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

fortune.com

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

#101

Post by mikeash »

Cthulhu_ wrote: post #81
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?

There was a hint that customers should withdraw their BTC from Coinbase before the split and (if they want to) move it back afterwards; the people that are suing knew this, and knew that Coinbase wasn't going to support it (at first), and yet kept their BTC hosted in Coinbase's wallets.

You can't be released from liability for doing something stupid and harmful just by warning people that you're about to do something stupid and harmful.

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

#104

Post by MichaelGG »

Klathmon wrote: post #61
MichaelGG wrote: post #40

Earlier quoted context omitted.

No they didn't. They could have offered withdrawals of BCC, eliminating all uncertainty. That would be handling it "best". Or even a clear policy as to under which circumstances they will offer BCC would be better. (If they said they'd do withdrawals if the price stays over 0.1BTC, that'd have placated a lot of people.) Giving notice so as to not totally screw customers is sort of the least they could do. How they ge…

Even the exhanges that support just about every currency out there still don't allow deposits/withdraws of BCC right now. There really is a lot of uncertainty around this whole situation, and due to the nature of a split a mistake in one of the coins can cause the user to lose both of them. It's not an area that I want my services rushing into and making mistakes. If I were in Coinbase's position, I'd make sure that…

Allowing BCC withdrawal doesn't mean it has to happen day one. But they could have said "within x days we will offer BCC withdrawl". That is better than they did.

Explain how you'd lose both coins? (If you mean 'well they could rush a code change and lose all their money', yes that's a risk. They shouldn't rush it.) The BCC chain has 2 way replay protection (granted, late addition) - but if it didn't, then Coinbase should have actively moved coins on BCC to prevent replays.

And if they "might", then it's unclear. That's just saying they're going to wait and see if BCC is popular enough. Instead they should have defined criteria of what popular enough is, and that'd have put to rest people's concerns.

All I'm objecting to is that "they handled it the best", which is clearly not the case.

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

#105

Post by mikeash »

fauigerzigerk wrote: post #94
btzll wrote: post #50

Earlier quoted context omitted.

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.

There's something I don't quite get (being a cryptocurrency newbie). Why can coinbase users not simply import their private key into some other wallet that supports both Bitcoin and Bitcoin Cash? My understanding is that Bitcoin Cash recognises the old Bitcoin blockchain as their own up to the point of the fork. So as of Aug 1st all Bitcoin balances are Bitcoin Cash balances as well. Or is that not how it works?

Coinbase users don't have a private key for their Coinbase balance. They have an account with Coinbase, and Coinbase has their own private keys for their internal wallets. When you withdraw money from Coinbase, you're asking them to use their private keys to sign a transaction sending bitcoins to an address you specify.

What users could have done was withdraw their Coinbase balance into their own wallet, then they'd have coins on both forks. This had to be done before the fork happened, though. Now that it has, anyone whose coins were in Coinbase at the time of the fork is at the mercy of Coinbase.

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

#106

Post by brianberns »

jbb67 wrote: post #70
brianberns wrote: post #41

As an outsider, the remarkable thing about this to me is that one can (for now) sell the same bitcoins twice, right? If I own 1 bitcoin pre-fork, I can sell it for $2700 and then sell the exact same bitcoin again as Bitcoin Cash for $700. Crazy.

Well, you could if there was any practical way to sell the bitcoin cash version at the moment. I personally think it likely that once you can, you'll be lucky to get $7 for one.

If there's no practical way to sell bitcoin cash, where does the $700 valuation come from?

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

#108

Post by undersuit »

Expez wrote: post #84
Cthulhu_ wrote: post #81

Earlier quoted context omitted.

There was a hint that customers should withdraw their BTC from Coinbase before the split and (if they want to) move it back afterwards; the people that are suing knew this, and knew that Coinbase wasn't going to support it (at first), and yet kept their BTC hosted in Coinbase's wallets.

With withdrawal limits being what they are, this is easier said than done for a lot of users, I'd guess.

Was their any actual limit to moving Bitcoins held in Coinbase to another wallet/software? If there are why is it a problem now and not always?

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

#109

Post by shpongled »

jmilloy wrote: post #86

I don't really follow these cryptocurrencies very closely. I assume that Coinbase is sitting on keys/wallets that own Bitcoin belonging to their customers, which would mean that they are now also sitting on keys/wallets that own Bitcoin Cash. So could Coinbase short (some of) that Bitcoin Cash by selling it on other exchanges? I read this statement from Coinbase: "If this decision were to change in the future and Coi…

Yes, Coinbase would control the private keys for any bitcoin stored there. So the issue is most likely that Coinbase hold's the majority of it's digital currencies in cold storage - essentially stored on air-gapped computers.

To redeem your bitcoin cash (BCH), you have to import your private keys into a new bitcoin cash wallet, and then transfer them. If you do not transfer your BTC to a new wallet before importing your private keys to the BCH wallet, a malicious wallet could then have access to both your BCH and BTC. With replay protection, the solution is to move your BTC to a new wallet, then import the old private keys (with a balance of 0 BTC, but still has BCH associated) to the BCH wallet.

Hopefully you can see all of the failure points here. I have coins stored in cold storage and haven't yet bothered to claim any BCH due to the hassle, and lack of exchanges where you can sell it.

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

#110

Post by lawn »

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…

> Coinbase isn't the only source to buy/sell BCC.

That's not what this is about. They want to withdraw their BCC which duplicated from their BTC.

> I think it's ridiculous that a company could be sued because they don't offer a new service.

I think it's ridiculous if a company, very similar to a bank, couldn't be sued when they effectively haircut their customers of 20% profit of their coins.

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