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Coinbase from YC to DPO

blog.ycombinator.com

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Re: Coinbase from YC to DPO

#491

Post by anonporridge »

microtherion wrote: post #439
anonporridge wrote: post #429

Earlier quoted context omitted.

Yes, but you also can't take your house with you stored in your brain if you have to flee the country. Bitcoin as chaos insurance (or schmuck insurance as Chamath calls it) is the use case that makes the most sense to me.

Then again, you rarely have to dig through a garbage dump for your house because you accidentally threw it out: https://www.cnbc.com/2021/01/15/uk-man-makes-last-ditch-effo...

True, but houses burn down all the time. Or get destroyed by "acts of god" that insurance won't cover.

If you backup your private key in a redundant way, multiple storage locations can be completely destroyed without any loss. If you were really paranoid, you could distribute it around the world to mitigate geographic and geopolitical risk.

Re: Coinbase from YC to DPO

#492

Post by NaturalPhallacy »

supernova87a wrote: post #217
Fede_V wrote: post #35

I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be sig…

Does a Bitcoin (for the $ value it represents) cost more to manufacture than an equivalent US $1? After all, a $1 of US currency represents some creation of work too, doesn't it? Capital/currency represents someone doing work, something being dug out of the ground, something being created -- because these things cannot be created out of thin air. When the Fed creates money, it is doing so in tandem with some physical…

This is a fascinating topic to me and something I've been casually studying for over a decade so bear with me if I come across as blunt or whatever... I just mean to answer your questions directly and expound a little.

>Does a Bitcoin (for the $ value it represents) cost more to manufacture than an equivalent US $1?

Yes, because it costs quote a lot of electricity. And...

>After all, a $1 of US currency represents some creation of work too, doesn't it?

Nope. Costs effectively nothing. Not at all tied to anything tangible - even electricity - whatsoever. Via fractional reserve banking - for some reason we just...let banks do this - they create it with a keystroke and it costs nothing whatsoever.

It's why we have inflation every year. Banks are constantly creating USD and then charging interest for the privilege they were given to do so.

>A US $ is not without cost as well, isn't that right?

Nope. Gets made up out of thin air every day. A bank creates a loan. How do you think we got to $14 trillion USD? The treasury has never printed that much money. Only ~10% of USD physically exists (according to the Fed itself), and that's counting $100 bills minted decades ago. And banks only have to have 10% of the money to cover their loans. The number being the same right now is just a coincidence.

>Currency is based on scarcity of something.

Currency is based on whether or not people will accept it in trade. There are countless examples that prove that that is the sole criterion. Even stupid, shitty, hard to use currencies get used if they're what's accepted. Getting initial buy in for USD was based on gold. Then silver, and then in 1971, literal faith in the US government and nothing else whatsoever:

"and the unilateral cancellation of the direct international convertibility of the United States dollar to gold." (https://en.wikipedia.org/wiki/Nixon_shock)

>Is it possible to have scarcity limited currency without some kind of work involved?

Not in my opinion. Gold requires mining. BTC requires computing. But USD isn't a scarcity limited currency.

Re: Coinbase from YC to DPO

#493

Post by onlyrealcuzzo »

Consultant32452 wrote: post #394
onlyrealcuzzo wrote: post #130

Earlier quoted context omitted.

Global wealth is $400T. All crypto currency combined is worth about ~$2T at this point. So to store 0.5% of the world's wealth, we are using 0.6% of the world's energy. Banks obviously don't use anywhere near this much energy. Bitcoin is estimated to use more energy than all other server farms put together. So we are using 0.6% of the world's energy to store 0.5% of the world's wealth. And Doesn't seem like the ideal…

What's the total energy cost, including human capital, of keeping the petrodollar afloat via global wars/hegemony?

Even if it is greater than 0.6% (it's plausible) - dollar denominated wealth accounts for 25% or global wealth. Which is 52.5x the amount of wealth as all of crypto.

The US doesn't even use 20% of the world's energy. So you would need to think that 125% of the energy the US produces and consumes goes directly into fighting wars and "supporting the petro dollar" - which is absurd. Almost 50% of energy is spent on transportation and utilities alone...

In the most generous of worlds, Bitcoin is 10x less efficient than the current systems. It is probably closer to 1000x less efficient (or more).

Re: Coinbase from YC to DPO

#494

Post by Grustaf »

pinkybanana wrote: post #324
AlchemistCamp wrote: post #156

This is pretty amazing. Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10 It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.

Airbnb market cap is at 105 billion and Coinbase is currently at 86. Personally I'm very sceptical that current valuation for Coinbase is justified. It is a great company for sure but there definitely arent similar network effects as with Airbnb. There's plenty of competition in the crypto exchange space.

Airbnb doesn't have network effects, the value to users increases pretty linearly with the number of hosts, and doesn't really increase at all with the number of other users.

Re: Coinbase from YC to DPO

#496

Post by Grustaf »

paulpauper wrote: post #414
aphextron wrote: post #407

Earlier quoted context omitted.

>also airbnb is not dependent on the value of a speculative asset. What do you think US real estate is?

people need shelter, they do not need crypto . There is huge demand for housing in metro areas even in spite of Covid, and regulation and other restrictions make it hard to increase supply, and landlords generally want to lock-in long-term rents with good credit scores due to difficulty of evicting, meaning more demand for short-term rentals. .

Airbnb doesn't provide "shelter", it's for travellers.

Re: Coinbase from YC to DPO

#497

Post by mtnGoat »

pinkybanana wrote: post #324
AlchemistCamp wrote: post #156

This is pretty amazing. Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10 It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.

Airbnb market cap is at 105 billion and Coinbase is currently at 86. Personally I'm very sceptical that current valuation for Coinbase is justified. It is a great company for sure but there definitely arent similar network effects as with Airbnb. There's plenty of competition in the crypto exchange space.

you think coinbase is overvalued at those numbers but not airbnb? how do you justify airbnbs?

Re: Coinbase from YC to DPO

#498

Post by NaturalPhallacy »

Dopameaner wrote: post #425
paulpauper wrote: post #364

And down bitcoin goes. $3k off the highs. If given a choice between 1 million to invest in in a large cap growth stock portfolio vs. Bitcoin, I would choose the stock portfolio every time. Crypto too volatile relative to upside. Airbnb and other big tech growth stocks have much smoother returns which can be magnified with some leverage strategies.

As Powell announced cryptocurrencies ‘vehicles for speculation’. It is mind blowing the cryptocurrencies are making bets and are valued without any sound reasoning behind them. How many companies actually use them at regular place? How hard is the barrier of entry?

USD doesn't have sound reasoning behind them either (anymore). It's based on faith in the system.

Re: Coinbase from YC to DPO

#499

Post by Grustaf »

anonporridge wrote: post #429
nick0garvey wrote: post #409

Earlier quoted context omitted.

I can live in a house. I can't live in a Bitcoin.

Yes, but you also can't take your house with you stored in your brain if you have to flee the country. Bitcoin as chaos insurance (or schmuck insurance as Chamath calls it) is the use case that makes the most sense to me.

People having to flee the country are not a big customer demographic for either of the companies.
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