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Coinbase warns that bankruptcy could wipe out user funds

fortune.com

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Re: Coinbase warns that bankruptcy could wipe out user funds

#271

Post by UncleMeat »

krono wrote: post #45

When a CEO requires 8 twitter posts[1] to essentially convey the message "Don't worry about this legal clause", it sort of has the opposite effect on me. [1]: https://twitter.com/brian_armstrong/status/15242334800407101...

I dunno, these headlines are always a bit silly. "Snapchat's IPO filing says that they might never turn a profit ever!" Yeah, the risks section of an IPO filing are dry and always filled with this stuff. They aren't some secret code the company is sending out. I see this as the same.

Re: Coinbase warns that bankruptcy could wipe out user funds

#272

Post by pluc »

CyanDeparture wrote: post #161

Can anyone tell me how to set up a wallet on my Mac in order to get my coins off coinbase. Is there any clear guide on how to do that. Every link on Google seems to be spam or downloading potentially malicious software. It's very fustrating because so many people seem to know how to set up a wallet on their computer/Mac however I cannot for the life of me find a clear wallet to download and move my funds to or a guid…

That was the funniest thing I've read all day.

Re: Coinbase warns that bankruptcy could wipe out user funds

#273

Post by lexapro »

brink wrote: post #155
yreg wrote: post #106

Earlier quoted context omitted.

A. speculation B. diversification against more tradional assets C. store of value if you don’t have access to any better financial instruments D. keeping some ready on hand to pay off ransomware attacks

E. Learning what it's like to be dumped on

So far it worked out pretty well

Re: Coinbase warns that bankruptcy could wipe out user funds

#274

Post by chill1 »

CyanDeparture wrote: post #161

Can anyone tell me how to set up a wallet on my Mac in order to get my coins off coinbase. Is there any clear guide on how to do that. Every link on Google seems to be spam or downloading potentially malicious software. It's very fustrating because so many people seem to know how to set up a wallet on their computer/Mac however I cannot for the life of me find a clear wallet to download and move my funds to or a guid…

I usually don't bother to login to comment, but I felt compelled in this case. The other replies include a lot of bad advice. You sound like you don't have much of experience actually using bitcoin (or cryptocurrencies). So the best (most secure and easiest) solution is to buy a hardware wallet and use the wallet app which they provide. I suggest either Trezor [1] or Ledger [2]. Do not buy a hardware wallet from secondary marketplaces or second-hand resale websites - buy direct from the developer's website only.

[1] https://shop.trezor.io/

[2] https://www.ledger.com/

For added opsec:

- Use a temporary email address on the order form (e.g. mailinator or similar).

- Do not ship the goods to your home address. Pick-up your order in-person at a drop-off spot, post-office, or have it delivered to your workplace.

A bit more information about hardware vs. software/app wallet:

- Hardware wallets protect your bitcoin and cryptocurrencies by keeping your private keys secure on a dedicated USB (or air-gapped) device. The private keys never leave the device.

- If you use an app on your phone or desktop computer, your private keys could be stolen by malware. This is the exact attack vector that hardware wallets are designed to protect against.

Good luck!

Re: Coinbase warns that bankruptcy could wipe out user funds

#275

Post by cnelsenmilt »

ahmetrcagil wrote: post #227
mbesto wrote: post #190

Earlier quoted context omitted.

Would you like to explain to my 70 year old mother that she should install a Chrome extension, transfer her coins to it and expect her not to lose that? Oh and then explain to her that she is going to print out a piece of paper with 12 words on it. That's her backup in case she loses everything...so "Mom, do not lose this piece of paper you're screwed!" Yes she'll figure that out easily!

Maaaybe 70 y.o. moms should not invest in crypto then?

This and also arguably 70 year old moms are probably just fine at "don't lose this crucial piece of paper" given stuff like social security cards, birth certificates, savings bonds, and all the other bits that have been important pieces of paper for most of their lives.

Re: Coinbase warns that bankruptcy could wipe out user funds

#276

Post by seydor »

prepend wrote: post #2

Since coinbase isn’t FDIC insured, it makes sense that if coinbase goes bankrupt, the customer currencies will go away as well. And they aren’t SPIC insured in the situations where crypto is a security. It’s funny to see people shocked (SHOCKED!) when crypto doesn’t have the protections of regular banking and investments. That’s why you don’t invest with stuff that isn’t insured. Those aren’t real rates, they are ris…

> when crypto doesn’t have the protections of regular banking and investments

Coinbase is not 'crypto' though. Nobody's coins go down if one exchange crashes, unless they are careless enough to leave them there. The real problem is that cryptocoins are hard to use , and so exchanges are used as banks (they shoudn't) . But that is something that tech can fix

Re: Coinbase warns that bankruptcy could wipe out user funds

#277

Post by rubyn00bie »

jpmattia wrote: post #266
tablespoon wrote: post #195

Earlier quoted context omitted.

> Since coinbase isn’t FDIC insured, it makes sense that if coinbase goes bankrupt, the customer currencies will go away as well. And they aren’t SPIC insured in the situations where crypto is a security. Is Coinbase "loaning" out the Bitcoin users have deposited in it? The reason banks need the FDIC is that they loan your deposits out instead of throwing it in a vault and sitting on it, so if they go under they don'…

deleted erroneous comment about shorting on Coinbase.

How do you short a coin on Coinbase? I have never seen the option nor heard reference to it. It sounds like you’re just assuming this is how it works to me but I’d prefer to be wrong and learn something.

Re: Coinbase warns that bankruptcy could wipe out user funds

#278

Post by pavlov »

tablespoon wrote: post #242
mellavora wrote: post #220

Earlier quoted context omitted.

not so mind boggling, if you regard it as any other company. Say you ordered a pair of jeans from Sears, via the catalog. And unfortunately your cash transfer cleared on the day they went bankrupt. They owe you a pair of pants, or your money back if they cannot deliver the product you ordered. They also owe their employees money, if they have not issued payroll yet for that month. They also owe their bondholders mone…

I get that's true in some situations, but is it true in all cases? Say I rent a safe deposit box, put valuable personal property in it, and the bank goes bankrupt. Does the bankruptcy court sell the box-holders' personal property until the bondholders are made whole? It seems like depositors should be one of the first in line, certainly before bondholders.

The property in the box was never the bank’s property. They’re just renting a space for you to keep your stuff. In a bankruptcy, that contract could be sold to a third party who takes over the management of the boxes, but the contents are yours.

When you send money to Coinbase, it’s not like that. This latest disclosure makes it clear assets held at Coinbase (or other exchanges) aren’t yours in any sense.

Re: Coinbase warns that bankruptcy could wipe out user funds

#280

Post by einpoklum »

chaosbolt wrote: post #150
_Algernon_ wrote: post #6

This boils down to the "not your keys not your coin" mantra that's often repeated in the cryptocurrency community. It is possible to move your coins to your own wallet and manage them on your own. This comes with risks (eg. lost keys). Keeping them on exchange comes with different risks. Anyone holding significant amount of cryptocurrencies should consider the risks of each choice, make an informed decision, and live…

I'm almost sure Coinbase practices fractional reserve and other forms of market manipulation, let's see how that bank run works for people. Some examples: - NuCypher goes up quickly on binance (a few months ago) because a whale is buying there, lots of people try to withdraw on CB to sell on binance, withdrawals start off working but then get locked for 5 hours straight, reddit and other social media had people compl…

> I'm almost sure Coinbase practices fractional reserve

I'm not a crypto guy, so excuse the naive question: Can coinbase loan out money without actually transferring some sort of single-ownership keys for the amount loaned? If so, then indeed, they should be able to engage in fractional reserve "banking".

> and other forms of market manipulation

Modern money markets are based on fractional reserve banking. That's how most money gets created these days. I'm no fan of the prevailing economic system but it isn't some manipulation which moves you away from some pristine state.

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