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Coinbase Custody Is Officially Open for Business

blog.coinbase.com

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Re: Coinbase Custody Is Officially Open for Business

#61

Post by [deleted] »

briatx wrote: post #6
yohann305 wrote: post #2

Not sure if this is related or not, but Coinbase's cryptocurrencies of choice (Bitcoin, Ethereum and Litecoin) just got a huge price bump in the past 2 hours which makes total sense because if this "Coinbase Custody" system is adopted by businesses and institutions, huge amount of money will be poured into these cryptocurrencies which will dwarf the current price. Am I missing something or it makes sense?

Institutions want investments that confer actual rights, something which these cryptocurrencies do not do. If you are expecting a large influx of institutional investment money, I expect you will be disappointed.

[deleted]

Re: Coinbase Custody Is Officially Open for Business

#62

Post by [deleted] »

occamrazor wrote: post #58
erikpukinskis wrote: post #57

Earlier quoted context omitted.

How do you lend the same cash to two people? Don’t people take loans to spend the money?

If Coinbase customer A borrows bitcoins and transfers them to Coinbase customer B, those bitcoins never leave Coinbase, assuming that customer B does not transfers them immediately out of Coinbase. Same happens if Coinbase customer A tranfers 1 BTC to Bitstamp customer B and Bitstamp customer C transfers 1 BTC to Coinbase customer D. Fractional reserve banking can happen (and did happen) even without a central bank,…

[deleted]

Re: Coinbase Custody Is Officially Open for Business

#63

Post by [deleted] »

cbase22 wrote: post #16

Coinbase stole $30,000 from me and won't return it. They listed a new coin (bitcoin cash) without prior announcement. I bought $30,000 worth at $5000 each. It went from $500 to $9000 in a matter of minutes. However, while allowing people to buy the coin at very high prices, they also froze everyone's ability to sell the coin. They only allowed people to sell it on their market again, about 24 hours later, after the c…

[deleted]

Re: Coinbase Custody Is Officially Open for Business

#64

Post by workinfunk »

JumpCrisscross wrote: post #25
gremlinsinc wrote: post #19

Earlier quoted context omitted.

I'm sure there's many things they could call it though, that would have more positive overtones. From a branding/marketing perspective. Edit: For example, why not call it Coinbase Custodian? Totally different connotation, and better name IMHO.

> why not call it Coinbase Custodian? "Coinbase Custody" tells me exactly what they're doing. "Coinbase Custodian" makes me think they're launching a janitorial service.

So you're familiar with "custody" as a term of art, yet not "custodian", very interesting, not saying you're lying, just interesting.

Re: Coinbase Custody Is Officially Open for Business

#65

Post by 21 »

kylebenzle wrote: post #60
21 wrote: post #5

Earlier quoted context omitted.

As someone who watches the price of bitcoin in detail every day, the price bump from today is not related to this news. It's just usual market activity (stop hunting)

Are you saying that if you were a trader or just in the market to buy and sell Bitcoin, and somehow you knew, 100%, 24 hours before anyone else, that Coinbase was announcing this, it would not influence you at all? Because that is what you are saying.

Yes, this is what I am saying. This is minor news. This is old news. It was known that this was coming since at least November:

https://medium.com/@barmstrong/announcing-coinbase-custody-a...

Re: Coinbase Custody Is Officially Open for Business

#66

Post by dang »

robertAngst wrote: post #39
cbase22 wrote: post #16

Coinbase stole $30,000 from me and won't return it. They listed a new coin (bitcoin cash) without prior announcement. I bought $30,000 worth at $5000 each. It went from $500 to $9000 in a matter of minutes. However, while allowing people to buy the coin at very high prices, they also froze everyone's ability to sell the coin. They only allowed people to sell it on their market again, about 24 hours later, after the c…

You bought shitcoin cash. This is your fault you idiot. Its literally fake bitcoin.

Commenting like this will get you banned here. Please don't do it again.

https://news.ycombinator.com/newsguidelines.html

Re: Coinbase Custody Is Officially Open for Business

#67

Post by beefield »

wereHamster wrote: post #49
beefield wrote: post #18

Next step: Coinbase gives discount of custody service fees - or even pays the deposit maker a fee (a.k.a interest) if it is allowed to lend coins forward while coins are within custody (a.k.a fractional reserve banking).

"fractional reserve banking" would be the case if Coinbase lends more than it holds in their accounts. That's impossible with bitcoins.

> "fractional reserve banking" would be the case if Coinbase lends more than it holds in their accounts. That's impossible with bitcoins.

That is definitely not impossible. Let's go through this step by step:

I start by depositing one bitcoin to coinbase and agree that coinbase is allowed to lend that forward, but will give me back one bitcoin whenever I request so. Coinbase promptly lends the bitcoin to you.

You, then, go ahead and buy stuff from me with the bitcoin, and I go back to Coinbase and make a second deposit. At this point Coinbase owes me two bitcoins. Then you need another loan, call again to Coinbase and borrow another bitcoin. Now Coinbase has lent you total of two bitcoins even if there is only one existing in the whole fictional universe.

Now, you can see a couple of interesting further observations from here:

First one is that quite soon people and coinbase figure out that it is very cumbersome to move actual bitcoins around, and it would be much more efficient if instead of me requesting one bitcoin back to now make an purchase from coffee shop, I just ask that Coinbase owe me one bitcoin less and the coffee shop owner one coin more.

The second one is that after this, the coinbase deposits are equivalent to bitcoin as money in economy. For the coffee shop owner it is irrelevant whether I pay with bitcoin or a coinbase dposit, the economical value is identical. What this then means is that the money supply of bitcoin economy is not fixed as bitcoin people expect, but the coinbases of bitcoin economy will create a chaotic supply of bitcoin money. Whic, of course, will cause bitcoin value to fluctuate chaotically to the end of the days. Finally, there exists no institution, mechanism or whatever in bitcoin to stop this development. Nobody is able to prohibit fractional reserve banking and nobody is able to stop money creation in bitcoin economy.

Sorry, but to me, bitcoin is destined to fail as a money.

Re: Coinbase Custody Is Officially Open for Business

#68

Post by ojr »

Animats wrote: post #48
ojr wrote: post #42

Earlier quoted context omitted.

Insurance: https://www.coinbase.com/legal/insurance

That's Coinbase generally, not the custodial service.

It says individual balances are FDIC insured up to $250,000. which is lower than the setup fee and minimum balance for the custodial account, I share the link to show they have some systems in place, speculation and trading will never be risk-free I think

Re: Coinbase Custody Is Officially Open for Business

#69

Post by erikpukinskis »

occamrazor wrote: post #58
erikpukinskis wrote: post #57

Earlier quoted context omitted.

How do you lend the same cash to two people? Don’t people take loans to spend the money?

If Coinbase customer A borrows bitcoins and transfers them to Coinbase customer B, those bitcoins never leave Coinbase, assuming that customer B does not transfers them immediately out of Coinbase. Same happens if Coinbase customer A tranfers 1 BTC to Bitstamp customer B and Bitstamp customer C transfers 1 BTC to Coinbase customer D. Fractional reserve banking can happen (and did happen) even without a central bank,…

So, if you need a loan for rent for your startup, and your landlord is also a Coinbase customer, then this is possible.

But I don’t understand your argument... you’re talking about a future where Coinbase has the installed base of, like, Venmo?

Re: Coinbase Custody Is Officially Open for Business

#70

Post by willio58 »

ricksanch88 wrote: post #30

They can't even get their two factor authentication to work. Their customer service a joke, and their processing takes too long. Why people are hyped over their new products / features knowing how shit their old ones are is beyond me.

Every time a new Coinbase feature or product is posted on HN most of the comments are anti-Coinbase.
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