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A Major Coinbase Milestone: 1 Million Consumer Wallets

blog.coinbase.com

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Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#41

Post by baddox »

thinkcomp wrote: post #3

That's one million consumer accounts with no FDIC insurance, no surety bonds, and no other backstop in the event of a problem. I'd love to see a Coinbase blog post about why Coinbase doesn't need to be licensed like every other MSB registered with FinCEN.

> That's one million consumer accounts with no FDIC insurance, no surety bonds, and no other backstop in the event of a problem.

All of which were created voluntarily by customers, which indicates that there is demand in the market for different types of asset/currency, some of which might not have FDIC insurance or any of those things.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#42

Post by diego »

baddox wrote: post #36
gnaritas wrote: post #31

Earlier quoted context omitted.

> Nothing False. Theft is against the law. Bitcoins don't magically avoid being subject to existing law. The owners are known and subject to US jurisdiction, you have legal recourse through the courts should they try and steal your funds.

Lots of people in this thread seem to think that there is either no incentive for Coinbase to conduct their business legitimately, or that the law is the only incentive. That ignores the much more obvious and presumably stronger incentive: they should be able to make a lot more money as a legitimate business than if they just ran away with one lump sum.

That relies on the assumption that they will not suffer a tremendous loss due to a rogue employee, a software bug or a malicious hack.

If they found themselves in a situation in which they are certain to go out of business as soon as people find out that they are in trouble, that motivation would cease to exist. It would come down to ethics, reputation, pressure from investors, etc.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#43

Post by waterlesscloud »

singularityyy wrote: post #17
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?

No security is perfect of course, but Coinbase has over 98% of the funds in cold-storage. See: http://antonopoulos.com/2014/02/25/coinbase-review/

Gox claimed 95% of their coins were in cold storage.

Unproven claims aren't worth much.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#44

Post by corford »

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…

Why put yourself in a position where you need to worry about that happening?

Keep the bulk of your BTC in a private wallet under your exclusive control and only use the intermediary provided wallet when you need to make a trade through their platform/exchange. You're still exposed while a trade is being executed but your maximum exposure is never more than the amount you are trading at that time.

You wouldn't deposit your life's savings with a new, unknown bank based out of a tiny island state with lax/non-existent regulation. Don't do the same with your BTC.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#45

Post by Mtinie »

sillysaurus3 wrote: post #29
devindotcom wrote: post #25

Earlier quoted context omitted.

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? A…

Or, it could be that Mr. Karpeles hasn't been harmed for a common sense reason; right now, he's the only one who seems to know what's going on inside of Mt.Gox, and what the actual status of the missing BTC is. If he comes out and announces that all of the customers' coins are irretrievably gone, then all bets are off.

(No, I don't want to see harm come to him, and I don't mean that comment above as a threat. What I do know is that there's a very strong chance that at last some of the BTC he lost/stole/squandered/etc. was owned by people who don't settle things with a lawsuit and a lawyer. Maybe it is unlikely, but it's something that I would be concerned of, if I was in his shoes right now)

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#46

Post by [deleted] »

pavanky wrote: post #39
gnaritas wrote: post #31

Earlier quoted context omitted.

> Nothing False. Theft is against the law. Bitcoins don't magically avoid being subject to existing law. The owners are known and subject to US jurisdiction, you have legal recourse through the courts should they try and steal your funds.

How do you probe you lost something that is not tied to your identity ?

[deleted]

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#47

Post by MichaelGG »

CoachRufus87 wrote: post #38
gnaritas wrote: post #31

Earlier quoted context omitted.

> Nothing False. Theft is against the law. Bitcoins don't magically avoid being subject to existing law. The owners are known and subject to US jurisdiction, you have legal recourse through the courts should they try and steal your funds.

> The owners are known and subject to US jurisdiction Assuming they don't just leave the country

... Most places have extradition treaties with the US or US-allies. I'm sure it wouldn't be hard to find one Coinbase user not in the US, then use that country's extradition.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#48

Post by grey-area »

singularityyy wrote: post #17
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?

No security is perfect of course, but Coinbase has over 98% of the funds in cold-storage. See: http://antonopoulos.com/2014/02/25/coinbase-review/

That's what mtgox said too, I believe their figure was 98%:

On average 98% of customer bitcoins are held in cold storage...Offline wallets are generated from an offline system and kept in paper format in three separate locations, using a technology based on raid.

https://bitcointalk.org/index.php?topic=23938.40

http://www.managementtoday.co.uk/bulletin/mtdailybulletin/ar...

But of course, they weren't really in cold storage or offline after all, because somehow they all disappeared...

Not that I mistrust coinbase specifically, but without insurance, audits and regulation (i.e. without a banking license), I'm not sure I'd trust anyone to store significant amounts of money.

Re: A Major Coinbase Milestone: 1 Million Consumer Wallets

#49

Post by joezydeco »

ceejayoz wrote: post #9
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?

I'm pretty sure anyone interested in heisting Bitcoin had Coinbase on their radar already.

True. So let's go with the hubris angle, then. Like others have said below, we trusted that Gox was secure as well.
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