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Coinbase S-1

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Re: Coinbase S-1

#391

Post by arcticbull »

G3rn0ti wrote: post #346
thedudeabides5 wrote: post #301

Earlier quoted context omitted.

Actually this isn’t the only way. If financial intermediaries like Coinbase start extending credit or engaging in fractional reserve banking, then yes, you can “create more Bitcoin.” Just like how in the gold standard, you could still create more gold backed dollars by making a mortgage loan... Kind of funny how all these new monetary wizards miss out on this simple fact.

That’s nonsense. Only miners can create new Bitcoin. What Coinbase could do is to issue a financial derivative backed by Bitcoin e.g. a “Coinbase Penny” representing a 1/1000th of Bitcoins. And then could go on issue more of those pennies than actually backed by Bitcoins. But it wouldn’t be cryptocurrency if it wouldn’t run on a blockchain. Of course, the “Coinbase Penny” could collapse if we people stopped trusting…

It would work just fine unless there's a run on it. So long as HODLers HODL, nobody would ever notice. That's the premise of the whole proof of keys business. (https://www.proofofkeys.com/)

Re: Coinbase S-1

#392

Post by trident5000 »

dgellow wrote: post #327
dannyw wrote: post #307

Earlier quoted context omitted.

The industry demand of gold is minuscule. It's a rounding error. Buying a $1000 asset with $10 in "intrinsic value" is really no different to bitcoin. Bitcoin can be transferred electronically, and can move across borders without being hassled at customs.

Where do you get this from? Statista data show way more than 10% of demand from the Jewelry and tech industries: https://www.statista.com/statistics/274684/global-demand-for...

Jewelry is just an extension of speculating on the metal. You can make a necklace out of many materials and it will function the same.

Cobalt is used more in electronics than gold. The MC is not close to the same. Almost 100% of golds value is from speculation.

Re: Coinbase S-1

#393

Post by id »

soared wrote: post #298
temp8964 wrote: post #288

Earlier quoted context omitted.

Can you "physically own" Bitcoin? Or what does "physically own" mean exactly? I kind of understand what "physically own" gold means, but not sure it means the same as "physically own" Bitcoin. Getting downvoted on this. I am not complaining about the downvotes, but seriously, please enlighten me...

It’s a comparison to your traditional bank account. At chase bank you don’t physically own the money in your account - it’s in a banks database. With Bitcoin you own that coin and it’s stored in your own digital wallet. Like cash v bank account, but Bitcoin is safer and easier to store than cash.

Your Bitcoin is stored as an unspent transaction output (UTXO) in a globally distributed ledger (i.e. a database). But for most people the private key that would allow them to spend that Bitcoin is not actually in their possession - it's owned by Coinbase for example, who are acting as a bank and keep yet another database to store who owns what.

Re: Coinbase S-1

#394

Post by 6gvONxR4sf7o »

thinkmassive wrote: post #304
jmcqk6 wrote: post #264

Earlier quoted context omitted.

> an unstable society or one facing high inflation What are the chances that in an environment where the USD is not usable, there is an available network and electricity that makes bitcoin usable?

Like yesterday, when Fedwire and ACH were offline for hours? https://www.bleepingcomputer.com/news/government/federal-res...

I use only USD and didn’t even know that happened, so it seems like a bad example.

Re: Coinbase S-1

#395

Post by tomjakubowski »

trident5000 wrote: post #392
dgellow wrote: post #327

Earlier quoted context omitted.

Where do you get this from? Statista data show way more than 10% of demand from the Jewelry and tech industries: https://www.statista.com/statistics/274684/global-demand-for...

Jewelry is just an extension of speculating on the metal. You can make a necklace out of many materials and it will function the same. Cobalt is used more in electronics than gold. The MC is not close to the same. Almost 100% of golds value is from speculation.

> You can make a necklace out of many materials and it will function the same.

How so? Jewelry's function is to look a certain way.

Re: Coinbase S-1

#396

Post by vmception »

arnaudsm wrote: post #44

Many have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. In the end CoinBase (like every exchange) is a great product, but just a bank. It's centralized, hackable, has economies of scale, etc.

The amount of bitcoin on exchanges - including Coinbase - is at an all time low.

so really: who cares man.

Re: Coinbase S-1

#397

Post by bhupy »

wpietri wrote: post #165
bhupy wrote: post #116

Earlier quoted context omitted.

This conflates "Central Banks" with ordinary "banks" that hold assets in vaults. The two are comparable in the same way that Java is comparable to JavaScript. The steel-man argument is that the monetary policy of central banks can cause hyper-inflation of a fiat currency, and holding onto an asset that is immune to that, and potentially even being able to transact with that asset is a reliable way to break free from…

The distinction between "central bank" and "ordinary bank" is only meaningful because of tight regulation and a central banking system that constrains ordinary banks. The whole reason we have a strong central bank is because we tried the alternative before and it worked terribly: https://en.wikipedia.org/wiki/Wildcat_banking

That constraint is only really required because paper money can be minted in a way that BTC (or gold) cannot. That's why the distinction is relevant in the case of cryptocurrency. The overall point is that the ship has mostly sailed with regards to whether Bitcoin can be a deflationary store of value like gold. The question now is who will provide the vaults to hold the new "gold bars". These vault providers are not really comparable to central banks.

> The whole reason we have a strong central bank is because we tried the alternative before and it worked terribly

I think there's a strong argument to be made (derived from history) that having a purely gold-backed currency be the sole and legal tender is bad. That said, there's a third option: "porque no los dos?". Do we know for certain that there's anything inherently disastrous about a society that has BOTH fiat-backed legal tender as a hedge against "Wildcat banking" alongside "digital gold" backed currency as a hedge against fiat-backed legal tender?

I think the answer is "probably not". I'd even go so far as to argue that we've already been doing that for the last 70-odd years; people still use gold as a hedge against the USD. Bitcoin is just digital gold that derives value because it's easier to trade Bitcoin for bread than gold bars (in theory).

Re: Coinbase S-1

#398

Post by webwielder2 »

So setting aside the merits of Coinbase as a business or the philosoeconomic significance of cryptocurrency, should I buy Coinbase stock? I want to make easy money by buying stock. Think it'll go up after it's listed?

Re: Coinbase S-1

#399

Post by jabroni_salad »

waheoo wrote: post #77
rawtxapp wrote: post #53

Earlier quoted context omitted.

It's an exchange, as soon as you're done trading, you can and should withdraw your coins to your personal wallet.

This is such a trope. Do you pull your funds from interactive brokers after you're done trading? What about vanguard? 401k?

I don't know about your brokerage, but my fidelity cash management account sweeps money into a set of FDIC insured bank accounts, which is a hell of a lot more than can be said for your coins. And anything that is parked in a security is protected by SIPC from the brokerage going insolvent.

What will happen to your assets if coinbase's systems become inoperable or if customers try to withdraw more coins than coinbase has on hand? Ask Mtgox customers how they feel about where to park coins.

Re: Coinbase S-1

#400

Post by vmception »

waheoo wrote: post #77
rawtxapp wrote: post #53

Earlier quoted context omitted.

It's an exchange, as soon as you're done trading, you can and should withdraw your coins to your personal wallet.

This is such a trope. Do you pull your funds from interactive brokers after you're done trading? What about vanguard? 401k?

The amount of bitcoin on exchanges - including Coinbase - is at an all time low.

People are learning the paradigm of self-custody, which the blockchain supports.

You can stick with DTCC freezing markets, we arent.

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