First U.S. Bitcoin Exchange Set to Open • Hacker News Board

Re: First U.S. Bitcoin Exchange Set to Open

#41

Post by Aqueous » Mon, Jan 26, 2015, 2:19 AM UTC

bdonlan wrote: post #33

skue wrote: post #23

Earlier quoted context omitted.

Is there any significant difference between this exchange and the upcoming Winklevoss exchange?[1] Both claim to be "regulated," but it doesn't look like the Winklevoss version will offer SIPC protections either.[2] [1] http://dealbook.nytimes.com/2015/01/22/winklevoss-twins-aim-... [2] http://www.sec.gov/Archives/edgar/data/1579346/0001193125132...

The Winklevoss Bitcoin Trust is not an exchange, it's an Exchange Traded Fund. Basically you can think of it as a shell company that exists solely to possess (approximately) 0.2 BTC per share; buying into it is _approximately_ equivalent to buying BTC (less the trust's expenses). It's no different in theory from precious-metal ETFs like GLD or PPLT, although I'd expect expenses to be lower since no precious metals ne…

He was not talking about the ETF he was talking about Gemini, the actual exchange that the Winklevii recently announced.

Re: First U.S. Bitcoin Exchange Set to Open

#42

Post by mirimir » Mon, Jan 26, 2015, 2:22 AM UTC

tlrobinson wrote: post #32

mirimir wrote: post #30

Earlier quoted context omitted.

Bitcoin arguably cannot become mainstream without secure hosted wallets. Most people won't use Bitcoins until wallets start looking like debit cards, with authenticated access, insurance, and so on. Even so, prudent investors will keep large balances in offline wallets, securely encrypted and backed up. In my experience, it's simplest to use multiple offline wallets, each in its own VM. To start using a wallet, one m…

Not sure I'd call that "simple". A hardware wallet like Trezor seems like a much better solution.

That's too proprietary for me. Too much could go wrong.

If someone has enough Bitcoins to bother with offline wallets, knowing how to use VMs isn't too much to expect.

Re: First U.S. Bitcoin Exchange Set to Open

#43

Post by aarondu » Mon, Jan 26, 2015, 2:54 AM UTC

Coinbase and Winklevoss ETF are acting more like new commodity exchanges than currency exchanges. A commodity (like Gold) has value attached but it is not a currency, and its value invariably fluctuates (like Bitcoin).

To date, crypto currency remains a technology topic. If you want to change finance, first understand it. Take your corporate finance, capital market, macro economics classes, and understand government's role in currency and economy. Learn about the history of how commercial banking, investment banking, currency and payment worlds have evolved over the last 100 years.

In short, figure out how bank and capital flows work before prescribing any solutions like Bitcoin, otherwise it will just prove the rightful criticism - that crypto may point to the right problem, but it in itself is just a technology looking for a problem to solve, and that even if it eventually finds its purpose, the chance that the problem will be small or a better, simpler solution comes by remains high.

Financial system as it's built today is an equally sophisticated system vis-a-vis the digital world. Most of those system designers (from say Banking Act of 1933) have left this world. Tech-hackers are many, finance-hackers are fewer. Even fewer understands both. This is why if you ask the view on crypto, you will have very conflicting views between the tech and the finance worlds. And rest to be sured, we are dealing with a problem that's more finance (including financial regulatory) than tech.

Almost anyone on hacker news understands how a full stack software system works. But do you understand how a financial "full stack" works? If you're interested in tackling the problem in a new way, we are hiring and welcome your input.

HN sn = Gmail sn

Re: First U.S. Bitcoin Exchange Set to Open

#44

Post by utunga » Mon, Jan 26, 2015, 3:05 AM UTC

aarondu wrote: post #43

Coinbase and Winklevoss ETF are acting more like new commodity exchanges than currency exchanges. A commodity (like Gold) has value attached but it is not a currency, and its value invariably fluctuates (like Bitcoin). To date, crypto currency remains a technology topic. If you want to change finance, first understand it. Take your corporate finance, capital market, macro economics classes, and understand government'…

FWIW aarondu appears to have posted an identical comment on three different bitcoin related hn threads.. and is associated with http://boomerangwallet.com. Not sure why this info not on his/her profile page.

Re: First U.S. Bitcoin Exchange Set to Open

#45

Post by pmorici » Mon, Jan 26, 2015, 3:11 AM UTC

Why is this being billed as the "first U.S. Bitcoin exchange"? No doubt Coinbase will do a good job but it isn't the first or even the first regulated exchange based in the US. CampBX, Kraken, and Coinsetter are all based in the US and follow regulations.

If there actually is some distinction between what Coinbase is doing here and what the existing exchanges have been doing for some time I'd be interested to know what that is.

Re: First U.S. Bitcoin Exchange Set to Open

#46

Post by fehrsam » Mon, Jan 26, 2015, 3:36 AM UTC

pmorici wrote: post #45

Why is this being billed as the "first U.S. Bitcoin exchange"? No doubt Coinbase will do a good job but it isn't the first or even the first regulated exchange based in the US. CampBX, Kraken, and Coinsetter are all based in the US and follow regulations. If there actually is some distinction between what Coinbase is doing here and what the existing exchanges have been doing for some time I'd be interested to know wh…

Co-founder of Coinbase here

You're right in that it's not the "first US Bitcoin exchange". However, it is the first US bitcoin exchange with some amount of money transmitter licenses (none of the companies you listed have them to my knowledge). If you're not familiar with money transmitter licenses, it's what you need from most state regulators to move or hold money for customers in that state. That's why we can't support all states at launch. You can see a list of the states we support here: https://support.coinbase.com/customer/portal/articles/178054...

There hasn't been a US based exchange which has had meaningful volume in comparison to the larger international exchanges, so our hope is this gives people a US option that is both stable (both on regulation and security) and has reasonable liquidity.

Re: First U.S. Bitcoin Exchange Set to Open

#47

Post by sankaetp » Mon, Jan 26, 2015, 3:50 AM UTC

fehrsam wrote: post #46

pmorici wrote: post #45

Why is this being billed as the "first U.S. Bitcoin exchange"? No doubt Coinbase will do a good job but it isn't the first or even the first regulated exchange based in the US. CampBX, Kraken, and Coinsetter are all based in the US and follow regulations. If there actually is some distinction between what Coinbase is doing here and what the existing exchanges have been doing for some time I'd be interested to know wh…

Co-founder of Coinbase here You're right in that it's not the "first US Bitcoin exchange". However, it is the first US bitcoin exchange with some amount of money transmitter licenses (none of the companies you listed have them to my knowledge). If you're not familiar with money transmitter licenses, it's what you need from most state regulators to move or hold money for customers in that state. That's why we can't su…

What about http://coinx.com/ ?

Re: First U.S. Bitcoin Exchange Set to Open

#48

Post by sidko » Mon, Jan 26, 2015, 4:06 AM UTC

fehrsam wrote: post #46

pmorici wrote: post #45

Why is this being billed as the "first U.S. Bitcoin exchange"? No doubt Coinbase will do a good job but it isn't the first or even the first regulated exchange based in the US. CampBX, Kraken, and Coinsetter are all based in the US and follow regulations. If there actually is some distinction between what Coinbase is doing here and what the existing exchanges have been doing for some time I'd be interested to know wh…

Co-founder of Coinbase here You're right in that it's not the "first US Bitcoin exchange". However, it is the first US bitcoin exchange with some amount of money transmitter licenses (none of the companies you listed have them to my knowledge). If you're not familiar with money transmitter licenses, it's what you need from most state regulators to move or hold money for customers in that state. That's why we can't su…

>However, it is the first US bitcoin exchange with some amount of money transmitter licenses

Not true. There are definitely exchanges out there that have state MSB licenses. Perhaps you're unaware of their existence. I know companies can sometimes be secretive about this stuff, but exchanges like CoinX have MSB state licenses. Check out http://coinx.com/money-transmitter-licenses for instance.

Re: First U.S. Bitcoin Exchange Set to Open

#49

Post by SomeoneWeird » Mon, Jan 26, 2015, 4:07 AM UTC

fehrsam wrote: post #46

pmorici wrote: post #45

Why is this being billed as the "first U.S. Bitcoin exchange"? No doubt Coinbase will do a good job but it isn't the first or even the first regulated exchange based in the US. CampBX, Kraken, and Coinsetter are all based in the US and follow regulations. If there actually is some distinction between what Coinbase is doing here and what the existing exchanges have been doing for some time I'd be interested to know wh…

Co-founder of Coinbase here You're right in that it's not the "first US Bitcoin exchange". However, it is the first US bitcoin exchange with some amount of money transmitter licenses (none of the companies you listed have them to my knowledge). If you're not familiar with money transmitter licenses, it's what you need from most state regulators to move or hold money for customers in that state. That's why we can't su…

That still doesn't mean you're the first.

Re: First U.S. Bitcoin Exchange Set to Open

#50

Post by bdonlan » Mon, Jan 26, 2015, 4:25 AM UTC

Aqueous wrote: post #41

bdonlan wrote: post #33

Earlier quoted context omitted.

The Winklevoss Bitcoin Trust is not an exchange, it's an Exchange Traded Fund. Basically you can think of it as a shell company that exists solely to possess (approximately) 0.2 BTC per share; buying into it is _approximately_ equivalent to buying BTC (less the trust's expenses). It's no different in theory from precious-metal ETFs like GLD or PPLT, although I'd expect expenses to be lower since no precious metals ne…

He was not talking about the ETF he was talking about Gemini, the actual exchange that the Winklevii recently announced.

Ah, the prospectus linked was for the ETF, and the other link was paywalled, so I assumed that was what he meant to refer to.