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

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

#311

Post by sixdimensional »

ChuckMcM wrote: post #269

I wonder sometimes if the origin of coinage was similarly fraught with these sorts of challenges. The history of money exhibit at the British Museum is pretty awesome and they go over some of the 'coin scams' of the day like nicking bits off the coins and remelting them into new coins, melting coins and alloying them with other metals so that they 'felt right' but were diluted. People who no longer had to be 'landed'…

Thanks for sharing this thought. I was just thinking something somewhat similar..

I didn't participate (and am still not participating) in the cryptocurrency movement, for no particular reason.

Watching it from the outside, it's fascinating to see how a value system that seems built virtually on the backs of processing power and technology, essentially has ended up mirroring so many challenges and raising so many issues that resemble or relate to the modern finance system.

There's probably enough going on here to last many PhDs many lifetimes!

So much so, that the tinfoil hat part of me almost wonders if Bitcoin was a grand experiment by the creator(s), to both show the fallacy of the financial systems we depend on, while simultaneously showing a new and different alternative.

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

#312

Post by derefr »

hendzen wrote: post #238
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…

Yes we expect Coinbase to support them all. Public companies have complicated stock actions like spinoffs (i.e. "Forking" the company), rights offerings, scrip offerings, stock dividends, etc. Do you think ETrade gets to not give their users the results of such actions because it would be complex to implement?

But the currency exchange booth in the mall is not the New York Stock Exchange. Coinbase is more the former than the latter.

The blockchain itself is the "exchange" in the sense of being the arbiter of trades; if you want something to support all these actions, it should be implemented somehow into the distributed consensus mechanism of the blockchain itself. Or a... meta-blockchain, I guess. A distributed-consensus DAG+constraint system representing the relationships of various blockchains to one-another, without requiring "centralized" side-chaining in a chain that might be the very one you're trying to fork away from.

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

#313

Post by AgentME »

vocatus_gate wrote: post #175
undersuit wrote: post #112

Earlier quoted context omitted.

Does the stock market offer do-overs if there is a significant move against you while you're on vacation? Would Coinbase normally be held accountable for a significant move in Bitcoin against you while you're on vacation? Coinbase isn't a company to secure your Bitcoins against the value of the dollar, it's a company that stores Bitcoins and facilitates transactions.

No, what I'm saying is by refusing to allow withdrawal of the "new" coins, they put themselves in the position to be sued because clients lose potentially a lot of free money. It's an opportunity cost: if I missed out on some big trades while the price was high due to their decision to withhold the keys, I'm rightfully annoyed by it. Of course leaving legality out of it, it'd also just be a smart thing to do because…

> No, what I'm saying is by refusing to allow withdrawal of the "new" coins, they put themselves in the position to be sued because clients lose potentially a lot of free money.

Coinbase is a company that handles people's Bitcoin (and a couple other currencies). Coinbase never made any promises to support other currencies that copy Bitcoin's balances or are otherwise awarded to Bitcoin users. Bitcoin Cash isn't mentioned or promised in any of Coinbase's advertising materials. Handling of Bitcoin Cash is a service that Coinbase has never claimed to offer.

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

#314

Post by AgentME »

colordrops wrote: post #134
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 I mentioned in another comment, no lines would need to be drawn if they didn't advertise themselves as holding your wallet/coins/private keys. If their website and marketing copy were direct about the truth, which is that you are a holder of an IOU for a particular chain, then there would be no problems. it's a common refrain that you don't actually own your coins if you are not the sole holder of the private keys…

Coinbase doesn't advertise itself as a service for Bitcoin Cash or having anything to do with it. They've never promised it, said it in marketing materials, etc.

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

#315

Post by SolarNet »

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

Not really. You are forgetting how the difficulty works (or simply don't understand bitcoin).

You'd have to have a significant percentage of the bitcoin mining infrastructure. If you have 1% of the bitcoin mining infrastructure it would take 100x the time to mine a block, or 1000 mins, or basically half a day, that would take a week of not getting bitcoin simply to confirm the new chain. As it is this new coin accounts for like 5% of the bitcoin mining power.

To do 10 new forks every day would take a 70% of the bitcoin mining power to sustain for just a week.

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

#316

Post by woodman »

matt_wulfeck wrote: post #257
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…

As one of the btc nouveaux rich, help me understand something I see reoccurring among my other btc-rich friends. Generally, when you're up big (and in some cases extremely wealthy), you diversify your investments in order to preserver your wealth. However, almost without exception my btc friends are such believers that they are holding on for the ride forever. Is it just that the risk-averse were initially drawn to b…

> ... initially drawn to btc as a speculative vehicle? Or is it a matter of principle to hold forever?

I got involved with btc when it was in the single digits, the crowd was very different then - cryptoanarchists. So your call to "diversify your investments" sounds to me much more like "diversify your politics", which is obviously a silly thing to tell somebody - especially somebody whose politics is any anarcho flavor. While I can only speak for myself, I do think this is true for many others: I was already living pretty comfortably and a few million isn't enough of appreciably change one's quality of life as a software developer.

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

#317

Post by AgentME »

MichaelGG wrote: post #31
gtirloni wrote: post #22

Coinbase did the right thing by warning their users beforehand that they wouldn't work with BCH. They could have simply ignored it altogether and continue business as usual like nothing had ever happened. Now after the fork, if people want to convert BTC to BCH, they have to go through a intermediary currency, just like many banks won't convert USD to $unknown_currency sometimes. It doesn't surprise me there are talk…

Not really. They should have taken a clear, objective stance, one they could apply to all forks. Like, if the volume of the fork reaches X and the value over 7 days is at least Y% then within 30 days we will offer withdrawals. That way fewer people would have made withdrawals from Coinbase before the fork, and fewer people could claim bad faith on Coinbase part. If BCC keeps up at least 10% of BTC price, I'm guessing…

I got an email plenty early this month that seemed to have a clear stance applicable to forks in general: withdraw my bitcoins before the fork if I wanted altcoins from any fork.

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

#318

Post by Animats »

bdcravens wrote: post #214
thefalcon wrote: post #206

Earlier quoted context omitted.

I can't imagine they'll continue to ignore the third largest cryptocurrency by market cap. Also it would be crazy for them to have encouraged their users to withdraw BTC prior to the fork if they were insolvent. I imagine it will all work out, though Coinbase loses lots of reputation points from me for by insisting on being so slow and reactionary instead of proactive like several other exchanges.

It won't be that large for long. Only reason why it's so high is the few places you can sell it aren't accepting BCH deposits; the only way you can sell is if you had BTC there prior to August 1. There's a ton of pent up demand to sell; once those exchanges allow deposits, there will be a ton of dumping and the price will fall substantially.

That makes it worse for Coinbase. They could be held liable for losses incurred because people couldn't access their BCH to sell at the top.

This is the sort of thing which may involve Coinbase in litigation over whether SEC and CFTC rules on "fails to deliver" apply to them. When a real broker does something like this, they're on the hook for customer losses.

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

#319

Post by [deleted] »

matt_wulfeck wrote: post #257
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…

As one of the btc nouveaux rich, help me understand something I see reoccurring among my other btc-rich friends. Generally, when you're up big (and in some cases extremely wealthy), you diversify your investments in order to preserver your wealth. However, almost without exception my btc friends are such believers that they are holding on for the ride forever. Is it just that the risk-averse were initially drawn to b…

[deleted]

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

#320

Post by ringaroundthetx »

woodman wrote: post #316
matt_wulfeck wrote: post #257

Earlier quoted context omitted.

As one of the btc nouveaux rich, help me understand something I see reoccurring among my other btc-rich friends. Generally, when you're up big (and in some cases extremely wealthy), you diversify your investments in order to preserver your wealth. However, almost without exception my btc friends are such believers that they are holding on for the ride forever. Is it just that the risk-averse were initially drawn to b…

> ... initially drawn to btc as a speculative vehicle? Or is it a matter of principle to hold forever? I got involved with btc when it was in the single digits, the crowd was very different then - cryptoanarchists. So your call to "diversify your investments" sounds to me much more like "diversify your politics", which is obviously a silly thing to tell somebody - especially somebody whose politics is any anarcho fla…

As someone that deals with political parties and regulatory regimes in many countries at once, diversify your political isn't silly at all. Or at least I feel like being unsubscribed from one countries politics has only given me advantages, even if it is less common to not be married to a political flavor.
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