Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue • Hacker News Board

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#171

Post by jncraton » Wed, Aug 02, 2017, 5:17 PM UTC

simias wrote: post #77

jncraton wrote: post #58

Earlier quoted context omitted.

> Of course if your BTC is not real, but is held by an exchange such as Coinbase, how you get your BCC isn't at all clear. Your BTC should still be "real", but the exchange holds the keys instead of you. Your point stands about it being unclear how you would access your BCC. If you aren't allowed access to your BCC, there's nothing preventing exchanges from dumping the BCC for cash as far as I can tell from a purely…

What if the exchange didn't actually hold the BTC but only had a line in the database with an "IOU xBTC"? Maybe at this point the exchange had used its stored BTC to speculate on an other market and attempt to increase its profets. Maybe they bought Ether or gold or Microsoft stock. Normally it doesn't matter as long as the exchange is capable of sending you back the coins when you claim them but in case of a fork th…

That's certainly a possibility. I was working from the assumption that Coinbase actually held BTC totaling the sum of all users account balances. Given the highly volatile nature of BTC and the nature of the BTC community (e.g. the conventional wisdom was to pull all funds from exchanges prior to the fork occurring), it seems quite irresponsible to not be holding funds as BTC.

I'm aware that exchanges in the past have behaved very irresponsibly, but I'm hoping that Coinbase is the exception here as a well known US-based company.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#172

Post by barkingcat » Wed, Aug 02, 2017, 5:18 PM UTC

fosap wrote: post #91

barkingcat wrote: post #73

Haha why is there "fiduciary" duty when Coinbase is not a bank, not a security agency, and not any type of share that people bought into (ie customers are not shareholder). Coinbase can do anything they want! Also, I suggest it's people's own fault for storing their bitcoins at a place that does not give access to their own private keys. This fork has been a long time coming. Everyone and their mother was warned to k…

>Coinbase can do anything they want! That's no how laws work. Not even remotely. Thankfully. Consider you order somebody (X) to transport your pregnant cow. At the destination the cow arrives. It's not pregnant anymore and X refuses to give you the calf because... well, because he can do anything he wants. That's theft.

The difference is Coinbase clearly announced their position that they will NOT honour Bitcoin Cash ahead of time

https://blog.coinbase.com/update-for-customers-with-bitcoin-...

Basically, they said "if your pregnant cow gives birth, we will not give you the calf. If you want your calf, take your cow away from Coinbase and keep it on your own pasture!" And their customers heard it, said ok I'll keep the cow with you, and when the cow gave birth they cried foul.

Sheesh, this situation is 100% predicable because Coinbase announced it ahead of time.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#173

Post by [deleted] » Wed, Aug 02, 2017, 5:21 PM UTC

Cthulhu_ wrote: post #78

lawn wrote: post #74

Earlier quoted context omitted.

As others have said, it really depends on the value of the fork. If you make a fork worth nothing, nobody's going to care. But as right now Bitcoin Cash is worth $634 and regular Bitcoin $2727 per coin according to coinmarketcap.com. That's 23% the customers are loosing out on instantly. And the defense that the users should be responsible to withdraw your coins if you want to keep it on both forks is disingenuous. T…

But there's other cryptocurrencies with a nontrivial market cap out there; Coinbase only supports three. Then there's fiat currency, of which Coinbase's support is also limited. Again, where do they draw the line?

[deleted]

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#174

Post by ghostbrainalpha » Wed, Aug 02, 2017, 5:21 PM UTC

bdamm wrote: post #170

holtalanm wrote: post #68

Earlier quoted context omitted.

That is not the issue at all. The issue is that Coinbase is _withholding_ the BCC from its customers. Technically, Coinbase has been awarded the BCC for all of the wallets they are in control of, but are refusing to distribute it. It really is akin to a brokerage refusing to award shares to customers due to a company split/stock split.

It seems clear that Coinbase must have a major fundamental financial problem.

How does that follow?

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#175

Post by vocatus_gate » Wed, Aug 02, 2017, 5:21 PM UTC

undersuit wrote: post #112

vocatus_gate wrote: post #98

Earlier quoted context omitted.

I think an argument against that is that 10 days is a pretty short deadline to act to prevent a potentially large financial loss. Especially if you were on vacation, not following the news about bitcoin, etc. Coinbase doesn't have to support trading BCC, they can simply provide a withdrawal function so people can claim their BCC and move on with their lives. Their decision to ignore it entirely is going to get them s…

Does the stock market offer do-overs if there is a significant move against you while you're on vacation? Would Coinbase normally be held accountable for a significant move in Bitcoin against you while you're on vacation? Coinbase isn't a company to secure your Bitcoins against the value of the dollar, it's a company that stores Bitcoins and facilitates transactions.

No, what I'm saying is by refusing to allow withdrawal of the "new" coins, they put themselves in the position to be sued because clients lose potentially a lot of free money.

It's an opportunity cost: if I missed out on some big trades while the price was high due to their decision to withhold the keys, I'm rightfully annoyed by it.

Of course leaving legality out of it, it'd also just be a smart thing to do because it makes their customers happy and maintains goodwill. Coinbase is fairly respected in the crypto space and making their customers happy during a turbulent period can only be good for them in the long run.

They will capitulate eventually. Same thing happened with ETH/ETC.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#176

Post by tedunangst » Wed, Aug 02, 2017, 5:22 PM UTC

mikeash wrote: post #114

For all the people saying this is totally fine and they warned people and they shouldn't have to support every single fork that comes along, I'd like to pose a hypothetical. All forks are basically equivalent. If I fork Bitcoin today, my fork is just as legitimate as Segwit or Bitcoin Cash. The only differentiation is community buy-in and hashing power and similar fuzzy metrics. Rather than sticking with Segwit and i…

Also, what happens with future forks? There's a 60/40 split to start. Ok, fine, drop the 40, keep the 60. Then that splits a while later, 55/45. Now your 55% of 60% stake is less than 40% of the original.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#177

Post by nicpottier » Wed, Aug 02, 2017, 5:24 PM UTC

fauigerzigerk wrote: post #145

vocatus_gate wrote: post #115

Earlier quoted context omitted.

You're more or less correct. Coinbase is sitting on the keys to customer wallets/funds. When the fork happened, those keys work both on the original Bitcoin network and the new "Bitcoin Cash" network. Which, apparently turned out to have substantial value (currently trading ~$650). Coinbase made a colossal mistake in outright ignoring BCC and will likely get sued (and lose) because of it. If I had 10 BTC on CB and mi…

>If I had 10 BTC on CB and missed out on the opportunity to trade or sell $6,500 worth of free BCC I just got, I'd be mad too. But is that really what's going on? As I understand it, each BTC also became a BCC at the time of the fork, and owners can now decide on which network they want to use these units (CB users are not technically owners though). No free BCCs were distributed. If I were to decide to move 1 BTC to…

This is confusing stuff, but there's no "deciding" if your coin is a BTC or BCC, the chain split and both exist now if you had a BTC pre-split.

The chains do not talk to each other in any way, so you can spend your BTCs and BCCs independently. So yes, free BCCs were given to everybody with BTCs.

Imagine it as if someone copied the entire history of bitcoin and just renamed it and started running on different nodes. That's basically what happened. If the bitcoin history showed you owned 10 BTC, then the renamed history shows you own 10 BCC.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#178

Post by DennisP » Wed, Aug 02, 2017, 5:25 PM UTC

tytso wrote: post #123

anthonybsd wrote: post #72

Earlier quoted context omitted.

>which is not at all what it's like. Coinbase isn't the only source to buy/sell BCC. I think it's ridiculous that a company could be sued because they don't offer a new service. As it happens, it's slightly more complicated than what you make it out to be. It's not a question of them simply not offering to support the new service. You see, when you hold your bitcoins inside Coinbase they have a private address of you…

When you hold your bitcoins inside Coinbase, they aren't part of "your" wallet. Coinbase works like a bank. When you deposit $100, they don't mark those bills as being yours. Instead they are commingled with everyone else and the bank gives you a promise that when you ask for your $100, you'll get your $100 back. Not that if you gave them a $100 bill, you'll get back that exact same bill. Coinbase works exactly the s…

Coinbase gave notice, but some customers probably weren't able to act on it due to withdrawal limits.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#179

Post by SnowProblem » Wed, Aug 02, 2017, 5:26 PM UTC

undersuit wrote: post #150

vocatus_gate wrote: post #136

Earlier quoted context omitted.

Yes, Coinbase limits BTC withdrawals based on current USD value. A lot of traders lost money because they couldn't get their funds out in time. Coinbase will likely get sued and it'll cost them.

No not witdrawals. Is there a Coinbase imposed limit to how many Bitcoins I can send to another wallet? And was that recently implemented? Coinbase certainly has conversion limits, but anyone that wanted their Bitcoin into Dollars knew about this limit far before the warning of Coinbase only supporting one side of the split, and converting into Dollars means you don't want to risk the split and you should have been d…

Yes. Coinbase calls BTC transfers withdrawals, and it screwed me over a lot when I found that out.

Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue

#180

Post by olegkikin » Wed, Aug 02, 2017, 5:32 PM UTC

Cthulhu_ wrote: post #78

lawn wrote: post #74

Earlier quoted context omitted.

As others have said, it really depends on the value of the fork. If you make a fork worth nothing, nobody's going to care. But as right now Bitcoin Cash is worth $634 and regular Bitcoin $2727 per coin according to coinmarketcap.com. That's 23% the customers are loosing out on instantly. And the defense that the users should be responsible to withdraw your coins if you want to keep it on both forks is disingenuous. T…

But there's other cryptocurrencies with a nontrivial market cap out there; Coinbase only supports three. Then there's fiat currency, of which Coinbase's support is also limited. Again, where do they draw the line?

Other cryptocurrencies don't share the original blockchain with bitcoin.