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Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

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Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#21

Post by JustAnotherPat »

Coinbase has been one of the more poorly constructed sites I've used in the past couple years. I don't just mean the inability to handle volume.

I saw it riddled with HTML errors, there were buttons that didn't do anything, I got (html) responses that were false, which I only knew was the case because I looked directly at the API response.

I remember I 'sold' some litecoin on Coinbase that never sold. Took me to a couple days just to know it wasn't going to mysteriously disappear.

I find the fact that they want to add new coins even though they haven't solved any of their current issues very alarming.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#22

Post by morley »

chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

How does one eliminate counterparty risk? The only thing I could think of is insurance, and I'm guessing no insurance company will underwrite that sort of policy.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#23

Post by JackFr »

> In traditional finance, custody banks like State Street Corp. hold securities, keep records and provide other services for investment advisers. A lack of similar offerings in the cryptocurrency world has kept many institutions on the sidelines.

>Coinbase has offered a solution: crypto custodial services, slated to roll out next year. Called Coinbase Custody, it'll be available to investors with at least $10 million in deposits.

Honestly, WTF?

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#24

Post by empath75 »

warbiscuit wrote: post #20
chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf. This point may prove to be very sticky. It might be solvable with smart contracts... consider ethereum's https://www.etherdelta.com , which operates as an auditable smart contract. Your money literally can't be stolen without your private key; ev…

This is what insurance is for.

If they can’t insure deposits, then that shows a fundamental weakness in the security model.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#25

Post by mrb »

chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

> I mean if the Nasdaq, NYSE or prime broker ever got hacked, no one would expect to suddenly loose all their shares, or cash held with their prime broker.

Actually, banks get hacked and lose cash. Permanently. It happens rarely, but it happens. For example in this SWIFT hack authorities were able to recover only $18 out of $81 million with the remainder $63 million permanently lost: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#26

Post by meesterdude »

nihonde wrote: post #14
chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

You’re very literally recreating, step by step, the current centralized, trust-based system that cryptocurrencies are seeking to remedy. If you need someone to trust, you’re doing it wrong.

What I read sounds like OP is asking for uptime and service resiliency. That's a tenant of basic business practice. Cryptocurrencies have nothing to do with it.

> If you need someone to trust, you’re doing it wrong.

You can't do anything in crypto without having to rely on someone else. Trust is not irrelevant in cryptocurrencies - it matters just as much as in traditional markets.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#27

Post by chollida1 »

babuskov wrote: post #19
chollida1 wrote: post #6

Earlier quoted context omitted.

> I don't know what reality you operate in, but hedge funds don't provide anywhere close to those types of guarantees. Strange comment, I think I've confused you. All this was about exchanges and what hedge funds expect from them, not guarantees about what hedge funds provide. And you are right, exchanges do go down, and its news when they do because they are so good at what they do that its very rare. > I don't know…

> When was the last time you heard of Goldman Sachs begin hacked Goldman Sachs is not an exchange. > it has absolutely nothing to do with what we are talking about:) Exactly. You are confusing others by giving GS as an example, while we're talking about exchanges.

Good question, I can see why you are confused.

Coinbase right now acts in two ways.

1) as an exchange who allows you to trade on it.

2) as a prime broker who holds your coins. In this capacity they are just like Goldman Sachs who can function as a prime broker for hedge funds.

(a prime broker is like a bank who holds your securities for you). So in this case Goldman is relevant as they do the same function that coinbase does with respect to holding securities on behalf of a client.

Does that help clear up the confusion?

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#28

Post by [deleted] »

chollida1 wrote: post #11
brndnmtthws wrote: post #7

Earlier quoted context omitted.

Hedge funds do a better job of hiding their failures than something which operates on a public ledger, because everything is done behind closed doors. Furthermore, hedge funds are very good at finding creative ways to lose money, and they have great liberty in doing so. The reporting requirements for hedge funds are relatively lax compared to, say, an index fund.

I agree with everything you've just said. And yet, it has absolutely nothing to do with what we are talking about:) Which is what exchanges need to do to get institutional investors;)

[deleted]

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#30

Post by pjc50 »

nihonde wrote: post #14
chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

You’re very literally recreating, step by step, the current centralized, trust-based system that cryptocurrencies are seeking to remedy. If you need someone to trust, you’re doing it wrong.

Someone has to trust someone in order to do a transaction between a cryptocurrency and something else such as USD. That's because the transaction is actually two transfers, one of cryptocurrency and one of USD, that have different clearing and settlement properties.
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