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Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

bloomberg.com

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Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#81

Post by heurist »

empath75 wrote: post #37

Until the situation with bitfinex pumping billions of unbacked tether into the ecosystem is resolved, doing anything involving bitcoin right now is insane. They’ve released almost $200 million worth of tether in the last day .

I've been reading about this but still don't understand the scope. The money might all be fraudulent, but it also seems like the most liquid exchange on the market would also have a huge pile of cash to sit on right now after the last few years appreciation of btc. Did Tether fraud kick off this wave?

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#82

Post by shroom »

This may be a stupid question but I dont understand every aspect of bitcoin so bear with me.

Is Bitcoin access coupled with one private key or multiple?

Say someone has 10 bitcoin on their computer and a private key so its only accessible from that computer. That computer holds a lot of value. If the computer gets stolen theyve stolen all the bitcoins with it? Given that the secret to the private key can be broken at some point in the future.

Or is there a way for the user to claim back his/ger bitcoin by creating a new key with same secret?

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#83

Post by solatic »

chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

These comments strike me as very much against the ethos of cryptocurrencies, which is to say, using a publicly available ledger with access governed by rules democratically set by the majority of nodes instead of many secret private ledgers governed by civil institutions.

Counterparty risk? What counterparty risk? The minute the funds leave your wallet governed by your private keys then you no longer have control. The moment you transfer funds then they no longer belong to you. By design!

Downtime? What downtime? If individual nodes go offline then the network continues to function. Bitcoin is a decentralized protocol. By design!

Perhaps instead of trying to hack centralized banking models onto decentralized currencies we should be using decentralized models to fit the currency. Perhaps, instead of Coinbase claiming to hold Bitcoin in the name of account holders, it should facilitate the immediate transfer of Bitcoin to the private wallets of people who are purchasing it and refuse purchases of people without wallets set up. Perhaps Coinbase should allow transaction fees to skyrocket as a result (even more than they have currently), due to not processing transactions off-chain, and that this would be fine, because it would push demand towards cryptocurrencies with lower fees.

Bitcoin exchanges won't mature until they're less like traditional stock brokers and more like BitTorrent trackers - they don't actually host the files or the money, but tell you where to find people who do, who you can exchange with directly in a decentralized way.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#84

Post by physguy1123 »

dimillian wrote: post #40

I think most of you don't realise at what scale Coinbase work. You just have to watch the trade history on GDAX for a few seconds to understand the sheer volume of what is actually happening. The GDAX web socket is very very robust. It's very rarely down for me, and have not been down at all since they did whatever upgrade/maintenance they had to a few days ago.

Yesterday Nasdaq handled ~10 million trades and probably ~1 billion messages so about 30k messages per second over all equities while keeping response times below 100 microseconds for the most part. GDAX is peanuts compared to any of the equities exchanges.

Hell, I worked for a startup FX exchange once with a team of 4 devs working on the actual matching pipeline and our beta product handled much more volume with better latency.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#85

Post by School-Cotton »

shroom wrote: post #82

This may be a stupid question but I dont understand every aspect of bitcoin so bear with me. Is Bitcoin access coupled with one private key or multiple? Say someone has 10 bitcoin on their computer and a private key so its only accessible from that computer. That computer holds a lot of value. If the computer gets stolen theyve stolen all the bitcoins with it? Given that the secret to the private key can be broken at…

Most wallets have a way of deterministically generating private keys from the same pass phrase. So you would enter the same pass phrase, it’d generate the same key, and you’d be fine (assuming the thief hadn’t spent your bitcoins to his own address yet)

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#86

Post by diego »

shroom wrote: post #82

This may be a stupid question but I dont understand every aspect of bitcoin so bear with me. Is Bitcoin access coupled with one private key or multiple? Say someone has 10 bitcoin on their computer and a private key so its only accessible from that computer. That computer holds a lot of value. If the computer gets stolen theyve stolen all the bitcoins with it? Given that the secret to the private key can be broken at…

You don't want to store your private key unencrypted on a computer ever. If someone gets a hold of a private key, they control all the bitcoin under that address. However they acquire the private key doesn't matter.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#87

Post by superquest »

shroom wrote: post #82

This may be a stupid question but I dont understand every aspect of bitcoin so bear with me. Is Bitcoin access coupled with one private key or multiple? Say someone has 10 bitcoin on their computer and a private key so its only accessible from that computer. That computer holds a lot of value. If the computer gets stolen theyve stolen all the bitcoins with it? Given that the secret to the private key can be broken at…

Often times you can create a wallet with a "recovery seed" -- which is usually a sequence of 12 words. This seed can be used to recover the secret.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#88

Post by Mizza »

H99189 wrote: post #8

Coinbase should solve it's coinbase trust issue. I bought a small amount of litecoin almost 2 weeks ago, i'm well past my "delivery by" date, my funds left my bank account over 10 days ago, yet I still don't have my coins in my account.

This happened to me as well a few weeks back. Smells a lot like a Ponzi scheme.

Looking for a new exchange, but they're all having problems with staying online or verifying new accounts.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#89

Post by FabHK »

sbergot wrote: post #32
chollida1 wrote: post #2

EDIT Yuck, this blew up and I think alot of people took it the wrong way. I think Coinbase is great, and I'm sure everyone who works there is awesome and terrific at their job. Anyone who has worked on any half way successful project knows just how hard both uptime and security are and I'm in no way upset at Coinbase for having growth issues. I've done this for years and might not even get an interview with them. The…

> every day at midnight for 10 minutes is fine No it is not. Coinbase has clients all over the globe. It is always regular trading hours.

It would be fine. The HK Stock Exchange used to operate 4 hours a day, and everyone was reasonably happy (particularly brokers with their 2 hour lunch break). Most exchanges open and close daily. Even FX pretty much ceases to trade weekends. It is not axiomatic that any BTC/fiat cross must trade continuously, let alone on Coinbase.

The fact that Coinbase has clients globally is not pertinent to the discussion (or only insofar as the distribution of those clients could influence at what time you'd want to put a daily trading break).

However, granted, a 10 minute trading break daily looks like too much effort to be worth it. A scheduled monthly break of an hour or so sounds reasonable.

Re: Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues

#90

Post by colemannugent »

shroom wrote: post #82

This may be a stupid question but I dont understand every aspect of bitcoin so bear with me. Is Bitcoin access coupled with one private key or multiple? Say someone has 10 bitcoin on their computer and a private key so its only accessible from that computer. That computer holds a lot of value. If the computer gets stolen theyve stolen all the bitcoins with it? Given that the secret to the private key can be broken at…

The private key is the secret. Someone who steals it does not have to break anything.

In this case it is similar to a physical lock on a safe: if you lose the key to the safe you just have to accept that you no longer can access the contents of the safe.

You can have wallets that are protected by multiple keys, but there is not a whole lot of wallet software that does this in an easy to use way right now.

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