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Coinbase S-1

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Re: Coinbase S-1

#151

Post by Galanwe »

fnord77 wrote: post #124
ceejayoz wrote: post #104

Earlier quoted context omitted.

I once saw crytpocurrency described as "speedrunning the evolution of the modern financial system".

in reverse. the evolution of the modern financial system is less and less friction for each transaction, lower costs. crypto: more friction, slower transactions, higher transaction costs. And wicked exchange volatility. Plus no way to expand or contract the supply to prevent economic shocks. I like my fiat and central banks, thank you very much.

> the evolution of the modern financial system is less and less friction for each transaction

Still, buying shares of a company is much more "friction" than buying coins.

> crypto: more friction

Can you elaborate?

> slower transactions

Huh, even bitcoin will settle with 6 confirmations in an hour. Settlement to buy a share or FX is 2/3 days.

> higher transaction costs

Hmm, no.

> And wicked exchange volatility.

Volatility is a property of the underlying currency, not to "crypto currencies" in general. The volatility of USDTxUSD is zero.

> Plus no way to expand or contract the supply to prevent economic shocks.

You are mixing "crypto currency" and "bitcoin".

Re: Coinbase S-1

#152

Post by grey-area »

bhupy wrote: post #128
fnord77 wrote: post #124

Earlier quoted context omitted.

in reverse. the evolution of the modern financial system is less and less friction for each transaction, lower costs. crypto: more friction, slower transactions, higher transaction costs. And wicked exchange volatility. Plus no way to expand or contract the supply to prevent economic shocks. I like my fiat and central banks, thank you very much.

> I like my fiat and central banks, thank you very much. I do too! But some people don't. And it appears that there are now options for everyone, which seems...good?

Entirely unregulated markets are not good, they are awful, and they can go on for quite a while before blowing up, taking the life savings of lots of ordinary people with them.

Re: Coinbase S-1

#153

Post by user-the-name »

Tenoke wrote: post #118
swiley wrote: post #89

Earlier quoted context omitted.

Is there a plan to deal with the high gas prices?

Yes, ETH 2.0 is coming in 2022 (unless it gets delayed). There's one proposal for July that might help a little and more transactions are moving to L2 chains (LRC, Matic) where you pay the high fees only on exit/entering the L2 but can do transactions there for cheap. Outside of ETH, BSC (Binance's smart chain, the exchange with 9x Coinbase's volume) already has lower fees but the chain is controlled by binance (its…

It's been coming "in a year" since 2014.

Re: Coinbase S-1

#154

Post by charcircuit »

fnord77 wrote: post #124
ceejayoz wrote: post #104

Earlier quoted context omitted.

I once saw crytpocurrency described as "speedrunning the evolution of the modern financial system".

in reverse. the evolution of the modern financial system is less and less friction for each transaction, lower costs. crypto: more friction, slower transactions, higher transaction costs. And wicked exchange volatility. Plus no way to expand or contract the supply to prevent economic shocks. I like my fiat and central banks, thank you very much.

>more friction, slower transactions, higher transaction costs. And wicked exchange volatility.

You are taking a look at the start of the speedrun and claiming that it's already over. All of those issues will eventually be solved.

>Plus no way to expand or contract the supply

This is simply not true. It is entirely possible to make it possible to mint new coins. You can burn coins by buying them back and sending them to a wallet owned by no one.

Re: Coinbase S-1

#155

Post by bondarchuk »

arnaudsm wrote: post #44

Many have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. In the end CoinBase (like every exchange) is a great product, but just a bank. It's centralized, hackable, has economies of scale, etc.

By the very nature of cryptocurrencies, they can't prevent anyone building a centralized company around them, and I don't think that was ever the intent. The permissionless, decentralized properties are important in the following respects:

- anyone can transact with anyone on the blockchain

- the fed can't print more of it

Anything else is a disctraction.

Besides that it's pretty obvious that Coinbase is centralized, regulated etc.. mainly because it deals in USD, not Bitcoin or Ethereum.

Re: Coinbase S-1

#156

Post by virgilp »

bhupy wrote: post #139
xadhominemx wrote: post #131

Earlier quoted context omitted.

Most money is created by normal banks, not the central bank. If you Google “money creation” you will find this helpful link: https://en.m.wikipedia.org/wiki/Money_creation#Role_of_banks...

Yes, but that's only possible because of the underlying monetary policy, which is controlled by the Fed. In contrast, there is no way you can do this with (most) cryptocurrencies. The monetary policy of Bitcoin is dictated by the physical bounds of the proof-of-work algorithm. There is absolutely nothing that Coinbase can do to "create" more Bitcoin outside of just mining it like everyone else.

You can't create more bitcoin but you can create more USDT and exchange it for bitcoin.

Re: Coinbase S-1

#157

Post by agumonkey »

a2tech wrote: post #97
arnaudsm wrote: post #44

Many have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. In the end CoinBase (like every exchange) is a great product, but just a bank. It's centralized, hackable, has economies of scale, etc.

We hate the central banks! We're going to take away the power from them and the government! slight inconveniences, fraud happens We need a place to store our coin and help securely move it! recreates central banks with even less regulation and security Profit!

I don't know about you guys since the web 2.0 / social network boom, I tend to see this 'new' world as an eldorado run toward some kind of digital heaven where people will enjoy the freedom for a while, while recreating the same system (almost) without realizing it. But it will be their new system so they'll love it. Childish regression in a bubble.

Re: Coinbase S-1

#158

Post by pjc50 »

bhupy wrote: post #148
xadhominemx wrote: post #147

Earlier quoted context omitted.

No money creation at banks is not controlled by central bank monetary policy. And it’s very easy to create new crypto assets. Bitcoin has gone from 100% to 60% of crypto market cap in the past 5 years - that’s 10% “inflation”

If it is, then that means Coinbase can create new "Bitcoin" on demand; which we both know that it cannot do. In your own source, the banks ability to increase money supply through the multiplier effect is capped by the capital adequacy ratios, which are defined by the Fed. It is also an inevitability of any currency that isn't backed by an asset. To be clear, I don't have problems with the concept of fiat currencies,…

It absolutely can, because all exchange users put their money in a big pot (the exchange's "cold wallet" and "hot wallet") rather than having individual wallets - this allows for instant trading. Exchange accounts aren't quite like banks but they are like brokerage accounts.

Numerous exchanges have blown up when the wallet got stolen from underneath them - but in the gap between the theft and the discovery, the users thought they had bitcoin when in fact they had a bitcoin balance.

Re: Coinbase S-1

#159

Post by Tenoke »

user-the-name wrote: post #153
Tenoke wrote: post #118

Earlier quoted context omitted.

Yes, ETH 2.0 is coming in 2022 (unless it gets delayed). There's one proposal for July that might help a little and more transactions are moving to L2 chains (LRC, Matic) where you pay the high fees only on exit/entering the L2 but can do transactions there for cheap. Outside of ETH, BSC (Binance's smart chain, the exchange with 9x Coinbase's volume) already has lower fees but the chain is controlled by binance (its…

It's been coming "in a year" since 2014.

While I don't deny and made sure to include the 'unless it gets delayed' part, they are much further along now.

The majority of ETH 2 is live and more and more ETH is locked to it (~12% right now) so the current 2022 estimate is a bit more realistic than past ones (though, of course it can keep being delayed).

Re: Coinbase S-1

#160

Post by ignoramous »

anonu wrote: post #37

Love reading the risk factors section. First thought: how can a lay person possibly understood the risks as laid out here? Also they view this as a major risk: •the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins; Second thought, what an incredible business and growth. 1.14bn in revenue on 193bn in trading volume: thats 60bps on every…

> These are insane fees ripe for disruption.

To think that coinbase started with a no-fee model:

Coinbase will make money more like an exchange down the road, 0.5% to convert money into our out of bitcoin, but once you have your money in bitcoin there are no transaction fees (it mentions this on the homepage, but admittedly it's still a bit confusing)...

It would be much easier to just say "no fees" - this is simple and shows a clear benefit of using bitcoin. If you have to explain to people that "sometimes there are fees, but they are a lot lower, etc" it loses some of it's punch. Right now we can do zero fees and transactions still get confirmed. In the future we may be able to do it by eating the cost and have this be a cost of doing business, but that is a decision for later."

https://news.ycombinator.com/item?id=4206265

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