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

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

#141

Post by makomk » Wed, Aug 02, 2017, 4:38 PM UTC

brianberns wrote: post #106

jbb67 wrote: post #70

Earlier quoted context omitted.

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?

The handful of smaller exchanges that support Bitcoin Cash gave everyone who had Bitcoins on their exchanges at the time of the fork an equal balance in Bitcoin Cash, and it's that relatively small amount of on-exchange BCH that people have been trading. (I think one exchange allowed trading before the fork even happened, and just required people to have both BCH and BTC in order to make withdrawals before the fork.) Actual on-chain Bitcoin Cash cannot be sold right now as it can't be deposited in any of the exchanges, and buying it is iffy too due to some of them not allowing withdrawals either. The price of Bittrex BCH has also generally been about 40-50% higher than BCH on the other exchanges for some reason.

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

#142

Post by abduhl » Wed, Aug 02, 2017, 4:38 PM UTC

throwaway2016a wrote: post #83

chrisabrams wrote: post #60

Earlier quoted context omitted.

It's a good way of looking at it. Another perspective, which makes this issue so complicated, is that we could compare this to: a company on the stock exchange splitting into two companies, investors should be getting shares in both companies, but the brokerage decides they are not going to recognize the second company and thus the investors don't get their shares in the second company.

In practice that's often not how that works, though. I had a company I have shares in that split in two and they gave me a choice, either convert my shares to the new company or keep them in the existing company. I didn't automatically get shares in the new company and if I opted too I would have lost the shares in the original company.

What company was this? I have literally never heard of a spin off that did not result in a stockholder getting ownership of the parent and spin off, or the stockholder retaining ownership of one company and being paid out for the value of their ownership in the other company.

Was this a publicly traded company?

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

#143

Post by MichaelGG » Wed, Aug 02, 2017, 4:40 PM UTC

anthonybsd wrote: post #72

alekratz wrote: post #54

Earlier quoted context omitted.

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 you…

No, when you hold "bitcoins" with Coinbase, Coinbase just marks that down in their MongoDB database. You don't have a Bitcoin wallet on Coinbase at all. Coinbase has various wallets that they'll use in order to honour their MongoDB records of who they owe what.

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

#144

Post by MichaelGG » Wed, Aug 02, 2017, 4:43 PM UTC

mikeash wrote: post #93

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?

I imagine the line gets drawn at a certain value. If Bitcoin Cash were trading at two cents a coin, this wouldn't be happening. Your fork would probably be at that end of things.

Exactly. Coinbase should have learned from Ethereum Classic and just announced a general policy. If a fork ends up with a certain volume and certain % of the original over a certain amount of time (to avoid someone inflating the stats temporarily), then Coinbase will support at least withdrawals. They can cap it to a month/year/whatever after the fork so it's not an indefinite issue they need to deal with.

By doing that, uncertainty is eliminated, people can keep their coins on Coinbase knowing if they're worth anything serious, then they'll be fine. Zero downside.

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

#145

Post by fauigerzigerk » Wed, Aug 02, 2017, 4:44 PM UTC

vocatus_gate wrote: post #115

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…

You're more or less correct. Coinbase is sitting on the keys to customer wallets/funds. When the fork happened, those keys work both on the original Bitcoin network and the new "Bitcoin Cash" network. Which, apparently turned out to have substantial value (currently trading ~$650). Coinbase made a colossal mistake in outright ignoring BCC and will likely get sued (and lose) because of it. If I had 10 BTC on CB and mi…

>If I had 10 BTC on CB and missed out on the opportunity to trade or sell $6,500 worth of free BCC I just got, I'd be mad too.

But is that really what's going on? As I understand it, each BTC also became a BCC at the time of the fork, and owners can now decide on which network they want to use these units (CB users are not technically owners though). No free BCCs were distributed.

If I were to decide to move 1 BTC to a BCC wallet now, I would buy something worth $650 for something worth $2700.

That is my very tentative understanding at least.

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

#146

Post by runeks » Wed, Aug 02, 2017, 4:47 PM UTC

This seems fishy to me. There’s a huge divergence in the price between the various exchanges that claim to trade BCH[1], signaling that arbitrageurs are unable to deposit to/withdraw from the exchanges.

Many exchanges aren’t even allowing BCH deposits, meaning that the price isn’t connected to the Bitcoin Cash blockchain, since you can’t sell these coins into the market. Right now there seems to exist multiple different BCH — one for each exchange — all of them with a different price because they’re not joined by the coins on the Bitcoin Cash blockchain.

[1] https://coinmarketcap.com/currencies/bitcoin-cash/#markets

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

#147

Post by MichaelGG » Wed, Aug 02, 2017, 4:52 PM UTC

yebyen wrote: post #125

MichaelGG wrote: post #79

Earlier quoted context omitted.

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…

I had a wallet.dat from a regular Core client, full node. I wasn't able to find a client that seemed to be able to import that wallet.dat. If you know a way to handle that, great! I don't know if I'd trust some arbitrary client to still be around and maintained when I need to retrieve my funds from the latest version of the block chain. I'm marginally afraid of what will happen if the person maintaining Electrum died…

https://en.bitcoin.it/wiki/Transferring_coins_from_Bitcoin-Q...

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

#148

Post by fosap » Wed, Aug 02, 2017, 4:54 PM UTC

jmilloy wrote: post #116

fosap wrote: post #91

Earlier quoted context omitted.

>Coinbase can do anything they want! That's no how laws work. Not even remotely. Thankfully. Consider you order somebody (X) to transport your pregnant cow. At the destination the cow arrives. It's not pregnant anymore and X refuses to give you the calf because... well, because he can do anything he wants. That's theft.

It's more like, while transporting the pregnant cows, one bird jumped on each cow in the trailer along the way, and now you're demanding X gives you not just the cows, but the birds, too, even though they're hard to catch.

No, is not like that. Both the calf to the cow and bch (bcc ?) to btc are "intrinsic". They are the result of the nature of these things. Not gifts, not accidents, not abritrary.

And coinbase keeps the bch (as they announced), so the bird analogy does not fit at all.

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

#149

Post by MichaelGG » Wed, Aug 02, 2017, 4:57 PM UTC

pera wrote: post #124

lawn wrote: post #95

Earlier quoted context omitted.

> Third, "Bitcoin Cash" is an altcoin, and anyone can create a similar fork from the Bitcoin blockchain, should Coinbase support them all?? Good luck creating a fork with currently 20% of the value of Bitcoin.

Non sequitur, but anyways: I could hard-fork the blockchain any day and sell each mined altcoin to myself to then sue Coinbase for not supporting my fork. How that makes any sense?

Sure if you can get a serious volume and trade on other exchanges where people are trading and keep it up for a bit, then yes, Coinbase should support your fork.

We'll see in a few more days when real trading is happening where BCC ends up.

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

#150

Post by undersuit » Wed, Aug 02, 2017, 4:57 PM UTC

vocatus_gate wrote: post #136

undersuit wrote: post #108

Earlier quoted context omitted.

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?

Yes, Coinbase limits BTC withdrawals based on current USD value. A lot of traders lost money because they couldn't get their funds out in time. Coinbase will likely get sued and it'll cost them.

No not witdrawals. Is there a Coinbase imposed limit to how many Bitcoins I can send to another wallet? And was that recently implemented?

Coinbase certainly has conversion limits, but anyone that wanted their Bitcoin into Dollars knew about this limit far before the warning of Coinbase only supporting one side of the split, and converting into Dollars means you don't want to risk the split and you should have been diversifying far before Coinbases announcement.