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Coinbase: The Heart of the Bitcoin Frenzy

nytimes.com

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Re: Coinbase: The Heart of the Bitcoin Frenzy

#271

Post by MichaelGG »

sobani wrote: post #228
MichaelGG wrote: post #207

Earlier quoted context omitted.

Why would anyone ever want to use a market order versus a limit? In any exchange, for any kind of trading? If you're really ok with e.g. selling for 0.01, set that as your limit.

Because the market could move against you. If you're ok with buying for 100, but someone else is selling for 99, you've effectively done a market order and have to pay the fees. However if the lowest sell is 101 and then the price moves up to 105, you've just screwed yourself for 4 in order to save 0.25

Huh? Just set your limit to 105 or 200 or 10500. There's no reason to ever use a market order unless there's some other severe limitation on limit orders in a particular implementation.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#272

Post by mancerayder »

csomar wrote: post #230
drawkbox wrote: post #18

With the frenzy out there, Coinbase makes crypto currencies trading/investing/purchasing as robust and seemingly as safe as possible. This could be a signal, now that we have some reputable market players that crypto currencies are really just starting and there is a very high ceiling. Getting in before coinbase you had to mine your own (that party ended quickly - Butterfly Labs, cex.io for cloud mining etc) or be pa…

As a heavy bitcoin/crypto trader, Coinbase and Gdax are one of the worst exchanges out there. Speaking strictly from a technical point of view. Not only their Front-End interface (Gdax) suffers from lag probably due to poor engineering but they also made terrible mistakes at the beginning. One of them being a lost deposit. The address generated by the site was wrong and thus the deposit never credited. It took a coup…

How about Bitrex?

The Bitfinex fiascos, of which there is a chain of suspicious events, could be circumstantial or truly something to be concerned about.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#273

Post by PeterisP »

Cthulhu_ wrote: post #245
TAForObvReasons wrote: post #136

Earlier quoted context omitted.

Other stories: - https://news.ycombinator.com/item?id=6933360 - https://news.ycombinator.com/item?id=5427985 4 years ago they had a problem with customer service and the situation does not appear to have improved: > When it takes a public outcry on HN for a company to do their job, I no longer deal with such a company. Simple as that. I don't care if you raised $25 million - if you can't treat your users fairly, you…

How do you do customer service when you get 100K new users / day though?

You charge the customers sufficiently so that you can (and do) hire a customer service person for each X new customers.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#274

Post by vertex-four »

Jommi wrote: post #234
csomar wrote: post #230

Earlier quoted context omitted.

As a heavy bitcoin/crypto trader, Coinbase and Gdax are one of the worst exchanges out there. Speaking strictly from a technical point of view. Not only their Front-End interface (Gdax) suffers from lag probably due to poor engineering but they also made terrible mistakes at the beginning. One of them being a lost deposit. The address generated by the site was wrong and thus the deposit never credited. It took a coup…

Wait you're suggesting one of the legally most robust changes out there (the one doing the most compliance) is actually slower than the shady, non-transparent exchange..?? Wow. Wonder why that might be

Because of bitcoin's origins in a largely an-cap community - and the continual anti-Government, pro-capitalist mindset in a significant part of the community as it stands now - there's not actually as much demand as there should be for "legal" exchanges etc. As a result, there's much more competition in the "shady" exchange space, less competition in the "legal" exchange space, and two things result: people occasionally lose a significant chunk of their life savings to shady exchanges, and legal exchanges don't have as much of a drive to be technically brilliant.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#275

Post by PeterisP »

Frogolocalypse wrote: post #198
canoebuilder wrote: post #195

Earlier quoted context omitted.

for which there is some hard evidence of it's existence Who is transacting monetarily in bitcoin? Why do they find it superior to other options? Is this a growing cohort?

It isn't momentary. It is decentralized savings.

The total long-term value of bitcoin ecosystem is the value of bitcoin as a transactional instrument.

There's a plausible justification to invest in bitcoin now if you believe that in future it'll have a large total capitalization because be used as valuable information of e.g. uncensorable pseudonymous transactions, and you'll be able to sell your bitcoins with profit to those people who'll want to use them for transacting.

However, it's not reasonable to state that the valuation is justified by it being used solely as a savings/investment vehicle; because what is the future exit for that investment? When a number savers in aggregate decide to withdraw their savings from the ecosystem at some point (which is inevitable, the global economy has cycles and at some point people will want that), to whom do they sell bitcoin? If there's a different use (as the one described above), then that's an exit that will set the total value of bitcoin at such an event; but if the only use case is "decentralized savings" then it's comparable to the "greater fool" motivation, you can sell/withdraw while there's someone else who wants to enter the product, but when the aggregate motion switches from saving to withdrawing, the value suddenly drops to zero - exactly the behavior that should be impossible in a good savings (as opposed to speculation) vehicle.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#276

Post by hectorr1 »

I have a ton of respect for Coinbase. It seems like their implied priorities are:

1) Security 1a) Compliance ... 57) Customer Service

While annoying, this was both sufficient and necessary for the business to date. Security is necessary for obvious reasons. Compliance is necessary because to be able to do business with US banks (card processing, ACH, wires...) they had to be aggressive about complying with US regulation. Which ultimately gives them an advantage on the customer service front relative to their competition for retail investors. And frankly, they aren't much worse than most online brokers.

These priorities were also sufficient. Amazon was competing against major incumbents and had to win on cost and service. By outcompeting an empty field on compliance, Coinbase has built a significant moat around US retail. They have relationships with Fidelity and USAA that signal legitimacy. They had cold storage while incumbents were/are still saying 'blockchain not Bitcoin'.

The critical question is how they manage customer service and communications going forward. Amazon, Facebook, and Google created monopolies based on a great user experience. Uber destroyed a thousand monopolies for the same reason. Coinbase is riding the coattails of Bitcoin's awesome UX, the warm fuzzies people get from making 10x on an investment. If and when there is a correction, their core business will hinge on how well they handle a large sell-off.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#278

Post by mv4 »

zeep wrote: post #255
drawkbox wrote: post #18

With the frenzy out there, Coinbase makes crypto currencies trading/investing/purchasing as robust and seemingly as safe as possible. This could be a signal, now that we have some reputable market players that crypto currencies are really just starting and there is a very high ceiling. Getting in before coinbase you had to mine your own (that party ended quickly - Butterfly Labs, cex.io for cloud mining etc) or be pa…

In my experience, Coinbase/GDAX becomes unavailable every time the cost of Bitcoin drops significantly in a really short period of time... it happened again this morning a little before 7am... Not sure if they are trying to control the drops or if their servers can't handle the load.

I was wondering the same thing about GDAX/Coinbase. I've been seeing "partial" outages both on their portal and their API side. Partial outages are the worst, as they only leave 'some' of the participants unable to act.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#279

Post by kgwgk »

Slightly offtopic, but this is so funny: (From today’s “money stuff” https://www.bloomberg.com/view/articles/2017-12-07/shale-sha...)

Happy Bitcoin 13,000 Day.

I mean, that was yesterday. A few hours after I sent out Money Stuff saying Happy Bitcoin 12,000 Day, which was also yesterday. At this rate we'll have Bitcoin 25,000 before my "Bitcoin 25,000 Before Dow 25,000" hats get here.

Happy Bitcoin 14,000 Day.

That was also yesterday.

Happy Bitcoin 15,000 Day.

That was this morning. See what I mean?

Happy Bitcoin 16,000 Day.

That will be this afternoon, probably.

Happy Bitcoin 17,000 Day.

Just in case, why not.

Still more bitcoin.

Bitcoin futures are set to start trading next week at CBOE Global Markets Inc.'s futures exchange, with CME Group Inc. following the week after that, but some people object:

The Futures Industry Association, whose members include Goldman Sachs Group Inc., JPMorgan Chase & Co. and Citigroup Inc., detailed its concerns in a letter to the Commodity Futures Trading Commission on Wednesday. The association said there should have been more discussion about margin levels, trading limits, stress tests and clearing before the contracts were given a green light.

For clearing members of futures exchanges, the worry is that some bitcoin futures trader will blow up, and that bitcoin is so volatile that the trader's margin won't be sufficient to cover its losses. That will leave the members of the exchanges on the hook for losses. This seems like a ... totally reasonable worry? If you collected 25 percent margin from someone who was short bitcoin on Monday, they would have blown through it by this morning. Also the standard fate of bitcoin exchanges seems to be to get hacked and lose their customers' money, so if you are a customer of a futures exchange I can see why you'd be skeptical of your futures exchange turning into a bitcoin exchange.

Meanwhile, here is a nice profile of Coinbase, a bitcoin exchange that hasn't been hacked, much. (Though: "In May, the company was criticized by a customer who could not reach anyone at the company after his account was hacked.") It "runs an exchange, called GDAX, tailored to larger investors," overseen by Adam White. "A year ago, his Wall Street outreach was difficult, but 'it’s all inbound now,' Mr. White said." Indeed.

Oh and another bitcoin thing was hacked:

NiceHash, the marketplace for cloud-based mining of cryptocurrencies, said hackers breached its systems and stole an unknown amount of bitcoin from its virtual wallet.

Some $60 million worth of bitcoins may have been affected. Elsewhere here's a guy who lost the password to his 40 bitcoins.

Re: Coinbase: The Heart of the Bitcoin Frenzy

#280

Post by PeterisP »

mbrock wrote: post #236
acjohnson55 wrote: post #66

Earlier quoted context omitted.

It's so bizarre to me that there isn't proper auth delegation in online banking. You should never have to put credentials for one domain into a form on another domain. Let alone banking credentials!

And that's a huge indicator of why blockchain finance is attractive. The banking system is AWFUL. Exchanges are bridges between banks and blockchains, and it's quite reasonable to want to keep your money in cryptocurrency just for technical usability reasons. I can send cryptocurrency from a shell script -- that's not going to work with bank money in a million years, or if it does it's going to be because of the comp…

You're talking about the USA banking system, which is pretty much stone age compared to everyone else. (paper checks? really?) For example, in EU the requirement for banks to open up APIs to everyone is coming in force next year, a bit closer than a million years - and it's not happening because of competition from blockchains, it was put in force (before blockchains boomed) for reasons of consumer rights and restricting anti-competitive behavior by banks.
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