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Sent $35,104.11 USD to CoinBase. Never received Bitcoins

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Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#401

Post by dragonwriter »

AnneOminous wrote: post #371
dragonwriter wrote: post #327

Earlier quoted context omitted.

> Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. The current cost of mining is a rough replacement cost of bitcoin (and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying), but since mining isn't inherently reversible its not an intrinsic value .

Quote: "...but since mining isn't inherently reversible its not an intrinsic value." It IS "value", because the resources used for mining have measurable value, and can be traded for things other than Bitcoins. It may be an indirect measure of value, but it's still a measure of value.

> It IS "value", because the resources used for mining have measurable value, and can be traded for things other than Bitcoins.

It is value, but its not value of bitcoins. It is the value that would need to be sacrificied to replace the bitcoins by mining, but its not value that can be recovered from the bitcoins, so its not intrinsic value that supports the market value of bitcoin.

Intrinsic value, as the term is used for currency, is value that you can recover from a currency without trading it -- e.g., the use-value of gold for ornamentation or industrial uses is intrinsic value.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#402

Post by dllthomas »

dragonwriter wrote: post #327
AnneOminous wrote: post #319

Earlier quoted context omitted.

This isn't a failure of Bitcoin. It's a failure of the market. Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. Current market price has been very far from that. Bitcoin market right now is pretty much the definition of a bubble. Beware. In a "bubble" market, your money can disappear overnight. But again: that's not Bitcoin's fault. It's the fault of idiots vast…

> Bitcoin has an approximate "intrinsic value", which in economic terms is a bit above the cost of mining. The current cost of mining is a rough replacement cost of bitcoin (and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying), but since mining isn't inherently reversible its not an intrinsic value .

"and thus, in a sane market, ought to be a ceiling on its market value, since if the exchange cost is higher than that, you are better of mining then buying"

Modulo time preferences...

But yes, bitcoin's intrinsic value is that it is the only method to pay transaction fees to have work done on your behalf by the bitcoin network. I don't know how to price that, though.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#403

Post by PeterisP »

jeremyrwelch wrote: post #224
apalmer wrote: post #194

Earlier quoted context omitted.

Its not ridiculous at all. With that much spread and at prices as high and fluctuating as much as they currently are you cannot expect to take 10 DAYS for a transaction of this nature. Honestly, looking at this from the outside what is the difference between this an actual larceny? A large purchase comes in while the commodity is priced high, the commodity is not purchased but instead funds are held on to while the p…

This is definitely ridiculous. The loss of value was not on the fault of Coinbase, but the result of market swings.

If you delay orders due to your fault (no matter if it's liquidity, intentional, technical or whatever) then you're liable for the market swings of the delayed good.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#404

Post by barrkel »

barmstrong wrote: post #53

Brian from Coinbase here. Sorry for the delay on that - definitely not the customer experience we are striving for. We should have things squared away for you by end of day. Edit: your bitcoin credit has now been processed. It looks like as we were performing server upgrades last week a handful of jobs didn't run as normal. We should have certainly caught it and responded sooner so that was our fault. My deepest apol…

You need to have at least one person in charge of reconciliation. If you're not running recs with data feeds from the various parts of your system doing transactions, you're just a lawsuit waiting to happen. If you were an actual regulated financial entity, not running recs would be illegal under risk management requirements.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#405

Post by infinitone »

chollida1 wrote: post #93

Here is the problem with coinbases tactics. Consider buying $1,000 worth of bitcoins... Coinbase can tell you your price. Coinbase can then just wait, and wait and wait, weeks on end for the price to dip down. They can then buy the coins at the lower price and deliver them to you voila, they profit from you. This is very dubious. If the price goes up they then buy at your price + some percent of their commission so t…

Yeah but what if you decide to withdraw while they are waiting for the price to dip?

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#406

Post by sheetjs »

jessedhillon wrote: post #326
sheetjs wrote: post #292

Earlier quoted context omitted.

As highlighted in the thread and in PG's reply, the default response to criticism of Coinbase is to nuke the conversation. As PG wrote: > Strictly speaking I should have killed the post entirely Now, it's possible that other complaints on HN were nuked by PG or some other moderator, making it difficult for someone to find it.

Apparently, referring to a thread which is highly critical of Coinbase, while participating in another critical thread, is proof enough for you that Coinbase criticism is silenced. I hope when I frame it like this, you understand how stupid it is, what you wrote.

What's apparent is the fact that you are incapable of analysis.

If you bothered to read the other thread, you'll see parallels to the current situation:

- transaction delays on the order of 1 week

- Coinbase is blaming technology (last time it was a database migration, this time server upgrades)

- Customer support has been silent (znowi described it as "information vacuum" https://news.ycombinator.com/item?id=5427985)

- Online account system called into question, users unaware of current positions (e.g. https://news.ycombinator.com/item?id=5428090)

If this were the first time, you can cut some slack if Coinbase responded appropriately and took steps to prevent this from happening in the future. Based on what played out recently, it's not clear if Coinbase actually learned anything from the previous issues.

And in the future, if you ever do decide to start a company and find yourself in a similar situation, I hope you would be a bit more communicative and proactive than Coinbase was in this case.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#407

Post by PeterisP »

this_user wrote: post #287
kudu wrote: post #223

Earlier quoted context omitted.

Here's the thing about financial institutions: when they make a mistake, they pay for it. They should really be crediting him 62.9 BTC, which is approximately what he would have gotten by selling on December 13 and buying again today.

That's true for traditional financial institutions that consider this the costs of doing business and can easily absorb such losses. Something like the $25mn Coinbase got in venture capital is lunch money for a JP Morgan or Goldman Sachs. BTC on the other hand has insane amount of volatility and the players are comparatively small. You may simply find yourself in a situation were they are simply unable to refund your…

Well that's the point - if you take a short/long position in BTC, then you must afford to pay it out even in fluctuations - if you can't, pay someone to hedge/'insure' it; if you don't - declare bankruptcy and pay up whatever you have.

The whole point is that 'comparatively small' players shouldn't be allowed to take up insane amounts of volatility; if you accept consumer's money then it would be reasonable to require to put that $25mm as a bond to pay out your debts, and put a ceiling on how much deal volume you're allowed to hold if you've got only tiny amounts such as $25mm.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#408

Post by lostlogin »

lem72 wrote: post #390
JeffL wrote: post #333

Earlier quoted context omitted.

One time I had almost 1 million extra dollars show up in my Waterhouse Brokerage account. I thought, "huh, that's interesting." It disappeared 4 days later.

Yup, it wasn't as much, but I magically had 10k show up after I made a deposit through a bank teller that stayed there for 2 weeks before finally disappearing.

My father withdrew cash from an ATM a while back, he got less than he asked for but had the asked for amount deducted from his account. He complained. The manager of the bank nodded knowingly when he complained. He wasn't believed. He was told that at the end of the month they would do a stocktake and see. Some months later it was credited back. This is about the best of my bad banking stories. The time our deposit for a house got lost was stressful several years of hard hard saving vanished during a transaction.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#409

Post by PeterisP »

Sami_Lehtinen wrote: post #397
tedunangst wrote: post #374

Earlier quoted context omitted.

It's not just regulation. It's basic accounting. If you're not doing it, you literally don't know how much money you have. It's always a good idea to know how much money you have, even if the government doesn't require you to know.

You clearly haven't been dealing with businesses. 99% doesn't do daily checks. Many notice thins after a month or so, when closing books for month. And some notice those kind of things aften closing a year. But there still are many businesses which won't ever notice or care missing 100 grand. Been there and done that, and it's much more common than you think. In some of those cases I personally think that the busines…

If this is really is business as usual, then it might be acceptable for a widget selling company but completely unacceptable for financial services. In financial services the same actions that you describe are gross negligence that (depending on jurisdiction) can mean personal liability, possibly including criminal charges, for the relevant CxOs, and a lifetime ban from running any other financial companies in future. You can't entrust consumer's money to companies being run like that, it's pure nonsense.

Re: Sent $35,104.11 USD to CoinBase. Never received Bitcoins

#410

Post by nostrademons »

alttab wrote: post #324
nostrademons wrote: post #273

Earlier quoted context omitted.

Umm, if the Bitcoins were purchased at a lower price that would be good for the buyer. It's "Buy low, sell high", remember? The problem, it seems, is that the price was locked in at the original, higher, order price, but the transaction didn't go through and so the buyer had no liquidity as the price continued to drop. Had the transaction gone through the buyer would've lost an equal amount of money (and so the accus…

What he meant was coinbase could have easily used some of the 35k to buy the 40 by cheaper, and keep the rest. They could have done this, and still said what they said and the net effect to the customer would be the same. This is not good for coinbase, even if it was an accident.

Is there any evidence that Coinbase actually did that? My read of the Coinbase founder's post up-thread was that they purchased the Bitcoins on the user's behalf at the time he entered the order, but a server failure prevented them from being transferred to the buyer's wallet. If they had given him the current market price they would have to purchase additional Bitcoins and eat the cost. (Which, reading the recent edit, seems to be exactly what they're doing.)

I agree this is not good for Coinbase, but I am also far less surprised or indignant than many posters here seem to be. This is what the early stages of most markets look like, with fuck-ups and manipulation galore. Read a book on the history of the NYSE (and later, Amex, which was called the "Over the curb" market because it consisted literally of people shouting orders at each other on a street corner in NYC) - this is far milder than the stuff that went on then. At least Coinbase seems to be exhibiting incompetence rather than the naked greed and malice that characterizes many other nascent markets.

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