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Coinbase S-1

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Re: Coinbase S-1

#601

Post by px43 »

isoskeles wrote: post #308
PragmaticPulp wrote: post #265

Earlier quoted context omitted.

The core Bitcoin holders don’t want more coins, so it won’t happen. Simple as that. The real elephant in the room is that new crypto currencies are being printed left and right. We may have a finite number of Bitcoin (in a couple decades) but one look at the list of crypto currencies will show that the number of crypto coins in general continues to explode at a phenomenal rate.

Why do the core Bitcoin holders have much to do with the decision? The decision here would be made by the miners, right? They have a different set of incentives from people who hold BTC. Maybe I’m missing something, I don’t see how holders and miners have the same interests.

First off, miners need to ensure that the coin they're mining retains value, so they need the network effect of the entire economy. No miner is going to make a decision that makes the underlying thing that they are mining worthless.

Even if 80% of miners wanted something, if it was egregious enough, like a change in supply, then no one would go along with it. Ecommerce companies like Coinbase etc would just ignore the fork and keep going with the remaining 20% of miners whose heads are screwed on straight.

Those 80% of rebel miners who are burning all that energy, and have all that sunk cost in hardware, would be stuck mining a nothing coin that no one wants, and would lose everything almost immediately.

Remember, miners have sunk costs. They, more than anyone, need the coin to retain value. Their incentives are incredibly aligned with everyone else in the ecosystem.

Re: Coinbase S-1

#602

Post by bravoetch »

jcims wrote: post #92
fidrelity wrote: post #63

Earlier quoted context omitted.

If Satoshi is identified he might also still be alive. This means that Satoshi's BTC (~1mio.) are potentially liquid which would mean a gigantic influx of fresh bitcoins. It's quite plausible that any movement of these old wallets would crash the Bitcoin price for quite a while.

This seems strange to me. Relative to the doubling that has recently happened, why would 5% of the total number of bitcoins suddenly moving have any drastic impact on price?

It is BTC that has never moved before. It would reveal at least one piece of information about the author of the bitcoin whitepaper - they are alive and engaged. Intent would be unknown, and destabilizing. Many pretenders would claim ownership. It would break a 12 year expectation in the story of Bitcoin.

Re: Coinbase S-1

#603

Post by px43 »

wtvanhest wrote: post #429
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.

First, congrats to everyone at Coinbase. What a great step in their journey. I’m going to hijack the negativity here and ask if anyone has any advice on writing a first smart contract. I feel like I cannot fully understand ETH or BTC lightning until I write one for fun. Does anyone have any advice on how to get started?

Something like this should get you started: https://www.youtube.com/watch?v=W0Lomo8CdTM

Re: Coinbase S-1

#604

Post by hntrader »

cmdli wrote: post #591
hntrader wrote: post #585

Earlier quoted context omitted.

"no underlying intrinsic value" How does that differ to investing in fine art, scarce wine, old/rare stamps and coins, limited edition/novelty items, historical artefacts, or even gold? There's loads of things that have kept value for centuries despite having no intrinsic value.

All of those things have intrinsic value in that they bring people some measure of joy. Bitcoin, by comparison, brings people very little joy in and of itself (you might argue it provides entertainment value, it certainly does for me). Not saying Bitcoin is worthless; it's a currency and it has it's uses, which makes it worth something. However, I think the belief that "it's scarce, therefore its worth something" is…

"it's scarce, therefore its worth something"

That's not the argument being made. My paintings are scarce but they're worthless. Lots and lots of scarce things are worthless, and rightfully so.

"bring people some measure of joy."

Right, so there's some aesthetic value there. Why can't BTC be like the Ancient Egyptian artefact that's valued purely on aesthetic grounds? I could plausibly see it as a historical artefact in 200 years time, given its novelty and role in tech history. I have an old stamp collection and some BTC, and I get much more pleasure from the crypto due to its novelty, role in culture, etc.

Re: Coinbase S-1

#605

Post by px43 »

boh wrote: post #182
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.

A bank/exchange with far fewer regulations than a bank/exchange.

How do you figure? They've got regulatory compliance requirements from almost every financial regulator on the planet. They are probabally, by far the heaviest regulated company on the planet.

Re: Coinbase S-1

#606

Post by xirbeosbwo1234 »

jsutton wrote: post #593

I find it interesting (sad, actually) that most other S-1 posts on here are congratulatory for the most part, giving kudos to the teams (look at the DO one today). However, when it comes to anything crypto related, the emotions really come out. It's all "bitcoin/crypto is useless, doesn't solve any problem, waste of talent." For a community of hackers, there really seems to be a lack of vision when it comes to crypto…

What sort of engineer ignores inefficiency on the order of six to eight orders of magnitude? Being a hacker is about creativity and innovation, sure, but it's also about knowing when something is total junk and should be discarded. If you heard people lambasting COBOL or CORBA or Windows 95 when they were new, would you criticize them for their "lack of vision"?

Even if I were optimistic about cryptocurrency, I would be opposed to places like Coinbase. The whole point is supposedly to get rid of banks and replace them with cryptography. Coinbase is building the same old banking system all over again, but with slower databases and regulation set back to the 1930s.

Re: Coinbase S-1

#607

Post by bhupy »

jellicle wrote: post #417
bhupy wrote: post #377

Earlier quoted context omitted.

What you've described is also roughly how gold vs gold certificates work. You're correct that an owner of a gold certificate doesn't truly own the gold, and are exposed to extra risk on account of that. That being said, the value of gold has still remained stable/flat (relative to USD inflation). Also, every time you buy BTC, you can see the underlying transaction on the public block explorer. The day that stops bein…

You seem confused about what I wrote. Suggest you read it again. All you've done is reiterate some Bitcoin dogma without attempting to grapple with reality as it presents itself to you.

I suggest you re-read what I wrote. Your description of fractional reserve banking only holds in a world where bank deposits are fungible legal tender regardless of what they are backed with at any particular moment. This doesn't apply with Bitcoin (and most of its peers) unless there are laws that ban making that distinction. Put simply: the crypto market today doesn’t appear to value Bitcoin “certificates” the same way it values Bitcoin. Other crypto exchanges don’t price BTC as a function of derivates at other unaffiliated exchanges. As long as that’s the case, it doesn’t matter if there are more certificates/obligations than there are Bitcoin, the underlying value of Bitcoin won’t change. This is not that dissimilar to what we’ve empirically seen happen with Gold (and Gold certificates).

Not going to continue this discussion any further because you seem less interested in having a polite conversation, and this is starting to get destructive.

Re: Coinbase S-1

#608

Post by ravenstine »

beaner wrote: post #586
ravenstine wrote: post #261

Earlier quoted context omitted.

Coinbase does allow people to store their funds with them, but it's common for people to buy bitcoins on Coinbase and then immediately transfer them to their own wallet, or to a service with far better security like Kraken(which will happen less once Kraken supports ACH and immediate funds).

Kraken doesn't have better security.

Explain?

Kraken doesn't keep sessions alive very long, whereas I can keep coming back to my Coinbase tab the following day and it will still have a session. 2-factor authentication is optional with Coinbase, but Kraken requires 2-factor and only allows an authenticator app or Yubikey(i.e. not mobile which can be intercepted). The Kraken app uses API keys that you set up rather than username/password; this allows the user to set login permissions in case they want their mobile app to only read their balances but not buy/sell. I'm sure I'm missing something.

The added value of that security can certainly be questioned, but I don't think it's unreasonable to say that Kraken is more secure by default and provides more options for keeping one's account secure.

Re: Coinbase S-1

#609

Post by xirbeosbwo1234 »

beaner wrote: post #597
entropea wrote: post #595

Earlier quoted context omitted.

I don't know if you're considering what Coinbase is when in alignment with cryptocurrency. It is exactly what cryptocurrency was supposed to not be. It's centralization, it's a bank. I personally have no emotion towards it, but I definitely understand those who do as the cryptocurrency project was quickly taken over by the same old financial interests.

False. The objective of crypto isn't to force everyone out of the banking system, it's to provide an ability to opt-out and be your own bank for those who need or want it. If you want to use a traditional bank or custodian instead, go for it. And indeed, for many people who cannot and should not be managing their own keys, it's the preferable option.

Bitcoin was supposed to replace banks but isn't up to the job. It is completely impossible to "opt-out" because people want to be able to pay for their groceries without waiting a half an hour and paying half the cost of the things they bought in transaction fees.

Re: Coinbase S-1

#610

Post by entropea »

jariel wrote: post #548
delaaxe wrote: post #529

Earlier quoted context omitted.

The whole point of his comment is that BTC is better viewed as store of value rather than a medium of exchange

Except that BTC is a terrible store of value, possibly the last option in a long line of better classical options such as real estate (or related funds), stocks, bonds, basket of currencies, commodities. We already have tons of options for 'store of value' why on earth would we invent another, worse one? BTC is not a store of value or a currency - it's a weird social movement.

Absolutely. There's no storing value in something that regularly swings 20%+ on a given day. The only people who are saying this are holders of Bitcoin. It was originally designed to be a decentralized currency, and now it's not. There are much better & safer value stores, even traditional rare metals.
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