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Coinbase S-1

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Re: Coinbase S-1

#681

Post by wpietri »

bhupy wrote: post #640
wpietri wrote: post #631

Earlier quoted context omitted.

If Bitcoin is the same as gold, then we don't really need Bitcoin. But its point is being different. So you can't handwave away concerns based on it being exactly the same. I'm not saying Bitcoin isn't perfect; nothing is. My point is that Bitcoin has not demonstrated any significant value certainly not in excess of its costs and harms, and it's had plenty of time. Bitcoin and Android are basically the same age. Bitc…

> If Bitcoin is the same as gold, then we don't really need Bitcoin This argument doesn't make much sense. It's like saying if rubies are the same as emeralds, then we don't need rubies. Also, there can be multiple types of assets! Nobody wants to put all of their eggs in one basket. Bitcoin can coexist with gold. Bitcoin is also arguably superior to gold in that it's MUCH easier to pay for bread with a little bit of…

> It's like saying if rubies are the same as emeralds, then we don't need rubies.

If rubies didn't exist and somebody were setting out to invent them at the cost of major ecological harm plus enormous waste and collateral damage to financial novices then that would be a decent comparison. Except that rubies have intrinsic value, whereas Bitcoin doesn't, making it a yet worse analogy.

> different but [...] still being "the same"

I am going to take this as an exercise in aggressive point-missing on your part. If you still don't get the point, feel free to ask.

> Bitcoin is absolutely valueless

I didn't say Bitcoin was valueless. Again, you seem to be aggressively missing the point.

> BNY Mellon and BlackRock

That's not proof of value. Traders will trade anything with enough volatility, because that's how they make money. Making money is frequently distinct from creating value. I'm speaking specifically of value, which again, Bitcoin has not demonstrated net value creation, especially when compared with other things that started at the same time, and especially when there's a full accounting of costs.

Re: Coinbase S-1

#682

Post by quickthrower2 »

dd36 wrote: post #122
kolinko wrote: post #96

Earlier quoted context omitted.

By „fraction” you mean a quarter of revenue - Coinbase having around 1B in revenue, Nasdaq having 4B in 2020. Then, Coinbase grew 300% in the last year, Nasdaq just 33%. It’s like asking how Amazon can be worth more than Barnes and Noble in 2004 (or what year that was).

Except Amazon had opportunity to move beyond books. Coinbase should be valued nearly as much as Wells Fargo because maybe it will become Wells Fargo?!? Coinbase is tied to crypto inflation. That bubble can keep going but it’s a fraction of the volumes of the large players and I don’t see any long-term competitive advantage if crypto actually becomes useful to daily commerce. EDIT: And fraction was less than 1/10th of…

And coinbase has no USP someone with $1b sets up a competing exchange no problem, and they are in the game for 1% of coinbase valuation. They just need to innovate in some dimension, let’s say customer service (see r/coinbase).

Lol coinspot let me send out my coins to a wallet no problem. No multi week delays!

Re: Coinbase S-1

#683

Post by jariel »

entropea wrote: post #610
jariel wrote: post #548

Earlier quoted context omitted.

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.

Worth noting: there is no such thing as a 'perfect store of value'.

We are psychologically caught up in the idea that 'gold' or 'property' has some 'intrinsic value'. Like if there were a nuclear war, it would all be cool, our 'Billions' would be protected!

But no, we can only hold on to stuff that others might find valuable some day.

In other words: currency, even 'stores of value' is a social contract within the system you operate.

If the system fails, well, both currency and stores of value are probably going to not be worth a lot.

Yes - Gold is nice because it's a default currency you can use anywhere. Property tends to hold value as long as there are people there who want to use it - and the legal system that recognizes ownership exist.

But otherwise, there is no way around it: you cannot magically store value in your pocket independent of a bunch of other complex systems being in place.

BTC is reminiscent of the 'Drain the Swamp' ideas, that somehow all the politicos and bureaucracy are useless and irrelevant. Well yes, shenanigans abound and does inefficiency, but that doesn't meant it's worse than nothing (!) our systems are made by smart people. The only way forward is 'doing something better' and BTC is probably not that.

Re: Coinbase S-1

#684

Post by arrosenberg »

boh wrote: post #659
arrosenberg wrote: post #596

Earlier quoted context omitted.

The difference between relying on credit backed by a physical item (gold bricks) versus credit backed by "the Full Faith and Credit" clause of the Constitution is what happens in the event of default by the issuer of the credit. If the wheels stop turning at some point, there is no recoverable asset.

You're confusing macro-economics with micro-economics. There is "no recoverable asset" with currencies and currencies aren't debts that demand payments.

Am I? From 1861-1933 you could redeem paper currency for gold. I agree you can’t do that today, which was the original distinction I was making.

Re: Coinbase S-1

#685

Post by xwolfi »

dcolkitt wrote: post #674
yao420 wrote: post #655

Earlier quoted context omitted.

I’m starting to feel this is a positive and all countries should do this. I know China gets a lot of flack for doing the same thing but maybe they are right? Better to have a local company do well and contribute to the local economy than to send profits overseas and be subject to global corps.

Disagree. But much better for domestic consumers to get the best prices and highest quality. I don't care if a Chinese or American magnate becomes a billionaire. I care that millions of middle-class Americans get the best deal possible.

Well I'm in China myself and while I agree I think it might not produce the effect you want. First, ideologies and absolute rules dont work because as soon as you know them, you work to bypass them to your advantage.

With that in mind, what do you think of the current situation? The US maximize price based optimization (get the best deal) while China maximize population occupancy (everyone must work, nobody is educated = low salary, high industrial out, low output price - one might say to make its population calmer, or simply because for them being busy > getting the best deal).

You then have the largest oldest country in the world trending toward mass slavery reducing prices for the richest most abstract country trending towards 0 productivity in exact opposite.

What is the end game? All americans, getting everything for free losing the ability to build anything while all Chinese work at their own health cost to provide the best prices while being the only ones able to produce anything ?

I think a more balanced local mini supply chain would help both countries and Im glad it s heavily discussed all over the world (decoupling from China, Chinese industries realizing their Chinese employees are now their best clients)

Re: Coinbase S-1

#686

Post by joubert »

bhupy wrote: post #381
joubert wrote: post #302

Earlier quoted context omitted.

> it depreciates because of the Fed The dollar depreciates / appreciates due to various economic factors, not just because of actions by the Federal Reserve. https://www.investopedia.com/articles/forex/051115/top-econo...

I don't think anyone disagrees that there are multiple causes of depreciation. The key takeaway from your link is that USD value is a combination of (1) Fed policy as well as (2) economic growth and corporate profits (or lack thereof). The argument is that (2) is an inevitability of the market, whereas (1) is political. Crypto adherents aim to solve for (1) and accept the inevitability of (2). And deciding to use Coi…

> (1) Fed policy as well as (2) economic growth and corporate profits (or lack thereof). The argument is that (2) is an inevitability of the market, whereas (1) is political.

The market is influenced by politics more than you might expect, and, conversely, the Fed’s actions are less political that you think.

Re: Coinbase S-1

#687

Post by Workaholic_87 »

atomicnumber3 wrote: post #451
ttul wrote: post #447

Earlier quoted context omitted.

Their growth rate is staggering, and they are enormously profitable. I was most stunned by the gross margins. They spend so little to make so much. It illustrates how feverish the crypto investing world is.

I worked for a prop firm that briefly did a foray into coin trading. Coinbase's trading fees are * outrageous** compared to what we're used to in the world of normal equity/option/future/fx trading. Literally 100x+ what we're used to paying. You have to do absolutely enormous volume before they'll give you anywhere near a sane rate. I'm not surprised they're printing money.

With wall street and other large players steadily moving into crypto, I don't suspect Coinbase will be able to continue to charge their high trading fees....and thus their margins will drop dramatically. Would be careful of jumping on this guy, and presuming it's success will fall in line as the latest on the tech IPO bandwangon

Re: Coinbase S-1

#688

Post by bhupy »

wpietri wrote: post #681
bhupy wrote: post #640

Earlier quoted context omitted.

> If Bitcoin is the same as gold, then we don't really need Bitcoin This argument doesn't make much sense. It's like saying if rubies are the same as emeralds, then we don't need rubies. Also, there can be multiple types of assets! Nobody wants to put all of their eggs in one basket. Bitcoin can coexist with gold. Bitcoin is also arguably superior to gold in that it's MUCH easier to pay for bread with a little bit of…

> It's like saying if rubies are the same as emeralds, then we don't need rubies. If rubies didn't exist and somebody were setting out to invent them at the cost of major ecological harm plus enormous waste and collateral damage to financial novices then that would be a decent comparison. Except that rubies have intrinsic value, whereas Bitcoin doesn't, making it a yet worse analogy. > different but [...] still being…

> major ecological harm

This is _really_ debatable. By most measures, the vast majority of Bitcoin mining is done via renewables: https://www.iea.org/commentaries/bitcoin-energy-use-mined-th...

"Around 60% to 70% of bitcoin is currently mined in China, where more than two-thirds of electricity generation comes from coal. But bitcoin mining facilities are concentrated in remote areas of China with rich hydro or wind resources (cheap electricity), with about 80% of Chinese bitcoin mining occurring in hydro-rich Sichuan province. These mining facilities may be absorbing overcapacity in some of these regions, using renewable energy that would otherwise be unused, given difficulties in matching these rich wind and hydro resources with demand centres on the coast."

"Electricity generation in other key bitcoin mining centres are also dominated by renewables, including Iceland (100%), Quebec (99.8%), British Columbia (98.4%), Norway (98%), and Georgia (81%). Globally, one analysis estimates that the bitcoin is powered by at least 74% renewable electricity as of June 2019. Another analysis of data from 93 mining facilities (representing 1.7 GW, or about a third of global mining capacity) estimates that 76% of the identified energy mix includes renewables."

Another report: https://coinshares.com/assets/resources/Research/bitcoin-min...

"Furthermore, we show that Bitcoin mining is mainly located in global regions where there are ample supplies of renewable electricity available. And finally, we calculate an estimate of the renewables penetration in the energy mix powering the Bitcoin mining network at 73%, making Bitcoin mining more renewables-driven than almost every other large-scale industry in the world. Our renewables estimate has marginally dropped since our last report, reflecting increased levels of mining in low-renewables regions such as Kazakhstan. However, we still caution that our location estimates likely have error margins of ±5% and should be considered within that context."

Of the BTC mining that isn't on renewables, it would be interesting to see how the net CO2 output compares to diamond/gold/ruby mining, not to mention the labor exploitation.

> Except that rubies have intrinsic value, whereas Bitcoin doesn't, making it a yet worse analogy.

What intrinsic value do rubies have? They're just used for jewelry. It doesn't really "do" anything. Bitcoin is the same. It doesn't "do" anything, and its value is subjectively derived by the people that use/hold it. Much like jewelry, when it's not being used as a store of value, it serves a somewhat superficial use case, and that's censorship resistant transaction.

> I am going to take this as an exercise in aggressive point-missing on your part. If you still don't get the point, feel free to ask.

> I didn't say Bitcoin was valueless. Again, you seem to be aggressively missing the point.

You'll have to help me out here, because whatever point you think you're making simply isn't coming across. You just said "Except that rubies have intrinsic value, whereas Bitcoin doesn't...", while also saying "I didn't say Bitcoin was valueless". It's hard to follow.

> That's not proof of value.

My point about BNY Mellon, BlackRock, Square, Tesla, Canada, etc was meant to be in response to your claim that Bitcoin use is "shrinking". The entire argument here is that Bitcoin is (among many things) a store of value. Its worth as a store of value is entirely predicated on whether others think that it's a store of value. The fact that institutional investors are also beginning to treat it as a store of value suggests that it might not be "shrinking", per your conclusion.

It's also used for censorship resistant payments: https://www.coindesk.com/nigeria-bitcoin-adoption

> I'm speaking specifically of value, which again, Bitcoin has not demonstrated net value creation

Calculating "net" value creation is debatable, because different people have a different point of view on how to measure the cost (eg how "bad" the electricity usage is). But, we can talk about the output: and that it has provided an easy-to-use store of value, comparable to gold, which can be used as a hedge against fiat currency. It's being used in regimes with poor monetary policy:

https://news.bitcoin.com/venezuela-bitcoin-use-hyperinflatio...

https://qz.com/africa/1947769/nigeria-is-the-second-largest-...

You, personally, may not see any value in that, and that's fine! But we go back to the Diamond-water paradox; you probably derive more use from a glass of water (or an Android phone, to your earlier point) than Bitcoin, but utility alone doesn't determine the price/value of the thing.

Re: Coinbase S-1

#689

Post by boh »

arrosenberg wrote: post #684
boh wrote: post #659

Earlier quoted context omitted.

You're confusing macro-economics with micro-economics. There is "no recoverable asset" with currencies and currencies aren't debts that demand payments.

Am I? From 1861-1933 you could redeem paper currency for gold. I agree you can’t do that today, which was the original distinction I was making.

You are. You are conceptualizing currency as debt, as if currencies represented finite deposits of gold which implies the value of the currency. Even with the gold standard, governments still decide the value of the currency.

Re: Coinbase S-1

#690

Post by smabie »

Workaholic_87 wrote: post #687
atomicnumber3 wrote: post #451

Earlier quoted context omitted.

I worked for a prop firm that briefly did a foray into coin trading. Coinbase's trading fees are * outrageous** compared to what we're used to in the world of normal equity/option/future/fx trading. Literally 100x+ what we're used to paying. You have to do absolutely enormous volume before they'll give you anywhere near a sane rate. I'm not surprised they're printing money.

With wall street and other large players steadily moving into crypto, I don't suspect Coinbase will be able to continue to charge their high trading fees....and thus their margins will drop dramatically. Would be careful of jumping on this guy, and presuming it's success will fall in line as the latest on the tech IPO bandwangon

most prop firms are not trading on CB. It's spot only (yuck) and yes, the fees are awful. I'm pretty bearish on CB and incredibly bullish on FTX. SBF could very well be the richest man on earth in 5 years.
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