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Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

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Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#161

Post by jboggan »

heurist wrote: post #81
empath75 wrote: post #37

Until the situation with bitfinex pumping billions of unbacked tether into the ecosystem is resolved, doing anything involving bitcoin right now is insane. They’ve released almost $200 million worth of tether in the last day .

I've been reading about this but still don't understand the scope. The money might all be fraudulent, but it also seems like the most liquid exchange on the market would also have a huge pile of cash to sit on right now after the last few years appreciation of btc. Did Tether fraud kick off this wave?

If you look at Bitcoin, Litecoin, and Ethereum, all three kicked off their current bull market in April after Tether lost their banking relationships and stopped even trying to show that they had funds in reserve. I absolutely think that the Tether fraud kicked off this wave to the point that the general public would come in and hold the bag.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#162

Post by H99189 »

j4ship wrote: post #155
H99189 wrote: post #146

Earlier quoted context omitted.

Well now I'm worried. I also bought a tiny amount of ETH and BTC which is still in my account but I'm really worried about getting the funds out, even if it's just a refund of my original USD.

why did you give them so much money that you are "really worried" dont be irresponsible, its a new venture , dont put in your life savings ... just a couple of dollars , try it out if it doesnt work then at least its not something to be "really worried" about I gave them money , they gave me coin , everything worked ... maybe you made them angry and tried to do something illegal on their site so they shut your user d…

I have a linked bank account. Can you elaborate please, how could I have possibly made them "angry" at me for buying Litecoins?

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#163

Post by brendanw »

stale2002 wrote: post #111
dahdum wrote: post #108

Earlier quoted context omitted.

Their audit was a couple months ago, but showed 1-1 backing at that time. Do you believe that was falsified?

That was not an audit. That was a memo. They have yet to release an actual legal audit, by an official auditing company.

https://en.wikipedia.org/wiki/Bank_Secrecy_Act

They may be fraudulent; they may be not. Regardless, they have a lot to lose by revealing their banking partners to the world. The United States probably used the Bank Secrecy Act to force large American banks to not send money to accounts associated with Bitfinex. If Bitfinex reveals its banking partners for Tether, then they risk getting cut off from those partners or those partners getting cut off from western banking.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#164

Post by spookthesunset »

meritt wrote: post #96
empath75 wrote: post #37

Until the situation with bitfinex pumping billions of unbacked tether into the ecosystem is resolved, doing anything involving bitcoin right now is insane. They’ve released almost $200 million worth of tether in the last day .

My theory on tether is their goal is to absorb as much downward (selling) pressure as possible on the BTC/USD market and encourage only upward movement of BTC (equally applies to any other crypto) 1) Someone who wants to sell $1M USD of BTC may be happy to take $1M USDT instead for legal/tax purposes. This transaction would have zero impact on the BTC/USD price. 2) Tether receives $1M worth of BTC they can slowly dis…

The beauty of all of this is Bitfinex, and most other exchanges for that matter, are all black boxes. No audits, no regulations, nothing. To my knowledge all the trading on their platform happens off-chain, only going "on chain" when somebody deposits or withdraws their crypto coins. The only visibility we have is what goes into and out of any known wallet.

These exchanges could be pulling all kinds of shenanigans including outright making shit up. What is stopping them from buying / selling more bitcoin then they actually have? If an exchange wanted to pocket some real cash, just sell some bitcoin they don't have. How about just creating fake buy / sell orders to drum up some excitement? Or better, just do real trades back and forth between yourself. Once you add Tether into the mix and abstract away real cash inputs and outputs things get even more exciting. An exchange could start buying bitcoin with unbacked USDT to jack up / stabilize the BTC price--works great so long as everybody doesn't all try to convert their USDT to real cash dollars.

Since they are all completely unaudited, exchanges could be pulling this stuff all the time.

Tether makes this 10x more exciting though.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#165

Post by warbiscuit »

empath75 wrote: post #138
warbiscuit wrote: post #31

Earlier quoted context omitted.

That is one reason why I'm actually kinda wild about distributed exchange like etherdelta (as proof of concept, at least). The security model is such that it literally doesn't exist in any country, anywhere in the world; doesn't have servers that can be hacked, etc. (Admittedly the website is housed somewhere, but it's little more than a GUI shell for signing procedure calls, you could run it locally or interact dire…

do you honestly think that smart contracts can't be hacked?

Oh, I definitely think they can. Didn't mean to imply otherwise!

I do think the surface area for attack is much more limited, since the code is innately public (unlike centralized trading houses).

That (in theory) should make them more secure, particularly if considered in terms of the transparency provided. I also think theorem proving, and languages amenable to it, can greatly reduce the surface area even further; reducing it down to a matter of reviewing what assertions the theorem prover was handed, along with trusting the VM's implementation itself. (The later is also helped by having multiple independant implementations).

But I don't think the tech is there yet. The languages currently being used aren't the greatest for theorem proving; no one's actually done much of that in practice anyways; there aren't "best practices" for upgrading your smart contract when a bug is found; and there's ALWAYS an assertion someone forgot to add to the test suite.

But I do think smart contracts could remove "server compromise" and "unauditable code" from the list of main dangers of an exchange, which does seem quite useful in the long term (once the ecosystem fleshes out a bit).

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#166

Post by zeep »

chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

> I'm in no way upset at Coinbase for having growth issues.

you probably should... but it might haven gotten better in the last couple weeks.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#167

Post by jboggan »

dahdum wrote: post #142
stale2002 wrote: post #111

Earlier quoted context omitted.

That was not an audit. That was a memo. They have yet to release an actual legal audit, by an official auditing company.

From a NYC law office wasn't it? You believe that was falsified? It could be, sure, I just haven't seen any proof. Seems like no amount of verification will ever be enough for a good chunk of the crypto community. The scars of Mt Gox and BFX socialized loss are too deep. The market seems to think otherwise, you can unload your tether for $1.02 most days if you want.

I don't believe it was falsified but it was missing a lot of things that an actual audit would include. Not just verifying that money was in accounts but verifying what purpose that money was for and what the banking relationship / terms of use of that money was. I do believe Tether had ~$40M in USD in April but I don't believe that they were 100% honest with their banks about their business model, which is why I think they lost their banking relationships and haven't allowed the public to deposit/redeem Tether since April.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#168

Post by kneath »

erentz wrote: post #53

I’m confused by this bit: > “But first, Coinbase...needs to legitimize itself -- and bring in revenue...” Like it doesn’t have revenue? It’s daily volumes of BTC are around 30k. Sometimes a lot more. Plus ETH. Plus LTC. They must be making at least a million per day in trading fees. They’re a money printing machine at this point.

In the context of this article (Coinbase going after Wall Street, looking to join Big Finance), I would guess that $1MM/day isn't significant enough revenue to count. Especially if they have overhead. Lone traders can make as much with a computer and a few subscriptions.

For comparison, JPMorgan generates around $280MM/day of revenue and $74MM/day of profit.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#169

Post by jboggan »

JustAnotherPat wrote: post #21

Coinbase has been one of the more poorly constructed sites I've used in the past couple years. I don't just mean the inability to handle volume. I saw it riddled with HTML errors, there were buttons that didn't do anything, I got (html) responses that were false, which I only knew was the case because I looked directly at the API response. I remember I 'sold' some litecoin on Coinbase that never sold. Took me to a co…

I remember the problem they had a few years ago using MongoDB to do their financial transactions, people reported lots of double and triple withdrawals.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#170

Post by empath75 »

brendanw wrote: post #163
stale2002 wrote: post #111

Earlier quoted context omitted.

That was not an audit. That was a memo. They have yet to release an actual legal audit, by an official auditing company.

https://en.wikipedia.org/wiki/Bank_Secrecy_Act They may be fraudulent; they may be not. Regardless, they have a lot to lose by revealing their banking partners to the world. The United States probably used the Bank Secrecy Act to force large American banks to not send money to accounts associated with Bitfinex. If Bitfinex reveals its banking partners for Tether, then they risk getting cut off from those partners or…

I'm not sure why that should give people the warm fuzzies about it.
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