Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue • Hacker News Board

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#71

Post by smokeyj » Wed, Aug 02, 2017, 3:41 PM UTC

gruez wrote: post #46

MichaelGG wrote: post #24

Earlier quoted context omitted.

You can read up on it all over. But the short answer is Bitcoin Cash forked Bitcoin and has 8MB blocks, which would have eliminated congestion and lowered fees on Bitcoin during the past year. Both sides (small Vs big) have economic incentives behind them, making the argument extra vitriolic. But larger blocks allow on chain growth, keeping it peer to peer without requiring any 3rd parties. (And the answer that 8x mo…

8 MB blocks = 1.15GB per day, or 420GB per year. Sure it might be feasible to run a node if you're in a first world country with fast internet and cheap storage (cost of living wise), but even in rural america, 34.5GB is a significant chunk of bandwidth. Not to mention they eventually plan to raise it to 32MB, which works out to 4.6GB a day or 1.63TB/year.

As if people in the third world have money for transaction fees, opening and closing lightning channels, and of course locking up funds to use the channel.

The idea that bitcoin can exist only as a settlement layer is a dream. It was pitched as something you can buy a cup of coffee with. Now the core team wants to call that a "spam transaction". Yeah right. Time to fire Core.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#72

Post by anthonybsd » Wed, Aug 02, 2017, 3:41 PM UTC

alekratz wrote: post #54

bdonlan wrote: post #42

It's an interesting situation, but assigning liability to coinbase for this seems like it'd be a problem long term. Unlike traditional securities, there's nothing stopping me from going out and making my own fork tomorrow - and then would all exchanges be required to add support for that fork, too? Where do you draw the line?

Yeah, that's how I feel about this. It's not coinbase's responsibility to act as a host to all cryptocurrencies. The article states, > An activist group, which claims Coinbase's decision is akin to a brokerage withholding new shares from its investors, ... which is not at all what it's like. Coinbase isn't the only source to buy/sell BCC. I think it's ridiculous that a company could be sued because they don't offer a…

>which is not at all what it's like. Coinbase isn't the only source to buy/sell BCC. I think it's ridiculous that a company could be sued because they don't offer a new service.

As it happens, it's slightly more complicated than what you make it out to be. It's not a question of them simply not offering to support the new service. You see, when you hold your bitcoins inside Coinbase they have a private address of your wallet which they don't disclose to you. You can of course withdraw the bitcoins at any time (we'll get back to this later) and transfer them into a wallet of your choice. Now when the fork happens you, as the owner of the private key to your wallet now own the same amount of bitcoins on both blockchains. Both, as it appears have market value. However, because coinbase is the sole entity possessing private keys in this case and because they have announced that they won't support BCC they are effectively pocketing the entire market value of the BCC bitcoins that their customers have entrusted them with, which is likely to be in millions of dollars. When they announced that they wouldn't support BCC a lot of people rushed to withdraw their money from Coinbase into other wallets. However, a lot of people were unable to do so due to a variety of reasons and Coinbase is notorious for having atrocious customer service in matters like this. Hence the outrage.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#73

Post by barkingcat » Wed, Aug 02, 2017, 3:42 PM UTC

Haha why is there "fiduciary" duty when Coinbase is not a bank, not a security agency, and not any type of share that people bought into (ie customers are not shareholder).

Coinbase can do anything they want!

Also, I suggest it's people's own fault for storing their bitcoins at a place that does not give access to their own private keys. This fork has been a long time coming. Everyone and their mother was warned to keep your own bitcoins in your own privately controlled wallet (entirely offline if possible) to weather this fork.

Anyone who cries that Coinbase didn't do whatever is being childish and deserves it.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#74

Post by lawn » Wed, Aug 02, 2017, 3:42 PM UTC

bdonlan wrote: post #42

It's an interesting situation, but assigning liability to coinbase for this seems like it'd be a problem long term. Unlike traditional securities, there's nothing stopping me from going out and making my own fork tomorrow - and then would all exchanges be required to add support for that fork, too? Where do you draw the line?

As others have said, it really depends on the value of the fork. If you make a fork worth nothing, nobody's going to care.

But as right now Bitcoin Cash is worth $634 and regular Bitcoin $2727 per coin according to coinmarketcap.com. That's 23% the customers are loosing out on instantly.

And the defense that the users should be responsible to withdraw your coins if you want to keep it on both forks is disingenuous. There are withdrawal limits and requests for raising the limit goes unanswered for months due to high demand. Those users have literally no course of action. Also Coinbase issued their stance on Bitcoin Cash 10 days before the fork, this doesn't leave much leeway for customers on vacation for example.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#75

Post by JustinAiken » Wed, Aug 02, 2017, 3:44 PM UTC

gruez wrote: post #46

MichaelGG wrote: post #24

Earlier quoted context omitted.

You can read up on it all over. But the short answer is Bitcoin Cash forked Bitcoin and has 8MB blocks, which would have eliminated congestion and lowered fees on Bitcoin during the past year. Both sides (small Vs big) have economic incentives behind them, making the argument extra vitriolic. But larger blocks allow on chain growth, keeping it peer to peer without requiring any 3rd parties. (And the answer that 8x mo…

8 MB blocks = 1.15GB per day, or 420GB per year. Sure it might be feasible to run a node if you're in a first world country with fast internet and cheap storage (cost of living wise), but even in rural america, 34.5GB is a significant chunk of bandwidth. Not to mention they eventually plan to raise it to 32MB, which works out to 4.6GB a day or 1.63TB/year.

You don't need to run a full node to send/receive Bitcoin/BCC though.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#76

Post by makomk » Wed, Aug 02, 2017, 3:45 PM UTC

btzll wrote: post #50

bdonlan wrote: post #42

It's an interesting situation, but assigning liability to coinbase for this seems like it'd be a problem long term. Unlike traditional securities, there's nothing stopping me from going out and making my own fork tomorrow - and then would all exchanges be required to add support for that fork, too? Where do you draw the line?

This is not a random fork. This is a fork with almost $400 million 24 hour volume. Coinbase should allow users to withdraw their BCC, since they are sitting on a huge pile of BCC units, which belong to customers.

Even the exchanges that trading is occuring on aren't necessarily allowing users to withdraw their BCC/BCH yet. Kraken say deposits and withdrawals may not be available for several days: https://twitter.com/krakenfx/status/892689436109971456 Not sure about ViaBTC and Bittrex.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#77

Post by simias » Wed, Aug 02, 2017, 3:45 PM UTC

jncraton wrote: post #58

gtrubetskoy wrote: post #34

What I think all the press isn't making very clear is that to the best of my understanding for every Bitcoin you own, you get a Bitcoin Cash coin. There is no "conversion", it is free money for all BTC holders. Everyone who owned BTC, now owns BTC+BCC. Of course if your BTC is not real, but is held by an exchange such as Coinbase, how you get your BCC isn't at all clear.

> Of course if your BTC is not real, but is held by an exchange such as Coinbase, how you get your BCC isn't at all clear. Your BTC should still be "real", but the exchange holds the keys instead of you. Your point stands about it being unclear how you would access your BCC. If you aren't allowed access to your BCC, there's nothing preventing exchanges from dumping the BCC for cash as far as I can tell from a purely…

What if the exchange didn't actually hold the BTC but only had a line in the database with an "IOU xBTC"? Maybe at this point the exchange had used its stored BTC to speculate on an other market and attempt to increase its profets. Maybe they bought Ether or gold or Microsoft stock.

Normally it doesn't matter as long as the exchange is capable of sending you back the coins when you claim them but in case of a fork they'd have to buy two coins instead.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#78

Post by Cthulhu_ » Wed, Aug 02, 2017, 3:46 PM UTC

lawn wrote: post #74

bdonlan wrote: post #42

It's an interesting situation, but assigning liability to coinbase for this seems like it'd be a problem long term. Unlike traditional securities, there's nothing stopping me from going out and making my own fork tomorrow - and then would all exchanges be required to add support for that fork, too? Where do you draw the line?

As others have said, it really depends on the value of the fork. If you make a fork worth nothing, nobody's going to care. But as right now Bitcoin Cash is worth $634 and regular Bitcoin $2727 per coin according to coinmarketcap.com. That's 23% the customers are loosing out on instantly. And the defense that the users should be responsible to withdraw your coins if you want to keep it on both forks is disingenuous. T…

But there's other cryptocurrencies with a nontrivial market cap out there; Coinbase only supports three. Then there's fiat currency, of which Coinbase's support is also limited.

Again, where do they draw the line?

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#79

Post by MichaelGG » Wed, Aug 02, 2017, 3:46 PM UTC

yebyen wrote: post #35

MichaelGG wrote: post #24

Earlier quoted context omitted.

You can read up on it all over. But the short answer is Bitcoin Cash forked Bitcoin and has 8MB blocks, which would have eliminated congestion and lowered fees on Bitcoin during the past year. Both sides (small Vs big) have economic incentives behind them, making the argument extra vitriolic. But larger blocks allow on chain growth, keeping it peer to peer without requiring any 3rd parties. (And the answer that 8x mo…

It doesn't make anything infeasible today. But if you think both Bitcoin and Bitcoin Cash are going to be around in 20 years, and you want to support both, now you've just added 800% to your annual storage growth rate. (Assuming that BCC always mines full blocks, which I will admit seems unlikely) I have to be honest, I was keeping a cold wallet with some ~1-2 BTC in it until the price reached record high territory i…

What was your goal in downloading the entire chain versus using a light client? Or why didn't you just download the last few blocks plus UTXOs? Either way you need a trust anchor, so starting from something recent makes sense if you don't want to wait days to verify the entire chain.

And if you need to view specific blocks or transactions, use an online viewer or download that specific block and check the hash of the block. 10 years of 10 minute blocks is only 16MB of hashes (32 bytes per block). So it's trivial to get all block hashes and then freely use other sources to check specific parts.

Storage is cheap. 2TB drives are a bit over $50.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#80

Post by bradly » Wed, Aug 02, 2017, 3:48 PM UTC

pera wrote: post #62

From the class-action lawsuit website "FAQ": > Coinbase allowed users to withdraw BTC prior to the hard fork > The process of transferring Bitcoin can be complex and potentially very risky even for experienced users. Additionally, creation of a new account or wallet on a different exchange is often a lengthy and difficult process. While Coinbase did suggest to users that they could move their BTC to a different walle…

I had to move my coins out of Coinbase last week and it was very scary. I had never moved coins before and I even though the process seems simple, I had very little confidence in what I was doing. Honestly, I almost just left the coins in Coinbase figuring losing 10% of value from BCH is still probably positive equity compared to my perceived risk of losing it all which felt between 25% and 50%.