Earlier quoted context omitted.
You could always make a forked version with a lowered difficulty. Doesn't sound unreasonable
So you have useless tokens. Value is perception.
And should Coinbase then be obligated to distribute those useless tokens?
Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
321–330 of 429 posts
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#322It's an interesting situation, but assigning liability to coinbase for this seems like it'd be a problem long term. Unlike traditional securities, there's nothing stopping me from going out and making my own fork tomorrow - and then would all exchanges be required to add support for that fork, too? Where do you draw the line?
Over the past month there have been several airdrops to bitcoin holders based on snapshots of bitcoin's blockchain.
Stellar Lumens had an airdrop
Byteball had an airdrop
and there are many more, let alone bitcoin forks. These are all very valuable for holders, and people that own their private key.
There are several problems for exchanges, and it doesn't make sense for them to bake that kind of functionality in until a legal framework forces them too. In which case, yes the customer SHOULD sue, thats the only way to progress this. But the old adage is that if you don't control your private keys you don't have any control. And unless the exchanges start providing access to these airdrops as if they are dividends for holding, then it will be a very complex issue for them.
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#323Earlier quoted context omitted.
Exchanges don't keep a real BTC wallet for each user. When one Coinbase user sends funds to another, the transaction is entirely virtual (which lets them avoid paying the network transaction fee).
I'm aware of this, but they should still have enough BTC in storage to cover the BTC in all accounts. This means they should also have BCC for each user.
That's an assumption that may or may not be true. Is there any reason why Coinbase could not be operating on a fractional reserve? Or, if we want to consider Coinbase as managing a discrete asset instead of managing deposits... Shorting stocks "loans" out a stock that technically belongs to someone else; there two "positive owners" and one "negative owner" until the position is covered. So they can also operate on a fractional reserve.
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#324Earlier quoted context omitted.
They already came to a decision. They told people who wanted BCC to withdraw their coins before August 1st. Everyone who wanted BCC already has them.
That doesn't resemble anything like the business practices of mature exchanges. The best analogy I can think of offhand is a stock split or (more frequently) a dividend. An exchange could not in any universe give its customers 10 days to withdraw its funds or agree to forfeiture. You don't just get to take customer assets because you sent out an email and gave them 10 days. This is why we have the concept of consider…
There are actually some somewhat analogous situations in the US listed equity options markets. Options are typically adjusted for corporate actions other than regular dividends. However, special dividends are only adjusted for if they are more than 12.5 cents per share. And for voluntary corporate actions the options are adjusted according to whatever would happen to a non-electing shareholder. So if there's an exchange or tender offer, or a merger with electable form of payment, you have to exercise your options ahead of the ex date in order to benefit.
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#325Earlier quoted context omitted.
In practice that's often not how that works, though. I had a company I have shares in that split in two and they gave me a choice, either convert my shares to the new company or keep them in the existing company. I didn't automatically get shares in the new company and if I opted too I would have lost the shares in the original company.
What company was this? I have literally never heard of a spin off that did not result in a stockholder getting ownership of the parent and spin off, or the stockholder retaining ownership of one company and being paid out for the value of their ownership in the other company. Was this a publicly traded company?
Pfizer, although I only owned a few shares so I didn't follow up. Doing some quick searches it seems the spin-off might have been halted.
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#326Earlier quoted context omitted.
A short is just a loan and a contract. If you can find your own counterparty, you might be able to do it.
I thought about this, but who would make a loan to somebody they don't know without a platform with sufficient guarantees? And anyway, it would need to be BCH which is already on one of the few exchanges that allow to trade it, as it's impossible for the time being to move it around (which is the very reason why the price is high there right now). Not very likely. On the other hand, if anybody who is long on BCH want…
Sufficient guarantees are just a contract. The result is the same either way if something goes wrong -- you take the counterparty to court.
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#327Earlier quoted context omitted.
That doesn't resemble anything like the business practices of mature exchanges. The best analogy I can think of offhand is a stock split or (more frequently) a dividend. An exchange could not in any universe give its customers 10 days to withdraw its funds or agree to forfeiture. You don't just get to take customer assets because you sent out an email and gave them 10 days. This is why we have the concept of consider…
There are actually some somewhat analogous situations in the US listed equity options markets. Options are typically adjusted for corporate actions other than regular dividends. However, special dividends are only adjusted for if they are more than 12.5 cents per share. And for voluntary corporate actions the options are adjusted according to whatever would happen to a non-electing shareholder. So if there's an excha…
I think that's a really good point, but I'm still going to contest it.
Options are derivatives, so they're different from cryptocurrencies, which are themselves analogous to equities. An option inherently has a date of expiration, whereas a cryptocurrency (even a fork) does not intrinsically have such a thing, and with an option you do not own the underlying unless you choose to exercise.
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#328Coinbase is in a bad situation here. If they set a precedent that all BTC forks will be available to their users, then they open themselves to some pretty obvious DOS attacks. 10 new "bitcoins" could fork every day. Are we really going to expect coinbase to support them all? That's absurd. I think it's pretty obvious that they're going to just issue the BCH to people eventually. Here's another thought experiment: I a…
As one of the btc nouveaux rich, help me understand something I see reoccurring among my other btc-rich friends. Generally, when you're up big (and in some cases extremely wealthy), you diversify your investments in order to preserver your wealth. However, almost without exception my btc friends are such believers that they are holding on for the ride forever. Is it just that the risk-averse were initially drawn to b…
> is it a matter of principle to hold forever?
There was a reply to this, now deleted:
> this is a pretty common (and self-destructive) phenomenon amongst unsophisticated investors
On the contrary, it's much more common for unsophisticated investors to sell their winners too early.
Dumb money is more emotional. Dumb money is risk averse and can't tolerate losses, so holds on to losers forever. Dumb money harvests winners after a 50% or 100% gain and reinvests in losers.
Smart money is coldly rational instead of emotional. Smart money isn't afraid of small losses. Smart money sells losers quickly and takes many small losses. Smart money holds one or two winners for a long time for 1000% and 10000% gains.
I'm sure some long-term bitcoin holders are ideological, but most are coldly rational smart money.
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#329Earlier quoted context omitted.
Regardless of the price, an exchange cannot seize customer assets by giving them 10 days notice for withdrawal. It doesn't matter if it's a separate currency - we have things resembling this in public markets, like stock splits. It doesn't matter if everyone can fork the cryptocurrency, that doesn't change the principle of a customer's asset. What Coinbase should have done is this: 1. Stood their ground on not suppor…
I don't get the "10 days notice" argument. Shouldn't it be the default assumption that they won't support any fork at any point UNLESS they announced support? It's not like they tricked anybody into it, or made it unusually difficult to withdraw BTC.
Their 10 day notice is also consistent with messaging Coinbase has been putting out for months on what their initial fork policy would be.
https://blog.coinbase.com/update-for-customers-with-bitcoin-...
Re: Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue
#330Earlier quoted context omitted.
Yes we expect Coinbase to support them all. Public companies have complicated stock actions like spinoffs (i.e. "Forking" the company), rights offerings, scrip offerings, stock dividends, etc. Do you think ETrade gets to not give their users the results of such actions because it would be complex to implement?
But the currency exchange booth in the mall is not the New York Stock Exchange. Coinbase is more the former than the latter. The blockchain itself is the "exchange" in the sense of being the arbiter of trades; if you want something to support all these actions, it should be implemented somehow into the distributed consensus mechanism of the blockchain itself. Or a... meta-blockchain, I guess. A distributed-consensus…
False. The blockchain is the DTCC. Coinbase is the exchange.