Coinbase valued above $100B, ahead of direct listing • Hacker News Board

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

#191

Post by hakeberio » Sat, Feb 20, 2021, 6:03 PM UTC

kevindeasis wrote: post #33

Ah yes, possibly the 5th company that I wished I joined this past 18 months... Historically there were some exchanges that have been hacked. This caused not only the company to go bankrupt but people losing a lot of money. How does coinbase prevent this from happening? This is very much one of the reasons I will never hold crypto (FYI: I've wrote my own Golang flavour of ethereum blockchain and solidity when it first…

Regarding your last line: futures trade nearly 24 hours, 6 days/week. It's also several times bigger than the ETF market, in terms of average daily dollar volume, so you get the liquidity and smaller spreads as well. [1]

[1]: https://www.cmegroup.com/education/courses/futures-vs-etfs/w...

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

#192

Post by solosoyokaze » Sat, Feb 20, 2021, 6:05 PM UTC

badjeans wrote: post #173

mewpmewp2 wrote: post #142

Earlier quoted context omitted.

The other possibility is that it will be widely used in the future as a store of value or for some other purposes. Might be rational to put at least some percentage of your net worth into it. People need and want something like that to exist where they have complete control over their assets without any worries about government or institutions.

> People need and want something like that to exist where they have complete control over their assets without any worries about government or institutions. The government can always just make a law and take whatever it wants from you (or imprison you). Doesn't matter if it's from a bank account or bitcoin cold storage on planet Musk.

> Doesn't matter if it's from a bank account or bitcoin cold storage on planet Musk.

It's a lot easier for the government to pilfer your bank account, than for them to torture you to hand over your seed phrase (that is if they even know your real identity). Decentralization absolutely takes power away from the state. That's not even touching the truly anonymous crypto like zCash.

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

#193

Post by ric2b » Sat, Feb 20, 2021, 6:09 PM UTC

Sparkle-san wrote: post #157

tedfernau wrote: post #146

Earlier quoted context omitted.

Isn’t cash losing value the definition of inflation?

Yes, and it's been sitting around or below 2% for some time which economists generally consider a good level for spurring spending.

Sure, until you want to go to college, or buy a house, or have access to healthcare or buy some stocks to save for retirement.

But if you don't want to improve your life and just want to survive until the next paycheck sure, I guess inflation is low.

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

#194

Post by samvher » Sat, Feb 20, 2021, 6:11 PM UTC

soared wrote: post #168

graeme wrote: post #145

Only tangentially related: How do bitcoin network costs scale with market price? We can expect the marginal cost to mine a coin to scale with price. So if btc worth $52,000 then people will invest on average $52,000 in equipment and electricity. There are 6.5 coins mined every 10 min. So daily network cost approximates to 6.5 * 6 * 24 * $52,000 = $48,000,000 This is not strictly accurate as past equipment costs less…

> We can expect the marginal cost to mine a coin to scale with price. This feels correct but I don’t think it is. For example gold has decreased by $200/oz recently - it definitely didn’t just get cheaper to mine. I know mining is different and it’s not a great comparison, but costs don’t scale immediately, miners don’t make decisions entirely based on the price of btc now, etc. Economic principles like supply and de…

You say "it definitely didn't just get cheaper to mine", which sounds obviously true, but in a way I'm not sure it is. If the price of gold decreases by $200/oz, that probably makes a bunch of mines unprofitable, leading them to close down (or at least pause) their operations. Which in a way would mean that (on average) gold got "cheaper to mine". And it seems to me that the Bitcoin mining market works basically the same in that sense.

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

#195

Post by csomar » Sat, Feb 20, 2021, 6:11 PM UTC

graeme wrote: post #181

csomar wrote: post #169

Earlier quoted context omitted.

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.

$24 is not a sizeable fraction of wealth by any measure. And here we are talking averages. The average per capita GDP is $18k. $24 is a very small number to that.

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

#196

Post by silexia » Sat, Feb 20, 2021, 6:15 PM UTC

dehrmann wrote: post #184

bob33212 wrote: post #180

Earlier quoted context omitted.

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…

The three comments preceding mine are brilliant at cutting through the pump and dump hype around Coinbase.

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

#197

Post by dragonwriter » Sat, Feb 20, 2021, 6:22 PM UTC

graeme wrote: post #188

usehackernews wrote: post #176

Earlier quoted context omitted.

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…

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

With BTC (and I would assume most other cryptocurrencies), by transaction fees.

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

#198

Post by TheBlight » Sat, Feb 20, 2021, 6:22 PM UTC

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.

Both can be true. ie. wanting to build something cool and potentially good for society while also enjoying the fruits.

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

#199

Post by alasano » Sat, Feb 20, 2021, 6:28 PM UTC

dehrmann wrote: post #184

bob33212 wrote: post #180

Earlier quoted context omitted.

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…

If somehow you could dissociate the tech from the currency aspect, would you still qualify cryptocurrencies as "high-price trading cards"?

I wonder because where some people are attracted to crypto because of the monetary gain and then learn about the technology, others are turned off by the constant focus on the $ value and then don't learn about the technology.

I truly find it fascinating to imagine our future running on a crypto layer. I'm not talking about bitcoin specifically due to its inherent limitations (which may or may not be bypassed through second layer solutions).

But playing around with some of the DeFi stuff, seeing directed acyclic graph ledgers perform at 10k tps and seeing projects which truly can bring value to people really gets me hyped about these things working seamlessly together.

The internet is not worth a lot because of the protocols underneath it but because of what people have built on it over the years. These various cryptocurrencies interacting with each other more and more gives me the same impression.

Every boom/bust cycle crypto goes through brings in more creativity from people who are building on this new world and I have trouble finding fault with it.

Would love to hear some arguments on how this view of things could be biased or perhaps wrong.

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

#200

Post by andruby » Sat, Feb 20, 2021, 6:28 PM UTC

graeme wrote: post #167

csomar wrote: post #161

Earlier quoted context omitted.

You are not wrong. However 1= $1m/bitcoin is x20 from here. And here is already a pretty high price. 2= $170bn is a lot of money. But on an international/global scale, it's a drop in the bucket.

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…

Just wanted to point out that 130M * $1000 = $130B, not 1.3B