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Coinbase says buying and selling temporarily disabled amid price rout

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Re: Coinbase says buying and selling temporarily disabled amid price rout

#131

Post by shepardrtc »

ceejayoz wrote: post #58
AndrewUnmuted wrote: post #48

Earlier quoted context omitted.

But why were you ever telling people to store anything on coinbase? That is downright terrible advice to be giving anyone. One of Bitcoin's selling points is that it's decentralized. By keeping coins in a cloud operated wallet that you don't fully control, you're willfully giving up control over your own wealth, and needlessly putting your coins at risk.

It's pretty terrible advice to tell non-technical users to manage their own wallet. Keeping it secure is a non-trivial (understatement!) task.

It certainly was, until the advent of hardware wallets. I wouldn't quite say its easy enough for Grandma to do it, but it makes things much more secure and its no more complicated than setting up a wallet on your machine (give or take a couple of steps).

Re: Coinbase says buying and selling temporarily disabled amid price rout

#132

Post by beavisthegenius »

SilasX wrote: post #109
abakker wrote: post #41

Earlier quoted context omitted.

Are you sure of that? In many ways bank regulation has achieved exactly that. We have an SEC, we have mandatory filings, we have disclosure requirements, conflict of interest requirements, bank capital requirements, stress tests, and many rules about types of financial products which cannot be sold. Those create much more uniformity and trust in the system. (of course this comes with some cost, but, arguably the thin…

... and then we had 2008, where you can violate all of that with reckless abandon and still get bailed out.

2008 was about over leverage and speculation.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#133

Post by frgtpsswrdlame »

ryanSrich wrote: post #121
frgtpsswrdlame wrote: post #12

Earlier quoted context omitted.

You think it's fishy and you have no way to know if something is going on behind the curtain at coinbase but you don't want regulation? Regulation is what lets you peek behind the curtain and know that Coinbase is or isn't doing something fishy.

Adding regulation would just increase the complexity. Instead of one curtain, you now have two. For as much as people complain about the US government, they certainly aren't backing down when it comes to having them meddle in private affairs. Let the market work this out. Coinbase exists to legitimize the industry. If they turn, someone will step in to take their place. Blockchain and crypto aren't going anywhere.

I think the issue is about transparency. Most of the economic models us laymen think about and use to rationalize our political beliefs rely on perfect information. There are valid libertarian arguments against regulations which restrict what actions a company can take but I don't think there are very good arguments against regulations which only require companies to publicize their internal workings.

>If they turn, someone will step in to take their place.

There's a lot of stuff going on in that 'someone will step in' though. How many people lose their money when CoinBase turns? Do quick movers get out with all their BTC intact and slow movers go bitcoin-bankrupt? 'Someone will step in' may be an assurance to the long-term future of crypto but it says nothing to the fates of many of the individual investors who currently hold that crypto.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#134

Post by ceejayoz »

AndrewUnmuted wrote: post #115
ceejayoz wrote: post #95

Earlier quoted context omitted.

That's just changing the threat from "compromised exchange" to "compromised phone". I'd trust Coinbase to get it right before I'd trust the average Android phone not to be hacked. Only 0.5% of Android devices are running the latest OS. https://developer.android.com/about/dashboards/index.html#

What are you talking about? This is not about the exchange being compromised at all. In any event, I don't think it's much more difficult to get your phone getting hacked than it is to get your Coinbase account hacked. That's not what this is about. This is about the cloud wallet service provider having the ability to basically do whatever it wants with your funds (including using them to pad their fractional reserve…

> What are you talking about? This is not about the exchange being compromised at all.

Yes, it is. The question is "which place to store your coins is riskier?" I'm of the opinion that a decently run exchange with a full security team in place is going to be better at managing security than virtually any individual attempting to do it at home.

You, for example, suggested an Android app as a wallet, which seems to conflict with the best practice of storing wallets on an air-gapped offline system or on a dedicated hardware device.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#135

Post by whytaka »

mr_spothawk wrote: post #108
slg wrote: post #56

Earlier quoted context omitted.

I can't help find it funny as the libertarian cryptocurrency fans slowly realize why we have all these dang laws. There are plenty of financial regulations that could use updates or tweaks, but an overwhelming majority are put in place to protect people and try to ensure transactions are as fair as possible. Cryptocurrencies too often throw the baby out with the bathwater.

Meanwhile, the libertarians in the crowd are nodding, having expected this... and protected themselves from the fallout ahead of time.

No true Scotsmen.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#136

Post by koolba »

osteele wrote: post #127
ceejayoz wrote: post #55

Earlier quoted context omitted.

It's fairly trivial to make sure everything's FDIC insured, and being wealthy enough to care about the per-account caps should mean you've got someone to advise you on doing so.

It doesn't even require a human advisor. Many banks participate in CDAR, which spreads large deposits across multiple accounts at other banks in the network. Fidelity isn't a bank, but their cash management feature includes checks, an ATM card, bill pay, and can send and receive ACH and wire transfers; they also implement this hack. None of this applies to securities. Presumably you could insure them. It's not obviou…

Securities held at a broker are usually backed by SPIC protection.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#137

Post by abakker »

SilasX wrote: post #109
abakker wrote: post #41

Earlier quoted context omitted.

Are you sure of that? In many ways bank regulation has achieved exactly that. We have an SEC, we have mandatory filings, we have disclosure requirements, conflict of interest requirements, bank capital requirements, stress tests, and many rules about types of financial products which cannot be sold. Those create much more uniformity and trust in the system. (of course this comes with some cost, but, arguably the thin…

... and then we had 2008, where you can violate all of that with reckless abandon and still get bailed out.

I'm not sure 2008 was a problem of information transparency. There were people who accurately read the signs and viewed the documentation.

The crash was the result of speculation and improper risk assessment, followed by the inevitable correction.

to say that 2008 happened as proof that these regulations don't work is kind of erroneous, as many of the regulations were revised or implemented as a result of that crash, to avoid it happening again.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#138

Post by theseatoms »

ceejayoz wrote: post #98
AndrewUnmuted wrote: post #96

Earlier quoted context omitted.

> If the user is only willing to learn enough to keep the coins in Coinbase, then this person has no business dealing with Bitcoin at all.

"It's the financial system of the future!" "Only techies can use it!" Pick one.

By 1950s standards, most Americans are "techies". We learn what we have to in order to survive in a given environment.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#139

Post by munificent »

slg wrote: post #56
frgtpsswrdlame wrote: post #12

Earlier quoted context omitted.

You think it's fishy and you have no way to know if something is going on behind the curtain at coinbase but you don't want regulation? Regulation is what lets you peek behind the curtain and know that Coinbase is or isn't doing something fishy.

I can't help find it funny as the libertarian cryptocurrency fans slowly realize why we have all these dang laws. There are plenty of financial regulations that could use updates or tweaks, but an overwhelming majority are put in place to protect people and try to ensure transactions are as fair as possible. Cryptocurrencies too often throw the baby out with the bathwater.

The entire Bitcoin saga has been the most shining example of this classic narrative:

1. Technology people are presented with a social/cultural/government situation that seems inelegant, irrational and overly complex.

2. They decide to "solve" that problem using technology.

3. Even with the new technology, it somehow appears everything is not miraculously better.

4. Technology people propose layering a few small social fixes on top of their technology to address the "minor issues" left by their brilliant technology.

5. They fail to realize all of their kludgy human-level patches on top of the technology are merely less-mature forms of the social structure they claimed to have replaced in step 2. Now we have an even less elegant, more irrational, more complex social institution, mixed with non-helpful technology.

6. Now the problem is not fun to work on any more (too much squishy inelegant human stuff), so they wander off to "solve" some other cultural malady.

Re: Coinbase says buying and selling temporarily disabled amid price rout

#140

Post by defo_nonconvex »

akhatri_aus wrote: post #103
brndnmtthws wrote: post #47

Earlier quoted context omitted.

Storing your coins on coinbase (or any other exchange) is pretty much always a bad idea. If you don't own the private keys, you don't own the coins. Coinbase is not immune from failure, government intervention, or fraud. The insurance no doubt has limits, and if you've ever filed an insurance claim you'd know that if something goes wrong you'll probably be up a creek without a paddle. Insurance companies almost alway…

> Insurance companies almost always win, that's how they make money Not exactly. They make money off pricing their insurance higher than the chances of it happening.

Err, a big chunk of their bottom-line comes from reinvesting the float, or just re-insuring and taking the spread.
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