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

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

#351

Post by ebcode » Wed, Aug 02, 2017, 10:29 PM UTC

lawn wrote: post #110

alekratz wrote: post #54

Earlier quoted context omitted.

Yeah, that's how I feel about this. It's not coinbase's responsibility to act as a host to all cryptocurrencies. The article states, > An activist group, which claims Coinbase's decision is akin to a brokerage withholding new shares from its investors, ... 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…

> Coinbase isn't the only source to buy/sell BCC. That's not what this is about. They want to withdraw their BCC which duplicated from their BTC. > I think it's ridiculous that a company could be sued because they don't offer a new service. I think it's ridiculous if a company, very similar to a bank, couldn't be sued when they effectively haircut their customers of 20% profit of their coins.

I think we're finding out that the coins that Coinbase's customers believe they hold don't actually belong to those customers. It looks like they belong to Coinbase, who is deciding what to do with them. You gotta read the fine print.

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

#352

Post by davesque » Wed, Aug 02, 2017, 10:31 PM UTC

vetrom wrote: post #278

So you needed to get 'your' BTC into a real wallet (and not an exchange) to be able to have pre-fork BTC that would act as BCH. While similar to both currency and commodity, this is one of the situations where cryptocurrency acts as more of a fungible contract than either the currency or commodity. IANAL, but it seems to me that there isn't a whole lot of law written on that. I'd argue that Coinbase expended its fidu…

> I'd argue that Coinbase expended its fiduciary duty by warning their users of the fork.

But people are arguing, and I think convincingly, that Coinbase didn't provide enough lead time after sending out the email announcing their decision.

Coinbase also essentially gets to pocket all the extra value which should reasonably have belonged to their customers.

IANAL either, but I have to imagine there are the beginnings of something like an unjust enrichment claim here.

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

#353

Post by MichaelGG » Wed, Aug 02, 2017, 10:34 PM UTC

paulmd wrote: post #347

MichaelGG wrote: post #288

Earlier quoted context omitted.

It's not THAT hard to run a full node, even with 32MB blocks. But for people that want to kickstart a local node, they don't need the entire history if there's a trusted checkpoint mechanism. So they can participate, validate new blocks coming in, while they never or slowly download the historical blockchain. A hash chain of every block is only a few MB so it's not that big of a deal to make sure the chain is immutab…

> It's not THAT hard to run a full node, even with 32MB blocks. Not at present, but if you increase the block size then you ramp that up pretty fast. Let's say there's a block every 9 minutes (nominally 10 but the network is reactive to increased hash power so it's a bit less in reality). That's 58400 blocks per year, which with a 32 MB block size would translate to 1,868,800 MB per year. A growth rate of 2 TB per ye…

Power users that could dedicated a $50 drive? Storage just keeps getting cheaper. Bandwidth is more likely to be a limiting factor. But looking at dedicated servers, $50/mo gets you 8TB of disk + plenty of bandwidth.

Checkpointing cannot be hard. The hashes of 58400 blocks is not even 2MB. So with a few dozen megs you can checkpoint every single block. Then you can download blocks on-demand if you need to find particular transactions or whatever. What is really lost if we tossed the previous blocks after a year and just kept balances?

But you're right: who needs to run a node?

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

#354

Post by colordrops » Wed, Aug 02, 2017, 10:35 PM UTC

AgentME wrote: post #314

colordrops wrote: post #134

Earlier quoted context omitted.

As I mentioned in another comment, no lines would need to be drawn if they didn't advertise themselves as holding your wallet/coins/private keys. If their website and marketing copy were direct about the truth, which is that you are a holder of an IOU for a particular chain, then there would be no problems. it's a common refrain that you don't actually own your coins if you are not the sole holder of the private keys…

Coinbase doesn't advertise itself as a service for Bitcoin Cash or having anything to do with it. They've never promised it, said it in marketing materials, etc.

You totally ignored my point. I said nothing about Bitcoin Cash.

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

#355

Post by madars » Wed, Aug 02, 2017, 10:36 PM UTC

SolarNet wrote: post #315

blhack wrote: post #229

Coinbase 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…

> 10 new "bitcoins" could fork every day Not really. You are forgetting how the difficulty works (or simply don't understand bitcoin). You'd have to have a significant percentage of the bitcoin mining infrastructure. If you have 1% of the bitcoin mining infrastructure it would take 100x the time to mine a block, or 1000 mins, or basically half a day, that would take a week of not getting bitcoin simply to confirm the…

This is assuming that forks retain the difficulty target, which they don't have to. In fact, the Bitcoin Cash fork doesn't.

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

#356

Post by kerkeslager » Wed, Aug 02, 2017, 10:37 PM UTC

onewaystreet wrote: post #160

kerkeslager wrote: post #138

Earlier quoted context omitted.

I'll add to this that Coinbase freezing everyone's Bitcoin Cash is a great example of the problems with giving up decentralization.

Coinbase warned people for a month that they wouldn't support Bitcoin Cash.

I'm not sure why you are saying this as if you're defending Coinbase. Warning someone you're going to seize their assets a month in advance doesn't make it any better for them when their assets get seized.

I'm not saying Coinbase is somehow ethically wrong for doing this, I'm saying that one benefit of decentralization is that no one can seize your assets.

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

#357

Post by danmaz74 » Wed, Aug 02, 2017, 10:39 PM UTC

jdmichal wrote: post #326

danmaz74 wrote: post #256

Earlier quoted context omitted.

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.

In this case, by "sufficient guarantees" I meant the automation of exchanges, where you need to have collateral to trade on margin, and the lender is automatically repaid (unless something goes very wrong) without courts.

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

#358

Post by milcron » Wed, Aug 02, 2017, 10:42 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…

How much notice is ample? The email wasn't sent until Jul 27. That's not even one week.

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

#359

Post by milcron » Wed, Aug 02, 2017, 10:43 PM UTC

AgentME wrote: post #317

MichaelGG wrote: post #31

Earlier quoted context omitted.

Not really. They should have taken a clear, objective stance, one they could apply to all forks. Like, if the volume of the fork reaches X and the value over 7 days is at least Y% then within 30 days we will offer withdrawals. That way fewer people would have made withdrawals from Coinbase before the fork, and fewer people could claim bad faith on Coinbase part. If BCC keeps up at least 10% of BTC price, I'm guessing…

I got an email plenty early this month that seemed to have a clear stance applicable to forks in general: withdraw my bitcoins before the fork if I wanted altcoins from any fork.

What date was 'early'? I didn't get the email until 4 days prior to the fork.

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

#360

Post by xorcist » Wed, Aug 02, 2017, 10:43 PM UTC

dsacco wrote: post #260

bdcravens wrote: post #228

Big point to remember: the current high price is artificial. There are only a few exchanges selling BCH, and they aren't accepting deposits. The only sellers are those who had BTC there prior to August 1. So it's a sellers market. There's a ton of demand to sell. Once those deposits are enabled, you'll see a flood of dumping, and the price will crash. So let's say Coinbase allows BCH withdrawals. Unless they enabled…

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…

If you have transferred funds to Coinbase and bought a Bitcoin, Coinbase owes you 1 BTC. That is your claim against them. Nothing else.

They do not own you Clams or Stellars or Byteball or any other token that you did not buy.

Keep in mind that this is the fourth coin to be initally distributed to the Bitcoin UTXO set this year alone. If anything, supporting one but not the other would increase their risk exposure, legally as well as support wise. Every token carries risk.