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Understanding Coinbase

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Re: Understanding Coinbase

#111

Post by sudhirj »

This reminds me a lot of the rise of Git in the early days, when decentralised version control made the spectacular promise of allowing people to share diffs directly with each other without going through a horribly centralised system like Sourceforge or any other SVN based service.

Of course, nobody wants to send diffs to each other, that would just be silly. We only want the option to do so. So now that we can mirror and switch to GitHub or Bitbucket to our own Git servers, we ask for centralised systems to handle our decentralised version control.

I think crypto will go the same way. It’s nice to have the option to be completely decentralised and run your own node and network and what not, but the number of people running the networks are likely to be the same proportion as the number of people running their own git servers.

A system that is capable of easy decentralised is better than one that isn’t, but we choose central hubs or bases either way for day to day use.

Re: Understanding Coinbase

#112

Post by lottin »

logifail wrote: post #110
nlitened wrote: post #105

Earlier quoted context omitted.

If your customer is willing to spend BTC they own for your services, and you’re willing to exchange your services for some amount of BTC — then it’s very straightforward, zero extra hoops to jump. Imagine now your customer is in a non-US country, and you are in another non-US country with another currency. Using USD wire transfer is jumping through hoops in this context, and might not always be fast, cheap, or possib…

> If your customer is willing to spend BTC they own for your services[..] In this scenario, would one's rate be set in BTC, or fiat? I'm struggling to understand how a (non-crypto) business could want to hire a contractor at - let's say - 0.016 BTC/day, then watch the real (fiat) cost of that rate change value as the crypto markets move. "We hired a contractor at what was $100/day but right now it's costing us $1000/…

It would be foolish for a business to enter into BTC-denominated contracts because that would expose them to a huge foreign exchange risk in return for nothing.

Re: Understanding Coinbase

#113

Post by smeej »

de6u99er wrote: post #90
littlestymaar wrote: post #31

Earlier quoted context omitted.

True, though in practice “stuff” means “drug dealing”. \s

Coffeeshops here in NL only accept either cash or plastic.

There's already an entire industry growing up around enabling cryptocurrencies to be spent using traditional payment rails too, though, for those who don't want to see their governments print away the value of their money.

Coinbase itself has a debit card that deducts directly from your crypto balance and allows you to swipe the card anywhere that normally takes Visa. They're even a card issuer for Visa in their own right, so they don't have to do it through partner banks.[0]

Spending crypto is easy, whether the vendor opts into using it or not, so if you do get paid in it, it's easy to use.

[0] https://cointelegraph.com/news/coinbase-becomes-direct-visa-...

Re: Understanding Coinbase

#114

Post by smeej »

freeone3000 wrote: post #99
alexeldeib wrote: post #87

Earlier quoted context omitted.

Who are you talking about?

Presumably people who make less than $22,000 USD and have no capital gains, which definitionally cannot apply to anyone dealing with cryptocurrencies (as they're securities).

The long-term capital gains rate is 0% for single people whose income and short-term capital gains are under $40k per year, or married people under $80k.[0]

"People who pay no income tax" absolutely can apply to people using cryptocurrencies.

[0] https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...

Re: Understanding Coinbase

#115

Post by sygma »

sudhirj wrote: post #111

This reminds me a lot of the rise of Git in the early days, when decentralised version control made the spectacular promise of allowing people to share diffs directly with each other without going through a horribly centralised system like Sourceforge or any other SVN based service. Of course, nobody wants to send diffs to each other, that would just be silly. We only want the option to do so. So now that we can mirr…

> It’s nice to have the option to be completely decentralised (…)

I think "nice" downplays the importance of the possibility of self-custody. Despite the majority of people perhaps not opting to control their own keys, the mere possibility has interesting game theoretical implications that will keep neobanks like Coinbase in check.

Re: Understanding Coinbase

#116

Post by smeej »

pta2002 wrote: post #42
ravenstine wrote: post #40

Earlier quoted context omitted.

Doesn't Coinbase give you a wallet? What am I missing?

You don't have the private keys. If coinbase loses them, you're out of money. Possibly. They're insured supposedly, but if you have your own private keys then the only entity you have to deal with in this case is yourself (this can be both a positive and a negative, depending on how careful you are)

There is a "Coinbase Wallet," though, which is somewhat confusingly a separate app where you actually do hold your own private keys.[0]

You can seamlessly link your exchange account and your Wallet account so you can move the money right into your own Coinbase Wallet with your own private keys as soon as you're done with the exchange.

I'm not sure the parent comment meant that wallet, but Coinbase does "give you a wallet" if you want, complete with your own private keys.

[0] https://wallet.coinbase.com/faq/

Re: Understanding Coinbase

#117

Post by slim »

sudhirj wrote: post #111

This reminds me a lot of the rise of Git in the early days, when decentralised version control made the spectacular promise of allowing people to share diffs directly with each other without going through a horribly centralised system like Sourceforge or any other SVN based service. Of course, nobody wants to send diffs to each other, that would just be silly. We only want the option to do so. So now that we can mirr…

I think you're underestimating the number of people that run their git server. given the fact that running a "git server" can be as easy as running "git init --bare" on an empty directory on a server for which your team has ssh access

Re: Understanding Coinbase

#118

Post by smeej »

agumonkey wrote: post #100
dannyw wrote: post #83

Earlier quoted context omitted.

Metamask is an app and browser extension. It's basically a crypto browser. The same way the internet needs a browser. Your argument can easily be used to dismiss the early internet.

Metamask is the only name I could remember, when you listen to people discuss how to use uniswap, the amount of step to do is quite random and it's full of lingo and basically, it feels like setting up the latest js toolchain, a big shiney blur. Then they'll go on and talk about other systems, like polka dot and its parachains and its another universe, then you have multichains, and oracles and whatever. It's more li…

So is your critique that the tech is just in its early stages of development and hard to use for non-techies right now? Or are you seeing some reason it can't eventually become as easy to use as the internet, even though that was also really complex and hard to use in its first decades?

Re: Understanding Coinbase

#119

Post by smeej »

dehrmann wrote: post #9
eruleman wrote: post #2

The biggest threat to Coinbase are decentralized exchanges like Uniswap & Sushiswap. During the peak of DeFi summer, Uniswap handled more trading volume than Coinbase. [0] Uniswap airdropped its token $UNI to all users on Sept 17, 2020. Uniswap is already at a $17 billion market cap. Coinbase is expected to IPO at ~$100 billion. [0] https://www.theblockcrypto.com/data/decentralized-finance/de...

The biggest threat is Bitcoin (and other popular cryptocurrencies) stop going up or experience a crash. Sure, there are true believers, but I suspect most people are just looking for an asset that's going up. It could be gold, Nikes, NFTs, Pokemon cards, or bitcoin. Or stocks, I suppose, but at least they have revenue.

The biggest risk to the world financial system is that people are going to realize the dollar isn't backed by anything, lose confidence in it, and it's going to crash.

I don't know what you want to be holding if/when that happens, but I'd like to own some provably scarce resource that can be transmitted digitally.

Re: Understanding Coinbase

#120

Post by abdullahkhalids »

sudhirj wrote: post #111

This reminds me a lot of the rise of Git in the early days, when decentralised version control made the spectacular promise of allowing people to share diffs directly with each other without going through a horribly centralised system like Sourceforge or any other SVN based service. Of course, nobody wants to send diffs to each other, that would just be silly. We only want the option to do so. So now that we can mirr…

In my country, at least, once upon a time, upper middle class people would use a person/business called "dhobhi" to wash and iron 90% of their clothes. Reasons included convenience, unreliable supply of water at home, low quality consumer detergents etc. For small communities, the dhobhis formed an oligopoly of centralized services.

When washing machines became available, people didn't buy them because they were expensive, unreliable, and required a lot of repair and maintenance. Ultimately, the washing machines became cheap, reliable, and low maintenance, and now most people use washing machines.

I think the analogy to github and personal servers is clear.

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