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

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

#281

Post by paulmd » Wed, Aug 02, 2017, 7:28 PM UTC

MichaelGG wrote: post #181

kijin wrote: post #155

Earlier quoted context omitted.

> So doing even 1000/sec means around 1.8Mbps (plus overhead) just to get the flow of transactions. Huh, maybe we should come up with a cryptocurrency where you are awarded new blocks for the storage and bandwidth you contribute to the effort, rather than for how many hashes you can calculate per second. After all, if we're hoping to handling transactions on the scale of Visa, and we don't like centralization, we nee…

They don't need to store everything. All that's needed is the list of addresses and balances (UTXOs), and the last few blocks. A hash chain of 10 years of 10 minute blocks is only a few MB, so it should be something we can distribute reliably. UTXOs are a couple GB but will grow.

But, now you have a stateful application running in the cloud, vs an immutable blockchain. And that implicitly means you are now trusting authoritative nodes to hold that state. This is basically moving closer and closer to just a bunch of nodes running a database with some consensus mechanism, rather than an actual blockchain.

(I'm not personally sold that this is actually a distinction that matters - after all, we are already implicitly trusting "authoritative nodes" to deliver the blockchain, and the same mechanism that prevents alteration of the blockchain right now would also prevent altering the database state. Namely, that nobody else is going to accept the version of history where I own infinity bitcoins, regardless of how we record that state.)

A middle ground might be to have the full state available to nodes that want to verify, but also implement a "checkpoint/epoch" mechanism on top for "fast clients" who aren't overly concerned about a massive concerted-but-silent attack on Bitcoin escaping notice.

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

#282

Post by barkingcat » Wed, Aug 02, 2017, 7:29 PM UTC

uncoder0 wrote: post #190

barkingcat wrote: post #172

Earlier quoted context omitted.

The difference is Coinbase clearly announced their position that they will NOT honour Bitcoin Cash ahead of time https://blog.coinbase.com/update-for-customers-with-bitcoin-... Basically, they said "if your pregnant cow gives birth, we will not give you the calf. If you want your calf, take your cow away from Coinbase and keep it on your own pasture!" And their customers heard it, said ok I'll keep the cow with you,…

The problem is they have a 48 hour timer on cold wallets. Which leaves you 2 days to move those coins and if you have a withdrawal limit of $10k but you had 20 BTC in cold storage you were only able to get ~4 btc out of coinbase in time.

This fork was foretold weeks or months ago. Sure, the precise timing of the fork wasn't known until July, but everyone has been talking about "bitcoin's gonna fork" for ages - even hit hacker news multiple times.

Bitcoin holders need to take responsibility for their own holdings, especially when there is no FDIC or any type of assurance that your coins are going to be your coins.

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

#283

Post by modeless » Wed, Aug 02, 2017, 7:30 PM UTC

dsacco wrote: post #260

bdcravens wrote: post #228

Big point to remember: the current high price is artificial. There are only a few exchanges selling BCH, and they aren't accepting deposits. The only sellers are those who had BTC there prior to August 1. So it's a sellers market. There's a ton of demand to sell. Once those deposits are enabled, you'll see a flood of dumping, and the price will crash. So let's say Coinbase allows BCH withdrawals. Unless they enabled…

Regardless of the price, an exchange cannot seize customer assets by giving them 10 days notice for withdrawal. It doesn't matter if it's a separate currency - we have things resembling this in public markets, like stock splits. It doesn't matter if everyone can fork the cryptocurrency, that doesn't change the principle of a customer's asset. What Coinbase should have done is this: 1. Stood their ground on not suppor…

Where do you draw the line though? Anyone can invent new tokens and grant them to bitcoin holders; should Coinbase be required to support every one?

This is not a hypothetical question. I particpated in two airdrops this year, Stellar and Byteball. I immediately sold the airdropped tokens and increased my bitcoin holdings by 3%. But I don't think Coinbase should be required to support Stellar or Byteball just because they did airdrops to Bitcoin holders.

Byteball in particular seems like just some guy's random project and only has value because of the current investment bubble in anything that looks like a cryptocurrency. I wouldn't trust it to be secure or work properly. What if Byteball is just a huge scam, and the creator can secretly mint tokens at will? Now Coinbase is participating in a scam!

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

#284

Post by Tyrek » Wed, Aug 02, 2017, 7:31 PM UTC

dragonwriter wrote: post #266

dsacco wrote: post #260

Earlier quoted context omitted.

Regardless of the price, an exchange cannot seize customer assets by giving them 10 days notice for withdrawal. It doesn't matter if it's a separate currency - we have things resembling this in public markets, like stock splits. It doesn't matter if everyone can fork the cryptocurrency, that doesn't change the principle of a customer's asset. What Coinbase should have done is this: 1. Stood their ground on not suppor…

> Regardless of the price, an exchange cannot seize customer assets by giving them 10 days notice for withdrawal. Perhaps, but the legal question is whether a protocol fork as a matter of law creates a new asset owned by the customer, creates a new asset owned by whoever controls the wallet keys, or merely creates an opportunity which someone who controls wallet keys may exploit to generate a new asset by participati…

While I'm sure that a lawyer can spin in circles arguing semantics over what is bitcoin, the stance that the SEC has taken is that cryptocurrencies are commodity-assets, and therefore any derived assets (forks, etc) are the property of the asset owner.

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

#285

Post by tobltobs » Wed, Aug 02, 2017, 7:32 PM UTC

fosap wrote: post #91

barkingcat wrote: post #73

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 k…

>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.

Your cow would die birthing during transport. You could then sue the guy transporting your cow, but the judge would dismiss your case because shipping a cow short before birthing is just a stupid idea.

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

#286

Post by d4l3k » Wed, Aug 02, 2017, 7:33 PM UTC

aqme28 wrote: post #264

blhack wrote: post #229

Coinbase is in a bad situation here. If they set a precedent that all BTC forks will be available to their users, then they open themselves to some pretty obvious DOS attacks. 10 new "bitcoins" could fork every day. Are we really going to expect coinbase to support them all? That's absurd. I think it's pretty obvious that they're going to just issue the BCH to people eventually. Here's another thought experiment: I a…

> 10 new "bitcoins" could fork every day. I think you're vastly underestimating how difficult it is to mine a new block on-demand. It simply is not worth throwing that computing power at a DDOS attack. Moreover, if I _had_ that computing power, I'd rather just mine a regular block and get that sweet miner's reward.

You could always make a forked version with a lowered difficulty. Doesn't sound unreasonable

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

#287

Post by bdcravens » Wed, Aug 02, 2017, 7:37 PM UTC

dsacco wrote: post #260

bdcravens wrote: post #228

Big point to remember: the current high price is artificial. There are only a few exchanges selling BCH, and they aren't accepting deposits. The only sellers are those who had BTC there prior to August 1. So it's a sellers market. There's a ton of demand to sell. Once those deposits are enabled, you'll see a flood of dumping, and the price will crash. So let's say Coinbase allows BCH withdrawals. Unless they enabled…

Regardless of the price, an exchange cannot seize customer assets by giving them 10 days notice for withdrawal. It doesn't matter if it's a separate currency - we have things resembling this in public markets, like stock splits. It doesn't matter if everyone can fork the cryptocurrency, that doesn't change the principle of a customer's asset. What Coinbase should have done is this: 1. Stood their ground on not suppor…

> The organic state of a cryptocurrency fork is that all extant holders receive a new asset, which may or may not be worth anything. A company cannot seize that asset without consideration.

So if I fork Bitcoin into Billycoin, this demands action by Coinbase?

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

#288

Post by MichaelGG » Wed, Aug 02, 2017, 7:39 PM UTC

paulmd wrote: post #281

MichaelGG wrote: post #181

Earlier quoted context omitted.

They don't need to store everything. All that's needed is the list of addresses and balances (UTXOs), and the last few blocks. A hash chain of 10 years of 10 minute blocks is only a few MB, so it should be something we can distribute reliably. UTXOs are a couple GB but will grow.

But, now you have a stateful application running in the cloud, vs an immutable blockchain. And that implicitly means you are now trusting authoritative nodes to hold that state. This is basically moving closer and closer to just a bunch of nodes running a database with some consensus mechanism, rather than an actual blockchain. (I'm not personally sold that this is actually a distinction that matters - after all, we…

It's not THAT hard to run a full node, even with 32MB blocks. But for people that want to kickstart a local node, they don't need the entire history if there's a trusted checkpoint mechanism. So they can participate, validate new blocks coming in, while they never or slowly download the historical blockchain.

A hash chain of every block is only a few MB so it's not that big of a deal to make sure the chain is immutably stored.

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

#289

Post by IanDrake » Wed, Aug 02, 2017, 7:39 PM UTC

This experiment in crypto currency has made me see the value in fiat money, which is probably the opposite of the desired effect.

At the end of they day, these digital monetary schemes have become less of a currency and more of a commodity.

Can someone explain to me why I should be less jaded about crypto currencies?

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

#290

Post by cesarb » Wed, Aug 02, 2017, 7:40 PM UTC

lorenzfx wrote: post #226

If the only difference between bitcoin and bitcoin cash is that bitcoin cash has larger block sizes (true?), why does bitcoin cash not go "back" to the bitcoin blockchain since it is now much longer and should also be a valid bitcoin cash blockchain?

Bitcoin Cash also has a rule that a specific block (the first one after a specific date and time) MUST be larger than 1 megabyte. If that specific block is smaller, it's not a valid Bitcoin Cash blockchain.

Since that specific block is smaller than 1 megabyte in the main Bitcoin blockchain (because the maximum block size for Bitcoin is 1 megabyte), the current Bitcoin blockchain is not a valid Bitcoin Cash blockchain.