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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

#221

Post by blhack »

nostrademons wrote: post #74
blhack wrote: post #46

Earlier quoted context omitted.

What about this is WTF? Please explain, in detail, how somebody with $10M in BTC should store it.

I think the WTF is that the original point of cryptocurrency was that it was supposed to be decentralized , with no big institutions that you must trust. Coinbase Custody is essentially reinventing the exact institutions that bitcoin was supposed to cut out of the loop. You're supposed to store $10M in BTC on the blockchain, which - after all - records ownership of every bitcoin ever mined. And keep access to it in a…

I still don't see the detailed answers I'm looking for here.

On a paper wallet? How do I generate that? How do I print it? Where should I store it?

A bootable Linux distro on an air gapped machine could solve the first one. An air gapped printer the second maybe. A cryptosteel the third.

I THINK that will make a safe place to store multiple millions (or billions, or trillions) of $ worth of crytocurrency.

I, unlike many others, don't want to make a $fortune dollar bet that I'm not going to make any sort of mistake (one I could have none about or not) when doing all of this stuff.

I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money.

The AMAZING WORLDCHANGING but much less dramatic, incremental improvement that bitcoin offers me is that now I don't have to. That's a BIG deal.

If my mom doesn't want to figure out what the hell an air gapped bootable Linux distro is, then coinbase is a fantastic solution for her.

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

#222

Post by d10r »

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?

I looked at the Etherdelta code and I believe that's in a class of complexity which can indeed be made unhackable.

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

#223

Post by solatic »

Retric wrote: post #98
solatic wrote: post #83

Earlier quoted context omitted.

These comments strike me as very much against the ethos of cryptocurrencies, which is to say, using a publicly available ledger with access governed by rules democratically set by the majority of nodes instead of many secret private ledgers governed by civil institutions. Counterparty risk? What counterparty risk? The minute the funds leave your wallet governed by your private keys then you no longer have control. Th…

If I buy coins using a 3rd party service and they have yet to transfer them to my private wallet then I have counter party risk until they do. All exchanges do this to one extent or another. To minimize risks they would need to accept cash and never accept bitcoins to their own wallet which would cause massive transaction fees.

If you buy coins, those coins are going to be transferred either from a wallet belonging to the exchange or a wallet from another exchange user which the exchange knows about. The difference between the two is a trade-off of speed vs reliability: if the source is an exchange hot-wallet, then the transfer happens immediately-ish and you, the purchaser of cryptocoin with fiat, can wait however long you wish to wait to confirm that legitimate nodes accept the transaction. If the transfer is from a third-party wallet, then you wait until the third-party authorizes the transfer, and the exchange then has a preset wait time to check that the transfer went through before transferring fiat to the third party. Either way, the counterparty risk is denominated in fiat, not cryptocurrency, and therefore much better understood, controllable, reversible, etc.

As you point out, this causes massive transaction fees, but that's built into the model. The transaction fees would be lower if they would increase the block size....

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

#224

Post by nostrademons »

blhack wrote: post #221
nostrademons wrote: post #74

Earlier quoted context omitted.

I think the WTF is that the original point of cryptocurrency was that it was supposed to be decentralized , with no big institutions that you must trust. Coinbase Custody is essentially reinventing the exact institutions that bitcoin was supposed to cut out of the loop. You're supposed to store $10M in BTC on the blockchain, which - after all - records ownership of every bitcoin ever mined. And keep access to it in a…

I still don't see the detailed answers I'm looking for here. On a paper wallet? How do I generate that? How do I print it? Where should I store it? A bootable Linux distro on an air gapped machine could solve the first one. An air gapped printer the second maybe. A cryptosteel the third. I THINK that will make a safe place to store multiple millions (or billions, or trillions) of $ worth of crytocurrency. I, unlike m…

Like I said, "That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of 'trustless completely-distributed systems' should perhaps heed." The people commenting in this sub-thread don't actually believe in the trustless utopia that initial Bitcoin aficionados did, we just have enough familiarity with the original Bitcoin technical paper to comment on the irony here. That may be why you're not seeing particularly compelling answers.

"I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money."

As someone with both a CoinBase account and a Vanguard account...your money is much, much safer in Vanguard. And that's the irony. When Bitcoin was distributed, people could at least point to the lack of a centralized institution as an advantage. Now that it has centralized institutions, they're inferior to the centralized institutions in the mainstream financial world.

And I certainly hope your mom isn't putting $10M into bitcoin on CoinBase. Regardless of security issues, that's a very good way to lose $10M.

(On second thought, yes, yes, she should absolutely put her life savings into Bitcoin, so I can take the other side of the trade and sell into this bubble. ;-))

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

#225

Post by warbiscuit »

nybble41 wrote: post #205
warbiscuit wrote: post #20

Earlier quoted context omitted.

1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf. This point may prove to be very sticky. It might be solvable with smart contracts... consider ethereum's https://www.etherdelta.com , which operates as an auditable smart contract. Your money literally can't be stolen without your private key; ev…

>> 1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf. > This point may prove to be very sticky. It might be solvable with smart contracts... Shouldn't be that hard, even using just the features available in Bitcoin today. You'd need a 2-of-2 multisignature wallet for each account holder, with one…

That's pretty much exactly how the EtherDelta smart contract works. The contract can only move coins you've signed an order for, and only when it's properly paired with a matching counter-order.

I think the mainly catch would be scaling the speed (etherdelta is limited to the ETH network block rate). I don't know too much about lightning's details, but given that they've demonstrated atomic cross-chain swaps, I bet it's set up to handle something exactly like what's needed.

Which is quite exciting... I just always moderate my enthusiasm because for all complex software projects, the devil (and 80% of the work) is in the details :)

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

#226

Post by omgbananas »

Rmilb wrote: post #173
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 .

Another worrying development on the bitfinex story is that one of its employees has removed the warrant canary from his twitter profile. https://twitter.com/el33th4xor/status/941707765910818816 I think this is a bearish signal until its clarified.

One of the replies that made say "Oh Sh.." out loud:

https://twitter.com/logansease/status/941704416201183235

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

#227

Post by passwordreset »

ryanmarsh wrote: post #17
H99189 wrote: post #8

Coinbase should solve it's coinbase trust issue. I bought a small amount of litecoin almost 2 weeks ago, i'm well past my "delivery by" date, my funds left my bank account over 10 days ago, yet I still don't have my coins in my account.

Same. Coinbase are in over their heads. There is so much room for competition here. At times I’ve been unable to access my accounts or have transactions complete in a reasonable amount of time. Coinbase closed my account without notice with no explanation other than a mention of their desire to comply with FinCEN. I never got an answer from them as-to what I did “wrong”. I sure as hell wasnt selling heroin or babies…

>Imagine if Wells Fargo closed an account without notice or explanation after a customer had a few normal deposits and withdrawals.

BB&T has done this to me in the past. The only recourse is taking your business elsewhere. Coinbase doesn't seem too different in that regard.

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

#228

Post by empath75 »

warbiscuit wrote: post #204
warbiscuit wrote: post #165

Earlier quoted context omitted.

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;…

Followup just to clarify: The reason smart contracts drastically mitigate "server compromise" is that compromising / altering the operation of the VM (and not merely exploiting a bug) requires a 51% attack on the entire network . That should generally be a MUCH more expensive undertaking than the value of any given smart contract (under the assumption that the network will be valued at least 2x more than any of it's…

You don't need to implement a 51% attack to hack a smart track, as evidenced by the dozens of smart contracts that have been emptied out on ethereum.

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

#229

Post by teemwerk »

sjy wrote: post #144
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 .

Can you provide a source for this? Is there an easy way to view the transactions that create new USDT? My searches are just turning up old Reddit posts and news articles supported by imgur screenshots. edit: This seems to show that $180 million was issued in the last 3 days: http://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC3...

they issued another $100 million in the last day.

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

#230

Post by hjjiehebebe »

ultraluminous wrote: post #176
j4ship wrote: post #155

Earlier quoted context omitted.

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…

"maybe you made them angry and tried to do something illegal on their site so they shut your user down." Ahh, crypto-punk-decentralized-liberatrians never seize to amaze with the level of double-think they can achieve. How someone can hold both "the government is evil and might take your money" and "maybe you made this website angry so they didn't give you your money" at the same time is truly impressice.

> crypto-punk-decentralized-liberatrians

Woah, nice strawman

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