as real estate (or related funds), stocks,
| bonds, basket of currencies, commodities.
|
| We already have tons of options for 'store of value' why
| on earth would we invent another, worse one?
|
| BTC is not a store of value or a currency - it's a weird
| social movement.
| swampfrog wrote:
| ...how embarrassed would you be for being like a decade
| late to such a massive "social movement" that went from
| like $1 to more than $ trillion dollars...? Yeah. sorry
| about your ignorance.
| jariel wrote:
| ""social movement" that went from like $1 to more than $
| trillion dollars...? "
|
| This is pure Ponzi Scheme language, helping to prove my
| point.
|
| There are rooms on Clubhouse you can join where people
| talk and hype up these kids of schemes, this is not one
| of them - don't bring this here.
| remolacha wrote:
| There are L2s that solve this, in exchange for slower
| inclusion into the main chain. Or you can just trade
| wrapped BTC on another network. In that case, the Bitcoin
| main chain functions like a gold depository institution in
| traditional finance.
| uncletammy wrote:
| I'll make sure and tell my grandma that she can save
| money by wrapping her BTC and trading it on another
| network rather than making on-chain transactions /s
|
| It blows my mind the amount of talent being wasted
| building "solutions" for an intentionally crippled chain.
| One can only polish a turd so much.
| x3n0ph3n3 wrote:
| Choose an L2 and send me $1. I dare you.
| ldbooth wrote:
| regarding the transaction cost, wells fargo charges me $15
| to receive a wired payment.
|
| If the use case is only large gold like transactions, the
| BTC use case makes more sense. Tbd.. shake it out.
| otterley wrote:
| Most banks don't charge their customers to process
| incoming wire transfers. You're saving $5 when you could
| be saving $15.
| uncletammy wrote:
| I'm not arguing that BTC isn't better than Wells Fargo.
| I'm arguing that you can't build a "financial network" on
| it. BTC is a great alternative to Wells Fargo although
| almost ANY OTHER COIN is a better one.
| ldbooth wrote:
| Can you anchor a financial network on BTC stability? (If
| it achieves stability). IDK.. Total aside..I imagine this
| utopian energy-financial system future where we overbuild
| our renewable grid and instead of storing energy we
| discharge the (green energy) overproduction into crypto
| mining operations. There are some dudes already on it,
| it's a new angle to grid power flow modeling.
| uncletammy wrote:
| On your aside, I'm amazed that smaller energy producers
| have not already become crypto miners. It would be so
| easy and incredibly lucrative. They could simply flip a
| switch any time the sale price of their generated power
| is less than the price of the coins their mining
| facilities could produce. They would get an instant
| profit increase. Almost all the costs associated with
| mining are fixed.
| vkou wrote:
| How much does it charge you to receive a direct deposit,
| or to buy a cup of coffee through their credit card?
| varajelle wrote:
| With the lightning network, the cost of a transaction is
| negligible.
| uncletammy wrote:
| You can't use lightning network without opening a
| channel. Opening a channel requires making an on-chain
| transaction which most of the world can't afford.
| Lightning network is absolutely useless on BTC. Add
| lightning network to a chain that isn't crippled then
| let's talk.
| ohbleek wrote:
| I use the lightning network almost daily and I've never
| done that. I just use a wallet that is lightning capable
| and that's it.
| __blockcipher__ wrote:
| How exactly are you using the lightning network without
| an initial transaction to charge up your metaphorical
| gift card?
| random_kris wrote:
| You could use a custodial solution untill you stack
| enough to get a channel of your own.
| Melting_Harps wrote:
| > But I'll never understand the westerners that seem to be
| almost rooting for their own society to collapse just to have
| another reason to use Bitcoin. I don't have any real need to
| be independent from banks, and I am lucky that I live in a
| pretty stable society where that's true.
|
| I can write a book on why this is, but since 2008 we have
| seen economic collapse after economic collapse starting in
| the very cradle of Western Civilization (Greece) and has gone
| from their.
|
| I despise the doom porn side of Bitcoin, especially because I
| actually focused and even lived in some of these collapsed
| societies, and have seen the misery, violence and overall
| worst of Humanity first hand. Whereas those guys are often
| people with small holdings that have a very detached view of
| the World. It's like asking a trophy wife of a celebrity to
| understand the plight of a factory worker at Amazon during
| the Pandemic when her trinket is late... it's impossible
| understand what goes in tier mind, but I'd argue a lot of it
| is borne of some type of mental illness and is only possible
| due to such wealth disparity. BUt the haves and have nots is
| nothing new so I won't delve into that.
|
| With that said, I'd say you also have a version of that
| (detachment from reality given your statement) and if you
| live in the Valley and in tech and cannot see the reason why
| a World run of fiat has led to the homelessness problem, and
| over all misery, and what it is, then you are in for a very
| real awakening as this is happening with or without you
| understanding. The Chinese central bank just started woring
| with several countries testing its digital currency
| transfers, JP morgan tried doing payments via satelites using
| 'blockchain' tech, and has the most patents utilizing
| 'Bitcoin-like' technology.
|
| In short: Satoshi created this technology with the intended
| purpose of giving people an option to opt-out of the
| predictable and inevitable central bank destruction, it's
| coded into the very genesis block; those of us from the early
| days were from all walks of life and various networth, but
| one thing we all noticed was a stark dissatisfaction for the
| status quo and what the limited options we had to really do
| about it from within, so it was worth dedicating our time,
| labour skill set if we even had the slightest chance at
| reforming the World for the better.
|
| It's hard to explain, but in 2010 (when I saw the community
| go against satoshi in order to support Wikileaks) I dor the
| first time wanted all those guys in that thread who donated
| to Julian Assange and made Satoshi say regarding the NSA 'we
| kicked the hornet's nest' to have the resources necessary to
| disrupt our Industries and our countries for the betterment
| of Humanity, getting rich wasn't the goal it was the means of
| making a better World we wanted to live in... A guy like Elon
| makes perfect sense to me, and he has never been the
| eccentric billionaire in my eyes, he should be the standard:
| instead we get the worst like Bezos, Gates, Zuck etc...
|
| Now those tables have turned and Musk is the darling of the
| masses and anything he does makes people take notice--for
| good or for bad. I hope we usher in a new era of people like
| this and Bitcoin will have played a significant role in
| making that happen.
|
| Look up /u/Pineapplefund if you want to see more, try Sean's
| Outpost and Satoshi Forest. Our History and our culture is
| rich, and best of all it's not race/gender based which was so
| damn refreshing given how absurd things have gotten this last
| decade alone.
|
| Silicon Valley being the parody of all the worst things in
| tech which lung on to this maxim--making the world a better
| place--because it sounded good to say during a pitch for the
| most pointless, non-sensical app/project, but I still recall
| a tech article from like 2013 I had saved on my old laptop
| that died in some event and the reporter concluded with
| 'unlike most people in technology, when Bitcoiners say they
| 'want to make the World a better place' they actually mean it
| and go out and do it,'
|
| I consider myself from that generation of Bitcoiners, which
| was common pre-2013's bubble. My entire career reflects that,
| and I consider myself incredibly fortunate to have had it,
| even if I have trauma and bad memories that induce anxiety at
| times.
|
| I left a career as a (miserable cog) university trained lab
| scientist after working 60+ hour weeks to pay down crippling
| student debt wasting away my best years but I sought to try
| and make my suffering mean something and try tackle the 1-2
| killers in the West at the time which are both diet based
| illness: diabetes and heart disease. And when I left that
| phase of my life I got to make environmentalism profitable in
| the process, and have many adventures that made me love Life
| itself, the good and the bad, and while this wasn't
| monetarily lucartive (the exact opposite actually) and quite
| honestly had I just held on to the coins I had I'd probably
| have a net-worth in the xx of millions in USD had I continued
| to passively buy, but that wasn't the goal: our vision and
| our impact mattered more than promise of wealth.
|
| And that's why I don't think you will ever understand the
| best of us, and why the latter 'moonboi' 'when lambo?' meme
| guys are what you could at best be able to relate to and
| cling on to. We lived completely different lives, and no
| amount of money you have would make me even exchange my
| darkest year for your entire Life.
|
| I don't expect you to understand, I really can't see how you
| could, but that is one reason and I probably shouldn't have
| shared as much as I did.
| jariel wrote:
| Folks - the Central Bank is an essential pillar of
| governance.
|
| If it 'goes down' it means, almost everything else is
| 'going down again'. Your BTCs are useless in that scenario.
|
| BTC is a terrible currency and a bad store of value - and
| there is no 'mathematical arrangement' that can replace
| good governance.
|
| It would be like using digital contracts for legal
| contracts etc. - that won't solve corruption and inanity.
|
| What we need a are good, well managed currencies. If you
| don't like how they are managed, don't hold on to currency.
| Buy real estate, stocks, any other classical form of value
| and use the local currency merely as a medium of exchange
| and you'll be fine.
| lottin wrote:
| Gold is commodity. The financial system is an industry that
| provides goods and services. Gold is not an alternative to
| the financial system. How could it be? It's a completely
| different thing.
| throwaway_kufu wrote:
| >Gold is not an alternative to the financial system.
|
| The modern financial system itself is in fact an
| alternative to gold
| xadhominemx wrote:
| No it is not
| boh wrote:
| We're going to need some more detail on that argument.
| arrosenberg wrote:
| Not sure what OP was specifically referring to, but the
| argument is true in the sense that pre-1971, gold was
| money and currency was backed by gold. Now money is
| whatever the Fed says it is, and currency is backed by
| faith.
| boh wrote:
| Otherwise known as credit, which has been the prevailing
| valuation since the Stone Age.
| arrosenberg wrote:
| The difference between relying on credit backed by a
| physical item (gold bricks) versus credit backed by "the
| Full Faith and Credit" clause of the Constitution is what
| happens in the event of default by the issuer of the
| credit. If the wheels stop turning at some point, there
| is no recoverable asset.
| jmcqk6 wrote:
| > an unstable society or one facing high inflation
|
| What are the chances that in an environment where the USD is
| not usable, there is an available network and electricity
| that makes bitcoin usable?
| temp8964 wrote:
| I don't think cactus2093 meant US / western world.
| jmcqk6 wrote:
| I get that I said USD, but the fundamental premise
| doesn't get that altered.
|
| Bitcoin is heavily resource intensive. In an environment
| that is already resource pressed either due to political
| instability/natural disaster/inflation/whatever, what are
| the chances that the resources are going to be found that
| can actually operate bitcoin, and won't be better
| utilizied elsewhere?
| malaya_zemlya wrote:
| You don't need to do mining in the disaster affected
| area. You need _someone_ to mine and to confirm
| transactions, but that can happen anywhere the world.
| [deleted]
| kristiandupont wrote:
| It might be available, but you might not be able to open a
| bank account for it. You can store cash of course, but that
| has a different set of problems.
| pvarangot wrote:
| What about usable but inconvenient? Most of the world is
| like that, Africa, China, India, for large transactions
| gold or the USD is inconvenient and dangerous. Venezuela,
| Argentina, are other examples closer to the US.
| lambda wrote:
| Argentina?
| csomar wrote:
| Bitcoin can actually be quite resilient to that. Also the
| USD failing, doesn't necessarily mean a global world war.
| The US can go the way of the Soviet Union or the British
| Empire.
| [deleted]
| moneywoes wrote:
| Can you elaborate on that please
| [deleted]
| katbyte wrote:
| Mismanaging themselves into irrelevance- see Texas power
| grid.
| thebean11 wrote:
| > What are the chances that in an environment where the USD
| is not usable, there is an available network and
| electricity that makes bitcoin usable?
|
| The post you replied to said unstable or high inflation,
| not unusable. An unstable dollar will not instantly bring
| about the apocalypse, there are plenty of real life
| examples of unstable, high inflation currencies. The
| currencies took years to fully fail.
|
| Not to mention, a few years of hyper-inflation don't even
| imply that the currency will fail.
| iso1631 wrote:
| In the 80s and 90s, Greek inflation was in the 15-20%
| range. Italy dropped to 5% more quickly but at the start
| of the 80s was in the 20% range.
|
| In the 70s UK inflation was 10-20%.
|
| that type of inflation is clearly bad for keeping cash,
| but not going to cause the collapse of civilisation. From
| about 73 - 80 US inflation was in the region of 10% per
| year.
| pjc50 wrote:
| I think we're more likely to see a Texas scenario in the
| US: the electricity becomes unreliable, but the money
| remains stable.
|
| Users of USD or EUR worried about inflation and getting
| into Bitcoin are really worrying about the wrong kind of
| tail risk. Users of other non-hard currencies have more of
| a point.
| thinkmassive wrote:
| Like yesterday, when Fedwire and ACH were offline for
| hours?
|
| https://www.bleepingcomputer.com/news/government/federal-
| res...
| 6gvONxR4sf7o wrote:
| I use only USD and didn't even know that happened, so it
| seems like a bad example.
| 542458 wrote:
| That didn't affect 99.9+% of people, and is a far cry
| from the USD being "unusable".
| thinkmassive wrote:
| Congratulations on not needing to send a wire transfer or
| ACH during the outage. For anyone who was expecting to do
| that, it was literally unusable.
|
| Your take is like claiming a major AWS outage didn't
| happen because you personally didn't get on the Internet
| that day.
| tdeck wrote:
| Most ACH transactions take 3+ business days to settle
| anyway since it's a batch processing system.
| RussianCow wrote:
| The original comment was talking about USD not being
| usable, not ACH. Having to delay money transfers for a
| day does not make a currency unusable.
| PragmaticPulp wrote:
| How many people would have noticed, if not for the
| headlines?
| thinkmassive wrote:
| Anyone trying to send money using ACH. Maybe that doesn't
| include you, but many regular people use it on an
| everyday basis.
| RestlessMind wrote:
| In my lifetime, if I were to compare 3 numbers - no. of
| hours there was no electricity (X), no. of hours there
| was no mobile data coverage so that I could continue
| doing transactions without electricity (Y) and no. of
| hours Fedwie/ACH was down (Z) which prevented me from
| bank transfers, I'd say X and Y and at least 2 orders of
| magnitude bigger than Z.
|
| If Fed/ACH going down for a few hours bothers you a lot
| but electricity/mobile network reliability doesn't faze
| you, you must be living in a truly unique place.
| thinkmassive wrote:
| My computers and network are powered by uninterruptible
| power supplies (UPS) which I highly recommend for every
| important system. I have a generator in case of extended
| outage, which I also highly recommend to everyone who is
| able to have one at home, regardless of whether you own a
| computer.
|
| I personally have fiber, cable, and LTE feeding my home
| gateway. This might seem like overkill to non-tech folks,
| but I recommend it to anyone whose productivity/career is
| highly reliant on being online.
|
| I realize this isn't necessarily a typical home setup,
| but I also think most people are horribly unprepared for
| many potential situations.
|
| This isn't a claim that I have zero downtime at home.
| It's only to say that if my Bitcoin node is offline then
| any hope of relying on fiat banking was abandoned much
| earlier.
| tablespoon wrote:
| > This isn't a claim that I have zero downtime at home.
| It's only to say that if my Bitcoin node is offline then
| any hope of relying on fiat banking was abandoned much
| earlier.
|
| Even if I had a setup like yours, I'd give up on bitcoin
| before "fiat banking." You can't buy gas for your
| generator with bitcoin.
| grioghar wrote:
| Yet.
|
| I don't mean this flippantly.
|
| One of the cryptocurrency is going to win out for day-to-
| day usage; the question is which.
|
| As Andreas likes to say: "email used to be a multi-step
| series of memorized commands from a green terminal in a
| University.
|
| Now my Mom can do it with a touch of her finger."
|
| I believe we'll get that in the near-ish future.
| RussianCow wrote:
| > One of the cryptocurrency is going to win out for day-
| to-day usage; the question is which.
|
| I don't know why you're so confident about this? It's
| entirely feasible that none of them are ever usable for
| day-to-day transactions.
|
| Personally, I haven't seen any evidence that Bitcoin (or
| any other cryptocurrency) is ever going to enter the
| mainstream. Even if it did, I don't see any benefit to
| using it over USD for the vast majority of people.
| [deleted]
| RandomLensman wrote:
| An "unstable society" and "high inflation" or two very
| different things. Bitcoin could easily help (and does in some
| parts of the world) in the latter case.
|
| In an unstable or even collapsed society things are
| different. While true that historically gold could be used to
| buy things it might be at a very depressed buying power or it
| can be used when dealing with a stable outside society. A
| hedge for a unstable society is something that actually has
| "need", for example, antibiotics. Even then, once violence is
| a standard part of life and interactions the usual calculus
| of interactions changes.
|
| History provides examples for societies that kind of collapse
| but sort of kept going on money surrogates that could get
| daily necessities at a high price; history also has examples
| for the violent kind of collapse/instability and there I
| would not count on bitcoin or gold to help absent access to
| violence.
| jariel wrote:
| BTC would be a bad choice in any unstable economy or high
| inflation. A much better choice in the case of high
| inflation, would be the currency of the nearest large
| country i.e. USD, Euros, Pound. Possibly RMB.
|
| You get a free financial system, just without the monetary
| policy until the country can get moving again.
|
| BTC doesn't provide any value whatsoever as it's by design
| a terrible medium for exchange, and not a very good store
| of value.
|
| There is no situation where BTC is useful whereupon there
| are not already many better solutions.
| qyv wrote:
| Scarcity itself does not imply value, something can be scarce
| but if no one wants it it still has no value. So the question
| needs to be what really drives the value of something like
| Bitcoin?
|
| In my opinion, I think that Bitcoin derives its value from
| the idea that one day it will become a widely used currency
| that can be exchanged universally for real-world goods and
| services. This has what has driven it to become a speculation
| tool; because at the end of the day when Bitcoin finally
| becomes a "universal" currency, everyone wants to be left
| holding a lot of it. But what if Bitcoin never becomes a
| currency, what happens to it's value then?
| hilbertseries wrote:
| This doesn't really make any sense. Bitcoins wild
| fluctuations make it terrible for a currency and its
| fluctuations have only gotten worse over time. It's just a
| speculators game. If it became a universal currency, you
| would just convert whatever you have to it. There's really
| no path for bitcoin to become a universal currency, because
| that would require stability. And there's no path to
| stability with the current speculation interest. If the
| speculation interest dries up it would plummet, but that
| would just continue the cycle. It won't ever stabilize
| unless it crashes and people stop caring about it.
| jariel wrote:
| What drives the valuation is pure speculation, partly by
| massive vested interests, and then of course by the masses
| of cultish believers who own a couple coins and are in on
| the Ponzi mania. The same things that excites people in
| Amway.
| jdoliner wrote:
| This is why you shouldn't leave your crypto in Coinbase. If my
| money is in a bank there's no real way I can transfer all of my
| money out of it and have it remain usable. I can transfer it to
| a different bank, or I can get it all in cash and hide it in my
| mattress. On the other hand, the banking part of Coinbase is a
| complete commodity, I can transfer my assets to my own wallet
| and they're just as usable. The existence of an escape hatch is
| a big difference. Even if CB itself is basically a central
| bank.
| electriclove wrote:
| This is the main fiat to crypto onramp in the US. The success
| of CoinBase will increase crypto adoption. I don't see this as
| preventing DEX growth but actually increasing it by growing the
| pond.
| Zetaphor wrote:
| I had to scroll past far too many hot takes about how
| centralized exchanges signal the end of decentralization
| before finally finding someone saying this.
|
| There is a decentralized version of every service that
| Coinbase currently provides and many more they don't, with
| the exception of fiat on/off-ramps. Until regulations change
| that's going to mean centralized entities that cooperate with
| the existing financial institutions.
|
| That fact alone does not invalidate the significant progress
| being made in every other part of this space with regard to
| decentralization. Once my USD are converted to crypto I can
| leave Coinbase and fully engage with the decentralized
| ecosystem, only going back to a custodian like Coinbase
| if/when I want to return to USD or other fiats.
| xur17 wrote:
| To me Coinbase has basically become a USD -> USDC onramp -
| everything else they provide can be done on decentralized
| exchanges in a way that is both cheaper, and (at least once
| you get used to the system) easier.
| gogopuppygogo wrote:
| Decentralization of a currency is great in theory but adoption
| has been abysmal.
|
| At least as an investment asset BTC has found a niche.
|
| Especially with billions of tether issued without any fiat
| behind it to keep the market extra liquid.
| charcircuit wrote:
| >Especially with billions of tether issued without any fiat
|
| Do you have any proof of this? Tether is over collateralized
| by $164M.
|
| https://wallet.tether.to/transparency
| gogopuppygogo wrote:
| https://ag.ny.gov/press-release/2021/attorney-general-
| james-...
|
| https://crypto-anonymous-2021.medium.com/the-bit-short-
| insid...
| charcircuit wrote:
| Neither of these links support your claim. The first link
| says there was a period years ago where it wasn't true,
| but nothing about the current state. Your second link
| just shows that people and businesses prefer Tether over
| USD. It's also surprising that the author did not know
| that bitcoin is a very common half of a trading pair.
| personjerry wrote:
| What's wrong with banks?
| flyingfences wrote:
| From the perspective of January 2009, quite a lot.
| Cthulhu_ wrote:
| A few want crypto for that. Most people just want to surf on
| the waves of profit from a highly unstable and unregulated
| investment market.
| overtonwhy wrote:
| It's PayPal but your balance changes constantly by random
| amounts.
| puranjay wrote:
| The dex world is thriving and centralized exchanges are the
| last place innovation happens in the crypto world
| rawtxapp wrote:
| It's an exchange, as soon as you're done trading, you can and
| should withdraw your coins to your personal wallet.
| cma wrote:
| Transferring it to your wallet takes the energy equivalent of
| burning like 20 gallons of gasoline or something, instead of
| just updating a micro penny database transaction.
| waheoo wrote:
| This is such a trope.
|
| Do you pull your funds from interactive brokers after you're
| done trading?
|
| What about vanguard? 401k?
| RealityVoid wrote:
| It's great that you _can_ do this, but... a lot of times it
| does not make sense.
|
| Still, the option to do so is very important and valuable.
| jki275 wrote:
| I trust Vanguard.
|
| I don't trust the exchanges in the cryptocurrency world,
| coinbase _maybe_ excepted.
| rawtxapp wrote:
| I'm not sure how you can _pull_ stocks from an exchange
| once you 're done trading.
|
| Personally, I deposit coins into an exchange, do my trade
| and withdraw it as soon as possible. Not just because I
| think there's a risk they might get hacked, etc, I also
| don't want them to hold my funds later on for reason x,y,z.
| ceejayoz wrote:
| https://en.wikipedia.org/wiki/Stock_certificate
| psychlops wrote:
| In practice, you cannot take ownership of your
| certificates any more. There may still be brokers that do
| it, but fewer all the time. Stocks are held in street
| name and the brokers like it that way.
| tonfa wrote:
| You can move them to the DRS
| (https://ibkr.info/article/2192) but then it while take a
| while to move it back to your broker if you want to
| trade.
| StavrosK wrote:
| If I could withdraw thousands of dollars in cash from IB
| instantly and put them in a secure hardware wallet where
| they take no space, you bet I would do it every time I was
| done trading.
| josefresco wrote:
| Obligatory: https://notyourkeys.org
| maxia wrote:
| Would you ever want a paper stock certificate?
| https://www.giveashare.com/stock.asp?buy=google-stock
| jabroni_salad wrote:
| I don't know about your brokerage, but my fidelity cash
| management account sweeps money into a set of FDIC insured
| bank accounts, which is a hell of a lot more than can be
| said for your coins. And anything that is parked in a
| security is protected by SIPC from the brokerage going
| insolvent.
|
| What will happen to your assets if coinbase's systems
| become inoperable or if customers try to withdraw more
| coins than coinbase has on hand? Ask Mtgox customers how
| they feel about where to park coins.
| pid_0 wrote:
| > Ask Mtgox customers how they feel about where to park
| coins.
|
| Your crypto is _not_ yours unless it is "kept" on a
| hardware wallet. End of story.
| vmception wrote:
| The amount of bitcoin on exchanges - including Coinbase -
| is at an all time low.
|
| People are learning the paradigm of self-custody, which the
| blockchain supports.
|
| You can stick with DTCC freezing markets, we arent.
| mindcandy wrote:
| It's not a trope. It's being realistic about the problems
| and advantages of crypto. Problem: Counterparty risk from
| crypto exchanges is much, much higher than that of
| traditional banking. Advantage: Self-custody of crypto is
| much more secure than stuffing stock certificates under
| your mattress. Solution: Exchange crypto on crypto
| exchanges. But, don't rely on them for custody any longer
| than necessary.
| spurdoman77 wrote:
| In many cases it is probably goood choice to keep the coins
| in custodial, but the fact that you have a possibility for
| self-custody is great.
| rglullis wrote:
| Trust and "Independence" are not binary qualities when we are
| talking about these systems. It's a matter of risk exposure, a
| sliding scale that you can control.
|
| With crypto I can choose how much of my assets are going to be
| in crypto that I control (long-term savings, DeFi investments),
| how much is going to be in a custodial wallet (could be for my
| scheduled on-ramp DCA buys, could be to keep more liquid
| trading) and how much I am going to keep in a regular
| traditional bank for more "traditional" investments, my
| checking account, private pension payments, credit cards, etc,
| etc.
|
| This wouldn't be easy to achieve if we don't have _reputable_
| centralized exchanges. I am not dependent on them to control
| the funds I already moved out, but I am relying on them to have
| a functional system to fill in the gaps that the current
| permissionless /trustless systems can not provide.
| Robotbeat wrote:
| Edited: I decided to delete my comment. I do think the hype
| deserves a dunk, but dunking doesn't advance the conversation
| and is lazy.
| [deleted]
| mediaguilt wrote:
| Many have forgotten why we used the internet in the first
| place. The original promise of the internet was to become
| independent from media/science/gov monopolies. In the end FAANG
| (like most popular websites) is a great product, but just the
| same as before. It's centralized, hackable, has economies of
| scale, etc.
| dehrmann wrote:
| > The original promise of the internet was to become
| independent from media/science/gov monopolies
|
| Depending on your definition or "internet," it was to connect
| military computers to each other.
| solosoyokaze wrote:
| Agree. First it was for military, then academia, then
| commerce (dot com), then more commerce/social/mobile.
|
| Bitcoin and other P2P apps starting with Napster were the
| subversive and populist tech that was built on a military
| industrial network.
|
| I would say the culture and ethos of programming was
| subversive, the home computer market somewhat so as well.
| But the internet solidly originated within the
| establishment and was part of the cold war.
| helsinkiandrew wrote:
| The trouble with Cryptocurrencies is that very few people seem
| to be using it for exchange of goods, where it could be used
| independently from banks.
|
| It seems that the vast majority of retail sales is into and out
| of USD and other fiat currency for speculation/investment. Here
| central markets will always have the advantage that you'll get
| a 'fair' price due to the mass of buyers and sellers (ignoring
| market manipulation) over finding someone to trade with you.
| yunesj wrote:
| We were never against private banks giving loans or private
| exchanges facilitating exchange.
|
| We wanted bitcoin because govt control of money results in:
|
| (1) new $ is unfairly distributed, (2) manipulation of $ to
| force consumer spending, (3) use of $ to fund wars and other
| govt programs, (4) threats of war are used to sustain $'s
| status as reserve currency, (5) absence of any innovation in $
|
| and bitcoin addresses these problems, while being censorship-
| resistant. BTC has been a great success for sending remittance
| payments, providing a store of value in countries with
| hyperinflation, and spurring innovation in the financial
| sector.
| [deleted]
| arcticbull wrote:
| So just to recap the current Crypto situation.
|
| - Scaling solution: Visa.
|
| - Custody: BNY Mellon.
|
| - Trading: Centralized, trustful exchanges.
|
| - Unlimited money printer: Tether.
|
| - The same insane unregulated over-leveraged garbage
| derivatives products that triggered this whole horror show in
| 2008: DeFi.
|
| - Volatility: Unbelievable.
|
| What exactly has been achieved? This is the first IPO I plan to
| short on day one.
| ojr wrote:
| money transfer on the internet that enables online sports
| gambling and prediction markets to levels that would make me
| nervous to place a short
| RestlessMind wrote:
| > What exactly has been achieved?
|
| A new asset class (like Gold) which everyone wants to invest
| in because they think everyone else values it (just like
| Gold). And with a few benefits over Gold like it can be
| transferred easily.
|
| That this has sustained for 12 years is amazing and the
| longer it stays, the longer it will further stay.
| arcticbull wrote:
| > A new asset class (like Gold) which everyone wants to
| invest in because they think everyone else values it (just
| like Gold). And with a few benefits over Gold like it can
| be transferred easily.
|
| haha, I've never had trouble buying and selling GLD
| instantly. Gold futures too! My broker charges a few
| pennies.
|
| On the other hand a BTC transaction uses 600kWh of power,
| yields 100g of e-waste, takes hours to confirm and $20 in
| fees. Yay! What a time to be alive. I'm sure glad we went
| through all this consternation.
|
| > That this has sustained for 12 years is amazing and the
| longer it stays, the longer it will further stay.
|
| Madoff lasted 17! :)
| TedDoesntTalk wrote:
| > We have forgotten why we used cryptocurrencies in the first
| place. The original promise of cryptocurrency was to become
| independent from banks.
|
| Lots of things evolve and change and their original intent is
| twisted. It's ok. Life goes on.
| adwn wrote:
| > _Lots of things evolve and change and their original intent
| is twisted. It's ok. Life goes on._
|
| Maybe, but that doesn't mean that a technology is still
| useful after it's lost its unique selling proposition.
| aserafini wrote:
| But this is like saying email lost its unique selling
| proposition after Yahoo web Mail came along. Email was
| always useful and is still useful. Coinbase is like the
| first Webmail. Maybe it turns out most people like managing
| their Bitcoin through an app and not running a node 24/7 in
| the same way that most people are ok using an app for email
| even though it is still technically possible for anyone to
| run their own mail server.
| ketamine__ wrote:
| How does that decentralized fiat on ramp look?
| charcircuit wrote:
| Fiat on ramps are already decentralized. Anyone can sell
| cryptocurrency for fiat. There is no centralized list of
| people who are allowed to sell cryptocurrency for fiat.
| ketamine__ wrote:
| That's clearly not true. People have been arrested for
| acting as money transmitters.
| charcircuit wrote:
| Just because something is illegal in certain
| jurisdictions it doesn't make whatever no longer
| decentralized. If running tor nodes was illegal, it
| wouldn't mean the tor is centralized.
| from wrote:
| I believe it can be found at https://www.fincen.gov/finan
| cial_institutions/msb/msbstatese....
| MadSudaca wrote:
| Imagine your SO saying this to justify cheating.
| csunbird wrote:
| People usually forget the fact that there was a reason why
| central bank or regular banks were created in the first
| place. It seems like the reason(s) still exist, hence
| Coinbase or any other crypto-exchanges are in demand.
| boh wrote:
| A bank/exchange with far fewer regulations than a
| bank/exchange.
| fasdf1122 wrote:
| No reason it can't be both. You can manage your own wallet, or
| you can use coinbase (or any number of "banks") for their
| services layered on top. Or you can have both.
| wtvanhest wrote:
| First, congrats to everyone at Coinbase. What a great step in
| their journey.
|
| I'm going to hijack the negativity here and ask if anyone has
| any advice on writing a first smart contract.
|
| I feel like I cannot fully understand ETH or BTC lightning
| until I write one for fun. Does anyone have any advice on how
| to get started?
| snicksnak wrote:
| coinbase offers staking rewards now if you park your crypto.
| They are essentially a centralized bank/exchange. Decentralized
| exchanges exist but access is limited, while sophisticated
| users can interact with e.g. uniswap, sushiswap, directly, most
| will rather buy their tokens on exchanges like coinbase and
| never leave.
| ravenstine wrote:
| Coinbase does allow people to store their funds with them, but
| it's common for people to buy bitcoins on Coinbase and then
| immediately transfer them to their own wallet, or to a service
| with far better security like Kraken(which will happen less
| once Kraken supports ACH and immediate funds).
| beaner wrote:
| Kraken doesn't have better security.
| PragmaticPulp wrote:
| Some people transfer coins out, but that's definitely not
| what the average person is doing with ever-increasing Bitcoin
| transaction fees.
| beaner wrote:
| Doesn't have to be what the average person is doing, it
| just has to be an option for those who want it.
| [deleted]
| bondarchuk wrote:
| By the very nature of cryptocurrencies, they can't prevent
| anyone building a centralized company around them, and I don't
| think that was ever the intent. The permissionless,
| decentralized properties are important in the following
| respects:
|
| - anyone can transact with anyone on the blockchain
|
| - the fed can't print more of it
|
| Anything else is a disctraction.
|
| Besides that it's pretty obvious that Coinbase is centralized,
| regulated etc.. mainly because it deals in USD, not Bitcoin or
| Ethereum.
| danschumann wrote:
| The reason is robot property rights, isn't it?
|
| If I sell you a robot, which is capable of cleaning and trading
| stocks, and that robot owns $100 of crypto, it can trade and
| randomly give you things, if it profits. This is possible with
| crypto.
|
| It'd be doable with fiat.. i suppose the robots would be
| considered a trust or something, and they'd just be "leased" to
| the customer or something, but that sounds like bs. I just
| wanna sell people a robot that also owns crypto.
| CPLX wrote:
| > The original promise of cryptocurrency was to become
| independent from banks.
|
| The original promise was being able to buy drugs and gamble.
|
| How much this has changed since then is left as an exercise for
| the reader.
| iexplainbtc wrote:
| You can't go to a bank, ask them to give you all your money in
| cash and hide it under a mattress (not in most countries at
| least).
|
| You can go to Coinbase and simply transfer all your funds to
| your own wallet in a matter of seconds.
| lottin wrote:
| I didn't know that in most countries it is forbidden to hide
| money under a mattress. This is news to me.
| t0mmyb0y wrote:
| It is what happens when the feds step in, create, and capture
| the crypto market. Coinbase is a fed company.
| holtalanm wrote:
| this is my gripe with cryptocurrencies in general now. they've
| strayed so far from their original ideal that they don't even
| hold up anymore for that. they're just a different form of
| stocks now, with no intrinsic value, imo, besides being an
| energy sink.
| snicksnak wrote:
| Didn't know that Mark Andreessen/a16z own that huge chunk of
| coinbase.
| ignoramous wrote:
| a16z are one of the biggest institutional investors in the
| cryptocurrency space: https://a16z.com/crypto/#vertical-
| landing-investment-thesis
| neximo64 wrote:
| It's in his personal name not A16Z
| snicksnak wrote:
| while his name is listed in the table the footnote says
|
| > (4) [..] held by entities affiliated with Andreessen
| Horowitz, as reflected in footnote 9 [..]
|
| footnote 9 attributes the shares to him and a variety of
| funds
| blhack wrote:
| It's so weird to me that here, on _hacker news_ people have such
| a hatred of coinbase.
|
| Coinbase is a YC company, and if some of the predictions are
| accurate, will be the highest valued YC company so far.
| orky56 wrote:
| Might get downvoted but HN opinions are based on a minority of
| people who are more technical and well informed to the point of
| elitism IMO. When something becomes too mainstream and doesn't
| cater to the HN demographic, its success is irrelevant and
| potentially a liability.
| ghego1 wrote:
| With this IPO the portfolio of YC is ridiculously successful.
| seibelj wrote:
| This is standard operating procedure for HN. Even when the
| market proves you wrong, continue parroting the same bullshit
| about tech you know absolutely nothing about.
| quickthrower2 wrote:
| The market doesn't prove anything other than the price of
| something.
| hanniabu wrote:
| It's because they view crypto like people viewed the
| internet/computers back in the day. "It'll never work it's too
| complicated. No need for it, mail workers just fine. It's just
| used for illegal activity. Why do I need a productivity boost
| when I have my assistant to do everything. "
| anonymousab wrote:
| > It'll never work it's too complicated
|
| It usually seems far more nuanced to me. People seem somewhat
| skeptical on some finer points of cryptocurrencies,
| blockchains and distributed ledger ideas.
|
| But then they see supporters trumpeting 'this is good for
| Xcoin' on every piece of news, good or bad, and can't help
| but get a snake-oil-salesman-y feeling from that. Everything
| in life has many ways in which it can or does suck, and you
| won't want to trust people who handwaive away or dismiss the
| sucky parts.
|
| So... partially reasonable technical and idea concerns, and
| partially a PR problem that anything with a particularly
| large and vocal fanbase will have.
| fastball wrote:
| I love HN but I think you're giving it too much credit on
| this one.
|
| Many (most?) of the conversations I see on here around
| crypto are copiously littered with straight FUD. Very
| little arguing on the actual nuances and intricacies of
| crypto. Seemingly low understanding / imagination of the
| possibilities allowed by the underlying concepts.
| Histrionics about power consumption in _every_ thread.
|
| Disclosure: I liquidated my crypto positions last year, and
| currently hold $0 worth of cryptocurrency.
| dodobirdlord wrote:
| I think the general perspective of Bitcoin specifically
| around here meshes with the general stance on a lot of
| topics. Bitcoin is the 1.0 cryptocurrency. It was
| groundbreaking, but it has technological deficiencies
| that are/were being addressed by improvements in the
| general technology of cryptocurrencies. But the Bitcoin
| protocol itself has demonstrated to be impossible to
| modernize, as even the most trivial change like a block
| size increase is not taken up, so progress in this space
| is happening in the form of other cryptocurrencies. But
| there are a lot of people, including in the comments of
| HN, who have a big stake not in _the technology_ or in
| _cryptocurrencies in general_ but in _Bitcoin
| specifically_. They're perfectly happy to see this area
| of technology stagnate and be held back by being forced
| to layer innovation over Bitcoin itself, as with the
| Lightning network, when much better solutions are
| available by moving on from Bitcoin.
|
| So when I see someone advocating for _Bitcoin
| specifically_ they come off as transparently self-serving
| and having no real interest in the technology. I see a
| lot of parallels to projects refusing to migrate off of
| Python 2, except in this case Bitcoin enthusiasts are
| compelled to actively evangelize the inferior technology
| instead of just sticking to it as the rest of the
| technology space moves along.
| jsutton wrote:
| Why does Bitcoin need to modernize? There are other
| crypto projects that can fill in the holes that Bitcoin
| leaves (tx fees, slow, etc). Bitcoin is a fully secure,
| fully self-sufficient, global monetary system. It doesn't
| need to be lightning fast or super cheap. It needs to
| WORK, and work very well, which it has demonstrated.
| [deleted]
| tyre wrote:
| People keep making this parallel to "well they said this
| about the internet." People also said that about pets.com,
| about bloodletting, about horoscopes and communism and
| hydroxyclorquine and Lizardpeople.
|
| It doesn't replace mail, it isn't used mainstream for
| anything but illegal activity and casino speculation, and I'm
| not sure what productivity boost we are talking about here.
|
| At some point you don't get to make the internet or the
| "Henry Ford said they'd ask for a faster horse" comparison.
|
| At some point you have to deliver the goods. Has coinbase
| made a shitload of money, sure. Has blockchain done any of
| the things its prophets have promised? Nope.
| [deleted]
| another_sock wrote:
| Bloodletting and horoscopes are real.
| freewilly1040 wrote:
| Why does being on this site imply a rooting interest in YC's
| portfolio?
| hn8788 wrote:
| Created a coinbase account recently and found that there's no way
| to verify your identity if you have an expired ID. Because of
| covid, Maryland let expired drivers licenses still be valid for
| the forseeable future, but Coinbase automatically declines them.
| smoldesu wrote:
| I am in the same boat, and it's remarkably frustrating since I
| have a relatively large amount of assets in their service,
| assets I cannot withdraw without confirming my identity.
| dgellow wrote:
| Also, no way to select a country different from your
| nationality. Whatever country you select they always change it
| back to the country of the passport or ID card you provide,
| even if you live in a different country than your
| nationality...
| Havoc wrote:
| Yup. Shovelled a couple countries worth of docs at them. All
| rejected. And then something got accepted anyway
| retrospectively.
|
| Like uhm ok then.
| capableweb wrote:
| I'm was in the same boat a couple of years ago. One email to
| support fixed the issue for me.
| dumbfounder wrote:
| I had the same issue trying to buy Sudafed at CVS. Can you use
| a passport?
| hn8788 wrote:
| I don't have a passport. The expired ID hasn't been an issue
| until now, because the state government sent out a letter you
| are supposed to keep with you that explains the situation,
| and says the ID is still valid. I ended up scheduling an
| appointment to get a new ID, but it's a ~3 month wait.
| kgwgk wrote:
| Maybe it will collapse before going public as WeWork did?
| Hopefully not, it will be interesting to watch.
| A12-B wrote:
| They don't let you buy dogecoin. I sleep.
| meagher wrote:
| Coinbase is extremely lucky that BTC seems to have established a
| new floor.
|
| I'm curious how bullish they were after the crash a few years
| ago.
| ArtWomb wrote:
| Looking forward to this IPO. Besides the "crypto comes to main
| street" cultural aspects. The dark horse may be Coinbase's
| venture arm. This is quite the portfolio:
|
| https://ventures.coinbase.com/
|
| Number one priority with the new cash: addressing downtimes in
| periods of high trading activity / market volatility.
|
| https://www.coindesk.com/how-coinbase-is-worth-100-billion
| tibiahurried wrote:
| Why would anyone use Coinbase when Binance.US is way cheaper ,
| better product and overall more listed assets ? I honestly don't
| get it.
| lawrenceyan wrote:
| Not a single mention of Monero or privacy coins? Thanks, but I'll
| be sticking with Kraken where the CEO actually has a spine.
| victor22 wrote:
| Coinbase is a stain in cryptocurrency's history and will be
| remembered as that in the future. It still has a chance to change
| and help, but for now its against everything bitcoin stands for.
| akudha wrote:
| I don't know what bitcoin stands for anymore. It is consuming
| insane amount of energy solving silly math problems, it is the
| perfect example to showcase human greed, it cannot be used for
| anything practical and the _only_ reason people seem to be
| interested in it is to make a quick buck.
|
| It all started with good intentions, but those seem to be gone
| now.
| victor22 wrote:
| Yeah I understand your frustration and I can see how projects
| can change after it grows (by many factors in bitcoins case),
| but I dont see bad intentions in play here. Fiat will still
| be printed non stop across the planet while bitcoin will keep
| following the same minting rate, locked at the same growth
| pace and the same 21M max limit. Isn't this a million times
| better than a system that is _by design_ made to rob us?
| Ninjinka wrote:
| I loathe Coinbase. Their support team is a joke (over a month
| with no response) and site stability is non existent.
| jsutton wrote:
| I find it interesting (sad, actually) that most other S-1 posts
| on here are congratulatory for the most part, giving kudos to the
| teams (look at the DO one today).
|
| However, when it comes to anything crypto related, the emotions
| really come out. It's all "bitcoin/crypto is useless, doesn't
| solve any problem, waste of talent."
|
| For a community of hackers, there really seems to be a lack of
| vision when it comes to crypto specifically.
| entropea wrote:
| I don't know if you're considering what Coinbase is when in
| alignment with cryptocurrency. It is exactly what
| cryptocurrency was supposed to not be. It's centralization,
| it's a bank. I personally have no emotion towards it, but I
| definitely understand those who do as the cryptocurrency
| project was quickly taken over by the same old financial
| interests.
| beaner wrote:
| False. The objective of crypto isn't to force everyone out of
| the banking system, it's to provide an ability to opt-out and
| be your own bank for those who need or want it. If you want
| to use a traditional bank or custodian instead, go for it.
| And indeed, for many people who cannot and should not be
| managing their own keys, it's the preferable option.
| hestefisk wrote:
| Good for them. But am I the only one who finds it slightly ironic
| that the brainchild of distributed ledger tech and crypto
| currency capitalism is now filing for IPO in what is the hallmark
| of old capitalism (regulated markets)?
| wtf_is_up wrote:
| It makes complete sense. You need a fiat ramp to get into the
| crypto ecosystem. You want the fiat ramp to be regulated.
| capableweb wrote:
| Coinbase is the brainchild behind cryptocurrencies? How? They
| were not the first, they are not the biggest, they don't have
| the most cryptocurrencies/platforms, they are not the
| fastest/cheapest/best support and so on.
|
| In fact, I can't figure out a single thing that Coinbase is the
| best at in the cryptocurrency industry. So what do you mean
| with brainchild here?
| amenod wrote:
| Note that GP stated they are "brainchild _of_
| cryptocurrencies ". I don't think that the meaning you imply
| is what they had in mind.
| capableweb wrote:
| "brainchild of distributed ledger tech and crypto currency
| capitalism" sure sounds like they are implying Coinbase
| almost invented cryptocurrencies. But English is not my
| native language so maybe I misunderstand it wrong.
| candiddevmike wrote:
| It's always better to sell shovels
| Ekaros wrote:
| This is not even selling the shovels... This renting a room
| to cash for gold traders...
| koolba wrote:
| Not quite. I'm sure both the company and owners have tons of
| crypto in their portfolio. But I'm also sure they'd love to
| be able to diversify that into boring fiat dollars and dollar
| based holdings too.
| mikepurvis wrote:
| Maybe, but I feel like that was always part of the point of
| Coinbase, providing the bridge between those worlds, and for
| some, bringing a sense of legitimacy and security to the
| proceedings. It's not surprising they would look for a
| conventional exit.
| jcfrei wrote:
| There's just more money that you can raise if you go down the
| traditional IPO way. ICO tokens can be very lucrative too
| (check out BNB) but there's a lot more regulatory uncertainty
| around them. Plus fund raising is crazy at the moment on Wall
| Street so this makes perfect sense.
| afavour wrote:
| Ironic... or inevitable? In many ways Coinbase is that Bitcoin
| wasn't supposed to be: a centralised authority that is
| responsible for a ton of activity on the platform. Not that it
| matters that much but I'd argue Coinbase wasn't in the "spirit"
| of crypto currencies from the start.
|
| (but hey, I still used it! Couldn't be bothered to work out how
| to buy Bitcoin a few years ago and they made it easy)
| Cthulhu_ wrote:
| Well yeah, nobody uses crypto on its own, it's always in
| reference to fiat and Coinbase enables that.
| anonyxyz wrote:
| See DeFi
| olalonde wrote:
| Is it ironic that Coinbase takes fiat deposits and withdrawals?
| Many in the community view the existence of centralized
| exchanges as a necessary evil that is temporarily needed to
| bridge the old world of finance to the new one. It's hardly the
| brainchild of distributed ledger tech.
| mlacks wrote:
| I use coinbase as it was the easiest and least sketchy way to buy
| a couple of years ago. I feel though that a lot of the big gains
| for a particular coin are made before coinbase authorizes that
| coin for trade on their platform. Can anyone provide some
| insight/ ELI5 as to why the coin selection is curated vs a free
| for all?
| capableweb wrote:
| > Can anyone provide some insight/ ELI5 as to why the coin
| selection is curated vs a free for all?
|
| Coinbase is a centralized exchange. Any support for new
| currencies have to researched, developed, tested, deployed and
| maintained (unless they are ERC20 tokens, then they'll require
| less of everything but still needs work to be added). So there
| is no way they can offer "free for all" as not all
| crypocurrencies are created equal.
| pmorici wrote:
| It takes work to support trading if a coin. Coinbase in
| particular is conservative about listing new coins because they
| don't want to run afoul of sec rules and list coins that
| qualify as securities. They blogged about what factors they
| consider when listing new coins a few years back. Coinbase is
| often the last to list a coin and rarely the first so if you
| only use Coinbase you are getting in later to n the game. The
| exchanges that list every junk coin under the sun though are
| often offshore and hire risk in many regards.
| yrgulation wrote:
| > a lot of the big gains for a particular coin are made before
| coinbase authorizes that coin
|
| interesting observation. it seems to be the case for binance as
| well. i see coins gaining 20-30x before or right when it gets
| listed. perhaps "insider" trading right before a coin listing?
|
| As for coin curation i suppose thats as a means to filter out
| scams.
| aww_dang wrote:
| Perhaps there is also an element of limiting competition for
| vested interests?
| vidarh wrote:
| A lot of listing is preceded by extensive campaigns to build
| support to get a coin listed. It's unsurprising that this
| leads to prices going up. "Insider" is extremely vague here
| given that a lot of this will be activity surrounding the dev
| teams that may or may not have anything to do with the people
| who started the coin.
| f430 wrote:
| when is coinbase going to IPO?
| purple_ferret wrote:
| 43 million users yet the narrative is cryptocurrency is still in
| its 'infancy.' I wouldn't be surprised if at least 10% of all
| Americans have dabbled in buying crypto.
| cirowrc wrote:
| given how big the world is, _yes_, still infancy
| Tepix wrote:
| Given what users Bitcoin and Ethereum appeal to (those that
| don't mine high fees), no.
| purple_ferret wrote:
| Well Coinbase marketshare of crypto buying is small (like 3%
| volume of bitcoin) so unless you believe every person on the
| planet will wind up trading crypto, it really isn't.
| goat_whisperer wrote:
| Bitcoin made a lot of sense when I first read about it in 2011.
| Back then I feel like it was primarily used as an anonymous
| payment method. Think dark web/silk road type stuff. I certainly
| don't endorse that behavior, but bitcoin as a payment method made
| a lot of sense.
|
| Bitcoin makes 0 sense to me as an investment. It's pure
| speculation with no underlying intrinsic value. It's the Dutch
| Tulips 10.0 basically.
|
| And now because the value of bitcoin is unbelievably volatile, it
| now makes 0 sense as a means of payment.
| silentsea90 wrote:
| At what point either in years or market cap or price per coin
| will you start to question your mental model of Bitcoin?
| chadash wrote:
| Not OP, but also a skeptic and here are my thoughts:
|
| - Market cap is sort of a misleading stat. Microsoft's market
| cap is ~1.75 trillion, but it's p/e ratio is 34. So if they
| stopped reinvesting in their business, I'd be making 3%
| yearly on that investment with a hedge against inflation
| since they can just raise prices. A lot more goes into their
| valuation than that, but my point is that even if you are a
| huge skeptic of Microsoft's current valuation, the company is
| still worth a ton of money. I don't have a number, but I'd
| imagine that at $500 billion, pretty much every investor on
| the planet would think that Microsoft is a crazy steal. On
| the other hand, bitcoin's value is based on perception of its
| value and nothing else. The fact that some people are willing
| to buy in at $50k doesn't mean that every investor on the
| planet would think that bitcoin is a steal at 10k. There'd
| still be plenty of people who consider that price to be way
| to high as well. Since market cap is determined entirely by
| people willing to pay the most, it's hard to say what market
| cap means for something like bitcoin.
|
| - I agree that there comes a point in time where even a
| skeptic has to give in. BTC really started to explode about 3
| years ago. For me, that's just not enough time. Subjectively,
| after 10 years at reasonably high values, I'd probably have
| to reconsider, assuming it gets less volatile over time.
|
| - The volatility is the main concern for me. Gold had a low
| around 100 and a high close to 200 in the past year of
| craziness, so it almost doubled. BTC went up about 10x from
| it's 2020 low to its recent high. Even Zoom and Peloton are
| only up ~4x from a year ago and this pandemic has
| fundamentally changed their businesses. I think if BTC got to
| a point where it didn't change more than 25% value in a year
| with a normal-ish economy, I'd have to reevaluate.
| tcoff91 wrote:
| By the time the volatility is gone so is the opportunity.
| Bitcoin would need to expand its userbase massively to be
| stable. Stability can't happen unless the price goes up
| massively.
| mattm wrote:
| > if BTC got to a point where it didn't change more than
| 25% value in a year with a normal-ish economy, I'd have to
| reevaluate
|
| You could probably cherry-pick some dates between Q2 2018
| and end of 2019 that would come pretty close to this
| criteria.
| vmception wrote:
| wow you have so many conflicting views, irrelevant
| comparisons between two types of markets and asset class,
| and don't seem to realize it?
|
| equities markets cant be compared to a commodity. so that
| invalidates your entire first paragraph, the longest one.
| as a corollary to that, don't derive your confidence from
| equities investors opining about commodities for the first
| time in their lives. you have equities investors that never
| traded tech and never traded commodities talking about
| bitcoin, you cant call that insight. bitcoin is looked at
| in market cap terms because it has a more transparent
| supply than any other commodity. this is completely new to
| the universe of assets and the market likes that. it
| removes a risk with gold, oil, etc.
|
| paragraph two and three: you want high price for a longer
| period of time, but are turned off by the exact and only
| mechanism in which it gets there - large % and large $
| amount price increases. fascinating.
|
| more tech equities comparisons. mmmmk
|
| I'd like to leave you with an alternative tool for valuing,
| and its just scarcity. if thats not good enough for you,
| then just stay out of the market. retail investors en masse
| never got married to commodities markets for the exact
| reason that they are not buy and hold outside of _some_
| metals. volatility is not controversial in the commodities
| markets, its termed as seasonality, as supply and demand
| ends up having a frequency in some markets. A lot of the
| equites market style comparisons to bitcoin is because it
| started with retail (non-institutional) who never traded
| anything else. But don 't be like them. Bitcoin's not a
| company so dont use company comparisons.
| chadash wrote:
| > commodity
|
| It's not really a commodity. More of a currency.
|
| > you want high price for a longer period of time, but
| are turned off by the exact and only mechanism in which
| it gets there - large % and large $ amount price
| increases. fascinating.
|
| I'm not saying it's worth nothing. If bitcoin stays above
| 5k for a long time, i'm willing to say it's worth at
| least 5k. If it stays above 50k for a long time, i'll
| come around and say it's worth at least 50k.
|
| > I'd like to leave you with an alternative tool for
| valuing, and its just scarcity.
|
| Scarcity alone doesn't mean anything. I can create a
| cryptocurrency any time that's scarce. Doesn't make it
| valuable.
|
| > Bitcoin's not a company so dont use company
| comparisons.
|
| The only commodity that it is comparable to is gold and
| maybe a few other precious metals that serve as value
| stores. And gold, for one, has held high value for
| thousands of years. Maybe it doesn't have intrinsic value
| in the way that canned beans do, but the chances of it
| being near worthless tomorrow are very very low since it
| has a 5000+ year track record. On the other hand, yes,
| there's seasonality and volatility in things like oil and
| pigs, but there are also real world use cases for those.
| vmception wrote:
| scarcity and liquidity then?
|
| there's nothing wrong with low float assets, really seems
| like you are making a separate higher standard for
| bitcoin
|
| yes all cryptocurrencies inherit that capability to an
| extent, just have to convince others to share the same
| view, with the security of the database becoming the
| limiting factor
|
| the future value of bitcoin are the drivers of its
| scarcity, if all of those drivers are too intangible for
| you then they wont become so
| chadash wrote:
| > scarcity and liquidity
|
| So it's valuable because it's scarce and it's liquid
| because it's valuable? I imagine you can see how a
| skeptic might view this. I would be skeptical of gold
| coins too, but for the fact that a gold coin today would
| have been valuable in ancient Rome as well. So I don't
| really understand why gold is so valuable, but the fact
| that it's been very valuable (to varying degrees) for
| 5000 years leads me to think that that will hold for at
| least for the rest of my life.
|
| I agree that Bitcoin has advantages as a store of value
| over gold. But it's value is only as high as people value
| it for, so the trillion dollar question is whether it's
| just a fad. For those of us who are skeptical, there are
| definitely things that could bring us to the other side,
| such as sustained value for a longer period of time.
| graeme wrote:
| > equities markets cant be compared to a commodity.
|
| But BTC advocates do so all the time by using an equity
| markets term, market cap. As far as I know that isn't a
| term applied to commodities.
|
| Also commodities have a use value. In what way is bitcoin
| a commodity?
| vmception wrote:
| they shouldn't either. and I address that.
|
| bitcoin's use value is what it brings to the market that
| people like and dont have elsewhere. transparent supply
| and emission schedule, 24/7 trading, faster settlement
| times, borderless self-custody in unlimited amounts,
| upgradable asset class with some attributes of multiple
| asset classes (commodities, currencies).
|
| let me guess, you were looking for industrial
| applications and drastically undervalue speculation as a
| use value?
| philosopher1234 wrote:
| What is the use value of speculation? It doesn't seem
| useful to me. The problem I have with Bitcoin is I have
| no confidence in its demand. For all I can tell, tomorrow
| people could get bored of Bitcoin and it would plummet.
| There doesn't seem to be a good reason, beyond hype, to
| want to own Bitcoin.
| goat_whisperer wrote:
| Ironically, as the market cap and price per coin increase, I
| grow more and more skeptical of bitcoin!
| silentsea90 wrote:
| Why so?
| capeterson wrote:
| For me personally, my belief in bitcoin is not tied to its
| monetary value at all. In fact, it's likely inversely
| related, as the more that it gains value, the more publicity
| it gets as a money-maker, which draws in more speculators.
|
| I'm overall "just fine" with Ethereum though. There's a lot
| of speculation going on, but it's also a rather productive
| idea that I hope takes off in the future.
|
| I'm a fan of cryptocurrency in general, just not really
| Bitcoin.
|
| edit: Thinking about your question though, maybe it could be
| interpreted as "if the market cap/price of BTC was more
| stable, would you like it?" and the answer to that is yes,
| however still I don't believe that it provides much utility
| compared to other cryptocurrencies.
| silentsea90 wrote:
| My question was trying to probe at Op's belief in value of
| btc being 0 and at what point they'd question it.
|
| If BTC was more stable and you'd like it then, it implies
| you are likely a late stage investor here. Volatility comes
| with price discovery. The publicity and speculation come
| and go but build on each other over time. We're conflating
| the short term volatility and hype cycles with long term
| value, and if you only focus on the former it is like
| missing the forest for the trees (my opinion).
|
| I am not a BTC purist, and think Eth has its place too. If
| that connects with you better, cool! Who knows if BTC will
| die and ETH is the future of crypto. ETH is more volatile
| objectively, but if your belief in ETH makes you hold
| through the cycles, more power to you.
| graeme wrote:
| Not OP, but for me it would be about when crypto actually
| starts _doing_ something. Smart contracts and NFTs show the
| hint of a possible future use case.
|
| But Bitcoin seems to have no use case, and it takes more and
| more energy as the price goes up.
|
| The higher price absent any use case or advantage seems like
| it _only_ has speculative value. It could become a religious
| thing where it has value because people value it: a lot of
| gold's value exists for this same reason.
|
| But I'll wait to see how things play out with Tether before
| thinking that is likely. They are under pretty severe
| reporting requirements for the next two years and if they
| can't show reserves for the $30 billion they printed last
| year they are in trouble.
| silentsea90 wrote:
| BTC is digital gold for now. I think an asset class that
| holds value and can't be printed at whim is a powerful
| idea. Yes it completely relies on our belief in its
| valuation and programmed scarcity and decentralization. It
| is a powerful hedge esp in current times where fiat is
| printed like there's no tomorrow.
|
| Please share which asset class has value without humans
| valuing it? If earth was to be wiped out of its human
| inhabitants, would any asset have any value in human terms?
| The Indian Rs 500 note lost value instantly as soon as it
| was banned, just as the German Reichsmark did through
| inflation. Tribal humans used seashells and beads as
| currencies. Their belief was no different than your belief
| in Apple or USD, and my belief in Bitcoin :)
|
| Energy : The power that nation states derive from printing
| money aka foreign interventionism, military, inefficiency
| in all processes etc. is likely orders of magnitude higher.
| BTC energy consumption is concerning but shouldn't be
| viewed in a void.
|
| Tether afaik is a nothing burger and will not hurt BTC
| valuation.
| hntrader wrote:
| "no underlying intrinsic value"
|
| How does that differ to investing in fine art, scarce wine,
| old/rare stamps and coins, limited edition/novelty items,
| historical artefacts, or even gold?
|
| There's loads of things that have kept value for centuries
| despite having no intrinsic value.
| cmdli wrote:
| All of those things have intrinsic value in that they bring
| people some measure of joy. Bitcoin, by comparison, brings
| people very little joy in and of itself (you might argue it
| provides entertainment value, it certainly does for me).
|
| Not saying Bitcoin is worthless; it's a currency and it has
| it's uses, which makes it worth something. However, I think
| the belief that "it's scarce, therefore its worth something"
| is a false one and leads a lot of people to speculate wildly
| on it.
| kleer001 wrote:
| @Travis_Kling: "Bitcoin is a non-sovereign, hard-capped supply,
| global, immutable, decentralized digital store of value. It's
| an insurance policy against monetary and fiscal policy
| irresponsibility from central banks and governments globally."
| elwell wrote:
| > Hodl: A term used in the crypto community for holding a crypto
| asset through ups and downs, rather than selling it.
|
| I appreciate the glossary
| ghego1 wrote:
| Pure meme gold. I'd like to see the face of the intern/entry
| position lawyer to whom they said: define hold. And then went
| on reddit for several hours
| brunorsini wrote:
| Does anyone please know where to find the cap table? I assume it
| should be public by now -- am I wrong? Couldn't find it under the
| document's "Capitalization" section. Thanks
| kacy wrote:
| Page 184 looks like it has some of the info you're looking for
| newbie578 wrote:
| I have no doubt that they have a good business model, and that
| they are positioned quite nicely in the market.
|
| It's just that these valuations are getting crazy.. Everyone is
| already pricing in like 10+ crazy years of growth. Not everyone
| can grow like Facebook did...
| wtf_is_up wrote:
| The nutty valuations will continue so long as the fed maintains
| ZIRP and buys $120b worth of bonds each month.
| dd36 wrote:
| Agree. What's the upside? How can Coinbase be valued at nearly
| that of large banks that process orders of magnitude more
| transactions and can actually earn money on balances? NYSE and
| NASDAQ are surely not valued at anywhere close to $100b. Does
| that mean Coinbase can acquire them? Bubbles are bizarre.
|
| EDIT: Yes, it is valued at more than ICE and NASDAQ combined
| with a fraction of the revenue and significant risk. Most
| optimistic outcome priced in at $100b. Is the benefit of
| *NoPOs" that there is no underwriter to push back on the
| valuation? Maybe you can get a few suckers at a super high
| price therefore you should?
| kolinko wrote:
| By ,,fraction" you mean a quarter of revenue - Coinbase
| having around 1B in revenue, Nasdaq having 4B in 2020.
|
| Then, Coinbase grew 300% in the last year, Nasdaq just 33%.
|
| It's like asking how Amazon can be worth more than Barnes and
| Noble in 2004 (or what year that was).
| dd36 wrote:
| Except Amazon had opportunity to move beyond books.
| Coinbase should be valued nearly as much as Wells Fargo
| because maybe it will become Wells Fargo?!? Coinbase is
| tied to crypto inflation. That bubble can keep going but
| it's a fraction of the volumes of the large players and I
| don't see any long-term competitive advantage if crypto
| actually becomes useful to daily commerce.
|
| EDIT: And fraction was less than 1/10th of the combined
| entities. Again, where's the upside? Are you saying this
| gets to tens of billions in revenue? Wells is at $80
| billion and valued at $150 billion. Is Coinbase going to
| get to $80 billion in revenue? How?
| kolinko wrote:
| 1/10 or 1/4 doesn't really matter if they manage to keep
| up 300% growth for a year or two. And there is still a
| lot of room for growth.
|
| As for where Coinbase can go - it can take the Wallstreet
| on in terms of trading securities (security tokens) and
| derivatives - the whole DeFi market which is what
| Internet was to publishing companies.
| dd36 wrote:
| Except the internet made things easier. Trading stocks
| isn't expensive or error prone. We'll see.
|
| Is the premise that every mom and pop will list shares in
| their company somewhere? The problem with that isn't
| technological. It's regulatory. And the regulations were
| created for good reasons.
| kolinko wrote:
| The problem is very much technological - traditional
| stock market is based on opacity and exclusivity.
| Blockchain is based on permissionlessness and
| transparency.
|
| Internet didn't succeed because it allowed illegal stuff
| to be published. It succeeded because anyone could begin
| publishing, and if it was illegal then it was their
| responsibility.
|
| With blockchain it's similar - you can create financial
| instruments without gatekeepers. It is your
| responsibility to uphold the laws.
|
| Such approach leads to far greater innovation. Just look
| at what UniSwap is doing - they are pioneering a system
| to exchange low volume tokens without an order book. This
| is something that stock exchanges tried to solve for many
| years and failed. Or flash loans - a concept that is
| virtually impossible to do on the traditional markets,
| and makes the whole financial system way more resilient
| in the end.
| [deleted]
| timr wrote:
| > How can Coinbase be valued at nearly that of large banks
| that process orders of magnitude more transactions and can
| actually earn money on balances? NYSE and NASDAQ are surely
| not valued at anywhere close to $100b. Does that mean
| Coinbase can acquire them? Bubbles are bizarre.
|
| I wonder how many folks here remember that AOL (yes, the
| dial-up folks who put CDs in magazines) acquired Time-Warner
| in 2000, thanks to the internet bubble. They even
| subordinated their brand to AOL:
|
| https://www.nytimes.com/2018/06/15/business/dealbook/aol-
| tim...
|
| By 2009, TimeWarner spun off AOL for a fraction of the
| original deal size.
| wtf_is_up wrote:
| Coinbase isn't going public via SPAC. SPACs are underwritten
| by the usual suspects... GS, CS, DB, MS, etc.
| dd36 wrote:
| What's this called? It's not underwritten per the first
| page.
|
| I'm not current on the nomenclature, apparently.
|
| I'm calling it a NoPO for no public offering.
| wtf_is_up wrote:
| Direct listing
| fasicle wrote:
| Could Coinbase have done an Initial Coin Offering (ICO) to raise
| money for their investors and employees instead, where the coin
| tracks revenue or something?
| ceejayoz wrote:
| Why?
| [deleted]
| ketamine__ wrote:
| Binance did something like this with BNB.
| langitbiru wrote:
| Binance did ICO, though.
| https://whitepaper.io/document/10/binance-whitepaper
| user-the-name wrote:
| They could, if they wanted to be sued.
| mindcandy wrote:
| That was attempted by many companies during the ICO craze a
| couple years ago. It took quite a while for the FTC to issue
| guidance on just how they expect such offerings to work and
| remain on the FTC's good side. What they eventually came up
| with was useless. Basically, you could pre-sell coupons for
| service discounts. Pretty much anything else would get you in
| trouble. And, so we don't hear so much about ICOs any more.
| kolinko wrote:
| They would need to invent a whole new protocol and make sure
| the token value somehow stays up - which is independent from
| how much money they earn from fees.
| harporoeder wrote:
| Coinbase is currently trading on private markets at a 77 billion
| dollar valuation:
|
| "Those shares in the largest crypto exchange in the U.S. are
| changing hands on the Nasdaq Private Market at $303 a piece,
| according to two people with knowledge of the auction. That
| implies a total company value of about $77 billion - greater than
| Intercontinental Exchange Inc., the owner of the New York Stock
| Exchange." (1).
|
| It will be interesting to see how that translates to the public
| markets.
|
| 1. https://www.coindesk.com/coinbase-valuation-nasdaq-
| private-m...
| atian wrote:
| Secondaries on Bitfinex are trading at $17 a pop equating to a
| $3.7B valuation for Bitfinex. This seems a bit low compared to
| Coinbase's for running the hodgepodge operation that is Tether.
| 0xy wrote:
| It seems low because Bitfinex has a literal money printing
| machine that the New York AG doesn't care about as long as
| they get their kickbacks in the form of fines.
| mensetmanusman wrote:
| Do you think BTC is worth $500k? If so buy Coinbase.
| cblconfederate wrote:
| 10 trillion economy? maybe
| andy_ppp wrote:
| This isn't even remotely necessary for Coinbase to do well -
| the only thing they need is for crypto currencies to be more
| widely used in 25 years.
| f430 wrote:
| They won't be. For the same reason it is not widely adopted
| as a store of value or a currency. Especially not with the
| looming Tether liquidity crisis.
| [deleted]
| kgwgk wrote:
| Absolutely, the only thing they need. Because the barriers to
| entry are so high!
| andy_ppp wrote:
| Well regulation of this stuff is a kind of nightmare.
| Building an exchange is a nightmare - I tried once and
| scaling the thing is really complicated.
| kgwgk wrote:
| It's not like coinbase has not to worry about regulation
| anymore.
|
| And for the technical aspect, did you spend a few billion
| dollars when you tried? Potential coinbase competitors
| may.
|
| I don't think a valuation higher than NYSE and NASDAQ
| combined (or CME and CBOE combined) is reasonable.
| andy_ppp wrote:
| They have a reasonable sized moat then no? I've no idea
| $77bn seems large, but they intend to be the world's
| financial system in 10-20 years so could be worth even
| more.
| kgwgk wrote:
| > They have a reasonable sized moat then no?
|
| Do they? I'd rather own a couple of major exchanges in
| today's financial system for the same price.
| ICE net income $2.1bn market cap $63bn NDAQ net
| income $0.5bn market cap $23bn CME net income
| $2.1bn market cap $72bn CBOE net income $0.4bn
| market cap $11bn
| dannyw wrote:
| You've listed exchanges, but Coinbase is much more than
| just an exchange. They are also a broker, as well as bank
| (provision of loans), custody-provider, etc.
|
| here are some brokers...
|
| Charles Schwab (SCHW): $119.81bn
|
| Interactive Brokers (IBKR): $32.47bn
| andy_ppp wrote:
| I mean if they get their mission done they'll be worth
| more...
| colinmhayes wrote:
| Coinbase's real value seems like it'll be its ability to
| use deposits to provide loans. Big money in banking.
| kgwgk wrote:
| Most banks do not have a $100bn valuation though.
| hahahahe wrote:
| The jokes on you because it's worth $1M.
| mciancia wrote:
| Why not just buy bitcoin then? Do you think coinbase will go
| 10x faster than btc?
| ketamine__ wrote:
| Coinbase makes money in a down market because of trading
| volumes.
| xadhominemx wrote:
| I guarantee you coinbase stock is going to be highly
| correlated to the price of Bitcoin.
| rvz wrote:
| Before you do that, wait for the bear market and when the
| financial system 'goes back to normal'.
| pistoriusp wrote:
| never time the market
| kleer001 wrote:
| Bitcoin's a little different. It seems to peak every 4
| years when the miner rewards are halfed.
| Trasmatta wrote:
| What if the current bull market goes to $200k, and then the
| bear market retreats to $100k? This is why trying to time the
| market doesn't work.
| whoisjohnkid wrote:
| keep in mind bear market could be hovering around 100-200k
| after this cycle tops. tough to time the market unless you
| have a ton of experience in the field.
| kolinko wrote:
| I know people that said they will get Bitcoin once it falls
| back to $70. They said that around $150 and they are still
| waiting :)
| 6gvONxR4sf7o wrote:
| > Address Not Applicable ^1
|
| > ^1 In May 2020, we became a remote-first company. Accordingly,
| we do not maintain a headquarters.
|
| Total tangent here, but every time I fill out a really old-school
| form (e.g. loan stuff), it asks for my company's address and
| phone number. It gets harder every job to figure out what the
| hell that number should be. In my last job I has to give out one
| of the founder's cell phone numbers for it.
| ppierald wrote:
| Argentina is a great example. I am an American and have been
| there many times. They have extreme inflation and regressive
| policies against USD or foreign currency. Take a look at
| https://bluedollar.net. Official rates are buy at 89.98 and sell
| at 94.98 (ARS). Unofficial rates are buy at 138 and sell at 143.
| That's a massive spread saying that the people on the street are
| willing to spend 35% more because they know the Peso will
| eventually blow up and the USD is more stable which they can sell
| down the line for more ARS. This is sketchy in country. You might
| be walking a slightly illegal line. Possessing cash makes you a
| target for theft. Owning bitcoin makes this money transfer and
| storage of equivalent money easier.
| phreack wrote:
| There's a bit more nuance to it, in that you're not even
| allowed to buy at the official rate, and buying something in
| USD with a credit card gets you slapped with a 65% tax, so it's
| more like the 140-160 rate actually reflects the current real
| value of the currency. Having an 'official' rate nowadays is
| more of a performance to pretend that the already high
| inflation rate is actually a lot higher, and incredibly it
| works.
| dmlittle wrote:
| I believe the USD transaction tax is 35% not 65% (not that I
| think it makes sense in any way).
| phreack wrote:
| Yeah there's a 30% 'solidarity' tax and then another 35%
| tax once we're at it, but the second one you can discount
| from income tax or get a rebate if you go through some
| bureaucratic processes.
| mettamage wrote:
| Awesome comment!
|
| Can you elaborate on this? If you can't do so in public, then
| I'd like to have a conversation about this. I'd like to know
| more about inflation issues and unbanked issues with regards to
| cryptocurrencies. To me, it always feels like "crypto
| marketing" (for lack of a better term), but I am also realizing
| that I'm living in a far removed bubble and find it hard to get
| out of it.
|
| My email is in my profile if you feel it's handier to have a
| private conversation instead.
|
| I think crypto is fulfilling one need at the moment which is:
| if you happen to have a super crazy inflationary national
| currency and you don't have access to actual dollars, then
| there's always cryptocurrencies that are most likely less crazy
| (in the inflationary sense).
| phreack wrote:
| Yeah that's exactly it. If your coin loses value by the
| second, you end up turning to whatever other asset you can
| find. If you can't acquire a state-based currency from a more
| stable country, real estate, or any other stable asset like
| stocks or index funds, you turn to crypto. There's lots of
| people with no tech background investing in stablecoins.
| arcticbull wrote:
| TransferWise Borderless accounts are permitted there for you to
| hold whatever currencies you want. [1]
|
| Currencies that don't fall _checks notes_ 26% in 4 days.
|
| Generally folks look to switch from one problem into a
| solution, not into a different problem.
|
| [1] https://wise.com/gb/multi-currency-account/
| kart23 wrote:
| money transfer with BTC is almost comical right now. Fees are
| incredibly high if you want to get confirmations anytime soon.
| The average transaction fee is $26 right now. Try buying
| groceries or clothes with those kinds of fees. Bitcoin has
| become a good way to store and move money when you have a lot
| of it, but terrible for an everyday use case. You're better off
| using something like Nano or a stablecoin.
| csomar wrote:
| Most countries with capital controls have this spread. There is
| a reason that they have these capital control in place. Most
| people in the western world don't have any idea how bad it is.
| Here is how much bad it is:
| https://tradingeconomics.com/country-list/inflation-rate
| culopatin wrote:
| I'm always surprised when my tiny (in population) and
| insignificant country shows up in HN. I'm now in the US and the
| power of going there with dollars in your pocket is incredible.
|
| I'm not an economist or even a very well versed person in the
| matter, but it is my understanding that Argentina is always
| almost out of dollars in its reserves and the local currency
| has been devaluated steadily since 2001. People figured out
| rather quickly that holding dollars is the only way to save
| money, but if let free, the demand would make the exchange rate
| skyrocket. So the Government (who put us there in the first
| place) has put limits on how much people can acquire per month.
|
| This of course has implications for the whole economy I'm not
| equipped to answer or understand, but by "faking " a lower
| official rate, most legal business happens at the official
| rate, while the street market dictates what the real value
| should be close to.
|
| If you do business internationally and it's bank to bank and
| all legal, you exchange at the official rate.
|
| If it's cash business then you exchange at the blue rate. Or if
| it's in Pesos but it's an imported good, calculate pesos value
| based on blue value.
| kgwgk wrote:
| #31 by population is not "tiny". It has more population than
| California.
| dalyons wrote:
| How do you get your ARS income into BTC though? Surely the
| government tries to put controls on that too? Or is there a
| black market for btc too with a similar high spread? Genuinely
| curious
| phreack wrote:
| There's a lot of legal exchanges, and also a booming black
| market and p2p, all of them with a similar spread. And
| there's a lot of legal projects aiming to control crypto
| trading going on at the moment, but it's uncertain what'll
| end up as law.
| andysinclair wrote:
| -We have applied to list our Class A common stock on the Nasdaq
| Global Select Market under the symbol "COIN."
|
| This in itself will probably add a few billion in market cap...
| glapworth wrote:
| It's interesting that on the first page under the copies to
| section they reference Satoshi Nakamoto and the genesis block of
| BTC.
| baxtr wrote:
| I am somewhat disappointed that they don't do an ICO.
| berniemadoff69 wrote:
| answer: the word 'fiat' appears 40 times in the comments of this
| kind of hn thread
| DSingularity wrote:
| So when is the listing?
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