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Coinbase valued above $100B, ahead of direct listing

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Re: Coinbase valued above $100B, ahead of direct listing

#181

Post by graeme »

csomar wrote: post #169
graeme wrote: post #167

Earlier quoted context omitted.

Yeah I just want to think through the claims of the maximalists. For example I often hear them say “it’s digital gold, so it has 10x to grow”. That would be $85 billion for mining, whereas gold mining annually is about $1.3 billion. ~$1000 per ounce mining cost * 130 million ounces mined. Of course it’s not an exact comparison as you prob ought to add in storage costs for gold but then maybe you’d need to add crypto…

Think about it this way: There is 7bn people on the planet. $170bn works out an average of $24/person. Or $2/month. Even poor people in poor countries can afford that. It might actually be cheaper for them, many poor countries (think Africa, Argentina, Brazil, etc...) are going through hyperinflation that it is safer and less volatile to hold Bitcoin.

That calculus doesn’t work as a store of value. For the substantial minority of people earnings ~$2 per day, $24 per year is a sizeable fraction of wealth.

As far as currency goes, it bitcoin transactions rise, does that have no impact on price? I realized my price thinking makes no mention of them and I don’t know how they affect things.

Re: Coinbase valued above $100B, ahead of direct listing

#182

Post by vmception »

bob33212 wrote: post #180
emehex wrote: post #155

Perhaps a dumb question: why is Coinbase even entertaining an IPO? Give away shares for fiat money? Isn't that antithetical to what they're trying to do?

They are trying to "Exit". That is what they call a IPO or a Sale in startups. They get paid with cash, then they buy houses, stocks, bitcoin, cars with that cash. The "Mission" of Coinbase exists because they don't want to say "Our mission is to build a 100 billion dollar company and then cash out" it sounds better and feels better to say that you are democratizing and decentralizing power for the people.

A direct listing is markedly different than an IPO or sale. It should just be added to your list of examples.

Re: Coinbase valued above $100B, ahead of direct listing

#183

Post by vmception »

Coinbase will make a lot on their staking products, I can see huge growth there!

I am surprised by this multiple but I can see it, as the law of diminishing returns has not set in and won't for a while.

Pretty much all aspects of this require growth in other parts of the market to support, but they are all things I agree with.

For example, Coinbase should be allowing people to pool their REN to run hosted darknodes - darknodes function as a progressively more trustless exchange letting people move assets across blockchains. Coinbase already lists REN. Taking a cut of that as the volume grows there will essentially allow Coinbase to double dip. They get the transaction fees when people trade, move funds off of their exchange, and a cut when people move funds to other blockchains through RenVM, which will be a many-to-many relationship. The Forex market does several trillion $ a day in trades, so another mere order of magnitude in growth of the crypto economy would support the growth of all the infrastructure projects inside of the economy.

Re: Coinbase valued above $100B, ahead of direct listing

#184

Post by dehrmann »

bob33212 wrote: post #180
emehex wrote: post #155

Perhaps a dumb question: why is Coinbase even entertaining an IPO? Give away shares for fiat money? Isn't that antithetical to what they're trying to do?

They are trying to "Exit". That is what they call a IPO or a Sale in startups. They get paid with cash, then they buy houses, stocks, bitcoin, cars with that cash. The "Mission" of Coinbase exists because they don't want to say "Our mission is to build a 100 billion dollar company and then cash out" it sounds better and feels better to say that you are democratizing and decentralizing power for the people.

Especially when you're running a company that facilitates the exchange of high-price trading cards. If those cards are popular and expensive, and the market thinks you're worth 22% as much as JP Morgan, it's a great time to cash out. They might be eyeing a direct listing because institutional investors know that price is ridiculous, but also because they see Coinbase as something of a competitor, so the only interest will be from retail investors.

Re: Coinbase valued above $100B, ahead of direct listing

#185

Post by wtfrmyinitials »

fergie wrote: post #79

What about the environmental impact / physical limitations of cryptomining? At this point BTC alone consumes more energy than Argentina ( https://www.bbc.com/news/technology-56012952)- will legislators allow this to continue? Will it even be possible for it to continue much further?

Most crypto mining is done with renewables because it’s the cheapest kWh when you don’t have to factor in energy storage.

Re: Coinbase valued above $100B, ahead of direct listing

#186

Post by solosoyokaze »

graeme wrote: post #171
naveen99 wrote: post #124

Earlier quoted context omitted.

If the bull case was only $150k, I might agree with you. The bull case is $5 million. But bitcoin has always been risky and can always go to 0 rather quickly. Anyway, there is no point at looking at nominal values given inflation, population growth, general progress. I like to look at everything as a ratio against total global numbers (global wealth, global debt, global population, global equality etc.). Unfortunatel…

At $5 million, at current mining rates, it would cost $1.7 trillion dollars per year in energy and equipment costs to run the network. That is fresh capital that needs to be shovelled in and burned each and every year. Not to increase the price, just to maintain the network. What is the network doing that would justify that investment? After halving the cost would drop to $850 billion a year but still.

It doesn't really make sense to measure this in USD if one of the major hypothesis driving Bitcoin is that USD is being hyper inflated. Yeah, it might cost $1.7 trillion dollars but at that point a 3bd house might cost $5M. If you're going to pin BTC to USD, you need to use inflation adjusted numbers.

Re: Coinbase valued above $100B, ahead of direct listing

#187

Post by dehrmann »

raiyu wrote: post #98

One important thing to note is that these are secondary transactions and not where the stock may potentially trade. Secondly, Coinbase doesn’t allow any secondary transactions, this was a company sponsored (approved) secondary. As a result this created immense scarcity so you can see how much the price changes just in these limited sales. Third, as we saw with the last bull run of Bitcoin everything with blockchain i…

> Third, as we saw with the last bull run of Bitcoin everything with blockchain in the name had a halo effect so there is definitely upward momentum.

We did, but blockchain tech rallying on the bitcoin price is a little like paper producers rallying on a baseball card fad. But markets are irrational, so...

Re: Coinbase valued above $100B, ahead of direct listing

#188

Post by graeme »

usehackernews wrote: post #176
graeme wrote: post #148

Earlier quoted context omitted.

Right just thinking through the claims of the boosters to their logical end. If it did happen in nine years the next halving is 2028 so the cost would be ~$85 billion per year. And that would be less than it is now due to inflation. Ok that’s actually not as bad as I thought, though still pretty expensive. You need $85 billion from new entrants in burnt capital just to maintain the value of existing bitcoins at that…

You seem to have a good grasp of creating high level models. I always see people referring to the energy consumption of bitcoin as though it’s strictly additive. What I’d be interested to know is how it compares relative to energy costs for transacting with and securing fiat currencies. Second, what people tend to ignore is that innovation doesn’t come in a vacuum - there are second, and third degree improvements tri…

> What I’d be interested to know is how it compares relative to energy costs for transacting with and securing fiat currencies.

Very hard to compare. One thing I’m unsure of for bitcoin: do costs go up if there are more transactions or does mining difficulty adjust so that costs don’t rise no matter how many transactions bitcoin does? I realize this is a major gap in my understanding.

The finance and currency system does much that bitcoin doesn’t currently do. So comparing as a whole isn’t adequate unless bitcoin network costs don’t scale up with numbers of transactions because mining gets easier.

Actually how do miners make money once there are no more coins to mine?

> In a world where bitcoin is $1million, it means the world has agreed on the benefits, and we will see innovations to address the tradeoffs that come from this. For example, we could see significant investment into renewable energy as a means to support the energy consumption of bitcoin.

That actually doesn’t follow. All that follows is that the world has decided to move $170 billion in capital into bitcoin per year.

The world is presently set to move about $20 billion of capital into bitcoin per year, and there’s no real consensus above usefulness.

The world could be putting $170 billion in because there is value, or it could be a massive waste of resources. The world has certainly misallocated resources before.

And yeah I was restricting my own comments to bitcoin. Ethereum et al I know much less about.

Re: Coinbase valued above $100B, ahead of direct listing

#189

Post by wonderwonder »

raiyu wrote: post #98

One important thing to note is that these are secondary transactions and not where the stock may potentially trade. Secondly, Coinbase doesn’t allow any secondary transactions, this was a company sponsored (approved) secondary. As a result this created immense scarcity so you can see how much the price changes just in these limited sales. Third, as we saw with the last bull run of Bitcoin everything with blockchain i…

The grayscale products come pretty close.

Re: Coinbase valued above $100B, ahead of direct listing

#190

Post by kgwgk »

raiyu wrote: post #98

One important thing to note is that these are secondary transactions and not where the stock may potentially trade. Secondly, Coinbase doesn’t allow any secondary transactions, this was a company sponsored (approved) secondary. As a result this created immense scarcity so you can see how much the price changes just in these limited sales. Third, as we saw with the last bull run of Bitcoin everything with blockchain i…

> Fourth, there is no Bitcoin tracking security on public markets.

Bitcoin futures are available since 2017 on CME and CBOE.

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