Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

A Major Coinbase Milestone: 1 Million Consumer Wallets

blog.coinbase.com

Post reply on HN
Print view View original

21–30 of 80 posts

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#21

Post by thinkcomp »

sillysaurus3 wrote: post #18

Quick question: What's preventing Coinbase from shutting down operations tomorrow and walking away with everyone's money, as MtGox walked away with mine? Or, what if the founders orchestrated some sort of disaster wherein all of the coins are claimed to be lost, but in reality they're simply transferred to the founders? I know they wouldn't actually do that. My question is, what's stopping them? Why wouldn't someone…

Nothing. And good luck finding their worldwide "cold storage" locations. They're apparently not in the United States, and not required to disclose them to any regulator.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#22

Post by thinkcomp »

[deleted] wrote: post #20
sillysaurus3 wrote: post #18

Quick question: What's preventing Coinbase from shutting down operations tomorrow and walking away with everyone's money, as MtGox walked away with mine? Or, what if the founders orchestrated some sort of disaster wherein all of the coins are claimed to be lost, but in reality they're simply transferred to the founders? I know they wouldn't actually do that. My question is, what's stopping them? Why wouldn't someone…

[deleted]

Actually, no. PayPal is licensed and bonded in 47+ states. Coinbase is licensed in 0.

I don't think it's the best regulatory framework, but it's all we've got.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#25

Post by devindotcom »

sillysaurus3 wrote: post #18

Quick question: What's preventing Coinbase from shutting down operations tomorrow and walking away with everyone's money, as MtGox walked away with mine? Or, what if the founders orchestrated some sort of disaster wherein all of the coins are claimed to be lost, but in reality they're simply transferred to the founders? I know they wouldn't actually do that. My question is, what's stopping them? Why wouldn't someone…

The promise of future profits amounting to more than what they would walk away with today, gained in a somewhat more respectable fashion. If they become the leading wallet in the world, they're sitting on a goose laying golden eggs. Doesn't make sense to slaughter it today for dinner.

These guys are known — like the guys at Mt Gox. They're not anonymous, and they would run a real risk of bodily harm by such a public crime.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#26

Post by TacticalCoder »

joezydeco wrote: post #2

I realize it's all startup-y to pat yourself on the back about growth, but aren't you painting a target on your back for those that want to perform the next heist?

As I understand it if security is done correctly then "stealing bitcoins" amounts to breaking strong cryptography. At this point nothing indicates that the elliptic curves or the cryptographic hashes (SHA-256, RIPEMD-160) used in Bitcoin are at risk.

Under the assumption that the crypto used in Bitcoin is safe, there's, for example, nothing an attacker can do to spend the coins in offline wallets. Not even a 50%+1 attack that'd be sustained for days...

If anything, the recent fiasco with Gox (which is more than shaddy) gives me lots and lots of confidence in Coinbase to do "the right thing".

Now I'm not saying they'll never get pirated or anything like that. But Bitcoin implemented correctly seems to be very safe and there are many people out there who have bitcoins which are "sleeping" safely on offline wallets in deep cold storage.

Most people holding bitcoins and most companies like Coinbase only need a fraction of their bitcoins "online" to be able to operate. And even for those bitcoins I take it Coinbase is taking security very seriously.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#27

Post by thinkcomp »

[deleted] wrote: post #23
thinkcomp wrote: post #22

Earlier quoted context omitted.

Actually, no. PayPal is licensed and bonded in 47+ states. Coinbase is licensed in 0. I don't think it's the best regulatory framework, but it's all we've got.

[deleted]

You're right, the surety bond system is fundamentally flawed. But it's $9 million more in security (in California, since different states have different bond requirements) than Coinbase has.

I've advocated for an FDIC-like system for money transmitters, run by CFPB or some other entity, for three years. Congress is hard to reach these days.

http://www.thinkcomputer.com/corporate/whitepapers/heldhosta...

http://www.thinkcomputer.com/20140214.cfpbcomment.pdf

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#28

Post by diego »

sillysaurus3 wrote: post #18

Quick question: What's preventing Coinbase from shutting down operations tomorrow and walking away with everyone's money, as MtGox walked away with mine? Or, what if the founders orchestrated some sort of disaster wherein all of the coins are claimed to be lost, but in reality they're simply transferred to the founders? I know they wouldn't actually do that. My question is, what's stopping them? Why wouldn't someone…

Nothing, so most people should use Coinbase the same way they use a grocery store: buy what they need and take it somewhere else. Unfortunately most people do not know enough to do that. I wrote a blog post about it if you're interested.

http://diegobasch.com/do-you-know-enough-to-securely-own-bit...

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#29

Post by sillysaurus3 »

devindotcom wrote: post #25
sillysaurus3 wrote: post #18

Quick question: What's preventing Coinbase from shutting down operations tomorrow and walking away with everyone's money, as MtGox walked away with mine? Or, what if the founders orchestrated some sort of disaster wherein all of the coins are claimed to be lost, but in reality they're simply transferred to the founders? I know they wouldn't actually do that. My question is, what's stopping them? Why wouldn't someone…

The promise of future profits amounting to more than what they would walk away with today, gained in a somewhat more respectable fashion. If they become the leading wallet in the world, they're sitting on a goose laying golden eggs. Doesn't make sense to slaughter it today for dinner. These guys are known — like the guys at Mt Gox. They're not anonymous, and they would run a real risk of bodily harm by such a public…

The promise of future profits amounting to more than what they would walk away with today

That's exactly the same argument I used to justify why MtGox wouldn't shut down, almost word for word. It's the same argument I used to convince myself why they wouldn't shut down. They still shut down.

They're not anonymous, and they would run a real risk of bodily harm by such a public crime.

So we're relying on mob justice? Also, Mr. Karpeles hasn't been harmed and probably won't be.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#30

Post by mbesto »

sillysaurus3 wrote: post #18

Quick question: What's preventing Coinbase from shutting down operations tomorrow and walking away with everyone's money, as MtGox walked away with mine? Or, what if the founders orchestrated some sort of disaster wherein all of the coins are claimed to be lost, but in reality they're simply transferred to the founders? I know they wouldn't actually do that. My question is, what's stopping them? Why wouldn't someone…

Simple - because YC, a16z, USV, SV Angel, etc all have skin in the game.[0] There are some serious people with some serious money who have reputations to uphold. AFAIK Mt. Gox had none of that.

[0]http://www.crunchbase.com/company/coinbase

Post reply on HN