[HN Gopher] Coinbase from YC to IPO
___________________________________________________________________
Coinbase from YC to IPO
Author : todsacerdoti
Score : 429 points
Date : 2021-04-14 15:15 UTC (7 hours ago)
(HTM) web link (blog.ycombinator.com)
(TXT) w3m dump (blog.ycombinator.com)
| llamataboot wrote:
| Compare Coinbase to say a major exchange like the NYSE. Realize
| that crypto is a space that could be damaged by gov intervention
| at any time. Realize that there is very little lock in effect on
| these markets, and fees are becoming less and less over time.
|
| How does Coinbase ever manage to justify a valuation this high?
| 100B....
|
| Ping me when the stock price is under $100.
| fnord77 wrote:
| ipos in recent years seem more like unload-on-the-bag-holder
| events than fundraising events.
|
| maybe they were always like this, but recently the valuations
| seem bloated by various measures.
| thebean11 wrote:
| Coinbase does things that have no NYSE parallel, for example
| running a centralized ETH staking service (they keep 50% of the
| profits, which are 5+% of staked ETH so it's very high margin).
|
| Of course anybody can run a service like that, but Coinbase has
| the brand name and a leg up on compliance/legal so they'll get
| to charge a big premium on this stuff.
| skybrian wrote:
| The ETH staking seems to be "coming soon?"
| kgog wrote:
| > How does Coinbase ever manage to justify a valuation this
| high? 100B....
|
| How is Doordash "worth" ~$50B?
|
| We're all in a delusion when it comes to public markets _.
|
| _ We're not ALL in a delusion, but market movers certainly seem
| to be.
| throwaway3699 wrote:
| If FAANG can be worth > $ 1T, then $50B starts to seem fairly
| reasonable. I really don't know what justifies either
| evaluation though.
| enra wrote:
| The difference is that NYSE doesn't make that much in the end
| by operating the market. Coinbase is crypto first company, has
| lot of different things going for them. The buy/sell ramp,
| exchange, they are the defacto listing platform for new coins,
| they hold assets, they provide custody of assets (which you
| need as a fund/company) and they are positioned to do almost
| anything that crypto does. More the crypto industry grows, the
| more they can grow.Now as a public company they are positioned
| to acquire companies much more cheaply.
|
| Most companies or banks offering crypto are not really built on
| it, they are just UI brokerages and buy the coins somewhere
| else. Same way they handle other assets. The trades are "free"
| because they take portion on off the spread. They buy a coin
| for $99 on the market and sell it to you for $100. It's easy to
| do but something Coinbase didn't want to do because it's not
| transparent and honest.
|
| Ironically finance and banking institution are the worst at
| tech. Building on top of crypto is hard. Crypto trading is
| hard. Crypto security is hard. Financial instigation security
| is based on the fact that you can always fix things manually,
| call and fax in changes. That doesn't work for crypto.
|
| And it's not like you can build all these capabilities and the
| legal framework over night or over months. Competition has been
| there from the very beginning but they are still the market
| leader in the western world.
|
| Overall bullish on Coinbase in the long run. It's more of a
| platform than it is bank or an exchange.
|
| Disclaimer: ex-Coinbase employee.
| 0xcb0 wrote:
| It will never be under $100 again! Like BTC will never be under
| $50k again. Well I have no plan about the price of Coinbase,
| this is more about the value it brings to the crypto market. To
| the liberation of money, wealth and power to the "normal"
| people.
|
| It's a revolution and we as IT sector have been sleeping on it
| (at least it feels like there is a lot of negative feedback
| concerning this technology). We are good people, but we refused
| to follow that hype since 2009 as any RDBM could do the same
| ... nearly ... on a local scale. Well, not really imho
|
| Now it's there and it wont go away. Tesla, VISA, Master,
| Coinbase, ... (I'm just from the west and know these, look at
| Asia, they are the future. They are much further than us)
|
| There will be billions if not trillions pumping into that
| market. And it will continue, as the industrial revolution in
| late 19th century. It's a paradigm shift and nothing less!
|
| That is a transparent market. NYSE will no be able to compete
| with it. Even thought it 100x more old and established. It'll
| look like a little shop in no time compared to Coinbase,
| Binance, TFX ....
|
| There have been pseudo "mafia" structures for so long in
| traditional finance. DeFi and Crypto will show/shows the world
| how much money can be made handling money. Basically banks have
| been earning more than all money in the world combined, and
| they did NOTHING!!! They just got richer, while generating no
| value for society. They even harmed the society and we accepted
| it as we had no option.
|
| Now we can shift that over generating value to the normal
| person. This is not less "crazy", generating value from
| basically nothing, but it's the only way to show that the
| current system is flawed.
|
| Any gov. trying forbid with crypto will fail. It's too late!
| There is no way of shutting anything like ETH down. It's
| technically impossible if there is enough incentive for the
| mines/staker!
|
| We need a better world! If the cost for doing so is to burn
| down NYSE (not literally), we should do so today. And not wait
| another 50 years.
| seriousquestion wrote:
| > could be damaged by gov intervention at any time
|
| Less likely as time goes on, especially now with a $100B US
| company on the books.
|
| > How does Coinbase ever manage to justify a valuation this
| high?
|
| Millions of active users, strong financials.
|
| https://investor.coinbase.com/news/news-details/2021/Coinbas...
| josu wrote:
| A few arguments to justify the valuation:
|
| - Government intervention tends to benefit incumbents.
|
| - Coinbase employs a lot of lawyers [1].
|
| - Coinbase invests a lot in lobbying [2].
|
| - While fees are lowering for international exchanges, those
| who serve US customers are still able to get away with very
| high fees.
|
| - People are less sensitive to fees when the assets they are
| buying are very volatile.
|
| - NYSE serves brokers, that then themselves serve the final
| clients. Coinbase is able to serve customers directly, thus it
| can keep all the fees for themselves.
|
| [1] https://news.bloomberglaw.com/business-and-
| practice/coinbase...
|
| [2] https://seekingalpha.com/news/3679495-square-fidelity-
| coinba...
| rednerrus wrote:
| Aren't very high fees antithetical to crypto, also
| centralization?
| lovedswain wrote:
| Antithetical? High fees are all but a feature :)
| spir wrote:
| Not for long
| https://twitter.com/zksync/status/1382244366023004161
| tingletech wrote:
| Meet Kevin also did an analysis
| https://www.youtube.com/watch?v=waTWaNqI23Y
| koolba wrote:
| There is no way that Coinbase has a stronger lobbying base
| than the established financial players. They can get into
| this game, block it with tighter regs, and dig into their
| deep base of clients to offer similar products. I don't see a
| moat here.
| GordonS wrote:
| I'm not so sure. Western governments could had intervened and
| banned or heavily regulated crypto currencies at any time over
| the past several years. In particular, the Silk Road and Alpha
| Bay take-downs would have been the perfect opportunities - but
| they didn't take them.
|
| Now we have crypto currency companies floating as public
| companies, and others (e.g. Tesla) heavily invested,
| speculatively, in Bitcoin - maybe crypto currency had now
| reached a point where it's too big to fail?
|
| OTOH, some western governments and their security apparatus are
| all-in on mass surveillance and privacy invasion, and they are
| going to _hate_ any real degree of currency anonymity, so more
| regulation could still be on the cards, but perhaps in (secret)
| consultation with the likes of CoinBase. The likes of Monero
| and Zcash are likely targets.
| dannyw wrote:
| Bitcoin is perfect for mass surveillance and privacy
| invasion.
|
| It's as if all transactions, of any size, can be perpetually
| tracked, with a courtroom-ready digital signature reducing
| evidence doubt about who made a transaction.
| eloff wrote:
| Agreed.
|
| I'm doing a little side project with my brokerage account where
| I pick 20 good socks and 20 bad stocks. Sell the bad ones short
| and double down on the good ones.
|
| That's how hedge funds work. It's interesting because as long
| as your picks are mostly right you can make money regardless of
| of the market is going up or down. Plus it'll be fun to say I
| started a hedge fund at parties.
|
| Coinbase is my number 1 bad pick.
| fukmbas wrote:
| It's a bubble just like every other valuation. Writing is on
| the wall...valuations, stocks, cars, houses
| skyrocketing...wages stagnant. Something has to give
| mensetmanusman wrote:
| Governments love crypto because it is easier to track than cash
| once it is used for a fiat exchange. Not sure why they would be
| against it.
| rawtxapp wrote:
| This IPO significantly weakened the "gov will ban it" argument,
| it's like too big to fail now that it's in the hands of
| millions of retail and institutional investors alike.
| throwastrike wrote:
| The exchange game as it was with stocks and bonds is all
| about consolidation (and resulting revenue base). People are
| betting that coinbase will consolidate the market. I don't
| buy it but that's the "story".
| melonakos wrote:
| Inspired by Coinbase, I wrote an essay on decentralization just
| now. A remarkable day today!
| https://notonlyluck.com/2021/04/12/the-compelling-vision-of-...
| dogman144 wrote:
| Really is! From Charlie Shrem going to prison to a IPO in ~7
| years. Space has come so far and has such a history.
| bosswipe wrote:
| I remember hesitating on a ETH trade because of Coinbase's high
| fees and losing money because of it. Ever since I've felt like
| Coinbase is a scam wrapped up in pretty UI.
| rgifford wrote:
| The NYSEs parent company Intercontinental Exchange Inc (ICE) is
| worth 66.40B. Today's IPO puts Coinbase at 100B+. The NYSE has
| been in operation since 1817. Coinbase has been in operation
| since 2012. The value of all crypto is < 1T. The value of the US
| stock market is 50T.
|
| Trading fees in the crypto-world are getting more competitive as
| more established players support crypto. I don't see a defensible
| market position here, let alone established track record or
| strong potential for growth in future earnings.
|
| This is all feeling very dotcom bubble 2.0.
| briefcomment wrote:
| The value of all crypto is over 2T now
| OnuRC wrote:
| No it's not. Crypto market beyond 1,5T now is probably just
| fake market cap and volum since nobody is checking that
| latter end, just saying it reached to 2T is wrong IMO. But
| it's absolutely beyond 1T sth.
| kirbypineapple wrote:
| Bitcoin alone is worth over 1T, so your statement that all of
| crypto is worth less than 1T is a bit silly. The goal posts
| keep moving for crypto...next year it'll be that crypto is
| worth less than 5T, etc.
|
| I looked at the NYSE daily volumes...unless I'm reading them
| wrong, they did $800m USD worth of trades today. Coinbase did
| $5b USD worth of trades today. So if you compare a company
| that's almost 200 years olds volume against a 9 year old
| company, and find that the startup is doing more than 5 times
| the volume of the incumbent (with zero lock in, since clients
| are free to trade cryptos on any exchange), then I'd say your
| comparison is actually a ringing endorsement for Coinbase.
| knowaveragejoe wrote:
| FWIW, I think that total of $800m is purely stock trades and
| not the sum total of money moving through NYSE. According to
| wikipedia they were moving $130bn in 2013.
|
| https://en.wikipedia.org/wiki/New_York_Stock_Exchange
| selectodude wrote:
| You are reading them wrong. The NYSE traded 971 million
| shares of stock today worth $51 billion. That's just the
| NYSE, too. ARCA and ICE are owned by them as well.
|
| https://www.nasdaqtrader.com/trader.aspx?id=FullVolumeSummar.
| ..
| austenallred wrote:
| Coinbase is... not a stock exchange?
| knowaveragejoe wrote:
| The value of all crypto is ~2.27Tn at the time of writing:
|
| https://www.coingecko.com/en/global_charts
|
| Roughly 1Tn of that from 01/01/2021.
| FabHK wrote:
| Agreed. As I've pointed out elsewhere, Coinbase trading fees
| are about 60x those of NYSE, Nasdaq, etc.; and Coinbase siphons
| off about 0.4% of the entire crypto market cap per annum.
|
| I don't see how that is sustainable at all.
| sdenott wrote:
| No retail investor has accounts directly with the NYSE.
| Coinbase directly holds the customer relationship and if more
| government regulation comes down on crypto it will be a better
| moat for them against competitors.
|
| I think Coinbase may still be overvalued but don't think it is
| directly comparable to NYSE or other major exchanges.
| dylkil wrote:
| >This is all feeling very dotcom bubble 2.0.
|
| How many dotcom era companies had net income of $800mil in a
| single quarter?
| rgifford wrote:
| I don't know exactly. Yahoo was one, adjusted for inflation.
|
| Man, almost forgot how it's spelled it's been so long.
| ghego1 wrote:
| The comparison with NYSE is indeed very convincing.
| bglusman wrote:
| It's a tiny bit pedantic, but the Coinbase offering today was not
| actually an IPO, I learned, but a DPO (Direct Public Offering).
| It was not a fundraising event for Coinbase, only a liquidity
| event for shareholders, and unlike an IPO no explicit valuation
| process occurred to select an offering price.
| Scoundreller wrote:
| Doesn't the Coinbase treasury create/hold un-issued Coinbase
| shares? Do we know they didn't sell any of those?
| eloff wrote:
| Its not pedantic at all, it's the most interesting part of this
| IPO, because this is a new way to do IPOs.
| Aunche wrote:
| Spotify and Slack went public through direct listings as
| well.
| fossuser wrote:
| Also Palantir and Roblox - I think it's the way forward for
| most companies. Spotify was the first and the others have
| had slight variation to terms, but the core idea is good.
| eloff wrote:
| Yeah, I wonder if this will become a trend. I always
| thought the underwriting agency in an IPO was a form
| institutional gate keeping / toll booth on the road to
| going public.
| ProAm wrote:
| It will be a trend for heavy VC funded companies that are
| not really profitable (not speaking about Coinbase
| specifically). DPO's allow VC to recoup investments at
| around the 10 year mark for company's that do not make
| financial sense on paper.
| xbmcuser wrote:
| its not interesting this is just another way stock markets
| are more about gambling instead of a way to raise capital.
| Previously you had startups doing their best to get sold to
| big companies instead of becoming profitable companies. Now
| they are going this route.
| eloff wrote:
| I don't know what your argument actually is, or what it has
| to do with what I said. You're just complaining under my
| comment because you objected to the word interesting.
| anonporridge wrote:
| 1. Keep valuable growth companies private for as long as
| possible where only accredited investors (rich people) can
| invest in them.
|
| 2. Open up to the public market only once you've reached the
| max theoretical valuation. The company is still hugely
| overvalued on hype and future growth is unlikely. Ideally,
| you quickly make it into the S&P 500 so you can hand off the
| bag to passive index holders who have very predictable buy
| rate (mostly retirement savings).
|
| 3...
|
| 4. The rich profit of the plebs like always.
| eloff wrote:
| Yeah, capital > labor as Thomas Piketty pointed out quite
| nicely.
| bhupy wrote:
| Just FYI, that's just a theory, and in the decade since
| his book was published, there have been several rebuttals
| and refutations pointing out that this theoretical
| mechanism doesn't match the empirical data.
|
| https://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf
|
| > Using a sample of 19 advanced economies spanning over
| 30 years, I find no empirical evidence that dynamics move
| in the way Piketty suggests. Results are robust to
| several alternative estimates of r-g.
|
| https://papers.ssrn.com/sol3/papers.cfm?abstract_id=35466
| 68
|
| > Recent influential work finds large increases in
| inequality in the U.S. based on measures of wealth
| concentration that notably exclude the value of social
| insurance programs. This paper revisits this conclusion
| by incorporating Social Security retirement benefits into
| measures of wealth inequality. We find that top wealth
| shares have not increased in the last three decades when
| Social Security is properly accounted for. This finding
| is robust to assumptions about how taxes and benefits may
| change in response to system financing concerns.
|
| Auten & Splinter came out with the most widely
| accepted[1] rebuttal, which showed that Piketty's
| theoretical model was based on a reality that ignored
| major taxes and transfers, and once you account for
| those, the effect goes away completely.
|
| http://davidsplinter.com/AutenSplinter-
| Tax_Data_and_Inequali...
|
| > Top income share estimates based only on individual tax
| returns, such as Piketty and Saez (2003), are biased by
| tax-base changes, major social changes, and missing
| income sources. Addressing these issues requires numerous
| assumptions, especially for broadening income beyond that
| reported on tax returns. This paper shows the effects of
| adjusting for technical tax issues and the sensitivity to
| alternative assumptions for distributing missing income
| sources. Our results suggest that top income shares are
| lower than other tax-based estimates, and since the early
| 1960s, increasing government transfers and tax
| progressivity resulted in little change in after-tax top
| income shares.
|
| [1]
| https://www.economist.com/briefing/2019/11/28/economists-
| are...
| stevewodil wrote:
| Let's start having companies mint fungible tokens so anyone
| can invest in them early on. It's like ICO's but hopefully
| it goes better this time
| xadhominemx wrote:
| A traditional IPO does not have to be a fundraising event. This
| was an IPO, just one structured as a direct public offering
| instead of negotiated sales the day before.
| ilyaeck wrote:
| What difference does it make? Shares trading openly on the
| market is as explicit a valuation process as it gets.
| fernandopj wrote:
| The basic difference:
|
| In an IPO the company puts private shares in the open market
| and gets money from it, priced at the IPO price. Whoever has
| (private) shares now has public shares and can trade whenever
| they want.
|
| In a Direct Listing the company often already traded shares
| "openly" but not in a "public" way, but now wants it listed
| publicly so retail investors can trade it, and there's no
| immediate need of capital so the objective isn't to get a
| funding from offering shares in an IPO.
| ttt333 wrote:
| Kinda. In a normal IPO the big banks will agree to underwrite
| (that is, buy from the company and then immediately sell to
| investors) all the shares at an initial "offering price", and
| this is agreed upon in writing a little bit before the launch
| day. I don't believe this happens in the direct listing
| format, it just starts floating with no underwriting process.
|
| So there is a difference in structure, but to your point
| immediately after launch it does not really matter to the
| general investing public
| fossuser wrote:
| Banks rip off companies in IPOs by underpricing the stock so
| their investors get a kickback.
|
| That's the least charitable way to write it, but it's
| somewhat close to the truth (the other part of the truth is
| that pricing is hard which is why we have markets).
|
| DPOs allow companies to list at a reference price without
| losing out on money - they can sell at the true price later.
|
| Banks naturally make up a bunch of reasons why this is bad,
| but it's mostly nonsense.
|
| When one side does many of these types of transactions per
| year (banks) and one side may only do one or two in a
| lifetime (founders) expect the side with more experience to
| both tilt the deal in their favor _and_ to have a compelling
| narrative of why it 's actually better for you.
|
| See: https://podcasts.apple.com/us/podcast/bill-gurley-
| direct-lis...
|
| There's a funny story (I searched briefly, but couldn't find)
| that when Elon took Tesla public via an IPO and the bankers
| told him the initial price he just said "no, at least $XX or
| no deal". I think the bank price was $17 and he said at least
| $19, but I could be off on the numbers. They did his price
| and that price was still too low.
|
| It's a mistake for any company to IPO from now on imo, SPACs
| are even worse really (unless you're running a fraud in which
| case SPACs are great).
| u678u wrote:
| DPO is the same though right? If you do the capital raise
| before the DPO or a capital raise in an IPO there isn't
| much difference.
| RaketenStadt wrote:
| There are a number of important differences, in fact the only
| meaningful comparison is that they are selling shares to the
| public.
|
| The title is wrong, there is no IPO. Presumably "IPO" is
| meant as "public offering." If there's a place to be specific
| about these things, isn't this thread it?
| Zelphyr wrote:
| I don't know much about finance but based on what GP said,
| the biggest difference (aside from the acronym) is that one
| is a fund-raising event and the other is a liquidation event
| for shareholders. I read the latter as Coinbase's investors
| said at a board meeting, "Ok, we're ready to cash out now."
| so they held the DPO.
| smashem wrote:
| So much BTC FUD on HN - it's kind of disgusting.
| sherifnada wrote:
| It would be really interesting to see an article about biggest
| companies YC passed on around that time in the crypto space. We
| hear about the YC success stories but I think the "could have
| been"s are also equally interesting
| rawtxapp wrote:
| For anyone interested, they have a listing day page[1] and are
| doing a cofounder Q&A live in a bit[2].
|
| 1: https://www.coinbase.com/listingday 2:
| https://www.youtube.com/watch?v=FuqkjklLSCY
| vmception wrote:
| thank you! shared that to a lot of people
| georgeecollins wrote:
| Does anyone know what percentage of their business is in Bitcoin
| vs Etherium vs other crypto currencies? I have not been able to
| find that out and I think it would be a helpful thing to know in
| terms of forecasting their business. Does anyone know how I can
| find that out?
|
| Thank you anyone who can help.
| dogman144 wrote:
| probably in their s1 or other sec docs
| georgeecollins wrote:
| You're right, it is in the S1. Thank you dogman144!!
|
| In case anyone curious, S1 page 99:
|
| Historically, a significant portion of Trading Volume and
| transaction fee revenue has been driven by the purchase,
| sale, and trading of Bitcoin and Ethereum, and in 2019,
| Litecoin. For example, for the year ended December 31, 2019,
| Bitcoin, Ethereum, Litecoin, and other crypto assets
| represented approximately 58%, 14%, 10%, and 18% of Trading
| Volume and 60%, 11%, 8%, and 21% of our transaction revenue,
| respectively, and for the year ended December 31, 2020,
| Bitcoin, Ethereum, and other crypto assets represented
| approximately 41%, 15%, and 44% of Trading Volume and 44%,
| 12%, and 44% of our transaction revenue, respectively.
| dogman144 wrote:
| Nice!
| FabHK wrote:
| One thing I find hilarious, btw:
|
| The antiquated low-tech equity exchanges charge less than 1 bp in
| trading fees on average, if I'm not mistaken.
|
| The hip new high-tech crypto exchange charges between 50 and 200
| bp in trading fees (unless you trade a lot), around 60 bp on
| average, it seems.
|
| So, crypto trading on Coinbase is two orders of magnitude more
| expensive than good old fashioned equity. Yay for progress!
| throwaway4good wrote:
| Right now Coinbase is trading around 350 making it worth about
| 100B, the total value of bitcoin is about 1.000B and all
| cryptocurrencies that are tradeable on Coinbase is maybe 1.500B.
|
| So the ratio between the value of the exchange is about 1/10 -
| 1/15 of the total value of the market it trades. (For comparison
| take say Interactive Broker's market value to the market value of
| the total stock market.)
|
| And Coinbase far from the only exchange out there. With this
| valuation I bet the value of the exchanges is higher than the
| value of the total cryptocurrency market.
| kvothe_ wrote:
| This is not an issue since they make money from per trade.
| aqme28 wrote:
| It's not even nearly the biggest exchange! Binance trades 10x
| the volume, so if Coinbase is worth 1/10 of the crypto market,
| is Binance worth 1x the crypto market?
| throwaway4good wrote:
| Yep. It seems crazy - if you take all the stock market
| brokers and exchanges and compare it to the full stock
| market, their value is only a tiny part.
|
| However for crypto exchanges ... well ... what is going on
| here?
| aqme28 wrote:
| Maybe because traditional investments have a lot of uses.
| Since crypto is pretty much just speculative right now, it
| makes sense that the exchanges are the ones capturing that
| value.
| FabHK wrote:
| One reason certainly is that Coinbase charges very high
| fees, namely around 0.6% of the traded amount. The other
| reason is that crypto is traded a lot. If 1/6 of the entire
| crypto market cap trades on Coinbase every quarter (and
| that seems to be the case), then Coinbase has earnings of
| 0.1% of the entire crypto market cap every quarter, or 0.4%
| per annum. Apply a 25 P/E ratio, and you get a value for
| Coinbase of 10% of the crypto market cap.
| pinkybanana wrote:
| It is already down to $330...
| agotterer wrote:
| Comparing the Coinbase market cap and the total market value of
| Bitcoin is not comparing apples to apples. Just in the last 24
| hours $74B worth of Bitcoin has traded hands. The entire
| purpose of Coinbase is to facilitate that exchange and take a
| cut for doing so. If the trade rate doesn't change the entire
| "market cap" dollar value of bitcoin will trade hands every two
| weeks. Being responsible for facilitating a sizeable percent of
| those transactions is pretty awesome and very valuable.
|
| With that said, I think they are overvalued at $100B. Not
| because of the total market cap size of crypto, but because
| their revenue doesn't justify a valuation that high.
| dsaavy wrote:
| I think a more relevant metric would be the velocity of the
| Cypto market rather than the total value of the number of coins
| out there. Since Coinbase is taking a % of every transaction,
| if you send .1 bitcoin once then they get .5% of that. But if
| you send .1 bitcoin 10 times then they get .5% of 10*.1 (not
| the real % obviously).
|
| I've seen numbers around 250k to 350k transactions per day for
| Bitcoin and more than 1 million for Ethereum. So if Coinbase
| can capture a decent percent of that market then you're talking
| about tens of millions in revenue per day (if not more).
|
| From a quick search it looks like Coinbase had around $1.8
| billion in revenue in the first quarter. That could/should grow
| along with popularity of crypto in general.
| paulpauper wrote:
| for what it's worth, I would not invest in it
| timdaub wrote:
| I've met Fred Ehrsam multiple times at conferences when he was
| around as a VC. He's a great guy! Well done!
| drocer88 wrote:
| Any idea what time COIN will start trading?
| ZeroCool2u wrote:
| Just started! Immediately spiked to over $400 from the listing
| reference price of $250.
| downrightmike wrote:
| Privately it was going for 540 earlier this week
| smeej wrote:
| This is a claim that would need a citation.
|
| There were no authorized private markets in the last
| week,and Coinbase's stock issuance documents forbid sales
| without company approval.
|
| FTX was trading over $600 at one point, but that was a
| synthetic asset and based off of an inaccurate estimate of
| the share count. Was that what you were referring to?
| downrightmike wrote:
| Yes, you're right.
| SavantIdiot wrote:
| Waiting to see that option chain...
| SCAQTony wrote:
| Netscape moment...' says Mike Novogratz -- Is that a scary quote
| or what? Netscape did their IPO in 1995 and IE 6 killed them in
| 2001 but the "body" was finally buried in 2008. It sounds like a
| self-inflicted curse tempting Goldman or JP Morgan to become
| their "IE6." YMMV.
|
| https://cointelegraph.com/news/coinbase-listing-is-crypto-s-...
| rawtxapp wrote:
| Netscape might have died, but it kickstarted the internet
| revolution in a major way.
| purple_ferret wrote:
| Coinbase is definitely a success story in how to appeal to the
| masses. There were always alternatives, but coinbase always came
| out on top despite the high fees and poor customer service.
|
| I think Coinbase as a publicly traded company will be very
| interesting to follow. Not only is it a massively cyclical
| industry, but the supposed point of crypto is to reducing the
| reliance on, and grifting from, companies like Coinbase. It's
| very success should be inverse to the goals of crypto, and over
| time, one would think the relationship can only get more fragile.
| jcims wrote:
| One factor of that appeal in the US is that you have to provide
| your SSN to the exchange you're using. There's a lot of
| intangibles that Coinbase brings that overcomes the activation
| energy required to punch in those numbers on a web form.
|
| Just an anecdote but, much to my chagrin, I've had a largely
| dormant Coinbase account since 2013 and haven't received any
| notable spam or evidence that my contact info has been handled
| sloppily.
|
| Recently I started the enrollment process for a couple other
| popular exchanges and almost immediately start getting some
| gnarly spam of topical relevance.
| sombremesa wrote:
| > much to my chagrin, I've had a largely dormant Coinbase
| account since 2013 and haven't received any notable spam or
| evidence that my contact info has been handled sloppily.
|
| > Recently I started the enrollment process for a couple
| other popular exchanges and almost immediately start getting
| some gnarly spam of topical relevance.
|
| So...you're happy now, right?
| jcims wrote:
| lol Yes! I feel like a member of the economy now. A guid in
| a database somewhere...i have value.
| dehrmann wrote:
| > the supposed point of crypto is to reducing the reliance on,
| and grifting from, companies like Coinbase
|
| That was the pitch of crypto. In practice, people are buying it
| as a bet that it will go up. I suspect most people are only
| buying it because the value is going up. If bitcoin _actually_
| worked like a currency and traded between $8k and $12 for the
| past 5 years, no one would care.
| rawtxapp wrote:
| Except currencies have much bigger market caps, it wouldn't
| have worked as a currency in that range (outside of a _very_
| small economy). We are now in the initial phase where it 's
| being used as a store of value, but sooner or later, it's
| going to reach roughly it's true value at which point, you
| would expect it to behave more like a currency rather than an
| asset with a huge upside.
| spiralx wrote:
| Currencies don't have market caps, assets have market caps.
| The fact that people talk about crypto's "market cap" is as
| clear an indication that it's not and never will be a
| currency.
| delaaxe wrote:
| Currencies definitely have total supplies which can be
| measured in USD. Let's not be finicky with definitions.
| https://fiatmarketcap.com/
| onlyrealcuzzo wrote:
| Global wealth is $400T. All crypto currency combined is worth
| about ~$2T at this point. So to store 0.5% of the world's
| wealth, we are using 0.6% of the world's energy.
|
| Banks obviously don't use anywhere near this much energy.
| Bitcoin is estimated to use more energy than all other server
| farms put together.
|
| So we are using 0.6% of the world's energy to store 0.5% of
| the world's wealth. And < 0.6% of the world's energy to store
| the other 99.5% of the world's wealth.
|
| Doesn't seem like the ideal wealth storage technology.
| delaaxe wrote:
| I like this reasoning in terms of global wealth
| Consultant32452 wrote:
| What's the total energy cost, including human capital, of
| keeping the petrodollar afloat via global wars/hegemony?
| onlyrealcuzzo wrote:
| Even if it is greater than 0.6% (it's plausible) - dollar
| denominated wealth accounts for 25% or global wealth.
| Which is 52.5x the amount of wealth as all of crypto.
|
| The US doesn't even use 20% of the world's energy. So you
| would need to think that 125% of the energy the US
| produces and consumes goes directly into fighting wars
| and "supporting the petro dollar" - which is absurd.
| Almost 50% of energy is spent on transportation and
| utilities alone...
|
| In the most generous of worlds, Bitcoin is 10x less
| efficient than the current systems. It is probably closer
| to 1000x less efficient (or more).
| Consultant32452 wrote:
| Well the US has killed over a million people in Iraq,
| Afghanistan, and Syria in the current wars. How are you
| calculating the cost of that million lives to prop up the
| dollar?
|
| This is one of the biggest selling points of crypto, it's
| not tied to a government that may decide to commit mass
| murder for its sake.
| lotsofpulp wrote:
| I would include the energy needed to maintain trust in
| other currencies including efforts to prevent counterfeits,
| which I might argue includes some portion of a nation's
| militaristic might. Trust is an even more ambiguous, yet
| crucial aspect of maintaining a currency's value, tied up
| in the "order" or predictability of the society using the
| currency, which involves various legal systems and at the
| most basic level, relationships between its peoples.
|
| It takes a relatively minuscule amount of energy to
| maintain a database of numbers associated with certain
| people and entities, but quite a significant amount to make
| it mean something.
| abalone wrote:
| If this were actually true, Coinbase would not need to
| exist with a market cap of $100B.
| g_sch wrote:
| I don't really understand this argument. If militaries
| are part of the embodied infrastructure of a country's
| banking system, this would imply that replacing the
| banking system with something decentralized (like
| cryptocurrency) would cause countries across the world to
| reduce their military footprint.
|
| I find it much more likely that military resources would
| be diverted to somewhere upstream of mining in the value
| chain. For example, if we continue relying on carbon-
| intensive proof-of-work blockchains, why wouldn't armies
| simply be diverted to secure energy resources?
| reidjs wrote:
| This implies that the energy required to store wealth in
| centralized databases is easily calculable.
|
| It also implies that the goal of storing wealth is
| optimizing for low energy usage, which seems less important
| than security/safety, ease of transfer, taxation,
| automation, and other factors.
|
| I'm not making an argument for or against PoW. Just want to
| point out it's possible >.6% of humans energy output may in
| fact go towards banking and payments.
| abalone wrote:
| This is a poorly reasoned comparison. The .6% figure was
| in reference to .5% of wealth; presumably much more
| energy would be required to store closer to 100% of
| wealth with crypto.
|
| Given that we are nearing the irreversible destruction of
| our climate and that existing electronic systems offer
| all the benefits you mention, but with massively lower
| energy cost, your claim that energy "seems less
| important" is unsupported.
| beervirus wrote:
| > So to store 0.5% of the world's wealth, we are using 0.6%
| of the world's energy.
|
| It's even worse in terms of energy per transaction.
| rozap wrote:
| That's why we need centralized exchanges like coinbase to
| enable off chain transactions within their walled garden.
| Then we can have the worst of both worlds.
| Grustaf wrote:
| The energy is not spent on storing though, it's expended
| when verifying transaction, isn't it?
| ufo wrote:
| In the sense that verifying transactions is what keeps
| the bitcoin network alive.
| ozmbie wrote:
| The energy spent on bitcoin's proof of work is not tied to
| the volume of transactions though. At a technical/protocol
| level, the same amount of mining would be needed if there
| was $100 trillion being stored or $1 being stored.
|
| Although higher prices make larger mining operations more
| enticing and profitable.
| svachalek wrote:
| Sadly this is true other than "no one would care". Many would
| care, just mostly not in countries with stable fiat.
|
| But the success of BNB which is basically just a corporate
| database on a blockchain shows there is a big part of the
| community that doesn't care about decentralization at all.
| delaaxe wrote:
| BNB is an ERC-20
| rodiger wrote:
| Yeah I believe you mean BSC
| gge wrote:
| > the supposed point of crypto is to reducing the reliance on,
| and grifting from, companies like Coinbase
|
| Yes, that is still the case? Decentralized exchanges like
| Uniswap are dominating (over $1B volumes daily) and growing
| very rapidly. Crypto is and always has been about
| decentralization.
| divbzero wrote:
| > _coinbase always came out on top despite the high fees_
|
| Commissions tend to come down as markets mature (with some
| exceptions like real estate) so I will be curious to see if
| this occurs in the crypto market as well. I suspect that appeal
| to the masses will not be a long-term durable advantage.
| paulpauper wrote:
| Early on coinbase made it very easy to buy, even if it meant
| taking losses. They allowed people to trade with funds that
| were not yet cleared. This was a long time ago. Some ppl could
| withdrawal the coins and then cancel the deposit by contacting
| the bank. that did not last long.
| Sohcahtoa82 wrote:
| In the past, Bitcoin exchanges IMO felt shady. They frequently
| were run from foreign countries and got away with avoiding
| Know-Your-Customer banking laws.
|
| Coinbase brought a true sense of legitimacy and trustworthiness
| to Bitcoin exchanging.
| cableshaft wrote:
| Yep. I always wanted to buy bitcoin way back in the day, it's
| just every time I almost joined an exchange (like Mt. Gox)
| they always made me feel really nervous and like I was going
| to lose my money (didn't help that several of them got hacked
| and did lose everyone's money).
|
| Coinbase was the first company that made the whole process
| feel pretty safe and reliable.
| MuffinFlavored wrote:
| > Coinbase brought a true sense of legitimacy and
| trustworthiness to Bitcoin exchanging.
|
| I could be wrong but to me this makes every shill for crypto
| that says "it's anonymous!" a joke.
|
| I had to provide a driver's license and do checking account
| verification to be approved on Coinbase. Does that not remove
| the anonymity or am I missing something?
| smolder wrote:
| It does remove any question of who you are for coinbase,
| but bitcoin was only ever pseudonymous transactions, not
| fully anonymous. We can all see how each wallet behaves.
| MuffinFlavored wrote:
| and in an "audit" or "government" scenario, your Coinbase
| wallet is linked to your driver's license + checking
| account, right?
|
| Do we know if Coinbase would cooperate with US government
| in such a situation? I would imagine they would.
|
| I'd imagine they are also going to be sending IRS
| 1099-like forms for all crypto transactions, right?
| fossuser wrote:
| Yeah - it's not anonymous, the shill people didn't
| understand the technology and are wrong.
|
| Every transaction is part of the public ledger. If you
| ever want to get money in or out from fiat you need some
| point that is going to require ID.
|
| You could try and avoid this doing in person and cash,
| but if make any mistake ever your entire history of
| transactions is known.
|
| Some people have tried to do things to obscure this (coin
| mixing), some coins exist to do something clever to make
| it private, but BTC isn't and the other stuff doesn't
| really work.
|
| Coinbase is great because the original exchanges like
| "Magic The Gathering Exchange" (Mt. Gox) were amateur
| hour, they were routinely hacked and lost everyone's
| money. Coinbase was the first real company that showed up
| and did what they were supposed to do. They also made
| things easy with good UI.
|
| I think this is partly because in the Mt. Gox days it
| wasn't taken too seriously, (most) people were playing
| with it because they thought it was cool not because they
| expected it to grow in to a trillion dollar monster.
| Sohcahtoa82 wrote:
| Bitcoin CAN be used anonymously if you never use an online
| exchange to convert fiat to Bitcoin or vice versa.
|
| But yeah, otherwise I agree with you. Once you've bought
| your Bitcoin from Coinbase, your name is attached to a
| Bitcoin address. Law enforcement might not know where the
| coins go once you spend them, but they could subpoena you
| or otherwise make some sort of legal demand to know who you
| sent them to if they suspected you of buying illegal
| things.
| o_p wrote:
| >the supposed point of crypto is to reducing the reliance on,
| and grifting from, companies like Coinbase.
|
| Not necessarily, the point of crypto is to reduce reliance on
| fiat money, due to the high fees of crypto it makes sense to
| build centralized services on top backed by decentralized
| cryptocurrencies, these exchanges dont hold real power, as you
| can just switch exchanges (unlike credit card processors).
| Bitcoin is like the internet gold, but you dont buy stuff with
| gold.
| urza wrote:
| Unpopular opinion - Bitcoin would be better without Coinbase.
| janandonly wrote:
| I used to buy my coins on MtGox, I am still waiting on the
| closure of that lawsuit in Japan.
|
| Happy to have done business with Coinbase back in 2015..
|
| Of course later on I looked for a better and cheaper exchange,
| but really, Coinbase helped Bitcoin grow as much as Bitcoin
| helped Coinbase grow...
|
| Today Coinbase is just one of many faceless shitcoin casinos
| but they had their use, once upon a time...
| whalesalad wrote:
| Frankly I think crypto would be hardly anything like it is
| today without Coinbase. They made it accessible.
| spurdoman77 wrote:
| Not very valuable opinion if you dont have any arguments.
| tofuahdude wrote:
| Ideologically, sure, but practically? Not a chance. Coinbase
| was instrumental in helping Bitcoin achieve its current
| stature.
| csomar wrote:
| Not really. The ship of a single exchange or wallet dominating
| Bitcoin or the crypto space has sailed. It's quite hard for
| Coinbase to have any significant control over the network. (ie:
| Bitpay tried that and now they are mostly history).
|
| Coinbase provides a regulated environment for trading crypto-
| currencies as well as on-off ramps to traditional finance. It's
| definitively a plus to have them around.
| smaps wrote:
| What's the reasoning behind your opinion?
| nscalf wrote:
| Were you in the space before Coinbase became big? Because I've
| had crypto exchanges get hacked and run away with my money.
| There was zero trust (for good reason) in any of the sites that
| let you buy crypto. Without Coinbase, this likely would still
| be a sketchy ecosystem that wasn't taken seriously. Coinbase
| was the first slick, trustworthy exchange based in the US. I
| personally am not very comfortable buying from foreign
| exchanges, and when I have to I move them out of those
| exchanges as fast as possible.
|
| I think Coinbase was absolutely crucial in changing the public
| opinion of "buying bitcoin is for criminals" and "you just get
| hacked and lose it all".
| thesausageking wrote:
| I was. Most Bitcoin OGs have a lot of animosity towards
| Coinbase. Some of it is the "eternal September"[0] effect
| that Coinbase had bringing a lot of new people who didn't
| embrace Bitcoin's values and just wanted to gamble on crypto.
|
| But some of it is based on Coinbase's actions against Bitcoin
| over the years. They've promoted and helped pump up a lot of
| s*t coins, including forks of Bitcoin. And they've done
| little to support or further the values Bitcoin was built on
| or core development.
|
| [0] https://en.wikipedia.org/wiki/Eternal_September
| russellbeattie wrote:
| I'm not sure what I'm more amazed at: The foresight of Coinbase's
| founder starting the company so early on, or _my_ personal total
| lack of foresight having read with interest about Bitcoin from
| the beginning and yet not bothering to buy a single coin at any
| point over the past decade.
| wmf wrote:
| TradeHill was founded a year earlier and failed due to lack of
| demand. Gemini was founded after Coinbase and never caught up.
| It really looks like Coinbase got the timing right.
| thinkingkong wrote:
| I know lots of really smart software people who avoided crypto
| because it didnt and still doesnt "make sense". But we all
| didnt invest on the merit of the technology. We forgot the
| whole "how will people behave" part and lost out on millions.
| randomopining wrote:
| That was me. But tbh I do now see the value of Bitcoin
| specifically, in a zero-sum deflationary sense. But the
| environmental cost doesn't really make it worth it.
|
| Defi could make sense... but I think people underestimate the
| value of a physical bank with real people running the show.
| But a lot of rent extraction too... so idk.
| tootie wrote:
| It still makes no sense to me. It makes sense in the sense
| that if people believe in it it becomes real. But I don't get
| why people believe in it. And frankly I'm still pretty
| skeptical that it's being floated by more than money
| laundering.
| rawtxapp wrote:
| One thing is, crypto is at the intersection of many
| disciplines at once, tech/finance/economy/psychology/game
| theory, etc.
|
| I'd if you try to start with a clean slate and no biases
| against it from the get go, spend some time researching and
| understanding it alonside what money is and it's history,
| etc. You'll probably start to see some usefulness to it.
| tootie wrote:
| I understand a lot of that stuff. I think the last 10
| years have very thoroughly vindicated fiat currencies and
| central banking. The fact that we powered through the
| last financial crisis without inflation and the biggest
| pain was inflicted by austerity policies in Europe made
| it all pretty unequivocal. Crypto is powering close to
| zero of the mainstream economy. Nobody got a bitcoin
| bailout. The "money" isn't flowing. I've seen multiple
| big Wall Street banks say they're going to start using
| blockchains for whatever and fail to get any traction.
| It's great for avoiding taxes or buying drugs but I
| haven't seen any other practical application. The game
| theory aspect is probably very relevant. There's a lot of
| FOMO driving speculators into the frenzy.
| rawtxapp wrote:
| > The fact that we powered through the last financial
| crisis without inflation...
|
| If you trust those metrics, yes everything is perfect.
| Prices at grocery might not have inflated, but assets
| certainly have, real estate is crazy expensive, stock
| market P/E ratios have also exploded. For the working
| class whose income has relatively stayed stable, it means
| life is a lot harder.
|
| The money is very much flowing in the crypto world, just
| look at DeFi, it has more or less the equivalent services
| available elsewhere, but everyone has access, you don't
| need trust, it has large volumes and billions of dollars
| in capital in these protocols.
|
| It's great if you want a predictable global monetary
| system not controlled by any single entity. If you don't
| see any value in that (as in you really trust your gov
| and the politicians/bankers), I don't think there's
| anything I could tell you to convince you otherwise.
| dogman144 wrote:
| From something I wrote above, this was my ah-ha moment:
|
| Not all cryptos are like this, but for bitcoin and other
| ones that have the incentives right: bitcoin's massive
| breakthrough is a protocol that can send verifiably
| discrete entities across a network, without a central party
| needing to verify the discrete-ness. This is a huge
| breakthrough in a lot of ways, but basically consider if
| you network could send payments as exactly as easily as it
| does HTTP packets, and w/o a client-server model, just p2p.
| HTTP changed the world, and that's the idea behind
| bitcoin's value. If you could somehow buy a slice of HTTP
| in 1997, or TCP/UDP, now knowing how important and valuable
| those became (valued by the size of the internet economy),
| would you?
| tootie wrote:
| The only distinction between crypto and just HTTPS is the
| distributed concept. Something that I don't really think
| is valuable and neither do most consumers. Crypto
| exchanges get robbed more often than banks. The notion of
| investing in "http" is akin to investing in "blockchain"
| which isn't a thing. Anyone who saw the value of the
| internet would have been buying Apple, Google and Amazon
| because they were providing goods and services. Not
| tokens. I'm heavily invested in reddit karma, but it's
| still not fungible.
| Ekaros wrote:
| I feel myself as value investor. That is why cryptos or Tesla
| and many other tech companies never made sense to me... I
| might be right one day, but currently it seems that market is
| what market is.
| rawtxapp wrote:
| To me, value investing is when you already have a good idea
| of what something is worth, but it's trading below that
| value. That's great strategy if you know and understand a
| certain sector.
|
| It's very difficult to value futuristic things, it might
| succeed beyond our wildest dreams or completely flop.
| cwkoss wrote:
| Everything seems so overinflated right now. As a value
| investor, what looks good currently?
| ignoramous wrote:
| $NET if you're looking for slightly undervalued tech
| stocks.
|
| The recently announced products to take on zscaler,
| crowdstrike et al looks commendable whilst they are also
| at the same time going after the cloud incumbents with
| Workers. I'd reckon, they've got the engineering chops
| and the infrastructure to bat both those out of the park.
| Black101 wrote:
| my $250 order didn't go through...
| kleer001 wrote:
| Try again without a time limit, unless you're joking
| Black101 wrote:
| I don't have access to a broker that allows orders with no
| time limit... unless you're joking
|
| And of course I was not joking... you should have tried it
| yourself... only bankers get the best price.
| paulpauper wrote:
| And down bitcoin goes. $3k off the highs. If given a choice
| between 1 million to invest in in a large cap growth stock
| portfolio vs. Bitcoin, I would choose the stock portfolio every
| time. Crypto too volatile relative to upside. Airbnb and other
| big tech growth stocks have much smoother returns which can be
| magnified with some leverage strategies.
| smabie wrote:
| BTC has a pretty amazing Sharpe ratio. If you want smooth
| returns, then reduce your allocation?
| Dopameaner wrote:
| As Powell announced cryptocurrencies 'vehicles for
| speculation'. It is mind blowing the cryptocurrencies are
| making bets and are valued without any sound reasoning behind
| them. How many companies actually use them at regular place?
| How hard is the barrier of entry?
| dogman144 wrote:
| I'm not sure what you mean by "cryptos making bets."
|
| Valid points on use, but paypal adoption might cause a jump
| and a few others in that direction, but still small.
|
| Barrier to entry, paypal or not, is fairly small actually.
| Good wallet and transaction ecosystem that works via QR code.
| Depending on what way CB and places like BlockFi go, links to
| dollar economy get a lot stronger too.
|
| What sound reasoning is behind all this: bitcoin's massive
| breakthrough is a protocol that can send verifiably discrete
| entities across a network, without a central party needing to
| verify the discrete-ness. This is a huge breakthrough in a
| lot of ways, but basically consider if you network could send
| payments as exactly as easily as it does HTTP packets. HTTP
| changed the world, and that's the idea behind bitcoin's
| value. If you could somehow buy a slice of HTTP in 1997, or
| TCP/UDP, now knowing how important and valuable those became
| (valued by the size of the internet economy), would you?
| NaturalPhallacy wrote:
| USD doesn't have sound reasoning behind them either
| (anymore). It's based on faith in the system.
| randomopining wrote:
| I mean realistically it's how you pay taxes to the US
| Government which represents the United States, probably the
| most innovative and industrial nation ever to exist.
|
| If you want to operate with/within the US, you pay the
| dollar. That's fairly "sound" reasoning.
|
| Btw im invested heavily in crypto but just saying.
| mmmmmbop wrote:
| It is backed by the U.S. Army.
| randomopining wrote:
| Why? Lol. If your risk/reward profile is such, it's a fine
| investment. Super liquid, volatile, upward trend.
|
| Yeah if you're 70 years old, don't throw in half of your net
| worth.
| edem wrote:
| Coinbase is not for crypto people. It is for people who only care
| about hodling some crypto for profit and want an easy on-ramp. It
| is not for traders either as it is incredibly expensive to
| deposit and trade. I'd take Binance over Coinbase any day of the
| week. If I use Coinbase I pay 2% only for depositing which is
| insane. If I use Binance for example deposit is free, withdraw is
| 0.75 EUR and I pay 0.2% (note the zero) for transactions.
| sosuke wrote:
| Dividends to HN users? Joking aside congrats! I'm planning on
| picking up a share or two as I did with Digital Ocean.
| Scoundreller wrote:
| Whenever something charges/pays $0, it's probably not a perfect
| price :)
| csomar wrote:
| They did give 0.1 btc in the early days. Which if you did hold
| into them would be roughly $6500 by today's rate (you'd also
| have BCH, BCHN, BSV and BTG).
| sosuke wrote:
| Crazy I missed another boat there. More will come down the
| river and I'll jump on the right one eventually.
| jedberg wrote:
| I just looked at my Coinbase balance for the first time in a
| few years.
|
| Apparently I got $5 of free bitcoin at some point in 2016 and
| it's now worth $800. Sweet!
| Tenoke wrote:
| They also seem to have quietly closed early users' accounts
| and taken the holdings.
| bhaile wrote:
| I have an account from early on when they first launched.
| Got some small BTC in it and never touched it again. Still
| there. Odd why some got closed. I log into it once every
| couple of years.
| clpm4j wrote:
| Can confirm that happened to me.
| lubesGordi wrote:
| I got .03 btc from the early days sign up. It's almost $2k
| now. Thanks Brian!
| jspaetzel wrote:
| It's incredible they were allowed to go public with risk being at
| such an all time high. Kudos to the company though, it's really
| ideal for the investors so c'est la vie.
| FabHK wrote:
| Allowed by who?
| haolez wrote:
| Indeed, Coinbase is so good that it doesn't look like a
| cryptocurrency exchange (despite the fact that it doesn't appeal
| to the more anarchic uses of crypto). Exchanges usually feel
| half-baked and there are tons of cases of security issues with
| the loss of customers' money.
|
| Kudos to the team!
| throwawaybbqed wrote:
| I was an early user of coinbase. I only bought a fraction of a
| coin because of Paul Graham and YC's reputation. Well .. I was
| wrong. I was not an active trader. It seems they have closed by
| account and liquidated the btc within (if there were actually btc
| in my name). I am deeply disappointed that they don't have a
| telephone number I can call to help figure out the situation.
| Pretty disappointed.
| smabie wrote:
| I _highly_ doubt this is true.
| bpodgursky wrote:
| As other people have alluded to, this might be California
| "escheating" you out of the account if you haven't logged in
| for a couple years (in which case Coinbase doesn't have a say
| in it). You should look into what's in California's unclaimed
| property registry: https://www.sco.ca.gov/upd_msg.html
| px43 wrote:
| Eh, maybe a month ago I found a Coinbase account from 2013 that
| I had forgotten about, and it still had everything in it. Your
| story makes no sense. Coinbase support has always been pretty
| good for every problem I've ever had. Why talk to someone on
| the phone when you can click a button and have a live chat with
| a support agent instantly?
|
| https://help.coinbase.com/en/contact-us
| marrone12 wrote:
| Is this a plant? coinbase support is notoriously horrible,
| even my friend who works at the company thinks it's bad.
| NaturalPhallacy wrote:
| If half the company isn't reading this thread I would be
| shocked. They came from YC and they're mostly a bunch of
| nerds like us.
| RhodoGSA wrote:
| I accidentally sent a wire from my business account instead
| of my personal account into coinbase. Since my account
| wasn't verified to be a business account they contacted me,
| sent the money back and reimbursed me the $30 wire fee. I
| found the customer service to be great.
|
| I've been trading crypto for a while and exchanges are as
| sketchy as it gets. Sometimes, you have anecdotal
| experiences that bubble up on the internet but i truly
| believe coinbase is the most trust-worthy exchange.
| px43 wrote:
| I've needed support maybe four times in my 8 or so years
| using them, and each time they've resolved my problem
| quickly.
|
| The complaints I've seen about Coinbase support are usually
| people who withdraw coins to the wrong address or something
| and are upset that Coinbase won't reimburse them for their
| own fuckups.
|
| I have had several cryptocurrency exchanges straight up
| steal money from me and then ghost me. Coinbase has been a
| pleasure to work with relative to everything else in the
| crypto space.
| dev_throw wrote:
| Coinbase customer service has always been tragic. I remember my
| BTC being locked up until I could "verify" my identity by
| submitting a photo of my passport, but their site kept
| glitching out and zero response from customer service. This
| went on for months.
|
| Pulled all my coins out and will never use this scummy product
| again.
| vmception wrote:
| yeah right, they likely have the account closed but the assets
| still held
| csomar wrote:
| > It seems they have closed by account and liquidated the btc
| within
|
| This might not be completely legal. How much Bitcoin was it and
| what it is the date of liquidation?
| unreal37 wrote:
| Have you even communicated with them about it?
|
| Today might not be a great day to try that. But reach out to
| them and ask.
| cbhl wrote:
| I wonder if this is escheat at work, or if it is just them
| adding new multi-factor and ID requirements and not staying
| on top of it...
| [deleted]
| dehrmann wrote:
| Since this is a direct listing, imagine making the first trade.
| There's no price for it. You might be an institutional investor
| who negotiated a price beforehand with large shareholders. Or
| maybe it's a bunch of people yoloing it with limit orders.
| nly wrote:
| Stock exchange liquidity is dominated by market makers who will
| do their own assessment, or simply wait for price discovery
| rawtxapp wrote:
| I believe it starts with a reference price of 250$ per share.
| olalonde wrote:
| Fun trivia: Brian Armstrong was looking for a co-founder on HN
| back in 2012: https://news.ycombinator.com/item?id=3754664
| newbie578 wrote:
| From startup to IPO in under a decade. Well played!
| Congratulations!
| arcticbull wrote:
| Not to take anything away from this accomplishment -- this is
| more a point of interest -- the average time from formation to
| IPO for a company that's going to is 6.3 years [1]
|
| [1] https://www.statista.com/statistics/320793/median-time-
| ventu...
| ignoramous wrote:
| Well, what's the average time to a $100B IPO?
| kilbuz wrote:
| Getting closer to infinity every day.
| arcticbull wrote:
| I echo this sentiment lol, in general, why would you? I
| think it's pretty barbell shaped. Either you're going
| public in the sub-20B range, or you wait until you hit
| $1T+ like Aramco. That's not to say there won't be folks
| in the middle. But why go through the reporting
| requirements if you have no trouble raising capital, and
| only have to answer to a small group of smart money? May
| as well just buy back shares from your employees at
| secondary.
|
| I know there's certain pressures - like the 7 year clock
| on RSUs, and there's still a cap on outside investors
| right?
| superos wrote:
| The irony; Bernard Madoff dies, but his spirit lives on.
| williesleg wrote:
| A busted clock is right twice a day
| ddevault wrote:
| Bitcoin is an enormously wasteful ponzi scheme mind virus and YC
| should be ashamed of their involvement in it - not proud. I long
| for the day (which it seems may come soon!) when cryptocurrencies
| are outlawed and we can all move on with our lives.
| literallycancer wrote:
| Your existence is wasteful. If you don't like it, just don't
| use it? Why do you feel the need to tell others what do to with
| their lives and money?
| unreal37 wrote:
| Outlawed? I don't think that will be possible. Bitcoin is part
| of the US financial system already!
| dehrmann wrote:
| https://en.wikipedia.org/wiki/Executive_Order_6102
|
| This was almost certainly a blatant due process violation,
| though. FDR was fond of those.
| ecommerceguy wrote:
| BTC is different. It will never go down from here.
| coolspot wrote:
| I would say it is a new paradigm!
| [deleted]
| tibiahurried wrote:
| As many other recent IPO, this valuation is just out of this
| world. Also, Coinbase is not the only player in the space. Many
| also use Binance.us; it offers stacking, cheaper fees and usually
| lists more alt coins.
|
| I must admin that I bought my first cryptos on Coinbase but soon
| realized how expensive it was and looked for alternatives.
|
| I don't understand what is so unique about Coinbase and why this
| insane valuation. I am skeptical and not going to buy, at least
| not at this price.
|
| Long term I expect exchanges to having to drop fees like stock
| exchanges. At that point, unless they can offer juicy interests
| rates like Celsius, how would they make money ?
| Tenoke wrote:
| I still prefer Binance who are exposed to users via actual crypto
| (BNB) than Coinbase who are trying to eat the trad investors
| exposure and banking on their preferential treatment from US
| regulators.
|
| Not to mention that Binance has 9x the volume, much much more
| crypto and is pro-competition and lists Coin on day 1 while CB
| wouldn't even consider listing BNB or anything by competitors.
| arcticbull wrote:
| Well, Binance is, somehow, dramatically more of a fly-by-night
| bucket shop intentionally looking the other way to people
| opening multiple accounts to avoid KYC -- and they won't event
| tell you in which country they're domiciled.
|
| They're one of Team Tether's top partners in crime.
|
| How on earth can you believe their volume numbers haha.
| literallycancer wrote:
| That's a feature. Willingness to avoid onerous regulation or
| even break the law to benefit users is a good thing.
| baq wrote:
| that's assuming non-users aren't getting hurt.
| arcticbull wrote:
| Yeah, it's not lol, it screws over legitimate participants
| to benefit the house.
| csomar wrote:
| > How on earth can you believe their volume numbers haha.
|
| They might be inflating their numbers but they are
| definitively huge. Everyone I know who is involved in Crypto
| is using them.
| Tenoke wrote:
| I doubt they are inflating them and it's trivial to check
| by going on both CB and Binance, looking at the order books
| and executing a few orders against them.
| arcticbull wrote:
| Right, you know in a completely unregulated market, you
| can just put fake things on the books yeah?
|
| Remember that ETF that was trying to list a few years ago
| said 95% of all volume in the crypto space was fake. [1]
| Now, at the time, they included Binance as a legitimate
| exchange but you know nobody's looking and they can do
| literally whatever they want.
|
| That designation is especially suspect as:
|
| > Of the 10 exchanges, only Binance isn't a money
| services business (MSB)
|
| Consider of course this was 2 years ago.
|
| This whole space is utterly uninvestable.
|
| So let me reverse the question -- on what basis do you
| believe these unregulated fly by night bucket shops are
| on the up and up? What have they done to prove their
| legitimacy to you?
|
| [1] https://cointelegraph.com/news/bitwise-calls-out-to-
| sec-95-o...
| ChainOfFools wrote:
| correct. the part that seems to evade people's mental
| model of this process is that the exchanges know which
| orders in the book are theirs, but the customers do not,
| so there's no risk whatsoever of the exchange filling an
| order that works against their balance sheet. it all
| looks perfectly organic from the outside.
| Tenoke wrote:
| I mean, how can what's on the book be be fake if my
| trades are executed faster, the spread is smaller and I
| can take advantage of the higher liquidity??
|
| Those things aren't just arbitrary numbers with no
| effect, if you are trading it's pretty noticable where
| the volume is higher even if you don't look at the order
| book.
| arcticbull wrote:
| Sorry? They most certainly can be arbitrary numbers. [1]
|
| You know 99% of all LTC trading on Coinbase was one
| account trading back and forth with itself a couple years
| ago. Spoof trading involves putting up a big order, then
| yanking it at the last second before it gets executed.
|
| If you're the house, you can do literally anything if
| only the fox is watching the henhouse. As the peer
| response states, if you're the house, you know which
| orders are yours so there's zero risk of them
| accidentally getting filled. You put fake orders on the
| books, you fake close them, and report them as a real
| transaction in the log. The liquidity can just be
| pretend.
|
| [1] https://www.complianceweek.com/regulatory-
| enforcement/cftc-f...
| Tenoke wrote:
| .. Again that's all good in theory but in practice you
| can verify by trading. My orders do get filled faster on
| Binance, I can take advantage of the better spread and
| liquidity etc. The majority of orders aren't just
| disappearing randomly or anything.
|
| It's especially obvious when trading higher amounts or
| trading a smaller liquidity token in the first place.
| Maybe I can't verify the actual numbers but I can very
| much verify there's more liquidity etc. than when I do
| the same transactions on a smaller exchange (and I'm on
| ~5 exchanges).
| arcticbull wrote:
| No you cannot verify by trading lol, any more than you
| can verify the payout ratio of a slot machine at a rigged
| casino. They can synthesize opening and closing the
| orders, matching them internally, based off a feed from a
| legitimate exchange. Since they control everything they
| can easily ensure they don't accidentally get matched to
| an external order. This gives the illusion of liquidity.
| Tenoke wrote:
| >any more than you can verify the payout ratio of a slot
| machine at a rigged casino.
|
| If I use a slot machine a million times and I get higher
| payouts than at the casino next door, why should I
| consider it rigged?
|
| This is just nonsense. I am getting all the benefits of
| high liquidity and volume, my orders actually execute and
| I take advantage of the smaller spread. You can posit
| whatever you want, but the more likely explanation is
| that the volume is indeed higher.
| arcticbull wrote:
| They have not provided you with any reason to believe
| them. They won't even tell you _where they 're located_
| lol.
|
| This was a common growth hack for exchanges. When a new
| exchange launched they wanted to feign liquidity to
| establish a sense of credibility. They literally copied
| feeds from peer exchanges until they bootstrapped.
|
| After all, why would anyone trade at an illiquid
| exchange? How do you get the first people onboard? You
| pretend you already have a lot of people onboard. More
| volume = more credibility.
|
| The question you should ask yourself is if nobody is
| looking, why would they ever stop?
|
| [note] by "growth hack" I mean literally a felony in any
| other context, but in the crypto space _shrug_ who cares
| I guess. After all in which jurisdiction would you even
| sue them lol. Thanks to the "beauty of the blockchain"
| they won't even tell you where they're based.
| pelorat wrote:
| Binance is used everywhere, whilst CB is mostly used by
| Americans.
| Tenoke wrote:
| >intentionally looking the other way to people opening
| multiple accounts to avoid KYC
|
| That's blatantly false. Many have been caught trying to
| circumvent via VPN or similar, it's just impossible to catch
| quite everyone no matter how hard you try.
|
| >which country they're domiciled.
|
| Malta?
| spurdoman77 wrote:
| https://coingeek.com/binance-not-licensed-to-operate-in-
| malt...
|
| Binance has never been in Malta, in fact they are not
| located anywhere. I would be very cautious in dealing with
| them because to me that kind of approach to regulation
| doesnt sound healthy.
| ketamine__ wrote:
| It's on the Binance wikipedia page.
| arcticbull wrote:
| Wikipedia cites a Malta Today article from 2019.
|
| > [Binance established their headquarters in Malta] soon
| after the Maltese government passed laws that provided a
| regulatory framework for businesses operating in the
| Cryptocurrency and Blockchain industry. The regulation
| officially passed into a law on July 4th 2018. Malta
| remains the only country in the world to officially pass
| such laws.
|
| The Coindesk article from 2020 states:
|
| > Until February [of 2020], Binance was considered to be
| based in Malta. That changed when the island European
| nation announced that, no, Binance is not under its
| jurisdiction. Since then Binance has not said just where,
| exactly, it is now headquartered.
|
| And quotes CZ:
|
| > "Well, I think what this is is the beauty of the
| blockchain, right, so you don't have to ... like where's
| the Bitcoin office, because Bitcoin doesn't have an
| office." [1]
|
| The Wikipedia article is stale, and incorrect on the
| basis of the subsequent statements from executives
| involved.
|
| The beauty of blockchain indeed.
|
| [1] https://www.coindesk.com/binance-doesnt-have-a-
| headquarters-...
| arcticbull wrote:
| > For example, the company's chief growth officer, Ted
| Lin, told Decrypt just a few days ago, "We have offices
| in Malta for customer services, and some compliance
| people there, but it's not the headquarters per say
| [sic]. It's the spiritual headquarters. It's a name that
| people think about when they think about Binance."
|
| Oh my god lol.
| arcticbull wrote:
| They won't tell you where their headquarters are "because
| Bitcoin doesn't have one":
|
| https://www.coindesk.com/binance-doesnt-have-a-
| headquarters-...
|
| In fact "Malta ... question mark?" is about as much
| information as we have.
|
| And the KYC evade is just based on opening more accounts
| before you reach their threshold. Because rather than
| operating like a real business, requiring everyone to
| provide KYC during onboarding, they just look the other
| way.
| Tenoke wrote:
| They do require KYC for any fiat deposits or withdraws
| and not requiring them for small amounts of crypro-only
| trading is not unusual nor illegal.
| spurdoman77 wrote:
| That is quite literally illegal nowadays in many
| jurisdictions.
| asdev wrote:
| CB abides by regulators and doesn't list every crappy project
| that comes along. They're trying to bring legitimacy to crypto.
| Binance is the wild wild west still and BNB is a centralized
| useless ETH sidechain.
| ketamine__ wrote:
| Users are moving to Binance Smart Chain (BSC) and using BNB
| because Ethereum transaction fees are too expensive for
| people that aren't rich.
| randomopining wrote:
| Aren't the BSC/BNB gonna go up if lots of people use it? If
| not, what technological advantage does it have? If it's
| because it's too centralized... doesn't that defeat the
| whole purpose?
| exdsq wrote:
| Agree. I was involved in integrating Rosetta with a
| blockchain and it was great to see their push for
| standardised interfaces and requirements to get listed with
| them.
| sneak wrote:
| The definition of legitimacy in cryptocurrencies is "can you
| send or receive this on the blockchain?"
|
| Arbitrary gatekeeping in an attempt to avoid the regulatory
| banhammer is somewhat of a lame kludge, in my view.
|
| There is a ton of value available on chains and in tokens
| that regulators don't like.
| nuclx wrote:
| They're listing a scam that is XRP though.
| colesantiago wrote:
| why is XRP a scam?
| vmception wrote:
| the reasons that XRP is considered a scam involves an
| ambiguous new standard that would require all securities
| and everything in the equities market to also be called
| scam. Things like there being a centralized issuer (like
| all assets except for physical commodities), things like
| all of the asset being created in advance which is called
| a premine (like all assets before crypto, except newly
| authorized shares which are then sold)
|
| as XRP aspires not to be within the securities framework,
| there is still a desire of the market for more
| forthcoming disclosure and many people (including myself)
| don't like prior - but extremely successful - marketing
| of XRP/Ripple that didn't separate Ripple Inc activities
| from XRP use
|
| but in the crypto space, scam is not defined at all and
| has complete dilution of any meaning. it is typically
| rooted in ignoring market sectors, in favor of a general
| all encompassing single cryptocurrency attracting all
| capital in the world at all times in perpetuity, so any
| crypto asset that dilutes some of that capital is called
| a scam because it slows down the desired world view.
| obviously people outside of the crypto space consider all
| of that to be an absurdity. the "middle" view is that
| there are assets that share a technology feature set that
| are simply bearable by the market, like any commodity or
| equity they can attract trillions of value even while a
| different technology matures that better matches an
| ideology of elitist enthusiasts.
| thepasswordis wrote:
| Coinbase delisted them.
| Tenoke wrote:
| >BNB is a centralized useless ETH sidechain.
|
| I dont agree and what you are incorrectly talking about is
| probably BSC, not BNB.
| seriousquestion wrote:
| Binance is a total mess compared to Coinbase in terms of
| usability.
| justinzollars wrote:
| Coinbase was a great idea, considering what a mess mt gox was!
| Congratulations to the team!
| mrb wrote:
| Nitpick: this was not an IPO, but a DPO (Direct Public Offering).
| In other words no new capital was raised today. Coinbase's
| existing shareholders (investors and employees) were simply
| allowed to sell their shares on the public market.
| whatever1 wrote:
| For reference, BP the number five global oil behemoth with 200B
| in revenues in 2020, has a market cap of 85B. Coinbase that sells
| pumped speculation for a fee has a market cap of 100B.
|
| Markets are efficient.
| Aunche wrote:
| The efficient market hypothesis means that valuation of
| Coinbase reflects all available information. I'd wager that
| this is true. It doesn't mean that the services Coinbase
| provides actually are actually worth that much or will ever be
| in the future.
| rgifford wrote:
| Literally compare COIN to any other market maker or financial
| institution. I would love to hear some justification here.
| rednerrus wrote:
| Worth $1B tops.
| s8s8discourse wrote:
| How do you justify your $100m valuation of a company that
| generated $700m of PROFIT in a single quarter?
| Aunche wrote:
| The fundamentals of Coinbase aren't actually that far off if
| you assume that their $730-$800 million Q1 income is
| sustainable.
| pjc50 wrote:
| https://www.advratings.com/banking/worlds-top-banks-by-
| marke... : it's in the top 10-20.
|
| Does anyone know what the value of assets under management by
| Coinbase is?
| hnews_account_1 wrote:
| AUM is the absolute wrong metric to measure for an
| exchange. This is why I tell everyone to never pretend they
| understand a subject the moment you read the first
| Wikipedia page you come across.
| rgifford wrote:
| All crypto is < 1T. I don't know what their market share
| is, probably high 100Bs.
| chabes wrote:
| All crypto is > 2T, as of the last few days
| FabHK wrote:
| USD 90 billion "assets on platform" (which, as has been
| pointed out, is not a good metric for an exchange at all).
| That's about 5-12% of total crypto assets (depending on the
| time of day) [1].
|
| By the way, Coinbase revenue in the last quarter was nearly
| 0.1% of the entire crypto market cap.
|
| So, Coinbase took around 60$ of any 10,000$ traded on
| Coinbase, and 10$ of any 10,000$ crypto market cap, which
| implies that 1/6 of the entire crypto market cap traded
| through Coinbase once this quarter, unless I'm mistaken.
|
| See the second story in Matt Levine's _Money Stuff_ : https
| ://www.bloomberg.com/opinion/articles/2021-04-14/good-a...
|
| [1] more likely, the percentage is fairly constant, while
| the USD value fluctuates a lot with crypto prices, so "AUM"
| might be around USD 200 billion now (as crypto market cap
| is USD 2 tr).
| ObserverNeutral wrote:
| > Fee for speculation
|
| Well first of all everything is speculation, it goes both ways,
| you mentioned BP, well people use barrels of oil today because
| they think it won't be worth more tomorrow
|
| Coinbase takes a fee for every transaction in the assets traded
| on the platform.
|
| The asset in question is the one which people choose as the
| asset to hold on to express their fears of inflation
|
| This is not unlike 2010 when people like Stanley Druckenmiller
| and libertarians alike predicted hyperinflation due to QE.
|
| Normies are where Druckenmiller was back in 2010, they have an
| irrational fear of inflation and they express it by buying BTC.
|
| Coinbase is perfectly positioned to gain from this movement
| which emerged, and it will only continue given that like
| anything the more authorities tell humans what to do (in this
| case to spend) the more they rebel by doing the opposite
| ROARosen wrote:
| So if their business model is raking it in by selling pumped-up
| speculation, and the pumped-up speculation market is a growing
| sector, then that's what is called an efficient _business
| model_ which has nothing to do with the fact that markets are
| 'efficient'.
|
| Also, since when does anyone care if casino's business is based
| on pumped up gambling. As long as there are millions of
| transactions going on, the business model will stay
| 'efficient'.
| pjc50 wrote:
| Unfortunately this is right. It doesn't matter whether it's
| rational or not, but it's definitely profitable. At the
| moment.
|
| Given we have financial crises in the global economy on
| roughly a decade basis, and the last one was 2008, there
| might be another one soon ..
| mandeepj wrote:
| Not really. We already had one - COVID + decade of economy
| reset cycle - combined rolled into one. Next one - will not
| happen (probably) until at least 2027\2028
| narrator wrote:
| Getting people to overpay for entertainment is a great
| business model.
| rgifford wrote:
| > As long as there are millions of transactions going on, the
| business model will stay 'efficient'.
|
| I have a timeshare to sell you.
| ROARosen wrote:
| Last time I checked timeshares were a shrinking sector. My
| advice to you is: consider pivoting your biz model to
| crypto brokerage.
| J5892 wrote:
| That's a saturated market.
|
| The real money is in crypto-timeshares.
|
| We have all the advantages of a timeshare business, and
| also blockchain.
| fosk wrote:
| I mean, re-read that 2-3 times.
|
| With the emergence of a new group of people that have
| massive crypto reserves at their disposal, paying for a
| timeshare in crypto would make that asset accessible to
| them natively.
|
| It's not a bad idea. If crypto is a new paradigm, the
| world will need crypto-XYZ to appeal to that crowd. Cars
| (Tesla), and timeshares are among them.
| narrator wrote:
| To Predict the Future: Think of the dorkiest idea you
| can. In the 2000s this was:
|
| * Completely made up digital money with no government
| backing that you have to convince some sucker to take so
| they give you two free pizzas.
|
| In the 90s this would be:
|
| * Keeping track of your friends on your computer!
|
| * Carrying a computer around that you use to take
| pictures of yourself and send them to friends!
|
| In the 80s this was
|
| * Electronic music without words.
|
| * Reading books on your computer
| sandworm101 wrote:
| >> Markets are efficient.
|
| They are certainly great at turning air into gold. Maybe that
| was always their true purpose.
| omgJustTest wrote:
| No they are turning gold into bitcoin. :)
| AbrahamParangi wrote:
| Would you rather own crude or DOGE, the official currency of
| Mars?
| dylkil wrote:
| the salt on this board when it comes to crypto only gets worse
| as time goes on
| staplers wrote:
| I have distanced myself from hn GREATLY over the last year.
| The decline is seemingly exponential.
| Shacklz wrote:
| And I think there are good reasons for that:
|
| 1) The energy consumption of bitcoin mining alone is
| estimated to have reached the levels of entire countries
| (Argentina was the latest country I've heard it being
| compared to), while actual usage of bitcoin (except for
| speculation) is still a fringe niche thing
|
| 2) When shown that the coins do not scale, instead of moving
| on to an improved version, those coins continue to grow.
| Instead of 'okay, proof of concept done, it does not scale,
| let's move on to an improved version', the bonanza just
| continues.
|
| There are probably more reasons like these, but I think it
| would be straight-up weird if the technically versed audience
| of HN would disregard the reasons above as much as the
| current crypto-markets do.
| jeremyjh wrote:
| Yes, perhaps this is correlated with the fact that the
| successive number of years that crypto has been hyped and
| failed to deliver anything of value only grows as time goes
| on.
| chrisco255 wrote:
| I would reply to you and describe the burgeoning ecosystem
| of economic activity and the speed at which the entire
| sector is growing, but I have a feeling that convo will not
| go anywhere. Crypto is eating finance. It's going to eat
| everything else too. The longer you fight that, the harder
| the 21st century is going to be for you.
| randomopining wrote:
| Yeah but how does Crypto make stuff happen in the real
| world? Like a bank can repossess people's houses and
| stuff and have the law applied. Crypto only has power
| over what's on that specific blockchains contracts.
| Judgmentality wrote:
| What problem does crypto solve apart from being a digital
| alternative to gold? It's not anonymous (except Monero
| which is centralized), transaction fees and times tend to
| be high (depends on which currency and exchange you're
| using), there's zero recourse for stolen funds currently
| (which makes it ripe for fraud). And in addition to that,
| at least for Bitcoin, it's an environmental disaster.
|
| What do you think makes crypto useful?
| dylkil wrote:
| At its bare bones crypto is a perimissionless payments
| system, you dont see any value here?
| galactus wrote:
| And also that people are starting to seriously worry for
| the energy consumption of something that provides no useful
| value.
| o_p wrote:
| Ok no-coiner.
| splithalf wrote:
| Your definition of efficient is anything but?
| SilasX wrote:
| BP, being an oil extractor, might have higher expenses and so a
| comparison purely by revenues might provide less insight than
| desired.
| whatever1 wrote:
| BP has been in business for decades making 20-80B/year in
| profit. If anything, their financials should be an indication
| of what a 100B company looks like.
| SilasX wrote:
| Then profit figures should be your headline, not revenues,
| which are more weakly correlated to enterprise value.
| pvarangot wrote:
| Yeah it sucks that the valuation for a company that
| inefficiently mines a resource that's going to be stored
| forever and mostly used to speculate, with only a small part of
| it ever put to productive use has such a high valuation.
|
| But yeah the valuation for Coinbase is also insane!
| Grustaf wrote:
| Oil is "mined" very efficiently, and I bet most of the
| production each year is used pretty quickly.
| pvarangot wrote:
| Oil is mined super inefficiently except for shallow wells,
| it has tight margins. Some operations, specially fracking,
| actually shut down pretty often when the barrel price goes
| down near 60 which is were we are now.
|
| If you look at production vs. consumption in the world
| there's usually a bit more consumption than production. If
| you look per country on the US there's more production than
| consumption. That's because "extraction" is heavily played
| with to speculate with the price.
| staplers wrote:
| a company that inefficiently mines a resource that's going to
| be stored forever and mostly used to speculate
|
| I've never heard the Nasdaq described like this. Interesting
| though.
| staplers wrote:
| sells pumped speculation
|
| Probably the same type of person to criticize biased
| journalism.
| whatever1 wrote:
| *someone who watched dogecoin soaring 100% in a week.
| staplers wrote:
| Dogecoin isn't listed on Coinbase. Is NYSE, Nasdaq, or
| SNP500 selling pumped speculation?
| HNfriend234 wrote:
| There is lots of speculation now but I think eventually real-
| world applications will be made with crypto. At the very least,
| it will be likely that the bigger cryptos will start to be
| accepted by major companies to buy goods/services.
| rgifford wrote:
| Crypto doesn't make a good currency for average consumers due
| to its instability. Who would do day to day purchases w/
| funds that fluctuate +/- 10 percent? This is why you want
| centralization.
|
| Store of wealth? Aight, you got me. Solid arguments to be
| made for it as a new anti-fiat. Its recent divergence from
| gold concerns me though. That seems bubbly.
|
| As a settlement protocol between nations and financial
| institutions? Already well proven out and in use. No argument
| to be made.
| Animats wrote:
| Remember how cryptocurrencies were supposed to eliminate the need
| for intermediaries who added cost to transactions?
| smabie wrote:
| I mean, you can swap without a centralized exchange. In fact,
| for my PA account I would never use a CEX to swap coins.
| Aunche wrote:
| Coinbase is very profitable and has huge cash reserves for a
| company of its size. I don't see any reason why they would feel
| the need to IPO if not to take advantage of people's FOMO.
| nostromo wrote:
| At a certain point people want to stop being billionaires on
| paper and to become billionaires with actual liquidity.
|
| And the timing seems right -- Bitcoin is sky-high and could
| crash tomorrow. (I'm presuming here that Coinbase and BTC will
| be highly correlated, but who knows.)
| base698 wrote:
| Paying for a lobbying org seems like a pretty good reason:
| https://seekingalpha.com/news/3679495-square-fidelity-coinba...
| marrone12 wrote:
| Also to provide liquidity to their employees.
| cwkoss wrote:
| I expect Coinbase becoming a publicly traded company benefits
| them to a greater extent in reducing the chance of regulatory
| destruction than they benefit from additional access to
| capital.
| atarian wrote:
| So this pretty much legitimizes Bitcoin right? I can't imagine
| the US government deciding to crack down on it after such a high-
| profile IPO.
| drawkbox wrote:
| The whole mission of Coinbase is legitimizing cryptocurrency
| when you break it down. They are like Windows 95 to the
| internet, it is how many people will use the market.
|
| People also asking why a company would go to the public stock
| market when they are an alternative market, well part of it is
| to legitimize it and reduce the chance for regulation. Once
| enough people are making money from it then it becomes harder
| to put back in the bottle. It is also part marketing, many
| people will for the first time hear about cryptocurrency soon
| because of it even though it has been around a decade+. It also
| makes the investors rich and fuels more cryptocurrency
| investments. This event alone will create many wealthy crypto
| entrepreneurs.
|
| Coinbase is like cryptocurrency being merged into Wall Street
| main/master on git. This is the moment that truly merges the
| Wall Street investment world with cryptocurrency, for better or
| worse. The roller coaster has reached the precipice, no turning
| back now.
| annoyingnoob wrote:
| What is coinbase's moat? Not sure I understand how they arrived
| at the valuation.
| cwkoss wrote:
| Time in existence without being hacked and losing customer
| funds and regulatory legitimacy.
| rgifford wrote:
| There isn't one. That's not really a concern these days. COIN
| is worth double ICE, the parent company of the NYSE. I don't
| know how you justify that.
|
| Coinbase is, in spirit, a modern pets.com.
| ecommerceguy wrote:
| I use coinbase to store eth mined along time ago and to rake in
| free crypto when I'm bored. Today I got $5 in something called
| CELO.
| boredpandas777 wrote:
| Casinos should be able to convert their business into crypto
| exchanges and list on the stock exchange with similar valuation.
| All remote too so they'd be pandemic proof :)
| rnikander wrote:
| How can I trade USD for BTC without paying these big fees to
| someone like coinbase?
| dogman144 wrote:
| coinbase pro purchase cuts fees a ton, you'll be able to access
| pro if you can access normal cb
| NaturalPhallacy wrote:
| Pay someone with BTC cash or paypal or something.
|
| I don't know of a better way.
| neolog wrote:
| Why do IPO announcements always get upvoted so much?
| seriousquestion wrote:
| Anyone know if the 60 employees, who didn't agree with the
| mission focused approach, kept their shares?
|
| https://blog.coinbase.com/a-follow-up-to-coinbase-as-a-missi...
| smeej wrote:
| They had the option to exercise whatever options they had
| vested, yes, subject to the company's normal rules.
|
| Employees who had been with the company two years or more would
| have seven years to exercise. Those who had been there between
| one and two years would have 90 days.
|
| Employees who had not yet been there a year would not have
| reached the vesting cliff, and would not have had vested
| options available to exercise.
| bherms wrote:
| This isn't accurate. All employees, regardless of tenure, got
| 7 years to exercise their shares that had vested up until
| that point.
| seriousquestion wrote:
| That's surprisingly generous. Startups in Silicon Valley
| usually have a 30-90 day exercise window.
| ashconnor wrote:
| I guess if the point was to get rid of people then
| reducing the financial disincentive is a prudent move.
| AlchemistCamp wrote:
| This is pretty amazing.
|
| Gary Tan made a YT video about his experience backing them very
| early and getting a 6000x return:
| https://www.youtube.com/watch?v=x5YApjnTG10
|
| It's remarkable that Brian Armstrong gave up what would have been
| very valuable options in Airbnb--the most valuable YC company at
| the time--to found a new company that surpassed it.
| [deleted]
| purple_ferret wrote:
| There's something pretty surreal about an actual multi-
| billionaire running the youtube investor guru schtick.
| ceres wrote:
| You know it's possible for people to start YouTube channels
| as a hobby/side project/whatever. Not everyone with a YouTube
| channel is trying to scam you. Billionaires are people too.
| Justin Kan has a YouTube channel for example. You should
| check it out :-)
| barnabees wrote:
| At least he's not selling a course
| cableshaft wrote:
| Wow. Assuming he put in just $10,000 (and I imagine it was
| probably more than that), 6000x return would be 60 million
| dollars.
|
| Any early companies out there right now seem like it could
| potentially offer even a 10th of that in ~5-10 years?
| paulpauper wrote:
| i dunno how people say VCs have a return of only 9% year when
| Ycombinator is absolutely crushing that even with a high
| failure rate. AirBNB, box, dropbox, coinbase, etc.
|
| Paul stumbled on an absolute goldmine by just giving a bunch
| of promising companies with good founders 10k in exchange for
| a decent portion of equity and then some of these companies
| being worth billions.
|
| NOw you know what those homes and are so expensive in Palo
| Also and elsehwre, You got of these guys making fortunes, and
| that money tricked down everywhere.
| mgfist wrote:
| There are a lot of VCs out there. Some do well, some don't.
|
| But remember that unlike the stock market, investing in a
| VC means locking up your money for 10 years. Slightly
| beating the market is not worth the liquidity loss, you
| have to do a good bit better.
| ZephyrBlu wrote:
| > _i dunno how people say VCs have a return of only 9% year
| when Ycombinator is absolutely crushing that even with a
| high failure rate_
|
| YC is a massive outlier and they have insanely good deal
| flow because of their brand.
| Simon321 wrote:
| What is the return like for Ycombinator?
| pinkybanana wrote:
| Well I bought BTC at $1 and so did many others, now it trades
| at $60k...
| KitDuncan wrote:
| but did you hold it this long?
| maxlamb wrote:
| He actually put in $300k, so his shares are worth around 2.4
| billion now
| janandonly wrote:
| Did he? If he simply bought bitcoins with his $300.000 in
| 2012 (average bitcoin price of $8) then his net worth now
| would be .... 37500 bitcoins or $2.362.500.000 ... 2 point
| 3 billion frigging dollars...
| lpapez wrote:
| In theory yes.
|
| In practice, cashing out billions of dollars worth of
| stocks is easier than cashing out billions of dollars
| worth of crypto.
| paulpauper wrote:
| OTC private block trade
|
| it's not like the btc must be sold on an exchange
| rawtxapp wrote:
| You wouldn't be selling those on the open market,
| institutions have been able to acquire billions of
| dollars worth of crypto OTC without moving markets.
|
| Another option is, now that it's becoming clear to people
| that Bitcoin is here to stay, you can just borrow against
| it to spend (avoid taxes, hold on to the upside). Case in
| point, this person/group borrowed 300M$ with about 1B$
| net worth[1].
|
| 1: https://defiexplore.com/cdp/8463
| pushrax wrote:
| I'm new to this. Is the collateral locked into the
| contract and unspendable until the contract is closed?
|
| It's also kind of unclear what the interest is from that
| page. edit: apparently it's 8.5%
| https://mkr.tools/governance/stabilityfee
| rawtxapp wrote:
| It's just a smart contact vault, you can put collateral,
| take it out whenever you want, you just need to make sure
| that at any given point in time you have at least 150% of
| your debts value in collateral in the vault. This person
| is at over 400%, so very conservative borrowing, can
| withdraw some collateral.
|
| There are also centralized versions with blockfi if you
| prefer traditional loans.
| nly wrote:
| 150% collateral (66.7% LTV) seems fairly risky for an
| asset like Bitcoin tbh
| rawtxapp wrote:
| It handled the black swan event of complete market crash
| at the beginning of the pandemic pretty easily. And the
| other thing is Bitcoin's market cap is well over 1T$ now,
| as expected the volatility goes down as the market cap
| goes up. I suspect those ratios are going to come down
| significantly within couple of years.
| pinkybanana wrote:
| How so? For example coinbase is happy to convert your
| early bought coins to fiat if you want, and these days
| the liquidity is billions.
|
| I haven't looked at Coinbase stock liquidity, but I would
| be it is worse as BTC liquidity.
| Kiro wrote:
| What do you mean? How is that any better than the 2.4
| billion worth of Coinbase shares he has now?
|
| You phrase it like he made a mistake and lost out on a
| huge profit but the ROI is exactly the same so really
| don't understand your comment.
| kgc wrote:
| Actually at one point Bitcoin had an equal fork, so that
| number should be double for Bitcoin.
| pinkybanana wrote:
| It is actually interesting thought pattern, which would
| be better investment? With owning private equity there is
| also lots of work involved I would guess, with BTC you
| just sit on it... Latter is of course very hard in
| volatile market, while PE you probably can't liquidate.
| pinkybanana wrote:
| Airbnb market cap is at 105 billion and Coinbase is currently
| at 86.
|
| Personally I'm very sceptical that current valuation for
| Coinbase is justified. It is a great company for sure but there
| definitely arent similar network effects as with Airbnb.
| There's plenty of competition in the crypto exchange space.
| paulpauper wrote:
| also airbnb is not dependent on the value of a speculative
| asset. There will always be demand for rentals.
| kneel wrote:
| There is 20 trillion of negative yielding debt floating
| around in govt bonds, luckily we can hedge against these
| horribly mismanaged house of cards before they fall on us.
| The demand is real.
| enjo wrote:
| Bitcoin is worthless without dollars backing it. It's
| because you can turn Bitcoin into dollars that anyone
| wants it.
| thebean11 wrote:
| You can make the same argument about any asset class. The
| path from Bitcoin/gold/real estate/crops to other goods
| or assets goes through dollars out of convenience
| (because your destination is purchasable in dollars).
| Don't confuse convenience with necessity.
| kvz wrote:
| Aren't they firing a lot of folks due to the pandemic?
| paulpauper wrote:
| That was a year ago. Airbnb completely recovered and then
| some in terms of value. A few metro area like SF and NY
| were hit , but the overall picture is improving, and such
| setbacks will imho be temporary.
| staplers wrote:
| "Temporary value recovery" interesting way to contradict
| your original claim. All value fluctuates.
| aphextron wrote:
| >also airbnb is not dependent on the value of a speculative
| asset.
|
| What do you think US real estate is?
| nick0garvey wrote:
| I can live in a house. I can't live in a Bitcoin.
| brudgers wrote:
| You can live in a car.
|
| You can't drive a house.
| knicholes wrote:
| Motor home, then, to cover both bases.
| anonporridge wrote:
| Yes, but you also can't take your house with you stored
| in your brain if you have to flee the country.
|
| Bitcoin as chaos insurance (or schmuck insurance as
| Chamath calls it) is the use case that makes the most
| sense to me.
| microtherion wrote:
| Then again, you rarely have to dig through a garbage dump
| for your house because you accidentally threw it out:
| https://www.cnbc.com/2021/01/15/uk-man-makes-last-ditch-
| effo...
| anonporridge wrote:
| True, but houses burn down all the time. Or get destroyed
| by "acts of god" that insurance won't cover.
|
| If you backup your private key in a redundant way,
| multiple storage locations can be completely destroyed
| without any loss. If you were really paranoid, you could
| distribute it around the world to mitigate geographic and
| geopolitical risk.
| Grustaf wrote:
| People having to flee the country are not a big customer
| demographic for either of the companies.
| anonporridge wrote:
| In America, there may not be tons of people ready to
| flee, but we do have a culture of valuing the people
| having checks against government power (see second
| amendment).
|
| So, that's what I think is more likely the mentality of
| western people holding long term. A check against
| incompetent government.
| mtnGoat wrote:
| do you really think if the sh*t hit the fan? the entire
| BTC network and the internet at large would still be
| working for you to transfer these units around?
|
| this to me is where the comparison to gold falls off. i
| can hold physical gold and silver and trade it at will
| even without power, pricing updates, etc. this does not
| apply to crypto. considering cutting internet access is
| now a normal thing during unrest, being able to pay with
| anything that is not physical, probably wont work out.
| anonporridge wrote:
| It depends on the scale of shit hitting the fan.
|
| If the global internet goes down and stays down, then I
| think it's safe to say that global civilization is
| permanently collapsing, in which case billions of people
| are going to die in the resulting famine and the
| survivors probably won't be able to maintain enough
| technology to survive long term as climate change
| continues to snowball.
|
| In this scenario, yeah bitcoin is worthless. But so is
| gold. The only thing worth stockpiling for this scenario
| is brass and lead (and a strong local community of other
| preppers who can organize into a new micro state after
| the collapse). And even then, you have to ask if the
| reward of surviving is even worth the cost of prepping.
| mtnGoat wrote:
| it wouldn't even take a global internet shortage, just
| your country to go offline, how you gonna pay someone to
| get you out(keep you safe, etc) if you cant transfer your
| crypto to them? A few ounces of gold on the other hand
| will take you anywhere you want to go. Crypto is far from
| a safe hedge in any type of crazy event.
|
| you see, gold can still be traded without power and
| internet, as could cash or really anything physical, as
| the value is assigned by those trading it at that time
| for whatever use they have but BTC is totally useless,
| toilet paper would literally have more value.
| brass/lead(killing people) isn't the only way to survive.
| fuzzer37 wrote:
| The people who say that bitcoin is going to be useful
| when "shit hits the fan" have a very very specific
| definition of shit hitting the fan that is just so
| unrealistic.
| thebean11 wrote:
| Like hyperinflation and an economic crash? I'm not
| convinced either will happen, but they seem squarely
| within the realm of possibility.
| paulpauper wrote:
| people need shelter, they do not need crypto . There is
| huge demand for housing in metro areas even in spite of
| Covid, and regulation and other restrictions make it hard
| to increase supply, and landlords generally want to lock-
| in long-term rents with good credit scores due to
| difficulty of evicting, meaning more demand for short-
| term rentals. .
| k00b wrote:
| Things precede shelter in the hierarchy of needs yet
| shelter is still valuable. Also there are shades of
| shelter. Most people might not want to live in the
| trailer park of money.
| Grustaf wrote:
| Airbnb doesn't provide "shelter", it's for travellers.
| programmarchy wrote:
| Agree, AirBnB is essentially serving a luxury travel
| market.
| s8s8discourse wrote:
| Bold assertion immediately following a pandemic in which
| the demand for rentals fell to... zero.
|
| It took a significant pivot for AirBnB to recover and
| maintain revenues.
| Grustaf wrote:
| Airbnb doesn't have network effects, the value to users
| increases pretty linearly with the number of hosts, and
| doesn't really increase at all with the number of other
| users.
| Ozzie_osman wrote:
| That's just cross-side network effects. More users is
| better for hosts which means more hosts which is better for
| users which means more users.
|
| What you probably have in mind is "direct network effects",
| more like what you'd see with a chat app or social network
| (though social networks also have cross-side effects
| between users and advertisers).
| d3ntb3ev1l wrote:
| Also ignoring most cities now are banning or highly
| regulating these illegal hotels in residential
| neighborhoods
|
| Coinbase seems less threatened by regulations
| mtnGoat wrote:
| you think coinbase is overvalued at those numbers but not
| airbnb? how do you justify airbnbs?
| sekai wrote:
| oh boy, wait until you hear about Tesla
| dang wrote:
| Please don't post unsubstantive and/or flamebait comments.
| It causes threads to go to repetitive (and often
| inflammatory) places, which is a failure mode for HN.
|
| https://news.ycombinator.com/newsguidelines.html
| You-Are-Right wrote:
| How does this help with climate change?
| janandonly wrote:
| And in Brian had simply bought bitcoins with his $10.000 in
| 2012, when the price was $4-$12 per piece?
|
| He could have bought 833-2500 bitcoins, with a current value of
| $5.2500.000 - $157.500.000.
|
| He choose to do more than "HODL" and go through the hard work
| of building a product and a company, which in my book, makes
| him a true hero. Even though he went the casino/shitcoin rout
| later...
| dnr wrote:
| Would bitcoin be worth nearly as much as it now if Coinbase
| didn't exist?
| koonsolo wrote:
| Plenty of exchanges out there, so I would say yes.
| paulpauper wrote:
| but Gemini is the only other regulated US one. Coinbase
| is huge, even bigger than binance. Something like 50
| million ppl have an account. Ppl wondered why the July
| 2020 Twitter hacker made so little. The reason is,
| coinabse blocked withdrawals to the hacker address, which
| if they hadn't, the hackers would have made 3x more..so
| let that sink in..
| thebean11 wrote:
| Isn't Kraken also based in the US? Last I heard they're
| in the process of getting a bank charter.
| runawaybottle wrote:
| Coinbase will be in every fund that needs crypto exposure. I
| can't see how this thing doesn't reach 1k, and splits a few times
| by end of year.
| gregwebs wrote:
| There are at least 14 applications right now to operate crypto
| ETFs.
| andxor wrote:
| Those funds can already buy GBTC.
| unreal37 wrote:
| They can't. GBTC trades over-the-counter, not on a major
| exchange.
| andxor wrote:
| ARKW is an ETF and includes GBTC.
| cwkoss wrote:
| That's like buying a box of cookies because you need
| chocolate chips
| andxor wrote:
| It's just an example.
| dd36 wrote:
| I still don't see what the upside is to their valuation? It's all
| baked in AFAICT.
| cj wrote:
| Very little. This is a result of the private equity market
| growing so large that companies can put off going public for
| very long (Coinbase raised $800 million and the last round was
| "Series E").
|
| 10-15 years ago, it was much more difficult for companies to
| raise this much before going public, which forced companies to
| go public much earlier, before all upside was realized by
| private investors.
|
| The result is private equity and VC funds benefit from the
| early gains, and by the time the company becomes public (and is
| accessible to retail investors) there's typically not much of a
| lucrative near-term upside opportunity.
|
| The same thing will happen with Stripe once they finally IPO.
| They'll debut at an insane valuation, and there won't be much
| upside opportunity for retail investors to benefit from.
| Because if there were, they would be able to more easily raise
| the capital from private investors rather than the public
| market.
| nostromo wrote:
| This may be starting to shift as companies are getting much
| higher valuations on the public markets than they are from
| VCs.
|
| Coinbase is getting a 10x valuation from public markets
| compared to what they got from private markets just two years
| ago. In theory, they've left a lot of money on the table by
| waiting so long to go public and raising from VCs instead.
|
| (The price is dropping, so who knows if this will be true for
| very long.)
| Dopameaner wrote:
| That said. it is interesting how most of the unicorn
| companies have reached above their valuations in the current
| market.
|
| Exit valuation of uber was 82.4$Billion, which we considered
| as insanely high then. Now it sits at 100.2 Market cap.
|
| I have been aggregating some of them in my google sheet. Its
| very peculiar https://docs.google.com/spreadsheets/d/1IPIyrn-
| 36GpepXXkfoLF...
| nojs wrote:
| > Because if there were, they would be able to more easily
| raise the capital from private investors rather than the
| public market
|
| Coinbase isn't raising capital though because it's a direct
| listing.
| nscalf wrote:
| This is assuming valuations are based off fundamentals. The
| market is absolutely disconnected from what companies can
| actually deliver, and instead has become a place to park the
| surplus of money in the system.
| dd36 wrote:
| Yeah. I was trained as a fundamental analyst. Multiple
| expansion doesn't even explain the relative valuations. It
| feels like a popularity contest sometimes.
| TameAntelope wrote:
| Is there any way of knowing how much YC made on the IPO?
| Ballpark/order of magnitude?
|
| Always curious to see what a win looks like from the accelerator
| side.
| jedberg wrote:
| Not sure about YC, but Andreessen-Horowitz seems to have made
| about $14B from their $2M investment? Assuming I'm reading this
| SEC filing correctly. And Union Square Ventures appears to have
| turned $13M into about $7B?
|
| https://www.sec.gov/Archives/edgar/data/1679788/000162828021...
| rp1229 wrote:
| If they wanted to realize those gains, they would have to
| sell right? causing the price to plummet?
| ignoramous wrote:
| Mental numbers.
| rawtxapp wrote:
| I believe this is the proof why VCs chase those 10x numbers,
| I bet that that single investment has paid off all their
| failed investments and then some.
| jedberg wrote:
| Most likely this single investment made their fund.
| wildrice wrote:
| Congrats, to YC. The world is full of people who will discount
| the success of Brian and , but in just a few short years he's
| created one of the world's largest financial institutions.
|
| In line with the ethos of crypto? No, not at all, but a bridge
| has been made between the old world and the new. This IPO will
| load the coffers of some of the most innovative VCs, engineers,
| and people who took the risk of investing in, and working at
| Coinbase.
| nojito wrote:
| You would think they would raise for BTC/Cryptos instead of USD
| via IPO.
|
| Really says a lot of their faith in Crypto's future.
| sowbug wrote:
| They're a bridge between USD and virtual currencies. They care
| a lot about USD's future as well.
| nojito wrote:
| Nope they just need capital to exit.
|
| Unfortunately there's no liquidity in crypto hence why they
| want USD.
| unreal37 wrote:
| That's a disingenuous argument.
|
| Just because you won't accept your salary in Euros, doesn't
| mean you don't have faith in the future of it.
| nojito wrote:
| How so?
|
| You would think the currency of the future would be liquid
| enough to provide capital for their growth no?
|
| Why resort to raising USD?
| PretzelPirate wrote:
| Coinbase did a direct listing and didn't raise money from
| this event. They provided liquidity for their shareholders.
| Fede_V wrote:
| I'm horrendously worried about crypto gaining more marketshare as
| long as proof of work crypto remains mainstream. It has
| significantly worse externalities than just about any company I
| can think of (including defense contractors/vaping companies),
| and, if it grows larger before we have clean energy, then we
| virtually guarantee we won't be able to tackle global warming. We
| are going to bestow a world that will be significantly worse than
| the one we inherited to our children, and, it's not like the
| carbon emissions that crypto is creating are used in the service
| of creating valuable technology - it's literally useless proof of
| work.
|
| I've worked in tech for a long time now, and I believe the
| stereotype about amoral techies is completely untrue - yet seeing
| the adoption of crypto among my peers is really depressing. I'm
| not sure how so many of my peers who would never ever work for a
| defense contractor or a vaping company are willing to work in
| crypto at this point. My objections are not ideological - if
| someone invented a cryptocurrency that was completely green and
| it would take over the market, I'd be totally in favor of it.
|
| I would genuinely like someone to explain it to me, because, the
| kinds of essays I've read that try to argue that crypto is
| actually good for global warming are so shoddy that I can't
| believe people would take them seriously absent a huge dose of
| motivated reasoning.
| fumblebee wrote:
| Couldn't agree more.
|
| I struggle to comprehend how an energy obliterating and
| (relatively speaking) primitive technology like Bitcoin is the
| top dog in this space. Sure, first mover advantage counts for
| something, but come on - how has superior tech not yet left it
| in the rearview.
|
| In a space that moves at such rapid pace with heavy investment
| and buckets of innovation, at some point the crowd surely will
| migrate en masse to a PoS based blockchain like (most likely
| but won't be fully operational until ~2022) Eth2, or (less
| likely but still in with a shout) Algorand, Tezos, etc.
| New_California wrote:
| Bitcoin is the only cryptocurrency that is very hard to
| change. This property is critical for sound money, including
| for the emission schedule.
|
| Other coins are easy to change and so cannot be relied upon
| to preserve _any_ properties, including emission schedule.
|
| Vast majority of coins is also not decentralized at all and
| being so prone to get effectively regulated.
| rodiger wrote:
| This is just plain incorrect. Every cryptocurrency's rules
| can be changed via hard fork. Bitcoin doesn't have any
| magic property that guarantees there won't be a hard fork
| affecting the emission schedule.
| seanyesmunt wrote:
| Bitcoin's "magic property" is the faith that the miners
| have. It has been hardforked, but the majority of
| computing power has chosen to stay on Bitcoin.
| rodiger wrote:
| I fully understand that, but sentiment can change. It's
| disingenuous to say it won't change in the future because
| it hasn't yet changed.
| New_California wrote:
| Bitcoin actually has this "magic" property of being very,
| very hard to change. It is derived from community
| extremism against changes and from the huge number of
| players who would need to agree and then huge number of
| existing deployments that are very slow to upgrade.
|
| Bitcoin is hard to change the similar way TCP/IP protocol
| stack is hard to change.
| rodiger wrote:
| It's easier than you think. Just five organizations
| command >50% of hashpower[0]. I don't think it's likely
| to change soon but it's not out of the realm of
| possibility, and it's not even the most decentralized
| cryptocurrency in terms of difficulty to enforce new
| network rules.
|
| [0] https://news.bitcoin.com/5-mining-50-btc-hashrate/ (I
| fully understand this is a pro-BCH site but their sources
| are accurate)
| Nursie wrote:
| > Sure, first mover advantage counts for something, but come
| on - how has superior tech not yet left it in the rearview.
|
| To me it demonstrates perfectly that this market is largely
| speculation based on brand recognition and number-go-up-tech
| rather than any use of the currency. If it was based on use
| and capabilities then yes, we would expect BTC to be
| superseded by its more capable cousins.
|
| But it's not.
| adventured wrote:
| I largely agree. It's specifically because Bitcoin is
| perceived to be a place to hide capital from inflation -
| and the world is comically flooded with capital right now,
| chasing anything and everything - while all the central
| banks are busy vaporizing their garbage fiat. Bitcoin is
| not a currency. It's bizarre that people keep calling it
| that, years after it became obvious that it's not. If it
| were a currency, Bitcoin would collapse rapidly toward
| zero, because it's wildly impractical as a currency.
|
| The Forbes list of world billionaires features 2755 names.
| They gained $5 trillion in wealth over the past year.
| Bitcoin is a trivial toy next to the wealth in the world
| today. A fun little token play thing, a place to hedge a
| couple of bucks, it goes in the basket.
| Nursie wrote:
| Which seems to me exactly like the sort of thing that
| will work out great, until it doesn't.
|
| Best of luck.
| rednerrus wrote:
| Tether is how BTC stays at the top.
| rawtxapp wrote:
| PoS is yet to be proven, I'm really hoping eth2 shows that it
| actually works, because the other ones with PoS aren't that
| heavily used or tested in adversarial ways.
|
| When it comes to money and value, the utmost important thing
| is security, that's the tradeoff that Bitcoin makes and
| that's what people are buying into. Everything else is
| secondary.
| monkeydust wrote:
| What would be the criteria for saying 'eth2 works' in your
| view ?
| toolz wrote:
| cardano is completely distributed PoS 46 billion market cap
| (5th largest crypto) - I'm not sure what you mean by "yet
| to be proven"
|
| it also theoretically supports 1MM tx/second - to put that
| into perspective VISA does somewhere in the ballpark of 2k
| tx/second (but theoretically can do much more than that I'm
| sure)
| RobLach wrote:
| That's all still in the "research" phase.
| toolz wrote:
| 45 billion market cap is "research phase"? Exactly what
| would make it move out of "research phase" then?
| jacoblambda wrote:
| As much as I like Cardano and as much as I have faith
| that it will succeed, I think you might be overstating
| what has been accomplished so far.
|
| - The network is decentralised and running Proof of
| State.
|
| - The network is not currently running automated peering.
| Block producing peers are manually selected by stake pool
| operators at the moment. This doesn't necessarily make
| the network more centralised but it exposes certain
| risks. A node update (and I believe a protocol update as
| well) will be coming out in the next 2-3 months that will
| transition SPOs to running automated peering.
|
| - The network currently sits around 250-300tx/s max.
|
| - A near term (next 6 or so months) protocol revision
| will be raising that limit to around 1k tx/s.
|
| - Hydra (isomorphic state channels) allows 1k tx/s to be
| processed per state channel (which then periodically
| checkpoints against the network) and was demonstrated to
| maintain these performance metrics up to 1k state
| channels.
|
| So the network is decentralised and it is doing very well
| however it is not currently capable or currently
| theoretically capable of handling 1MM tx/s. It can
| however handle an impressive amount of transactions
| compared to many other decentralised networks at the
| moment. The protocol revisions that will allow close to
| the stated 1MM tx/s are completed with corresponding
| papers (containing formal proofs and simulations to
| support tx rate and security claims) already accepted to
| or well received at cryptography conferences.
|
| Cardano is doing very well and moving at a solid pace
| however overstating where the project is and what it is
| capable of will only serve to undermine outside
| perception of the project.
| New_California wrote:
| No, Cardano is still centrally coordinated, with an
| intention to go actual PoS some day.
| delaaxe wrote:
| Not anymore, it's fully decentralized since recently
| toolz wrote:
| no it's not, where would you even come up with the idea
| that it was?
| jacoblambda wrote:
| I'd be curious what you mean by centrally coordinated and
| not PoS?
|
| There are certain ways that Cardano is not yet fully
| decentralised to be sure but the network is operating as
| a proper decentralised PoS network.
|
| The network has been transitioning from Federated nodes
| to Decentralised nodes (transferring by about 2% every 5
| to 10 days) for the past few months. The d parameter
| (marking the transfer from 100% federated(1.0) to 100%
| decentralised(0.0)) ticked down to 0 at the end of last
| month and block production is fully decentralised.
|
| Where it is still centralised:
|
| - Peering between block producing nodes is currently
| manual however automatic peering will be enabled before
| the end of the quarter.
|
| - Development is largely controlled by the Cardano
| Foundation, IOG, and EMURGO. This isn't unusual in the
| decentralised software space however the plan is to
| transition to handling development/feature contracts via
| on-chain voting and treasury disbursement (and this is
| already being trialled through Project Catalyst as a
| decentralised accelerator program) within a year or so.
| All feature integration and HFC event mechanics however
| are properly decentralised.
| New_California wrote:
| Thank you for providing technical details.
| deckard1 wrote:
| I've often thought that, maybe, PoW crypto could be the Great
| Filter.
|
| I feel like there is a good sci-fi book here. Bitcoin
| continues to gain speculators, continues to rise in "value",
| and humans are largely powerless to stop it. It ends up
| forcing humans to produce more and more electricity, thus
| heating up the planet in a horrible feedback loop. A crypto
| twist on the nanontech "gray goo" threat.
| nrp wrote:
| I think the sci-fi end state is an interstellar
| civilization that exists largely to grow an ever-expanding
| system of Dyson Spheres, harnessing entire stars solely to
| fuel proof-of-work cryptocurrencies.
| cbhl wrote:
| If Coinbase gets sufficiently mainstream, I suspect it will
| mitigate a lot of this.
|
| A transfer of BTC between two Coinbase users can happen off-
| chain, which means skipping the work necessary to mine a block
| including the given transaction.
| lysecret wrote:
| So..... a bank?
| Hallucinaut wrote:
| Which then negates the espoused benefits of Bitcoin, no?
| hctaw wrote:
| Doesn't that defeat the entire purpose of cryptocurrency
| themariner21 wrote:
| Well, I'll tell ya, and this is just me.
|
| But last night, I re-watched Waterworld. It was the first time
| in quite a while.
|
| And I found myself thinking, "Man, that life would be pretty
| cool. Global warming would be pretty cool. Why haven't the ice
| caps melted yet?"
|
| Honestly, I remember they were supposed to be totally melted by
| 2007. And then it got pushed up to 2014. And then 2018. And now
| here we are in 2021 with the same thick, boring ice caps, and
| Dryland is still not a myth.
|
| I don't know about you, but I'm getting tired of our boring
| pre-apocalyptic world.
|
| If Bitcoin is now what will bring about the Waterworld, then
| I'll tell you what: I'm all for it.
|
| Just call me "The Mariner." 'Cause I'll be marinatin' in BTC
| awaiting the end of this world, and the dawning of a far more
| watery one.
| delaaxe wrote:
| 2 links:
|
| - In today's news: https://www.zerohedge.com/crypto/critics-
| claim-bitcoin-threa...
|
| - From earlier: https://pomp.substack.com/p/bitcoin-mining-is-
| good-for-the-e...
| kbos87 wrote:
| These are two great examples of just how thin and self-
| serving the counter-arguments to crypto being an energy hog
| are. I'll save you some time...
|
| The premise of the first article is that the carbon footprint
| of fiat currency needs to include the impact of an endless
| cycle of debt, inflation, recessions, and wars that fiat
| currency enables. Regardless of whether or not that cycle is
| true and driven by fiat currency is one thing... assuming
| that cycle would end if we could flip over to crypto is
| solidly ridiculous.
|
| The second article talks about the fact that 75% of miners
| use renewable energy. Dig a level deeper into the source they
| cite and you see that it's 75% of miners who use renewable
| energy as a part of their "energy mix" (LOL) - and that it's
| more like 39% of the energy used in mining is renewable. They
| go on to talk about Great American Mining's efforts to mine
| using captured methane emissions from oil & gas production.
| It's an intriguing concept but it's literally in its infancy,
| and the source they are focused on looks like it accounts for
| less than 1/3 of methane emissions -
| https://www.epa.gov/ghgemissions/overview-greenhouse-
| gases#m...
|
| The fact that the reasoning is so very thin in both of these
| examples tells me everything I need to know. People just want
| a headline to point to.
| svachalek wrote:
| You are right but you need to substitute "proof of work"
| for "crypto" when you talk about energy hogs. Proof of
| Stake is also crypto and does not need to guzzle power.
| raverbashing wrote:
| Interesting the mental gymnastics people are going through to
| defend their interests.
|
| The cryptofolks are trying for gaslighting and Firehose of
| Falsehoods to cover up for their energy wastage projects.
| spicyramen wrote:
| I would be worried more about living in a country with high
| inflation and been able to use cryptos. Can you share your
| specific concerns about environmental impact?
| russdpale wrote:
| The problem is that you are solving the issue from the wrong
| direction. Like getting people to stop littering, the answer is
| to regulate the producers of the waste, not the end users doing
| the wasting.
|
| The answer is to lobby governments for green energy, not rail
| against people doing PoW. People who fold at home are using a
| lot of energy also.
| amznthrwaway wrote:
| It's utter and complete horseshit to compare people doing
| folding @ home with their spare cycles to BTC power usage.
| mempko wrote:
| Yet the Producer of Waste here is coinbase no?
| burlesona wrote:
| Not Coinbase, the miners. The arms race dynamic makes
| electricity cost the only real limit on mining, and
| unfortunately the more a single BTC is worth the more kWh
| you can profitably burn to mine one.
| px43 wrote:
| It's not the miners, it's the power companies.
|
| Power companies have been burning shitty fuel to save
| money forever, and it's astounding that they've managed
| to shift the blame to consumers.
| gt565k wrote:
| Cardano is PoS and has been live for a while now.
|
| It's slowly chipping away at Ethereum's use case and with smart
| contracts coming soon that are backwards compatible with
| Ethereum solidity code, it will overtake Ethereum over time.
|
| There's other PoS blockchains that work and solve the concerns
| you have outlined.
| unreal37 wrote:
| What do you think about computers that are always on 24/7? Or
| TVs that never turn off (even if the screen is off)?
|
| (ETA: 23% of household energy use is by always-on devices. The
| scale of this waste is MASSIVE.)
|
| Devices in our life consume energy 24/7 when we're not even
| using them or needing them to be on. Energy conservation has a
| LONG way to go.
|
| In fact, one could argue that the current stock market system
| is a huge waste of energy compared to the benefit it actually
| brings to "raising money for companies".
| [deleted]
| Fede_V wrote:
| We should do a much better job of building energy efficient
| devices, but, the amount of energy that's "wasted" by things
| like TVs that never turned off is really tiny compared to the
| energy footprint of the crypto ecosystem.
|
| Further, I worry that crypto will grow _massively_. If that
| happens, all bets are off. In its current state, crypto
| consumes more energy than several large countries - imagine a
| world where that 's 10x or 100x and we've still not moved off
| of proof of work. What's global warming going to look like?
| unreal37 wrote:
| "A study by the Natural Resources Defense Council found
| that the energy use from Always On devices across the US
| accounts for 23% of power consumption in the average
| household, or a quarter of any given electricity bill. Our
| own research confirms this."
|
| 23% of energy used by households is by always on devices.
|
| Not "tiny".
| PragmaticPulp wrote:
| Two wrongs don't make a right.
|
| Yes, unnecessary energy waste of other devices is bad and
| should be reduced. Fortunately, we're making strides to
| reduce electronics inefficiency all of the time.
|
| Proof-of-work cryptocurrencies are uniquely bad because they
| become less efficient with each additional miner. The maximum
| number of Bitcoin transactions was the same a decade ago as
| it is now, but the energy consumption is many orders of
| magnitude higher and continues to increase.
|
| When someone adds an additional server to a server rack or
| buys a new laptop, we also get a net increase in value. The
| new technology is likely to be more efficient, so we get a
| net increase in efficiency. Proof-of-work is the only
| technology that gets worse and worse over time, and literally
| _pays_ people to continue making it worse.
| mmanfrin wrote:
| Idle CPU !== full-blast GPU.
| loceng wrote:
| And I still have yet to understand why should the rest of
| society who hasn't bought into Bitcoin shoulder higher energy
| costs because Bitcoin are driving up demand?
| sleepygardener wrote:
| This could be said about any commodity. Like because of gold
| hoarding banks/individuals driving up the demand rest of the
| society has to pay high price of gold for jewelry.
| regimeld wrote:
| It's a false equivalence (energy consumption, therefore bad).
| What if Bitcoin is solving a true market need (that is,
| preserving wealth in a truly decentralized way)? Would that
| make it worth the energy consumption?
|
| You only need to look at what the current monetary system is
| based on -- the petro-dollar. Backed by the might of the US
| military, consuming crazy amounts of energy. What if Bitcoin
| eliminates the need for this?
| qwertox wrote:
| I wouldn't be too worried. The industrial revolution brought us
| many things which were just as disastrous, for example certain
| chemicals, but these things can get regulated. DDT is no longer
| used like it was used in the 70s.
|
| Let Bitcoin be Bitcoin, let the G7 (or whoever finds himself
| responsible) quickly regulate the power consumption issue, then
| PoW will likely disappear for mainstream applications. Luckily
| there are alternatives.
| supernova87a wrote:
| Does a Bitcoin (for the $ value it represents) cost more to
| manufacture than an equivalent US $1? After all, a $1 of US
| currency represents some creation of work too, doesn't it?
|
| Capital/currency represents someone doing work, something being
| dug out of the ground, something being created -- because these
| things cannot be created out of thin air. When the Fed creates
| money, it is doing so in tandem with some physical output of
| the economy (unless they are purely inflating unbacked by
| actual goods/services activity).
|
| A US $ is not without cost as well, isn't that right? Currency
| is based on scarcity of something. Is it possible to have
| scarcity limited currency without some kind of work involved?
| NaturalPhallacy wrote:
| This is a fascinating topic to me and something I've been
| casually studying for over a decade so bear with me if I come
| across as blunt or whatever... I just mean to answer your
| questions directly and expound a little.
|
| >Does a Bitcoin (for the $ value it represents) cost more to
| manufacture than an equivalent US $1?
|
| Yes, because it costs quote a lot of electricity. And...
|
| >After all, a $1 of US currency represents some creation of
| work too, doesn't it?
|
| Nope. Costs effectively nothing. Not at all tied to anything
| tangible - even electricity - whatsoever. Via fractional
| reserve banking - for some reason we just...let banks do this
| - they create it with a keystroke and it costs nothing
| whatsoever.
|
| It's why we have inflation every year. Banks are constantly
| creating USD and then charging interest for the privilege
| they were given to do so.
|
| >A US $ is not without cost as well, isn't that right?
|
| Nope. Gets made up out of thin air every day. A bank creates
| a loan. How do you think we got to $14 trillion USD? The
| treasury has never printed that much money. Only ~10% of USD
| physically exists (according to the Fed itself), and that's
| counting $100 bills minted decades ago. And banks only have
| to have 10% of the money to cover their loans. The number
| being the same right now is just a coincidence.
|
| >Currency is based on scarcity of something.
|
| Currency is based on whether or not people will accept it in
| trade. There are countless examples that prove that that is
| the sole criterion. Even stupid, shitty, hard to use
| currencies get used if they're what's accepted. Getting
| initial buy in for USD was based on gold. Then silver, and
| then in 1971, literal faith in the US government and nothing
| else whatsoever:
|
| "and the unilateral cancellation of the direct international
| convertibility of the United States dollar to gold."
| (https://en.wikipedia.org/wiki/Nixon_shock)
|
| >Is it possible to have scarcity limited currency without
| some kind of work involved?
|
| Not in my opinion. Gold requires mining. BTC requires
| computing. But USD isn't a scarcity limited currency.
| gdubs wrote:
| There's an article in the NYTimes today on the environmental
| impact of NFTs and I personally find the whole thing deeply
| upsetting. I care a lot about the climate. It's maybe my number
| one concern long-term, especially as my kids are concerned.
|
| I saw the buzz around NFTs, and thought - "hey, cool! A new way
| for artists to make some money directly from their fans."
| Sounds great. Minted a few NFTs to learn how it all works.
|
| And then I read incredibly distressing figures - some comparing
| the cost to a _years'_ worth of family carbon emissions. From
| clicking a button and waiting a few minutes!
|
| I haven't been able to get a straight answer on how true these
| stats are. But the possibility that minting a few tokens caused
| that much damage frankly makes me want to cry.
|
| You might say, well, that's stupid -- but honestly, when you
| care about something deeply like the climate and you take pains
| to reduce emissions and do things to try and help -- well, it's
| incredibly upsetting.
| thamer wrote:
| The article: https://www.nytimes.com/2021/04/13/climate/nft-
| climate-chang...
| iso1210 wrote:
| The problem is those emissions aren't being properly
| accounted for. Those causing them aren't paying the true
| cost.
| frongpik wrote:
| A dissenting opinion. If those in power really cared about
| global warming, the WH would have codified work from home into
| law. Right now the big corps are pulling workers back to
| offices, so millions of office workers are going to drive back
| and forth again. Obviously, the media prefers to talk about the
| bad bitcoin instead.
| hundreddaysoff wrote:
| Naive related question from a crypto n00b that a lazygoogle
| failed to answer:
|
| I just plotted some Chia. I left my laptop open to do this.
| Usually I would just put the laptop in power save mode all
| night.
|
| My understanding is that to actually make any Chia, I would
| need to wait ~1 year with my one 100GB plot with full-power
| mode enabled. Vs mostly with the case closed, as it is now,
| while I do other things.
|
| And this doesn't even account for the rare elements etc needed
| to fabricate my hard disk.
|
| So, general naive questions:
|
| 1. Vs Proof of Work, just how much better _are_ Proof of Space
| /Proof of Stake/$HDOS_SUPER_AWESOME_PROOF in terms of energy
| consumption but also other standard measures of environmental
| impact?
|
| 2. How much worse, if at all, are they vs the null hypothesis
| of "modern" pre-crypto finance?
|
| Has anyone run credible numbers on these things?
| Nursie wrote:
| Proof of space/time is a bad idea and you're right, it will
| put incentives on manufacture and hoarding of storage space.
|
| Proof of stake involves using staking of cryptocurrency to
| secure the currency. In theory it avoids the resource usage
| of the other types of proof. In theory.
| colinmhayes wrote:
| Proof of stake has no mining, no datacenters. If proof of
| stake ends up working it would probably be almost as
| effective as Visa currently is. Visa is always going to be
| more efficient due to it's centralized nature. Currently one
| bitcoin transaction uses the same amount of energy as driving
| a tesla 2000 miles, so POS is quite an improvement.
| cwkoss wrote:
| Proof of stake still requires cryptographic validation of
| each block by each node, so it uses much less energy than
| PoW, but not none.
|
| I think "no miners, still (distributed) datacenters" would
| be more accurate.
| ardme wrote:
| Proof of stake is not secure, there is no way to recover
| from a 51% attack. Proof of work and proof of space are
| much better.
| knuthsat wrote:
| Complaining about externalities of PoW cryptocurrencies is like
| complaining about the fastest function that exists in your code
| and is magnitudes more efficient than anything else.
|
| Externalities that pollute the ocean, air, rivers and cities
| are not present in crypto at all in the amounts that other
| industries and human activities produce.
|
| There will be more people jumping on carnivorous and meat heavy
| diets than there will be people using electricity powered
| cryptocurrencies. Keto is trending more than cryptocurrencies.
|
| The amount of destruction that factory farming will inflict on
| this world and is inflicting will never be reached by
| cryptocurrencies. There will be no deforestation, no waste
| mismanagement, no fertilizer drain, nothing.
| rawtxapp wrote:
| Just put a carbon tax on everything that has environmental
| externalities, it's as simple as that, it doesn't make sense to
| target a specific industry, especially one that uses
| stranded/renewable energy.
| aeternum wrote:
| This is the simple answer. In the unlikely event Bitcoin
| moves to PoS, miners will just redirect their hardware to
| other coins
|
| The simple solve: price the externality.
| skeeter2020 wrote:
| broad-based consumption taxes are the best theoretical
| response, but politically no one is going to impose them at
| the levels needed to discourage consumption, and they almost
| always get perverted in their application with carve-outs and
| exemptions. Plus where does that money go? At best it's an
| inefficient recycling paradigm when what we really need is an
| at-source reduction in consumption in the first place.
| aeternum wrote:
| The goal should not be to discourage consumption, the goal
| should be carbon neutrality.
|
| Any industry such as fossil fuel power plants must buy
| carbon offset credits/tokens from industries or companies
| that sequester carbon. Then let the market solve the
| problem. The credits/tokens may turn out to be very cheap.
| tovej wrote:
| No credible way to decouple production/consumption from
| emissions has been found. So no, we do need to start
| curbing consumption, especially among people in the top
| wealth quantiles (because they consume the most).
| dd36 wrote:
| Cap-n-trade was a very successful program for reducing
| nox and sox emissions. If you create the right
| incentives, markets tend to find a way.
| tovej wrote:
| They still aren't decoupled from emissions. IIRC
| Emissions actually grow faster than GDP, so it's actually
| worse than a simple coupling: it's a feedback coupling.
|
| All studies that have looked at seeming decoupling of
| emissions from the economy have found that they
| decoupling was due to outsourcing the emissions to other
| countries. Markets cannot solve emissions as long as
| value is a function of production.
| aeternum wrote:
| Countries that tax emissions should simply levy a
| proportional tariff on goods imported from countries that
| do not tax emissions.
|
| Wouldn't this eliminate the incentive to outsource the
| emissions? You could even add some margin to the tariff
| such that it is more economical for countries to tax the
| emissions themselves rather than pay the tariff.
| triceratops wrote:
| > we do need to start curbing consumption
|
| You do that by increasing the cost of consumption.
| Everyone has, even wealthy people, have a price point
| beyond which something is too expensive for them.
| tovej wrote:
| I agree, and what better way than to impose a tax on
| consumption after X dollars. Or perhaps even a general
| luxury tax for goods that aren't absolutely necessary for
| your welfare.
|
| Still better would be to start taxing natural resource
| usage, or even setting quotas with strict penalties. But
| it's hard to see politicians going along with it and I
| don't know if it can be monitored sensibly.
| triceratops wrote:
| > start taxing natural resource usage
|
| I'd go with taxing fossil fuel extraction. Every barrel
| of oil, liter of nat gas, or ton of coal is taxed. The
| revenue from these taxes should go towards either a)
| carbon capture or b) tax credits for lower-income
| households or c) UBI. The costs of these taxes will
| propagate throughout the economy and everyone will adjust
| their consumption accordingly.
| dd36 wrote:
| The goal should perhaps even be carbon negativity.
| Structure our economic systems such that removing
| pollution pays.
| bhupy wrote:
| I think the idea is that it discourages _certain kinds_ of
| consumption, and that 's carbon-based consumption. Once
| upon a time, that could have been construed as a broad-
| based consumption tax simply because there were no non-
| carbon alternatives. Today, in 2021, that's not the case.
| Solar is already the cheapest source of electricity, and
| the relatively higher price of CO2 emitting energy is
| already a market-based "consumption tax". A carbon-tax just
| exacerbates and speeds up what's already happening. That's
| probably acceptable because time is of the essence as far
| as the climate goes.
| abecedarius wrote:
| > politically no one is going to impose them at the levels
| needed to discourage consumption
|
| This seems like one of those Overton-window true-if-and-
| only-if-the-media-say-it's-true things, like the supposed
| taboo against vaccine challenge trials which was recently
| falsified in a poll.
|
| > where does that money go?
|
| To the low-income people who are supposed to be the
| insuperable political obstacle to carbon taxes in the first
| place?
|
| Politics is hard, yes, but this Overton-window kind of
| reasoning just drags at any real solution to anything. It's
| not worth any allegiance.
| jariel wrote:
| "it doesn't make sense to target a specific industry"
|
| Normally, we wouldn't want to target one line of business
| over another because we want the market to figure out where
| the most value creation is, but it's not always the case.
|
| In this case it makes sense to target people who are
| literally wasting electricity for supporting a Ponzi scheme.
| Even if BTC or Crypto is eventually a useful medium of
| exchange, there's still no reason at all to waste energy in
| it's proliferation.
|
| Electricity transportation, and to some extent production -
| is partly socialized in most countries.
|
| The market is not 'all knowing', it's full of asymmetries, we
| regulate all sorts of things for that reason.
| JohnJamesRambo wrote:
| Proof of stake is here in Ethereum 2.0 and it works great.
| Invest in that because this is the last hurrah for Bitcoin. The
| next cycle will be the "Ethereum is the new better Bitcoin"
| cycle. I say that as someone with almost all my net worth in
| Bitcoin but it has miserable transaction speed and energy
| usage. History has shown us that not innovating has never
| worked out for any company I can think of.
| WanderPanda wrote:
| So you are saying your money is not where your mouth is?
| qertoip wrote:
| Incorrect, Ethereum is still using PoW.
| dehrmann wrote:
| If all you care about is energy usage and transaction speed,
| the traditional finance system still wins.
|
| Unless people are actively trading bitcoin enough where the
| transaction cost because an issue, there's little reason to
| trade in their tulip bulbs for iris bulbs. A bet on a
| cryptocurrency is a bet that people will think it's worth
| more money, not an investment in the underlying technology.
| base698 wrote:
| Any idea where I can keep my money and generate 10 - 20%
| passive income like you can with DeFi in the traditional
| system? Most savings account have negative interest rates
| currently.
| capableweb wrote:
| > If all you care about is energy usage and transaction
| speed, the traditional finance system still wins
|
| Does it though? There are so many things to consider when
| talking about the "energy usage" of traditional money. All
| the vans moving money around, manufacturing, items to
| support PoS systems, sorting, protecting the money and so
| on.
| Nursie wrote:
| > There are so many things to consider when talking about
| the "energy usage" of traditional money.
|
| Yes, so many things that BTC will never do. It's vastly
| less efficient and offers nothing like the range of
| services and products of the existing finance system.
| [deleted]
| pcthrowaway wrote:
| It's coming, but it's not there yet; you can't buy PoS ETH on
| any exchange I know. May be anywhere from 1-3 more years, but
| hopefully sooner. There have been coordinated efforts by the
| ETH miners to prevent the transition which has resulted in a
| political clusterfuck in the Ethereum landscape.
|
| Cardano is the top cryptocurrency currently on PoS, and while
| I agree that the next cycle will be the ETH cycle, I think
| the one after that could be the ADA cycle.
| Fede_V wrote:
| I've been reading a few of the white papers about this, but
| I'd absolutely love to go deeper in this. Do you have any
| suggestions?
|
| I am especially interested in assessment about CO2 emissions
| from _credible_ sources (please, no VCs with zero training in
| physical sciences posting thought leadership pieces, I beg
| you).
| BobbyJo wrote:
| Maybe I'm a huge cynic, it certainly wouldn't surpris me, but
| I think the people pumping up crypto this cycle aren't
| necessarily the kind that care about the difference. If
| anything they'll stay away from ETH because it lacks a long
| term cap.
| yokem55 wrote:
| One of the changes going into the July update is a
| transaction fee change that burns (throws away) part of the
| transaction fees. That will put some deflationary pressure
| on total issuance, while at the same time, when they switch
| to the staking chain total new issuance will be drastically
| cut since running a validator is far more efficient then
| mining.
|
| What the long term inflation rate will be then is really
| set by the demand for transactions and how much congestion
| there will be on their network, driving up transaction
| prices and fees burned (or not).
| throwastrike wrote:
| A green crypto will not work unless it's tied to BTC. BTC is
| basically a ponzi scheme built on top of ponzi schemes on top
| of ponzi schemes. I too was optimistic about cryptocurrencies
| back in 2013-14. I thought we'd eventually have a global
| currency that's beneficial for all parties involved. But no.
| There's simply no interest in doing that. Everyone is just in
| it for the money.
| ipaddr wrote:
| Your dream and Mr Robots dream died along the way.
|
| When all debt was erased everyone filled with panic flocked
| to the evilcorp coin.
|
| The system exists today for a reason. Discover and elimate
| each reason to change the system.
| RazTeve wrote:
| Money has always been a tool for trading time
| bko wrote:
| Bitcoin allows you to convert excess energy into money. Because
| it can be mined anywhere at any time, it's priced to the global
| low cost of energy. It doesn't make sense to use expensive
| energy sources.
|
| Much of energy production is meant to meet peak demand and
| storage is difficult. Bitcoin mining is a great way to monetize
| energy that has a low market value and would likely go to
| waste.
|
| If you want to price energy or put a tax, by all means. But you
| shouldn't discriminate against particular usages of energy.
| You're angry at the wrong thing
| frongpik wrote:
| You imply good will of bitcoin miners. Once it becomes big
| enough for state actors, people in power will burn the Amazon
| forest or dry up entire rivers to mine bitcoin. Our
| civilization is all about ruthless greed and bitcoin exploits
| this nicely.
| PragmaticPulp wrote:
| "Excess energy" is a myth.
|
| It's 2021, and transmitting energy across the power grid is
| easier and more efficient than ever before. No one is
| building hydroelectric dams in the middle of nowhere without
| a way to transmit that energy to somewhere else. It's still
| better to send the energy somewhere where they can replace
| coal-fired power plants than it is to burn it up mining
| cryptocurrency.
|
| > Bitcoin mining is a great way to monetize energy that has a
| low market value and would likely go to waste.
|
| It's exceedingly rare for energy to "go to waste".
|
| Miners do not really care about anything other than profit.
| As long as the profit out of their operations is greater than
| the cost of electricity going in, the machines will be
| running.
| londons_explore wrote:
| Across most of the world there are at least brief moments
| when the price of electricity goes negative. It happens
| because some energy sources cannot quickly be shut down
| (eg. Nuclear), so it makes financial sense to _pay_ to get
| rid of electricity for brief periods.
|
| These negative prices don't coincide worldwide, indicating
| that there is not sufficient electrical transmission
| capacity.
| bko wrote:
| > Miners do not really care about anything other than
| profit. As long as the profit out of their operations is
| greater than the cost of electricity going in, the machines
| will be running.
|
| Exactly my point. That's why they choose the global lowest
| cost of energy provider. And if you allow the price system
| to work, this would be the least valuable undesirable
| energy. Anything else would be uneconomical.
| enragedcacti wrote:
| or they just bribe a local official and make profit on
| what would otherwise be 'desirable' energy.
| skeeter2020 wrote:
| this implies some sort of perfect price for energy which
| (regardless of the fossil fuels v. renewable angle) is a
| myth.
| barrenko wrote:
| This and - literally millions of office worker drones power a
| PC for MS Office/Excel whole day long for no net effective
| social or global benefit which the likes of Bitcoin will weed
| out eventually. And then one day we will replace Bitcoin with
| something even more effective.
| jariel wrote:
| "Bitcoin mining is a great way to monetize energy that has a
| low market value and would likely go to waste."
|
| Mining BTC is literally a waste.
|
| There is no value creation at all.
|
| Though some individuals may value it - it's not actually
| useful. The world economy does not grow one bit due to BTC or
| BTC mining - lives are not improved, products are not
| developed or made, or enabled etc..
|
| Even if BTC were a very useful currency, it would still be
| wasteful to use considerable electricity to support it,
| because it's not necessary - it just happens to be the
| mechanism chosen to mine new coins.
| christkv wrote:
| I'm more worried about a hostile state actor like China using
| its dominance in Bitcoin and other crypto coins weaponizing it
| against our economies. Say crash the coins wiping out big
| actors causing domino effects in the markets.
| Tenoke wrote:
| >I'm horrendously worried about crypto gaining more marketshare
| as long as proof of work crypto remains mainstream.
|
| It's not really remaining mainstream. Bitcoin is soon going to
| be the only big project (in terms of electricity used) with it.
| The industry as a whole is moving away from it quite fast at
| this rate, with ETH (second biggest) moving to PoS within a
| year, and almost every new project being a or on a non-PoW
| chain.
| randomguy5421 wrote:
| Eth is always moving to POS ---> THIS YEAR.\
|
| Believe it when I see it.
| rauljordan2020 wrote:
| It is already live since December 1st, 2020
| https://beaconcha.in. The next step is to perform the
| actual "merge" from PoW to PoS which will happen this year
| bko wrote:
| Bitcoin and Ethereum are two entirely different value
| propositions. Ethereum is a lot more controlled by a central
| body, moves a lot faster and is optimized for entirely
| different things (flexibility, scale, building apps, etc).
|
| You can't substitute one for the other. Both will likely
| continue to exist indefinitely.
| PragmaticPulp wrote:
| The problem is that Bitcoin miners and investors have a huge
| incentive to keep the status quo.
|
| Bitcoin is no longer the scrappy renegade alternative
| currency. It's big business now, with big institutional money
| behind it. The investors in these Bitcoin businesses do not
| want to see Bitcoin fall out of favor, and they're going to
| do everything in their power to keep it popular and
| profitable to mine.
| Tenoke wrote:
| Sure, but that's a Bitcoin problem not a crypto as a whole
| problem.
|
| And let's face it - all the projects being built on crypto
| which can cause it to grow much further cannot be built on
| Bitcoin in the first place.
| randomopining wrote:
| STX - Stacks is built on top of Bitcoin and allows smart
| contracts through proof of transfer.
| New_California wrote:
| You may like this:
|
| https://www.coindesk.com/frustrating-maddening-all-consuming...
| yumraj wrote:
| My biggest worry with Coinbase IPO is that it will become too
| big to ban, as now it will impact the stock market and not just
| the minority few who own it.
| asenna wrote:
| Are you also worried Facebook and Google have become too big
| to ban?
|
| I don't get this logic.
| bob33212 wrote:
| Like a lot of bubbles, there is FOMO and lack of understanding
| of the technology. It is easy to compare crypto to the
| internet. When the internet first started out a lot of people
| didn't invest in GOOG because it was not obvious where the
| revenue would come from.
|
| People are afraid of making the same mistake here as well. "I
| don't know how BTC will generate cashflow outside of being a
| Ponzi scheme, but I assume the technology will advance and
| revolutionize finance" so they buy.
| api wrote:
| GOOG was a good investment because nobody invested in it. If
| everyone had invested in GOOG, it would not have been as good
| an investment since its success would already be priced in.
|
| If the number has already gone up, you are too late. If
| everyone is talking about it, you are too late.
| randomopining wrote:
| The function that BTC provides is a deflationary hedge. If
| you look at the big existing things for that, gold and
| silver etc... check out their market cap and you see btc
| has a ways more to go.
| fossuser wrote:
| I don't know what BTC will do, but this is a banality and
| mostly wrong in any way that's important.
|
| "The number has gone up" for Google almost since it has
| gone public.
|
| If you bought BTC at $1 and it went to $10 - is $10 too
| late? The number went up.
|
| The hard part is it's hard to know the underlying value of
| things and a lot of value is socially determined by how
| others value something.
|
| Why is gold traded as an expensive commodity? It has some
| tiny practical uses, but is that why the price fluctuates?
| People trade it because they think other people will trade
| it and use it as a store of value when other stuff is
| volatile.
|
| Some people think BTC's scarcity guarantees provide a
| similar digital version of that. It's volatile now because
| it's still early and uncertain, but if that's true then
| BTC's price could be very high and it's hard to know if
| you're too late.
|
| For other Non-BTC coins unlikely to get the same level of
| social buy-in their value is a lot more questionable imo.
| ETH has some real underlying applications (uniswap
| decentralized exchange, powering contracts, other tokens
| etc.). The privacy coins maybe can leverage that for a
| reason for people to use them. The others seem like even
| more fringe bets and more likely to be FOMO bubbles.
| tolbish wrote:
| That's what everyone thought about Bitcoin back when it hit
| the crazy high of $800.
| paulpauper wrote:
| the problem will fix itself after the bubble bursts. Bitcoin
| doesn't provide anything of much value. It is just a
| speculative instrument.
| base698 wrote:
| If you haven't seen the DeFi space you are missing out.
| 10-20% interest on crypto holdings. If you know where to get
| interest rates like that...
| DCKing wrote:
| Having mined cryptocurrency a long long time ago when it was
| still a novelty, it's really good to appreciate just how bad
| the externalities are for cryptocurrencies. The incentives are
| created for people to buy the cheapest energy possible and just
| burn it up for a made up financial instrument [0], even when
| that comes with a significant carbon footprint. Even if mining
| is only a tenth as bad as the University of Cambridge thinks
| [1]. On a much more minor note, it takes up energy generation
| (renewable and otherwise) and chip production resources that
| could be spent on actual production instead of yet another
| financial instrument.
|
| I'd be in favor of banning the trade of all PoW
| cryptocurrencies for this reason alone. There is no proper way
| of banning _mining_ in general, and neither should anyone
| desire to ban specific types of computation. Banning its trade
| to strongly disincentivize the sheer senseless resource
| consumption is more important and much more clear cut than any
| financial arguments to do it.
|
| I realize this would utterly devastate the current
| cryptocurrency market, but that's the point (at least for
| anything that isn't proof of stake). We should get this over
| with before our dependency on it further increases and the
| environmental damage gets worse.
|
| The zeitgeist around this has changed substantially. PoW
| cryptocurrencies really aren't credibly grassroots and have
| been captured by whales. And there really isn't any application
| of PoW ledger designs outside of cryptocurrencies with
| significant mindshare either. For all of this - proof-of-stake
| cryptocurrencies _should_ be an alternative. Not a direct
| replacement, but able to cover most use cases.
|
| Coinbase was founded under a different zeitgeist and I don't
| blame them for jumping into this market. But I think that
| banning PoW cryptocurrencies should be strongly advocated, and
| once this realization catches up at the right level, they have
| a significant liability on their hands.
|
| [0]: For the record, all financial instruments are "made up".
| PoW cryptocurrencies are the only one that come with blatant
| resource consumption however.
|
| [1]: https://techcrunch.com/2021/03/21/the-debate-about-
| cryptocur...
|
| (For the record, if a ban on PoW cryptocurrencies would come
| into effect today I'd lose money over it.)
| kolinko wrote:
| PoW is on it's way out - Ethereum is moving away from it and
| there is no reason for other cryptos to not follow.
|
| The major player in PoW will remain Bitcoin, which won't
| change.
|
| But as soon as solar/wind become cheaper than coal, it will
| switch to green without a blink of an eye.
|
| A random thought - I'm genuinely surprised Bitcoin folks didn't
| yet crowdfund building a nuclear reactor for mining purposes ;)
| They crowdfunded first ASIC production lines which are 1000x
| cheaper, but at the time when Bitcoin was 1000x cheaper as well
| :)
| delaaxe wrote:
| BTC is already mostly powered by green
| randomguy5421 wrote:
| lol no.
|
| Just no.
| paulgb wrote:
| The study I think you're referring to came from a crypto
| company. It's the equivalent of when cigarette companies
| released studies saying smoking was good for your health.
| colinmhayes wrote:
| The green energy used by bitcoin miners would be used by
| others if bitcoin didn't exist. Instead those others use
| dirty electricity.
| deckard1 wrote:
| It's weird seeing this argument that green energy is
| somehow free and infinite energy.
|
| And yet, look at the market for Nvidia and AMD GPUs right
| now. The miners already know that gamers have been pushed
| out of the high end GPU market. Supply and demand doesn't
| go away. People still need electricity for doing things
| other than mining Bitcoin. All that happens is their
| electricity rates go up.
| londons_explore wrote:
| Ethereum is quite centralised - people will follow the main
| developers.
|
| Bitcoin probably wouldn't switch - there is no single person
| or group who could get majority support to force such a
| change.
| yokem55 wrote:
| Ethereum's development structure is only "centralized" in
| the same way that linux kernel development is
| "centralized". There is a big process that generates
| consensus across the community from a lot of different
| parties. By the time a change get into a pending hard fork,
| it's been through multiple rounds of establishing buy-in.
| Were the developers to push a major change in that didn't
| enjoy the support of the broader community, it would be
| abundantly apparent.
| paulpauper wrote:
| it has been 5 years an ethereum is still a long way form any
| sort of POS adoption
| asenna wrote:
| The Beacon chain went live in December, 2020 and has been
| running without issues.
|
| It now has about 4 Million ETH locked and staking which
| cannot be withdrawn - that's almost $8 billion worth of ETH
| locked until the move to PoS happens. Which means now there
| is some real pressure to make it happen soon enough
| (between 8-15 months).
|
| The situation now with the Beaconchain live and running is
| very different from the past 4 years of research and
| planning.
|
| https://beaconcha.in/
| baby wrote:
| > if it grows larger before we have clean energy, then we
| virtually guarantee we won't be able to tackle global warming
|
| I stopped reading here.
| cslarson wrote:
| As someone quite involved in the Ethereum ecosystem - I totally
| agree. I also believe the Ethereum network will switch entirely
| to Proof of Stake _this year_.
| splithalf wrote:
| Agree and I can't support companies that are putting their
| weight behind it (Tsla, sq). It incentivizes global warming, as
| a feature not a bug. Insane.
| yrral wrote:
| You never explicitly stated, but is your argument that the
| energy consumption of bitcoin is the negative externality?
|
| First of all energy is not fungible, not in time and not in
| space. There are times where consuming electricity is actually
| beneficial for renewables and the environment. I think the main
| mental block people have is that are trained to "save
| electricity" and that "all energy usage is negative." I would
| argue that using electricity during periods of wind or solar
| oversupply is actually positive for the environment. Because of
| this non-fungibility of energy, proof of work mining can be a
| positive sum game for the environment. Let me explain:
|
| Back in the days where all our electricity came from fossil
| fuels, I completely agree that marginal electricity usage was
| bad for the environment. However I think that thought has
| persisted with us even though it is no longer true 100% of the
| time. With renewables sometimes the marginal cost of
| electricity to our environment is near 0 or even negative (eg,
| during periods of higher winds and lower demand)
|
| I predict that in the future as bitcoin mining becomes more and
| more of an efficiency game that you will see bitcoin mining be
| kind of a load balancer for the grid, effectively turning off
| during peak demand (or low supply) times and contributing to
| the base load during regular times. Of course this would be
| distributed across the globe, and you would see more plants
| running midday (with solar oversupply) and overnight (with wind
| oversupply) than you would during early morning and evening
| peak hours.
|
| For example, it may even help the economics of building new
| wind plants. Eg, currently it may not be profitable to build a
| new wind plant because base load is too low that the excess
| power generated would need to be sold off at 0 or even negative
| prices. However if bitcoin mining could be turned on during
| these times and off during periods of high demand, there will
| need to be fewer peaker plants in operation and it would
| positively affect the economics of opening a new wind plant.
|
| Bitcoin mining only cares about the cost of electricity at a
| given time, it is not like most other electricity demands that
| are very time based. With the large variance of electricity
| generation by renewables, I think bitcoin can in the future
| help smooth demand according to the real supply/demand curve.
|
| It's kind of like a different implementation of the Tesla
| utility grid batteries. Instead of deploying power, you force
| the grid to build more renewable capacity (that the miners are
| paying for) that you use except in peak periods, where you turn
| off and effectively provide the grid with more power.
|
| Here are 2 articles of a bitcoin mining company doing just
| this:
| https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-m...
| https://www.forbes.com/sites/christopherhelman/2020/05/21/ho...
| praveenperera wrote:
| People always complain about Bitcoin's environmental effects.
|
| What about Gold's, the current financial system's?
|
| https://www.zerohedge.com/crypto/critics-claim-bitcoin-threa...
| losteric wrote:
| 1. whataboutism
|
| 2. Most currencies are fiat, not gold-backed
| praveenperera wrote:
| 1. No it isn't, not if bitcoin can be a replacement for
| gold.
|
| 2. You didn't read my link
| amznthrwaway wrote:
| BTC wastes more power as it becomes more valuable.
|
| This is the opposite of other major currencies.
|
| BTC is an environmental travesty.
| dd36 wrote:
| Bitcoin is already terrible and it's structured to get ever
| more terrible.
| eloff wrote:
| I think we've given this proof-of-work experiment plenty of
| room to run, and it's time to end it as a failure through
| governments making it illegal.
|
| The algorithm sort of worked, but the costs are too high. In
| the end those high costs led to efficiencies of scale leading
| to a few large miners controlling the whole blockchain. So it
| never lived up to the decentralized dream anyway.
|
| Now it mostly serves to fuel rampant speculation and crime. It
| enabled a whole new category of crime through cyberlocker
| attacks (well not new, but made it so, so much more
| successful.)
|
| The harm well outweighs the good. If it continues unabated
| proof-of-work crypto could double the energy requirements of
| the planet in just a few decades. It's not worth that. Kill it
| now before the consequences get worse.
| the_local_host wrote:
| Bitcoin can only be _demonstrably_ free of government controls
| by continuing to operate after being made illegal. I wonder if
| its creators actually intended to make it a target for legal
| sanction by building in conspicuous environmental costs.
|
| Could there be an equilibrium where energy efficiency is
| achieved because miners have avoid using a noticeable amount of
| electricity to avoid legal trouble?
| [deleted]
| thesausageking wrote:
| Bitcoin mining uses less energy than video gaming. And because
| mining can happen anywhere, it tends to use clean energy or
| energy trapped at power plants that would otherwise go to
| waste, so it's CO2 footprint is much, much less than video
| gaming.
|
| Other things that contribute more to global warming than
| Bitcoin include: the meat industry, Christmas lights, and the
| mining and supply chain around gold.
| RazTeve wrote:
| Worse externalities than the fiat standard which brought us
| genocides, nuclear war, and mass murder? Bitcoin could
| eradicate democide.
| px43 wrote:
| Why are you so worried about cryptocurrencies, and seemingly
| not worried about energy companies who actually are the ones
| who are creating the carbon emissions?
|
| Using electricity and emitting CO2 are only loosely correlated,
| and in the case of cryptocurrencies are even _less_ correlated
| because cryptocurrencies are dis-proportionally mined with
| energy from hydroelectric dams.
|
| All of these articles about the ecological impact of
| cryptocurrencies only exist to divert public and regulatory
| attention away from the energy companies that are actually
| doing all the damage.
|
| Oil companies did the same thing in the 70s when there was
| public outcry about plastic pollution, so they funded the
| "reduce reuse recycle" campaigns, and the crying Indian
| commercial etc, all to divert responsibility from the companies
| manufacturing the plastics to the consumers who use them.
|
| There is a documentary called "The Story of Plastic" which
| covers this strategy, and how successful it has been for them
| in the past.
| tim333 wrote:
| I was thinking of trying to make a coin/token that would fight
| global warming to help counter that stuff. Basically if you buy
| it the money goes into a fund some of which goes to carbon
| capture / anti warming causes, some is retained for buying back
| coins for liquidity. Anyone think that's a good idea?
| CFA178B wrote:
| I feel the similar. There are innovations out there and things
| that change the world and improve the way we think and, work
| and develop together, and there is this world of essentially
| greed, where we all just want to get out of where we are -
| because, why? We have to sell someone else the ticket out, to
| get richer ourselves.
|
| Thankfully, this is a bonafied bubble and in a few months,
| it'll all tank again.
| RazTeve wrote:
| did you dismiss this one already?
| https://www.yahoo.com/entertainment/could-bitcoin-solve-oil-...
| fossuser wrote:
| I'm skeptical of proof-of-stake, proof-of-work seems like the
| main innovation of cryptocurrencies that differentiates them
| from the standard financial industry?
|
| If you swap out POW for POS (or worse clearing house type trust
| orgs like Stellar) then aren't you just putting trust into some
| incentive based system no different than existing financial
| systems? Just instead a government you're trusting some other
| entity. You get faster throughput and less energy waste, but
| you lose the mathematical guarantee that was kind of the entire
| point?
|
| I think climate change is a serious issue that would lead to
| change (likely bad), but I'm not sure it's a true e-risk or
| that cryptocurrency POW changes the tide that much. Feels like
| an irrelevant (somewhat identity-ish/political) side debate to
| me? (see Matt Yglesias' comments in this:
| http://rationallyspeakingpodcast.org/show/episode-251-the-
| ca...)
|
| Happy to think about arguments that would change my mind.
| greg7mdp wrote:
| I don't see any reason to be skeptical of proof-of-stake. The
| ethereum beacon network has been up and running fine for
| months. And POS negates the power usage objection to POW.
| cwkoss wrote:
| I don't think anyone debates that POS is more power
| efficient than POW. The controversy over POS is whether the
| game theory incentives of POS will be sufficient deterrent
| for bad actors at scale.
| mikkel wrote:
| The biggest argument is the other coin networks that have
| been running for years in production without proof of work.
| Nano and EOS have interesting consensus models. Nano manages
| to remove all inflation and transaction fees and is just a
| base level currency. EOS has an account fee and you have to
| rent resources but can do code execution on transactions
| (smart contracts). They both rely on accounts voting for
| representatives and have had similar problems with spam. Nano
| has been running for > 4 years and EOS for > 1 years.
| sireat wrote:
| I am surprised a workable IPv4 based POS coin has not been
| produced. The consensus protocols are already using IPv4
|
| That is one IPv4 address -> one unit of vote
|
| Difficulty adjusts based on how many IPv4 addresses
| participate
|
| Sure, it gives advantage to Apple, MIT or anyone with /8
| block and disadvantages citizens from some countries with
| very small allocations but otherwise it could be scaled to
| whole world while staying truly green.
|
| I suppose the hard part is figuring out the stake when
| multiple people on the same IP address want to participate.
| kruxigt wrote:
| I guess one problem is that everyone has an IP, while only
| ones that really care puts in proof of work.
| Paradigma11 wrote:
| The staking rewards for block generation are inflationary. So
| you are penalized by not staking and it does not matter how
| long how stake your tokens your share of the blockchain does
| not increase. You also have to pay taxes for staking rewards
| in most countries so you have to sell at least that much. In
| the context of a bc with smart contracts you are basically
| owning and operating a share of a cloud for financial
| services. Those customers pay fees which get distributed with
| the staking rewards.
|
| This does sound a lot saner to me than having some cabals
| operating giant computer farms and hydroelectric dams to
| generate new blocks. Their interests are different than those
| of token holders and having to pay for all those gpus and
| electricity is just stupid.
|
| What mathematical properties are you losing?
| stormbeta wrote:
| And this is exactly why I'm so skeptical of cryptocurrencies
| in general. There doesn't appear any viable way to make them
| work as currencies that doesn't either have horrendous
| externalities, simply replicate what existing currencies
| already do (often poorly and with many downsides), or often
| both.
|
| I don't think it's a coincidence that even a decade plus
| later, the primary use cases for crypto still seem to be
| grey/black market deals, speculative investments, and pyramid
| schemes.
| Moodles wrote:
| Not to even mention the even more useless buzzword
| application of blockchains to business to pump up stock
| prices. I'd go as far to say that cryptocurrency is the
| most "useful" application of blockchain to date. And even
| then, it appears only truly useful for dark web
| transactions and pyramid schemes. Why else would we use a
| wildly fluctuating currency that takes 20 minutes to send a
| payment?
| fossuser wrote:
| I remain cautiously optimistic about the underlying idea
| and core technology (even if there's a lot of pyramid
| scheme snake oil surrounding it).
|
| Interesting applications do exist:
| https://news.ycombinator.com/item?id=24242005
|
| Its applications are more interesting in countries that
| have unreliable governments and inflationary currencies
| (for now).
|
| It also does provide something new (one way 'cash'
| transfers across a decentralized network).
| abecedarius wrote:
| > way ... that doesn't either have horrendous externalities
|
| The CO2 emission externality need have nothing to do with
| Bitcoin or any other proof-of-work chain. Tax carbon at
| whatever level makes sense and Bitcoin will adjust. (As I
| understand it, even currently Bitcoin mining mainly uses
| renewable energy, because it's cheaper; and it's trending
| cheaper still.)
|
| The externality is at the _power plant_ , not the use.
| Banning a use is like basing your server's security on
| client-side Javascript.
| jsiepkes wrote:
| > Tax carbon at whatever level makes sense and Bitcoin
| will adjust.
|
| > The externality is at the power plant, not the use.
| Banning a use is like basing your server's security on
| client-side Javascript.
|
| How would that work? Applying the same carbon tax on
| farming as on bitcoin? You always need to differentiate
| on use. Otherwise we could also just have a single income
| tax and be done with it. However taxing food as much as a
| Ferrari doesn't really make sense.
| abecedarius wrote:
| The whole purpose of taxing carbon is to _reduce carbon
| emission_ to the efficient level and _shift energy
| consumers away_ from uses that are not worth the cost in
| carbon emission.
|
| Say you're a bitcoin miner powered by a coal plant. A
| carbon tax is imposed. The price of your power goes up.
| Your competitors, powered by solar, are unaffected. Maybe
| you keep going at the higher price; more likely, if the
| tax was set at anything like the genuine externality, you
| shut down. Possibly you keep going for a while, winding
| down your ops at this location but moving any new ones to
| find affordable power. Sucks to be you if you didn't
| anticipate the tax (which seems implausible, they won't
| announce it effective next Monday), but Bitcoin itself
| will hardly notice.
|
| Say you're a farmer also in coal-plant-land. Aren't
| farmers powered more by internal-combustion engines than
| grid power? That should be carbon-taxed too in this
| world, and that's good: you want farming, where it's
| climatically most expensive, to shift to less-CO2-costly
| methods and crops. Farming spends energy on a much wider
| set of tasks, some of them more essential to the output
| than others, and some outputs more inelastically demanded
| than others. For some of them you adjust, for some you
| continue and pay the higher price. The ones you adjust
| were _not worth the carbon cost_ ; the ones you don't
| _were_. You have to charge your customers some amount
| more, depending on how essential the coal turns out to
| be. Maybe, like the bitcoin miner, you stop farming, or
| shift to some sort of less-intensive organic farming;
| maybe you don 't. Either way, it's more likely the right
| decision for the planet! We stopped pretending that
| dumping carbon is free.
|
| You don't "differentiate on use" by politicians and
| bureaucrats deciding what's naughty or nice. They don't
| even know! It's an incredibly complicated problem! They
| further have no real incentive to do it even vaguely
| right, rather the opposite: any competent politician can
| look to the public like they're public-spirited while
| favoring concentrated interests. Was the FDA just stupid
| for banning the J&J vaccine the other day? No, they're
| fundamentally misaligned with the public interest.
|
| Re painting cryptocurrency as a nobody-needs-it Ferrari,
| see https://news.ycombinator.com/item?id=26654767
| cwkoss wrote:
| Dollar hegemony has many horrendous externalities as well.
| danimal88 wrote:
| While that -might- be true, the question is whether the
| dollar, the RMB, the CAD, and every other currency have
| anything like the -direct- pollution cost of bitcoin,
| which my understanding is that they do not
| meowkit wrote:
| Can you share how Bitcoin has a direct pollution cost?
|
| Last I checked BTC primarily uses excess electricity in
| the cheapest regions of the world. What if BTC only ran
| on solar power?
| cwkoss wrote:
| Of the estimates I've read, it seems like BTC uses about
| 60% green energy. Which is about double the 'green-ness'
| of the broader energy economy, but it's still a
| significant amount of 'direct pollution' from carbon
| sources.
| cwkoss wrote:
| I think the dollar undoubtedly has several orders of
| magnitude lower direct pollution costs, but also have
| several orders of magnitude higher indirect costs.
|
| It's a pretty tangly web, so hard to know what to lump in
| as a comparison but in the superlative case consider: the
| federal reserve, many bank/FI departments tasked with
| securing and transferring money safely, auditing (public
| ledger has many benefits for transparency and reporting),
| money transfer industry, international relations,
| lobbyism, US military dominance, etc.
|
| Bitcoin has zero employees, probably only thousands of
| people working on Bitcoin-interfaced systems. The network
| uses a large amount of electricity, but that's kind of it
| - there are few other costs to account for. All of those
| industries above collectively employ millions of people -
| should we account for only organizational energy
| consumption or do we also account for salaries and thus
| private energy consumption of all of the individuals
| necessary to support dollar hegemony?
|
| I think it would be really interesting to find a number
| for "for each dollar in existence, how much is spent per
| year preserving the dollar's position as the global
| reserve currency?" How does this number compare to
| inflation? If it is greater than inflation, does that
| mean that dollar hegemony is unstable and its fall is
| inevitable?
| jtsiskin wrote:
| For the uninformed, what mathematical guarantees does POW
| have that POS doesn't?
| jude- wrote:
| PoW is open-membership, because the means of coin
| production are not tied to owning coins already. All you
| need to contribute is computing power, and you can start
| earning coins at a profit.
|
| PoS is closed-membership with a veneer of open-membership,
| because the means of coin production are tied to owning a
| coin already. What this means in practice is that no
| rational coin-owner is going to sell you coins at a fast
| enough rate that you'll be able to increase your means of
| coin production. Put another way, the price you'd pay for
| the increased means of coin production will meet or exceed
| the total expected revenue created by staking those coins
| over their lifetime. So unless you know something the
| seller doesn't, you won't be able to profit by buying your
| way into staking.
|
| Overall, this makes PoS _less_ resilient and _less_
| egalitarian than PoW. While both require an up-front
| capital expenditure, the expenditure for PoS coin-
| production will meet or exceed the total expected revenue
| of those coins at the point of sale. So, the system is only
| as resilient as the nodes run by the people who bought in
| initially, and the only way to join later is to buy coins
| from people who want to exit (which would only be viable if
| these folks believed the coins are worth less than what you
| 're buying them for, which doesn't bode well for you as the
| buyer).
| jacoblambda wrote:
| One important difference in favour of PoS that isn't
| brought up often is the financial cost to pull off an
| attack. Pulling off an attack in most PoS protocols
| results in coin slashing for the attacker ("deletion" of
| coins used in the attack) and on top of that can (and
| likely will) result in coin devaluation as well. This
| makes a successful attack against a PoS system very very
| expensive. The resource is spent and actually burned.
|
| With PoW however the GPUs or ASICs don't disappear or
| lose value after the attack (caveat that the ASICs can
| lose value if networks switch away from the algorithm it
| is built for). The hardware can be used to attack
| "competitor" networks or used again in another attack
| against the network or other networks in the future.
|
| In this sense, I suspect that PoS networks are able to
| properly recover from successful attacks far easier as
| well as dissuade attacks from the offset.
| jude- wrote:
| It's far easier to break a PoS chain -- you simply knock
| the coin-holding nodes offline. Knock enough offline, and
| you can no longer reach quorum. If offline nodes' coins
| get slashed in order to reach quorum and restart block
| production, and the system permits forking, then why
| would offline nodes rejoin the original fork? They're
| incentivized to only consider forks where they're not
| slashed. If the system does not permit forking, then the
| system breaks once the attackers (1) stake a nominal
| amount of coins, and (2) knock enough other nodes offline
| such that they are the majority staker.
| jacoblambda wrote:
| This isn't really an attack unique to Proof of Stake. If
| a node goes offline they can lose rewards or even in rare
| cases have their coins slashed to some extent but that
| isn't inherent to a Proof of Stake overall. A decent
| number of Proof of Stake systems instead place reward
| penalties on pools/nodes that go offline. The idea being
| that it is a penalty for not maintaining sufficient
| infrastructure while also not being so severe that it
| could be leveraged in such an attack.
|
| Most PoS algorithms I've seen instead reserve stake
| slashing as a penalty for malicious behaviour. Going
| offline isn't by any means inherently malicious. There
| are however plenty of actively malicious actions that can
| be detected and reacted against. Often for the more
| severe penalties it will require some level of community
| involvement in the recovery stage to limit opportunities
| for abuse.
|
| Additionally, it shouldn't be easy to take a block
| producer offline and Stake Pool(or node) Operators should
| be preparing for these types of attacks. I've been
| watching some of the work being done in the Cardano Stake
| Pool Operator community and the various SPO guilds have
| decently sophisticated architectures. "Nodes"/"Pools" are
| broken up into Relays, Producers, and sometimes
| additionally Key Generators. Key Generators produce the
| periodically expiring KES keys and pass them to the
| Producers on a schedule (to minimise potential attack
| surfaces). The Producers actually engage in the consensus
| using the keys provided by the key generators and
| communicate through the relays. The Relays handle the
| throughput and communication. This allows the producers
| (and by extension the key generators if used) to be
| largely shielded from the open net. This also allows
| producers and relays to have a certain amount of
| redundancy/failover. An architecture like that may cost
| more (and eat into rewards a bit more) however they are
| far more difficult to DDoS or compromise.
|
| Since the barrier for the hardware is so low, a 1x2x2 or
| 1x2x3 (keygen x producer x relay) architecture can still
| be more than profitable (retaining 25% to 75% of the SPO
| rewards as profit). Additionally this has the advantage
| that various other income streams can be integrated in
| (state channel operation, compute nodes, storage nodes,
| etc) over time and the operation can be scaled up without
| compromising security or requiring a significant re-
| architecture.
|
| Proof of Stake can be just as secure as Proof of Work but
| it requires that the incentives be structured properly
| and sufficiently hedged against potential risks.
| jude- wrote:
| Okay, so instead of knocking your nodes offline, the
| attacker only has to commandeer them for just long enough
| to commit a slashable offense. That's usually easier
| anyway.
|
| This is fundamentally a double-edged sword -- the harsher
| your penalties are for bad behavior, the easier it is for
| someone to use a zero-day and kill your staking coins.
| But the laxer your penalties are, the more damage a buggy
| or malicious node can do with impunity.
|
| Either way, the resilience of PoS comes down to the
| resilience of the majority of its staking nodes, because
| once you lose _that_ , the system is dead. Once you
| control majority stake, it doesn't matter how many other
| offline coins exist -- you, as the majority staker,
| simply never mine their transactions.
|
| This isn't true for PoW systems. A PoW system can always
| be brought back to life, even after an arbitrarily long
| amount of inactivity, and even if all the previous miners
| cease mining. All you need is one miner, somewhere, that
| has a copy of the chainstate, and the system makes
| forward progress.
| Paradigma11 wrote:
| Staking rewards for new block generation is inflationary,
| so you are just not losing value by staking. Additional
| value is generated by fees and store of value.
|
| With PoW coin you are constantly devaluing your share of
| the blockchain by paying some third parties operating
| giant gpu farms and hydroelectric dams.
| jude- wrote:
| > block generation is inflationary > store of value.
|
| I stopped reading at this point.
| Paradigma11 wrote:
| Good to know.
| melolife wrote:
| Open membership is arguably a worse problem than stake
| requirements, as PoW participants do not have a vested
| interest in preserving the integrity of the chain.
| Ethereum 2 actually throttles validator entries and exits
| for exactly this reason.
|
| As an example, any sufficiently powerful entity can
| temporarily and affordably commandeer computational
| resources with the intention of disrupting the chain.
|
| Under PoS doing so would devalue your (presumably
| enormous) stake, so participants are at least
| incentivized to act in the interest of the chain.
| jude- wrote:
| Open membership means that the chain stays alive as long
| as anyone in the world wants it to. This isn't true for
| PoS chains -- you must to acquire tokens to keep the
| chain alive.
|
| > As an example, any sufficiently powerful entity can
| temporarily and affordably commandeer computational
| resources with the intention of disrupting the chain.
|
| A sufficiently powerful entity can DoS enough staked
| nodes that quorum can't be reached, and thereby force a
| PoS chain offline indefinitely for far less energy. If
| they're clever, they'll buy some PoS coins first, so that
| once the offline nodes all get slashed, they'll be the
| majority staker.
| sibeliuss wrote:
| It's worth investigating Algorand's Pure Proof-of-Stake
| model and seeing how it compares to other POS
| implementations: https://algorand.foundation/algorand-
| protocol/about-algorand...
| jude- wrote:
| If the means of coin production require owning coins, you
| have these problems that PoW does not have. Definitely
| true for Algorand.
| sibeliuss wrote:
| Owning coins is a means of validating the network and
| appending to the blockchain, not producing new coins.
| jude- wrote:
| Try reading the paper:
| https://people.csail.mit.edu/nickolai/papers/gilad-
| algorand-...
|
| You have to own coins to produce blocks.
| sibeliuss wrote:
| > If the means of coin production require owning coins,
| you have these problems that PoW does not have
|
| Producing blocks != coin production
| jude- wrote:
| If you're producing blocks, you're getting paid
| (otherwise what's the point). If the probability you get
| picked to produce a block is proportional to how many
| coins you own, then you're getting paid proportional to
| how many coins you own.
|
| I don't care for Algorand's shell game of trying to say
| that all tokens have been minted already, and are just
| being distributed. If it's the case that nodes who stake
| more coins are getting paid more coins, then all of my
| analysis holds.
| sibeliuss wrote:
| > If it's the case that nodes who stake more coins are
| getting paid more coins, then all of my analysis holds
|
| Thats fine, but it's an important clarification. All the
| tokens _have_ been minted already, and _are_ just being
| distributed. The mechanics are different. Owning 1 coin
| is one potential vote in a lottery to determine the
| validity of a proposed block. This is not the generation
| of new coins.
|
| In any case, regarding nodes and payment, that process is
| being phased out by their new governance model which was
| just released the other day:
| https://algorand.foundation/the-algo/algo-governance.
| jude- wrote:
| I'm glad we agree, then, that Algorand is just as
| vulnerable as all the rest of the PoS systems.
| dlubarov wrote:
| It seems like your contention is that PoS coins are
| priced based on discounted cash flow, correct? I think
| that's a reasonable model, but it's hardly unique to PoS
| coins, and it doesn't really seem problematic.
|
| > the system is only as resilient as the nodes run by the
| people who bought in initially
|
| This point applies to any assets that generate cash flow,
| like stocks, yet they seem to have plenty of trading
| volume. And looking at some numbers on CoinMarketCap, it
| doesn't seem like PoS coins have lower trading volume
| than PoW coins. As one example, XTZ seems to have ~double
| BTC's turnover in the past 24h.
|
| > these folks believed the coins are worth less than what
| you're buying them for, which doesn't bode well for you
| as the buyer
|
| This could be said about most assets, even ones without
| cash flow like PoW coins. In practice there are other
| reasons for selling, like wanting to offset gains/losses
| for tax purposes, or wanting to buy food.
| jude- wrote:
| > It seems like your contention is that PoS coins are
| priced based on discounted cash flow, correct? I think
| that's a reasonable model, but it's hardly unique to PoS
| coins, and it doesn't really seem problematic.
|
| It's very problematic if the system's liveness is tied to
| owning a coin. If I can knock PoS nodes offline, I can
| not only cause a quorum failure, but also I can cause the
| offline nodes's coins to get slashed (which is usually
| how PoS chains deal with this problem). Moreover, there's
| no recovery from this -- the temporarily-offline nodes
| are forever slashed, even if they come online later.
| (EDIT: I'm not limited to knocking nodes offline -- if I
| can commandeer them through a zero-day, the effect is the
| same: I make your nodes commit a slashable offense).
|
| Contrast this to PoW, where even if you manage to knock a
| majority of miners offline, you ultimately have to _keep
| them offline_ in order to prevent them from later
| generating and broadcasting a better chain than the one
| you want to exist. Even if you can _physically destroy_
| the majority of miners, the chain still lives on, and new
| miners can be built and brought online elsewhere.
|
| > This point applies to any assets that generate cash
| flow, like stocks, yet they seem to have plenty of
| trading volume
|
| Trading volume is easily faked in crypto-land -- a whale
| just sends coins to themselves. I'd like to see some hard
| evidence that the volumes are not from wash-trading.
| Also, this isn't relevant at all to the system's
| resilience.
|
| > In practice there are other reasons for selling, like
| wanting to offset gains/losses for tax purposes, or
| wanting to buy food.
|
| I didn't say you don't sell coins. I said you don't sell
| enough of them that the buyer can use them to increase
| their rate of coin production.
| RhodoGSA wrote:
| Thanks for this little tangent, it was pretty
| informative. what's your opinions on nominated proof of
| stake?
| SkyMarshal wrote:
| PoW is anchored in some real-world value, the cost of
| electricity. PoS is not. Most of PoW's security and tamper-
| resistance advantages derive from that characteristic.
| yokem55 wrote:
| Ultimately, proof of stake has the same property. The
| value of the network that the stake protects is rooted in
| some kind of real world value. The tokens from the
| network can be traded for fiat money that is worth
| something. So, unless the value of the network being
| protected falls to zero, the stakes themselves are worth
| something. An attack on a proof of stake network still
| requires the resources to procure the attacking stakes.
| So, you still have a direct relationship between the item
| being protected and the cost of the protection.
| yokem55 wrote:
| I would add - by focusing on using the economic value of
| electricity and stacks of special semiconductors to
| secure your network, you actually are making the network
| vulnerable to folks that can effectively create arbitrage
| on those specific narrow resources. In contrast, proof of
| stake can leverage a much broader range of economic
| resources that have far fewer arbitrage opportunities.
| fossuser wrote:
| This is the best (and also approachable well-written) book
| on the topic that I've found:
| https://bitcoinbook.cs.princeton.edu/
|
| My (possibly incorrect) understanding is that POW is
| computationally expensive because that large investment of
| computation is what creates a chain of successive blocks
| (the blockchain). This prevents someone from rewriting
| history of transactions on the public chain (which would
| allow them to 'double-spend' or to take their money back).
|
| POW currencies are guaranteed to prevent this kind of abuse
| unless any individual entity is able to get more than 51%.
| There's an incentive in addition to this because corrupting
| the integrity of the network would also devalue the
| currency. Larger networks (like BTC) are harder to do a
| hostile take over of because it's harder to get that much
| compute (though mining centralization is a risk).
|
| POS relies on some variant individuals 'staking' coins to
| enable transactions, this means putting them up in escrow
| sort of in the network (they are paid small fees for this
| based on how much they stake) and if abuse is attempted,
| the system takes those staked coins away. There are no
| mathematical guarantees outside of this incentive.
|
| POS is not as standardized across different currencies so I
| may be missing important bits in my understanding.
| plokiju wrote:
| > POW currencies are guaranteed to prevent this kind of
| abuse unless any individual entity is able to get more
| than 51%. There's an incentive in addition to this
| because corrupting the integrity of the network would
| also devalue the currency. Larger networks (like BTC) are
| harder to do a hostile take over of because it's harder
| to get that much compute (though mining centralization is
| a risk).
|
| Couldn't this be re-written as:
|
| > POS currencies are guaranteed to prevent this kind of
| abuse unless any individual entity is able to get more
| than 51% of the staked currency. There's an incentive in
| addition to this because corrupting the integrity of the
| network would also devalue the currency. Larger networks
| (like ETH) are harder to do a hostile take over of
| because it's harder to get that much stake (though
| validator centralization is a risk).
|
| My (non-expert) interpretation is that staking is just an
| abstraction of mining, and they are secured by the same
| incentive system
| fossuser wrote:
| This comment above does a better job than I did at
| explaining why the staking incentive is somewhat flawed:
| https://news.ycombinator.com/item?id=26810686
| plokiju wrote:
| > PoS is closed-membership with a veneer of open-
| membership, because the means of coin production are tied
| to owning a coin already. What this means in practice is
| that no rational coin-owner is going to sell you coins at
| a fast enough rate that you'll be able to increase your
| means of coin production
|
| It seems to me like they're arguing that PoW is more
| egalitarian/decentralized, which may be a fair point. But
| using the same argument, attackers being forced to buy
| stake in the open market should make PoS even more secure
| against 51% attacks than PoW.
|
| I think this is a good post explaining the tradeoffs:
| https://vitalik.ca/general/2020/11/06/pos2020.html
| jude- wrote:
| Why would they need to buy 51% stake? Just buy x% and
| then knock the remaining staking nodes offline so that
| less than 2x% stake remains participating. That's often
| much cheaper.
| skybrian wrote:
| Well, "direct listing" apparently. I don't think that counts as
| an IPO since there's no offering?
|
| It seems not to be trading yet, or at least Google and Yahoo
| don't have it.
| tenaciousDaniel wrote:
| Fidelity doesn't have it yet either. It gives an error,
| something about not being able to purchase it until its on the
| secondary market.
| thefourthchime wrote:
| I came here with the same question. When is this thing
| actually going live?
| _u wrote:
| Precise timing isn't clear yet. MarketWatch hints to 1:30PM
| Eastern Time as a possibility
| teddyg1 wrote:
| It's live now (as of 1:40pm Eastern).
| unreal37 wrote:
| "early afternoon" is when people expect the first trades to
| hit.
| Hnrobert42 wrote:
| "Additionally, it's worth celebrating that Coinbase was always a
| good business, i.e. it always made money."
|
| Why is that worth celebrating? A company made money. That is what
| companies are created to do. I suppose if you invested in
| Coinbase, you could celebrate it. Otherwise, who cares?
| dang wrote:
| It's a big internet cliche to boo companies that don't (yet)
| make money. The flip side would be to yay companies that do.
|
| Not that many humans are consistent in that way, but someone
| out there must be!
| Hnrobert42 wrote:
| I also don't care about companies that don't make money.
| endisneigh wrote:
| It will be interesting to see how Coinbase performs compared to a
| weighted average of the top 3 cryptos directly.
|
| Anyway, Coinbase is a good case study on how UX/UI makes all the
| difference. I'll definitely study them in the future.
| ignoramous wrote:
| I believe Karri Saarinen was the founding designer at Coinbase,
| and here's a relevant blog entry from them:
| https://karrisaarinen.com/posts/designing-coinbase/
|
| See also: Metalab's showcase of their collab with the Coinbase
| design team: https://projects.metalab.com/coinbase
| enraged_camel wrote:
| A friend of mine knows several "movers and shakers" in the
| crypto space, and he says they're all going to invest heavily
| in COIN stock because they understand that everyone else views
| it as a proxy for crypto in general.
|
| edit: why the downvotes?
| hanniabu wrote:
| Can't wait for another 100 P/E ratio stock /s
| sowbug wrote:
| I didn't vote, but I would guess that the downvotes are
| because your post is indistinguishable from pump-and-dump
| posts on trading forums.
| exdsq wrote:
| I imagine it should be tightly correlated. Saying this, the
| stock market is a lot more regulated and has a different type
| of investor so I think it will end up being much more stable
| and less correlated.
| capableweb wrote:
| I predict a slow, constant increase in value over time, not
| even going down when cryptocurrencies are going down, as people
| still want to buy/sell cryptocurrencies when prices go down, so
| Coinbase will still make a killing as a company no matter what.
| cj wrote:
| > as people still want to buy/sell cryptocurrencies when
| prices go down
|
| Is this true?
|
| If you look back at the price graphs, there's typically a
| huge run up every 1-3 years, followed by a crash, followed by
| another run up 1-3 years later. We're in the middle of a run
| up.
|
| The run up is when people get excited and buy. After the
| crash, I would guess that enthusiasm about crypto will
| lessen, until the next run up.
|
| I think this is somewhat supported by the fact that
| Coinbase's most recent quarter brought in an insanely higher
| amount of revenue compared with previous quarters before the
| latest run up.
| capableweb wrote:
| > Is this true?
|
| Yes. Go here: https://coinmarketcap.com/charts/ and select
| before February this year (big spike in volume) and look at
| the transaction volume chart below the price chart.
| Steadily increasing rather than jumping, going down and
| jumping again. I'm guessing transaction volume for Coinbase
| looks the same way, as people need fiat money for
| cryptocurrencies and others place fiat money in
| cryptocurrencies no matter if the price goes up or down.
| blockchainman wrote:
| Congratulations to coinbase and the team ! Crypto and blockchain
| technology are the 800 pound gorilla that will disrupt everything
| in society ! We are coming !
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