This was all I needed to take all my coins out and put them in my own wallet. Bye, Coinbase!
Coinbase warns that bankruptcy could wipe out user funds
431–440 of 473 posts
Re: Coinbase warns that bankruptcy could wipe out user funds
#432Earlier quoted context omitted.
I do wonder why he's allowed to say on Twitter there is no risk of bankruptcy [0]. While the risk could be minimal and maybe negligible saying "no risk" means zero chance. That can't be true of any company. For a public company ceo to say that, isn't that securities fraud? I guess even if it is fraud and they do get prosecuted by the SEC they'd just get fined for it. And maybe the fine here would be much less than th…
Does anything have a zero chance of happening?
Yes. You can only compute probabilities with respect to a probability model. There exists a model M and an outcome x, such that x has zero probability under M. For example, the probability of getting 2 heads in one coin toss has zero probability under the standard binomial model.
Re: Coinbase warns that bankruptcy could wipe out user funds
#433Earlier quoted context omitted.
Their depositors wallets aren't "on the blockchain" -- if they were, they'd be in the the depositors custody not coinbase's. Their users balances are just entries in a database at coinbase. Users expect that coinbase holds coins to back up those balances, but there is no proof of it. Last I checked coinbase doesn't participate in any proof of solvency protocols so there is no way to know if customer balances exceed t…
> Their depositors wallets aren't "on the blockchain" -- if they were, they'd be in the the depositors custody not coinbase's. If the users' wallet values are really just database entries referring to some miniscule portion of the mega-wallet whose private keys are actually owned by an exchange, then what's the point of using the blockchain at all? What is the value provided by exchanges other than an asset database…
The exchange is just that.. an exchange, people use it as gateway to the world of dollars. When they're done trading users can (and ought to!) withdraw their funds to their own wallets. Like anything else that requires an extra step, many do not (or delay a long time before doing so).
> Couldn't that function be equally served by some kind of high-risk brokerage account that has a crypto investment option?
Absolutely. What coinbase does could be done by traditional brokerage accounts. This is one of the reasons that people have been critical of coinbase as a business.
The regulatory uncertainty around Bitcoin has so far mostly kept more traditional brokerages out of the space. Though, FWIW, Interactive Brokers has a partnership with PAXOS to support bitcoin on their platform, the integration is not amazing however.
It's also the case that cryptocurrency exchanges make a considerable amount of income from promoting varrious extremely sketchy alternative cryptocurrency and accepting massive bribes for their listings and other activities that traditional brokerages wouldn't likely be interested in engaging in because they're already illegal for the other assets they handle.
Re: Coinbase warns that bankruptcy could wipe out user funds
#434This 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…
Mt. Gox take N! I wish I could withdraw my ETH but it’s staking and Coinbase doesn’t have an option to stop staking or move it in any way
Isn’t that because you converted your ETH to ETH2 for staking? They are pretty clear ETH2 cannot be transferred or traded, and it’s because the ETH2 network isn’t ready yet, not some sinister plan of theirs.
Re: Coinbase warns that bankruptcy could wipe out user funds
#435Earlier quoted context omitted.
If you don't have significant liabilities you can't really go bankrupt. (I didn't look to see if that was the case, just making the point in general)
Nonsense. They can get hacked or introduce a bug into their stack and go bust in under an hour. That's extremely unlikely, but not impossible.
That actually does sound kinda impossible, 98% of their crypto is in secured cold storage, and it’s spread across distinct coins and different wallets.
I’m not saying it’s risk free, but what exchange or broker is? Does anyone else match Coinbase for security? Gemini seems at best equivalent.
Re: Coinbase warns that bankruptcy could wipe out user funds
#436Earlier quoted context omitted.
> but Bitcoin failed at that what makes you say that? I use bitcoin to conduct private transactions regularly and its pretty darn solid for that purpose. Doing such a transaction over the internet, before bitcoin, required you to use permissioned rails.
And yet if a hundred million people tried to use it the way you do, the whole system would implode. A monetary system that only works if a small number of people use it is...not useful.
having permissionless money is quite useful IMO. I'm not concerned with it being a mass phenomenon
Re: Coinbase warns that bankruptcy could wipe out user funds
#437Earlier quoted context omitted.
> but Bitcoin failed at that what makes you say that? I use bitcoin to conduct private transactions regularly and its pretty darn solid for that purpose. Doing such a transaction over the internet, before bitcoin, required you to use permissioned rails.
> what makes you say that? I use bitcoin to conduct private transactions regularly and its pretty darn solid for that purpose. Doing such a transaction over the internet, before bitcoin, required you to use permissioned rails. Just because it can be used like that doesn't mean it actually succeeded. The vast majority of Bitcoin is held as a speculative investment, and the deflationary aspects are a strong disincentiv…
it failed at its purpose if it achieved said purpose but a bunch of people are also using it as a speculative asset?
Re: Coinbase warns that bankruptcy could wipe out user funds
#438[deleted]
Re: Coinbase warns that bankruptcy could wipe out user funds
#439Earlier quoted context omitted.
Mt. Gox take N! I wish I could withdraw my ETH but it’s staking and Coinbase doesn’t have an option to stop staking or move it in any way
Isn’t that because you converted your ETH to ETH2 for staking? They are pretty clear ETH2 cannot be transferred or traded, and it’s because the ETH2 network isn’t ready yet, not some sinister plan of theirs.
Yes that’s the case
Re: Coinbase warns that bankruptcy could wipe out user funds
#440When 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...
That thread actually seemed like a reasonable response to balance out the "gloom and doom" from the media. Also, not sure why you think "8 twitter posts" are a such big deal -- tweets are limited in size, and twitter has a broad audience, and these types of tweet threads are very common.
You say "doom and gloom" as if the media is being unfair in their coverage of Coinbase. The same Coinbase that saw a 43% decline in share price in four days before releasing their earnings.
In said earnings report, they:
- Posted a net loss of $430m (defying analyst expectations of a profit)
- reported a decrease in monthly active users.
- reported a decrease in transaction volume.
Their bonds have been downgraded, they are facing increased financial regulation and two of the largest stablecoins have become unpegged in the last few days.
Coinbase then files an SEC disclosure stating in plain terms that it will use the assets of its users to pay off secured creditors in the event of a bankruptcy.
His twitter thread was definitely not a reasonable response.