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Coinbase from YC to DPO

blog.ycombinator.com

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Re: Coinbase from YC to DPO

#851

Post by GoblinSlayer »

morpheos137 wrote: post #817
aazaa wrote: post #735

Earlier quoted context omitted.

Some observations: 1. Armstrong was so concerned about privacy that he used a throwaway, but ended up giving his identity away anyway. 2. Those responses! The negativity on Bitcoin has been there from the start on HN especially for some reason. 3. That whole payment angle has not worked out the way most people thought. Most enthusiasts in 2012 saw Bitcoin as a PayPal replacement. Instead, Bitcoin has taking its own p…

1. See 2. 2. Bitcoin was always a dumb idea from the perspective of building a business or an economy on it. 3. Anyone who really looked at Bitcoin in 2012 could see it was not a realistic replacement for PayPal unless you were thinking about paying on a place like SilkRoad.

Fiat systems have such infernal UX, bitcoin can win on that metric alone. The FUD spread by the regulator is the only reason we're here.

Re: Coinbase from YC to DPO

#852

Post by mrb »

rgifford wrote: post #796
mrb wrote: post #718

Earlier quoted context omitted.

« No retail investor has accounts directly with the NYSE » That's a good point. So a fairer comparison would be to compare Coinbase to the market cap of NYSE ($66B) + a stock broker who has roughly the same userbase as Coinbase. For example Schwab ($127B) has about half as many accounts as Coinbase. So NYSE+Schwab = $193B. Suddenly Coinbase valued at $100B while having twice as many accounts and trading fees per doll…

Why stop there? Let's add in Visa too. If we're gonna add Visa, let's add Mastercard. What about banks though? Maybe we add in JP Morgan? If Coinbase has network effects, they're incredibly weak. I'll drop my Coinbase account tomorrow if I find a cheaper, safe place to buy coins. Schwab on the other hand has inarguably the best checking account out there, incredible customer service, and a great brokerage. Coinbase i…

«Coinbase is in a race to the bottom»

90%+ of industries are. It's what capitalism is all about. It's not unique to Coinbase.

«Grandma ain't making a Coinbase checking account»

She already did. They have 56 million verified user accounts. Twice more than Schwab. A lot of grandmas in this user base :)

Re: Coinbase from YC to DPO

#853

Post by dogman144 »

tootie wrote: post #590
dogman144 wrote: post #532

Earlier quoted context omitted.

From something I wrote above, this was my ah-ha moment: Not all cryptos are like this, but for bitcoin and other ones that have the incentives right: bitcoin's massive breakthrough is a protocol that can send verifiably discrete entities across a network, without a central party needing to verify the discrete-ness. This is a huge breakthrough in a lot of ways, but basically consider if you network could send payments…

The only distinction between crypto and just HTTPS is the distributed concept. Something that I don't really think is valuable and neither do most consumers. Crypto exchanges get robbed more often than banks. The notion of investing in "http" is akin to investing in "blockchain" which isn't a thing. Anyone who saw the value of the internet would have been buying Apple, Google and Amazon because they were providing go…

It's not so much the distributed concept, but it's the "verifiably discrete" packets that behave like a global internet protocol concept. I don't think you know the tech under the hood vs. existing tech, it sounds like. There has been no way, prior to now, to verify that my packet I'm sending over a network is a discrete entity, unless you use something like a certificate authority, and that's not really the same ballpark/use case. It's worth digging in that direction if you actually have an open mind about it.

Re: Coinbase from YC to DPO

#854

Post by swensel »

cryptica wrote: post #813
swensel wrote: post #778

Earlier quoted context omitted.

Proof of Stake has yet to demonstrate as much resistence to adversarial attacks as Proof of Work. An expert in the space, Andreas Antonopoulos, speaks to this topic here: https://www.youtube.com/watch?v=U0T49duRt74&t=2720s

There is a very strong incentive for Bitcoin proponents to push this narrative but it doesn't stand up to scrutiny. Proof of Stake is more secure than Proof of Work because it's not possible to use external resources to take control of the system. The cost of hijacking PoS is exponential, not linear. With PoW, someone who has no stake in the network could buy or rent mining hardware using fiat and take control of the…

This is interesting. I am curious, which PoS coin implementations do you like?

If an attacker wanted to not raise the price of a coin, couldn't they use crypto OTC markets to buy large amounts while not raising the price (i've seen OTC at least marketed that way)?

Aren't cryptocurrencies also only a scarce resource if they have a hard supply cap? Or do you figure in something like inflation vs coin burning to this as well?

I do understand your point that the incentive to follow through on the attack decreases as the attacker accumulates more tokens, since it would be in their interest for the network to function properly at that point due to how many tokens / how much stake they have in the network.

The only reason I could see the attack making financial sense at that point would be if it was a competitor who was trying to kill a competing PoS network and it was worth it to them to do so in order to promote their own network (or maybe it could be a government trying to protect their fiat currency)?

Re: Coinbase from YC to DPO

#855

Post by Animats »

ericlewis wrote: post #647
smabie wrote: post #582

Earlier quoted context omitted.

I mean, you can swap without a centralized exchange. In fact, for my PA account I would never use a CEX to swap coins.

Sure, but if you use coinbase you’re locked it. And in some cases unless you produce an ID you can’t even get the money out. Pretty weird you can dump as much money in as you want but getting it out isn’t as easy.

That's the biggest problem with crypto exchanges. They need to be brought under the same rules as other broker/dealers. The Know Your Customer rules are applied when you open the account, not when you withdraw.

Fails to process a withdrawal within specified time limits gets a broker in serious trouble. Institutional clients stop dealing with you within hours. See Drexel Burnam Lambert for an example. Then FINRA lands on you.

Re: Coinbase from YC to DPO

#856

Post by rednerrus »

s8s8discourse wrote: post #816
s8s8discourse wrote: post #468

Earlier quoted context omitted.

How do you justify your $100m valuation of a company that generated $700m of PROFIT in a single quarter?

Nice edit. How do you justify your $1000m valuation of a company that generated $700m of PROFIT in a single quarter?

q4 2020 and q1 2021 were anomalies. The government put $900B in stimulus money into individuals pockets. There is probably no single company that got more benefit from those payments than Coinbase. The fear of inflation from unfettered spending drove investors into crypto with the idea that it was a hedge against inflation. I don't buy that value proposition for crypto but it did drive prices higher. The stimulus also put money directly into individuals pockets many of whom were hoping to cash in on the boom.

Coinbase did $1.28B revenue in 2020 with something like half of it coming in q4. This was before Venmo, Cashapp, Paypal, etc. started selling crypto. The cost for customer acquisition is about to skyrocket at the same time fees are about to plummet.

There's a reason Coinbase is rushing to DPO right now. The stars are perfectly aligned for them to get out while the getting is good.

Re: Coinbase from YC to DPO

#857

Post by [deleted] »

alanbernstein wrote: post #834
programmarchy wrote: post #592

Earlier quoted context omitted.

Agree, AirBnB is essentially serving a luxury travel market.

I don't think that's really true as a blanket statement. I stayed in what turned out to be a depressing, small, rental apartment in Denver for a weekend via airbnb, because it was something like $20/night. The place smelled like trash and there was no laundry on-site. You might say that any type of travel is a luxury. Ok, I guess. This trip was for a funeral. The flight was under $100. While I'm fortunate to be able…

[deleted]

Re: Coinbase from YC to DPO

#858

Post by [deleted] »

Hnrobert42 wrote: post #381
dang wrote: post #290

Earlier quoted context omitted.

It's a big internet cliché to boo companies that don't (yet) make money. The flip side would be to yay companies that do. Not that many humans are consistent in that way, but someone out there must be!

I also don’t care about companies that don’t make money.

[deleted]

Re: Coinbase from YC to DPO

#859

Post by eloff »

sjg007 wrote: post #754
eloff wrote: post #602

Earlier quoted context omitted.

Agreed. I'm doing a little side project with my brokerage account where I pick 20 good socks and 20 bad stocks. Sell the bad ones short and double down on the good ones. That's how hedge funds work. It's interesting because as long as your picks are mostly right you can make money regardless of of the market is going up or down. Plus it'll be fun to say I started a hedge fund at parties. Coinbase is my number 1 bad p…

I remember a guy telling me he was shorting Google after it IPO’d because of the volatility in yahoo at the time. I told him that was a bad idea.

Yeah, that was a terrible idea in hindsight.

For coinbase to ever grow into it's valuation crypto would have to become an integral part of society at large.

After 12 years, it's still largely useless and offers no advantages over centralized financial solutions. The only advantage it had is it is decentralized. But in practice this turned out to be false. So what concrete use case could it have that can't be done better with a traditional database?

My bet is this is a bubble, and it will pop sooner or later. Having some short exposure to that is desirable. Especially if it's not in bitcoin which could rise a lot, but an overvalued company that would take a long time to grow into its valuation.

Re: Coinbase from YC to DPO

#860

Post by eloff »

triangleman wrote: post #789
eloff wrote: post #706

Earlier quoted context omitted.

Why does that matter here? Profitability is not a prerequisite for an IPO, and any IPO let's investors recoup their money.

It used to be that you could not IPO unless you were profitable, and furthermore the point of an IPO was to raise money needed to fund growth. But today these companies have raised enough money from VC's that they don't need any more from the public markets. By listing shares and letting these insiders sell, there is more limited supply and great demand, so they can sell tiny stakes for inflated prices. It's really g…

> It used to be that you could not IPO unless you were profitable

Citation please. Lots of companies IPO while losing money.

If this was a thing, it's ancient history and not relevant to IPO vs DPO discussion.

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