Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues(bloomberg.com)
bloomberg.com
Coinbase Wants Wall Street to Resolve Its Bitcoin Trust Issues
https://www.bloomberg.com/news/articles/2017-12-15/coinbase-wants-wall-street-to-resolve-its-bitcoin-trust-issues
232 comments
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.
To counter anecdote with anecdote, I've had no issues with coinbase and have found them pleasant to use. That includes transferring to gdax/selling/withdrawing, etc.
You can’t counter a bad experience with a neutral one man.
Example:
Ann Rule was on a first name basis with Ted Bundy before he was caught. He didn’t murder her or any of her friends once. Its probably fine to take a car ride from him.
Example:
Ann Rule was on a first name basis with Ted Bundy before he was caught. He didn’t murder her or any of her friends once. Its probably fine to take a car ride from him.
I've never had a single problem with Coinbase either. Most complaints seem to be from brand new signups getting delayed, people failing the AML/KYC checks.
My USD withdrawals always show up in my bank account 2 days later.
My USD withdrawals always show up in my bank account 2 days later.
My account is 4 years old, was verified, 2FA setup, and bought/sold without issue 4 years ago.
Recently logged in to find that previously verified ID documents were somehow wiped out and my account became restricted. Reverified ID without issue, but account still restricted. Been 13 days and nada from their support save for an automated response.
Recently logged in to find that previously verified ID documents were somehow wiped out and my account became restricted. Reverified ID without issue, but account still restricted. Been 13 days and nada from their support save for an automated response.
My account is over 3 months old. They took my money and successfully gave me my tiny bit of ETH and BTC, but for some reason my litecoin transaction is stuck in the ether.
That's annoying then, maybe the run up in LTC triggered a new tier of verification or they really are that far behind. I'm sure you'll get it eventually but if you're looking to flip it now you can't yet.
If you're not buying with the intent to hold, I recommend depositing USD to their exchange GDAX. Fees are lower and you can sell/withdraw immediately.
If you're not buying with the intent to hold, I recommend depositing USD to their exchange GDAX. Fees are lower and you can sell/withdraw immediately.
So? Services that operate on money shouldn't just have an SLA where is works fine for some people. When you want a lot of nines, "it worked for me a few times" is not enough.
Probably should be completing AML/KYC checks before funding the account, but funny how there's never any issue with that not happening in a speedy amount of time...
It's happened to a lot of people, and recent coinbase news supports the parent's anecdote.
There are hundreds of similar complaints about Coinbase on their sub-reddit just within the last week or so, many including support ticket numbers. People are getting pretty freaked.
https://www.reddit.com/r/coinbase
FYI this is identical to what happened on Mt Gox. It was easy to send money in, but getting more than 0.5 BTC out became quite difficult.
That said, it seems closer to the truth to say that they're simply under load. But it's hard not to wonder. There's no way to know there's a problem until it's too late.
It's a good reminder to keep your coins off Coinbase.
That said, it seems closer to the truth to say that they're simply under load. But it's hard not to wonder. There's no way to know there's a problem until it's too late.
It's a good reminder to keep your coins off Coinbase.
> It's a good reminder to keep your coins off Coinbase.
I'm finding that keeping coins off of Coinbase is easier to do than keeping cash off of Coinbase. It's fast and cheap to transfer cryptocoins to Coinbase, but takes me days to add cash.
I'm finding that keeping coins off of Coinbase is easier to do than keeping cash off of Coinbase. It's fast and cheap to transfer cryptocoins to Coinbase, but takes me days to add cash.
> but getting more than 0.5 BTC out became quite difficult
And then Bitfinex is not processing BTC > USD transactions for ">250BTC"...
And then Bitfinex is not processing BTC > USD transactions for ">250BTC"...
Yep. I follow the ecosystem closely (not invested, just fascinated by it) and there are an incredible number of complaints about coinbase in general, and their atrocious support in particular.
A VC-funded SV company should do better.
A VC-funded SV company should do better.
Coinbase has said they've scaled their support team 2x in recent weeks. Surely that's not an easy feat and speaks to the sort of volumes they are handling at the moment.
Coinbase has been saying, publicly, that their support is sorely lagging for a year or more. This is hardly news to them (or their customers).
I've used Coinbase since 2013 but I had a very important transaction simply disappear about a year and a half ago (despite being confirmed 10s of times) until I showed support that the transaction definitely went through. No explanation whatsoever. Just showed up a day after they replied to me.
Agreed. I sold some ETH and deposited the funds into a USD wallet, which Coinbase decided to close due to eligibility restrictions once the funds were already in it.
I've had a ticket open for about a month w/o access to those funds.
I've had a ticket open for about a month w/o access to those funds.
I had a situation where the coin balance was displayed as 0.0, but I could trade / withdraw by typing in the number I was supposed to have.
Silly question, but did you try reloading the page? I've noticed that if I place an order that isn't immediately filled, then tab to a different page and switch back to the gdax page an hour later, the account balance isn't updated even if it shows that my order was filled. Refreshing has always fixed it for me.
After I read on Hacker News by a number of commenters that Coinbase Customer Support had given up -- seemed fairly dodgy to give them money as you've no reason to think you'll get recourse should something go wrong.
I went with BitPanda. I should leave my referral link here but rather my own words carry the recommendation.
I went with BitPanda. I should leave my referral link here but rather my own words carry the recommendation.
Use support less. Write to Attorney General more. Dont demand. Require.
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.
Looking for a new exchange, but they're all having problems with staying online or verifying new accounts.
> This happened to me as well a few weeks back. Smells a lot like a Ponzi scheme.
Readers, please enshrine this comment as the canonical example of the Cryptocurrency Corollary of Godwin's Law: "As an online discussion about cryptocurrency grows longer, the probability of a comparison involving Ponzi approaches 1."
Coinbase's entire business is to irreversibly and permanently send you Bitcoin in exchange for you sending them funds that you have months to dispute and reverse. And this is with reasonable fees that put a check-cashing outfit to shame. Of course they're going to err on the side of caution. Based on zero information whatsoever, I'm going to assume you're telling the truth. But for every honest person like you, there are probably at least two who truly are trying to steal Bitcoin from Coinbase.
I don't like it any more than you do when businesses make mistakes. But jumping straight to "Ponzi scheme" is just silly.
Readers, please enshrine this comment as the canonical example of the Cryptocurrency Corollary of Godwin's Law: "As an online discussion about cryptocurrency grows longer, the probability of a comparison involving Ponzi approaches 1."
Coinbase's entire business is to irreversibly and permanently send you Bitcoin in exchange for you sending them funds that you have months to dispute and reverse. And this is with reasonable fees that put a check-cashing outfit to shame. Of course they're going to err on the side of caution. Based on zero information whatsoever, I'm going to assume you're telling the truth. But for every honest person like you, there are probably at least two who truly are trying to steal Bitcoin from Coinbase.
I don't like it any more than you do when businesses make mistakes. But jumping straight to "Ponzi scheme" is just silly.
If you have a statement on your site saying you will deposit x coins in y days, you should do that. If you don't for a lot of people, then something is wrong with your business and no, people should not trust you.
> in exchange for you sending them funds that you have months to dispute and reverse
and here we see the limits of crypto currency and the legitimate concerns people have with it.
> in exchange for you sending them funds that you have months to dispute and reverse
and here we see the limits of crypto currency and the legitimate concerns people have with it.
>Readers, please enshrine this comment as the canonical example of the Cryptocurrency Corollary of Godwin's Law: "As an online discussion about cryptocurrency grows longer, the probability of a comparison involving Ponzi approaches 1."
Because the Corollary is true. At this point to believe otherwise marks you as a credulous dupe.
You were probably defending Mt Gox up to the day of its collapse. The Bitcoin True Believers are the easiest marks for these scams and cons because their ideology blinds them to reality.
Because the Corollary is true. At this point to believe otherwise marks you as a credulous dupe.
You were probably defending Mt Gox up to the day of its collapse. The Bitcoin True Believers are the easiest marks for these scams and cons because their ideology blinds them to reality.
You're inserting ad hominem attacks in a thread that didn't have them or need them. Settle down.
I don't think it's unreasonable to think that they might using the cash influx from newer users to cover cash outs for older users. Which I suppose is fine if they keep balanced books, but not if they're not delivering advertised service to the new users, which they aren't. They took my money, gave me nothing, then went absolutely silent.
Yes, it is unreasonable. You could say that any business "might [be] using the cash influx from newer users to cover cash outs for older users." Seriously, don't hide behind the word "might." It's a lazy defense of an accusation that's based more on emotion than reason or facts.
I once ordered a computer from Dell. The sealed box arrived empty. I went through few weeks of increasingly enraged emails and phone calls. Should I have assumed Dell was a Ponzi scheme?
I once ordered a computer from Dell. The sealed box arrived empty. I went through few weeks of increasingly enraged emails and phone calls. Should I have assumed Dell was a Ponzi scheme?
The fact that HN is just discovering Coinbase (Normiebase) and not discussing the in's and out's of Etherdelta tells me this bubble still has a far way to go before it bursts.
How many fund-stealing XSS attacks has EtherDelta been hit with by now? It should be considered criminal that they still haven't put up a competent Content-Security-Policy header that would entirely block that class of exploits. Their current one is trivially-bypassable security theater that I tried reporting and got blown off. It's probably for the best that they don't have more attention.
Did you end up getting your coins from Coinbase?
In that particular case, no.
Well now I'm worried. I also bought a tiny amount of ETH and BTC which is still in my account but I'm really worried about getting the funds out, even if it's just a refund of my original USD.
I didn't come here to spread doubt, just to +1 with my experience. I have had other transactions with them go okay, but when this one went wrong I realized how absolutely abysmal their support is.
They stole my money and I'm being downvoted for it, ha!
They stole my money and I'm being downvoted for it, ha!
why did you give them so much money that you are "really worried" dont be irresponsible, its a new venture , dont put in your life savings ... just a couple of dollars , try it out if it doesnt work then at least its not something to be "really worried" about
I gave them money , they gave me coin , everything worked ... maybe you made them angry and tried to do something illegal on their site so they shut your user down.
I hear they prioritize "good" users in their system.
There is a section where there is the type of account you add, if you add a bank account you get special treatment
I gave them money , they gave me coin , everything worked ... maybe you made them angry and tried to do something illegal on their site so they shut your user down.
I hear they prioritize "good" users in their system.
There is a section where there is the type of account you add, if you add a bank account you get special treatment
"maybe you made them angry and tried to do something illegal on their site so they shut your user down."
Ahh, crypto-punk-decentralized-liberatrians never seize to amaze with the level of double-think they can achieve. How someone can hold both "the government is evil and might take your money" and "maybe you made this website angry so they didn't give you your money" at the same time is truly impressice.
Ahh, crypto-punk-decentralized-liberatrians never seize to amaze with the level of double-think they can achieve. How someone can hold both "the government is evil and might take your money" and "maybe you made this website angry so they didn't give you your money" at the same time is truly impressice.
> crypto-punk-decentralized-liberatrians
Woah, nice strawman
Woah, nice strawman
> just a couple of dollars , try it out if it doesnt work then at least its not something to be "really worried" about
Could you imagine living in a world where you had to start every business relationship by only making extremely small "beta test" transactions, be it a trip to Target to opening an account at your local credit union. Like, on your first trip to Costco, you only bought a box of gum because you couldn't ever be sure they wouldn't somehow completely fuck you over and if they did fuck you over the societal response would always be "LOL too bad, so sad.... shouldn't have trusted them!!!"
I dunno about anybody else, but that really isn't the world I would want to live in.
There is value, substantial value, to trust others and when that trust fails, having a solid legal system to back you up. If you cannot trust anybody but yourself, every transaction you make becomes significantly more expensive.
Could you imagine living in a world where you had to start every business relationship by only making extremely small "beta test" transactions, be it a trip to Target to opening an account at your local credit union. Like, on your first trip to Costco, you only bought a box of gum because you couldn't ever be sure they wouldn't somehow completely fuck you over and if they did fuck you over the societal response would always be "LOL too bad, so sad.... shouldn't have trusted them!!!"
I dunno about anybody else, but that really isn't the world I would want to live in.
There is value, substantial value, to trust others and when that trust fails, having a solid legal system to back you up. If you cannot trust anybody but yourself, every transaction you make becomes significantly more expensive.
I have a linked bank account. Can you elaborate please, how could I have possibly made them "angry" at me for buying Litecoins?
Same. Coinbase are in over their heads. There is so much room for competition here.
At times I’ve been unable to access my accounts or have transactions complete in a reasonable amount of time. Coinbase closed my account without notice with no explanation other than a mention of their desire to comply with FinCEN. I never got an answer from them as-to what I did “wrong”. I sure as hell wasnt selling heroin or babies on Silk Road. Imagine if Wells Fargo closed an account without notice or explanation after a customer had a few normal deposits and withdrawals. deep rolls eyes
At times I’ve been unable to access my accounts or have transactions complete in a reasonable amount of time. Coinbase closed my account without notice with no explanation other than a mention of their desire to comply with FinCEN. I never got an answer from them as-to what I did “wrong”. I sure as hell wasnt selling heroin or babies on Silk Road. Imagine if Wells Fargo closed an account without notice or explanation after a customer had a few normal deposits and withdrawals. deep rolls eyes
Imagine if Wells Fargo closed an account without notice or explanation after a customer had a few normal deposits and withdrawals.
You don't have to imagine.
https://consumerist.com/2017/08/21/feds-investigating-wells-...
You don't have to imagine.
https://consumerist.com/2017/08/21/feds-investigating-wells-...
At least you have organized, specific recourse. From the first few words of the headline of that article:
"Feds Investigating..."
"Feds Investigating..."
>Imagine if Wells Fargo closed an account without notice or explanation after a customer had a few normal deposits and withdrawals.
BB&T has done this to me in the past. The only recourse is taking your business elsewhere. Coinbase doesn't seem too different in that regard.
BB&T has done this to me in the past. The only recourse is taking your business elsewhere. Coinbase doesn't seem too different in that regard.
I have similar experience recently. Tx on T+3 day got cleared but a T-day tx is still pending.
I had a Coinbase account for a year or so. Switched to Bitstamp and couldn't be happier.
What do you like about BitStamp?
Were you a new user? It takes time to go through bank verification and fraud checks.
And yet they'll debit your account that very day...
Yeh I think people flooding to coinbase to make overnight money expect instant gratification but coinbase has to register users with the Federal Trade commission at least for me as an American so let's not forget in addition to the other comments detailing how hard it is for any startup to scale, there is another bottleneck called FTC approval for first time coinbase users and that is on the Federal Trade Commissions timeline.
Let's also not forget while many other otherwise good UI platforms dropped out of NY because well, it was too hard and the fees were too high coinbase continued to integrate and work with lawmakers because they know how important it would be not to disciminate against states and also to have legal integration with Wallstreet, so as much as you may be upset with Coinbase for not scaling fast enough for you and making the government go faster, you should ask why so many other platforms aren't there to offer you an equally good alternative.
That being said, throughout all this bustle lately, I have not experienced issues with Coinbase and have performed a variety of money moving actions to and from multiple bank accounts coinbase and gdax with no delays. This could be because I'm an established user, approved by the Federal Trade Commission and have an established credit history with Coinbase which has led to another increase in what I am allowed to do.
Furthermore, Coinbase has been open apologetic, taken complete responsibility for the lack of being able to instantly gratify as they stayed over 8x the exponentiation of new users trying to register relative to the last spurt in the sunmer and promised to be transparent even if they can't be perfect. They have a ten day backlog on customer support tickets even after hiring 400 new people just for customer support and plan to hire even more.
It sounds like you are a new user who feels entitled to instant gratification, instant approval by the FCC, instant trust from Coinbase who probably doesn't have an established credit history with you and you're mad because things didn't work for you immediately.
I saw the other day Coinbase had an update saying wire transfers we're delayed 2-3 business days but I did not have a delay with mine, which means they probably prioritize established traders.
I wouldn't be so hard on Coinbase, but if you think you can provide a better solution by all means go for it. We need more competition in this space.
I also recommend certifying yourself with a few other platforms and getting your accounts tested and registered and having some money there so if you experience delays with Coinbase you have other options to move money. I am established with multiple platforms in case I experience issues with Gdax, but as it turns out I never have.
Very impressed with them.
Let's also not forget while many other otherwise good UI platforms dropped out of NY because well, it was too hard and the fees were too high coinbase continued to integrate and work with lawmakers because they know how important it would be not to disciminate against states and also to have legal integration with Wallstreet, so as much as you may be upset with Coinbase for not scaling fast enough for you and making the government go faster, you should ask why so many other platforms aren't there to offer you an equally good alternative.
That being said, throughout all this bustle lately, I have not experienced issues with Coinbase and have performed a variety of money moving actions to and from multiple bank accounts coinbase and gdax with no delays. This could be because I'm an established user, approved by the Federal Trade Commission and have an established credit history with Coinbase which has led to another increase in what I am allowed to do.
Furthermore, Coinbase has been open apologetic, taken complete responsibility for the lack of being able to instantly gratify as they stayed over 8x the exponentiation of new users trying to register relative to the last spurt in the sunmer and promised to be transparent even if they can't be perfect. They have a ten day backlog on customer support tickets even after hiring 400 new people just for customer support and plan to hire even more.
It sounds like you are a new user who feels entitled to instant gratification, instant approval by the FCC, instant trust from Coinbase who probably doesn't have an established credit history with you and you're mad because things didn't work for you immediately.
I saw the other day Coinbase had an update saying wire transfers we're delayed 2-3 business days but I did not have a delay with mine, which means they probably prioritize established traders.
I wouldn't be so hard on Coinbase, but if you think you can provide a better solution by all means go for it. We need more competition in this space.
I also recommend certifying yourself with a few other platforms and getting your accounts tested and registered and having some money there so if you experience delays with Coinbase you have other options to move money. I am established with multiple platforms in case I experience issues with Gdax, but as it turns out I never have.
Very impressed with them.
Imagine building a startup that moves 10's of millions of new users' monies each month out of US bank accounts. While other startups are just scaling page views, Coinbase is scaling money. Keep in mind that it takes just one financial loss to break trust from the entire community. Has any other bank in history scaled this fast?
To the dozens/hundreds of complaints like this, there are tens of thousands of non-complaints that you don't ever hear about -- users who use the service to buy/sell/withdraw without issues.
People are particularly emotional about Coinbase because it touches on their bottom line -- money. But let's not forget the fact that ALL startups have major scaling woes. Bugs in the tech being ironed out, overwhelmed support and engineering teams recruiting and integrating talent to meet the demand -- in Coinbase's case exponentially growing demand. If you've worked in a software startup you know how easy it is to be met with exponential increase in demand, and how impossibly difficult it is to stay above water growing a team at the same rate.
I'm positive on Coinbase due to their backing. YC, Andreessen Horowitz, DFJ, among dozens of high-profile investors. These guys want a $20B valuation, they're not interested in backing a failing company or a scam.
People are particularly emotional about Coinbase because it touches on their bottom line -- money. But let's not forget the fact that ALL startups have major scaling woes. Bugs in the tech being ironed out, overwhelmed support and engineering teams recruiting and integrating talent to meet the demand -- in Coinbase's case exponentially growing demand. If you've worked in a software startup you know how easy it is to be met with exponential increase in demand, and how impossibly difficult it is to stay above water growing a team at the same rate.
I'm positive on Coinbase due to their backing. YC, Andreessen Horowitz, DFJ, among dozens of high-profile investors. These guys want a $20B valuation, they're not interested in backing a failing company or a scam.
If a new investment firm took this long to have securities show up in your account, they'd be shut down faster than you can say SEC. Coinbase isn't exactly a new t-shirt company working out issues with their silk screener, they're an allegedly $20B (alleged) currency exchange. They have a higher standard to meet.
I can see how Silicon Valley standards have to rise up to Wall Street standards and they're not there yet. Tech like Auto/Finance/Space are new to SV and they're all full of scaling woes. Traditionally "SV style" has been to be scrappy and accept a healthy amount of breakage, and never say no to incoming demand, even if it's crippling your platform.
You have a point that SV needs to get into the mindsets of the industries they are trying to disrupt and rise to those higher standards.
You have a point that SV needs to get into the mindsets of the industries they are trying to disrupt and rise to those higher standards.
To add another point, Coinbase is in unchartered territory. I want to see a new cryptocurrency investment firm show up on the market and function without a hitch. Companies like Coinbase are the only datapoints so far in this space.
Handwaving.
Yup, they're a startup, they're having problems, they're doing their best, actually managing pretty well given the circumstances.
None of that changes the fact that they can't deliver the service as expected.
Yup, they're a startup, they're having problems, they're doing their best, actually managing pretty well given the circumstances.
None of that changes the fact that they can't deliver the service as expected.
"Can't deliver the service as expected" is par for the course in innovative early stage startups. Veteran tech companies like Apple, Microsoft, Cisco, Intel, Oracle, etc., struggled hard and failed to deliver as expected for many years. And still do. Apple computers and OSes in the 90s were unusable garbage; you spent more time twiddling extensions than actual use. Remember Windows 3.1x? It was an utter failure of an OS but the only available solution to many businesses. Time will tell how Coinbase evolves but my take is they'll continue to improve and catch up to demand.
But that's not the point here, is it?
It can't provide the level of service expected for financial services of this sort. That doesn't imply they should give up and go home, but it does mean that one should temper one's expectations of being taken fully seriously.
It can't provide the level of service expected for financial services of this sort. That doesn't imply they should give up and go home, but it does mean that one should temper one's expectations of being taken fully seriously.
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.
They’ve released almost $200 million worth of tether in the last day.
My theory on tether is their goal is to absorb as much downward (selling) pressure as possible on the BTC/USD market and encourage only upward movement of BTC (equally applies to any other crypto)
1) Someone who wants to sell $1M USD of BTC may be happy to take $1M USDT instead for legal/tax purposes. This transaction would have zero impact on the BTC/USD price.
2) Tether receives $1M worth of BTC they can slowly disperse back into the market via their own exchange (since Bitfinex owns Tether) in a controlled manner that doesn't push the price down.
3) With USD in hand they can either put it into their reserves (assuming we trust them) or they could also use the cash to further eliminate any selling pressure on the exchange (with a large buy order "wall") or even generate upward pressure.
4) BTC price becomes stable or only moves upward and attracts more outside money and speculation. Repeat the cycle.
1) Someone who wants to sell $1M USD of BTC may be happy to take $1M USDT instead for legal/tax purposes. This transaction would have zero impact on the BTC/USD price.
2) Tether receives $1M worth of BTC they can slowly disperse back into the market via their own exchange (since Bitfinex owns Tether) in a controlled manner that doesn't push the price down.
3) With USD in hand they can either put it into their reserves (assuming we trust them) or they could also use the cash to further eliminate any selling pressure on the exchange (with a large buy order "wall") or even generate upward pressure.
4) BTC price becomes stable or only moves upward and attracts more outside money and speculation. Repeat the cycle.
The beauty of all of this is Bitfinex, and most other exchanges for that matter, are all black boxes. No audits, no regulations, nothing. To my knowledge all the trading on their platform happens off-chain, only going "on chain" when somebody deposits or withdraws their crypto coins. The only visibility we have is what goes into and out of any known wallet.
These exchanges could be pulling all kinds of shenanigans including outright making shit up. What is stopping them from buying / selling more bitcoin then they actually have? If an exchange wanted to pocket some real cash, just sell some bitcoin they don't have. How about just creating fake buy / sell orders to drum up some excitement? Or better, just do real trades back and forth between yourself. Once you add Tether into the mix and abstract away real cash inputs and outputs things get even more exciting. An exchange could start buying bitcoin with unbacked USDT to jack up / stabilize the BTC price--works great so long as everybody doesn't all try to convert their USDT to real cash dollars.
Since they are all completely unaudited, exchanges could be pulling this stuff all the time.
Tether makes this 10x more exciting though.
These exchanges could be pulling all kinds of shenanigans including outright making shit up. What is stopping them from buying / selling more bitcoin then they actually have? If an exchange wanted to pocket some real cash, just sell some bitcoin they don't have. How about just creating fake buy / sell orders to drum up some excitement? Or better, just do real trades back and forth between yourself. Once you add Tether into the mix and abstract away real cash inputs and outputs things get even more exciting. An exchange could start buying bitcoin with unbacked USDT to jack up / stabilize the BTC price--works great so long as everybody doesn't all try to convert their USDT to real cash dollars.
Since they are all completely unaudited, exchanges could be pulling this stuff all the time.
Tether makes this 10x more exciting though.
> Someone who wants to sell $1M USD of BTC may be happy to take $1M USDT instead for legal/tax purposes.
This sounds extremely foolish. Why would anyone intentionally wish to hold such a large amount of a token that all evidence points towards being actually worthless? (Tethers can only be used to purchase cryptocoins in Bitfinex, which is most likely insolvent -- it is not possible to redeem them for USD).
> 4) BTC price becomes stable or only moves upward and attracts more outside money and speculation. Repeat the cycle.
I think this is the most likely explanation for Bitfinex's behavior. They know that there will inevitably be a bank run when Bitcoin's prices show a sign of going down and that will unravel the scam they have been running so at this point the only thing they can do is continue to push up the price at all costs.
This sounds extremely foolish. Why would anyone intentionally wish to hold such a large amount of a token that all evidence points towards being actually worthless? (Tethers can only be used to purchase cryptocoins in Bitfinex, which is most likely insolvent -- it is not possible to redeem them for USD).
> 4) BTC price becomes stable or only moves upward and attracts more outside money and speculation. Repeat the cycle.
I think this is the most likely explanation for Bitfinex's behavior. They know that there will inevitably be a bank run when Bitcoin's prices show a sign of going down and that will unravel the scam they have been running so at this point the only thing they can do is continue to push up the price at all costs.
> This sounds extremely foolish. Why would anyone intentionally wish to hold such a large amount of a token that all evidence points towards being actually worthless
Yep. Which makes the "institutional investors are handing Bitfinex hundreds of millions of real dollars in exchange for Tether" claims people are pushing even more ridiculous.
Yep. Which makes the "institutional investors are handing Bitfinex hundreds of millions of real dollars in exchange for Tether" claims people are pushing even more ridiculous.
This is a great analysis, but I’m stuck on this point.
> 1) Someone who wants to sell $1M USD of BTC may be happy to take $1M USDT instead for legal/tax purposes.
Can you clarify that you mean for the purpose of tax evasion as opposed to tax avoidance? IANATL but it seems very unlikely that the IRS or any tax jusrisdiction that I’m aware of, would consider a trade into USDT a like-kind transaction [1]. It would still trigger capital gains.
If lots of people really are operating under a different belief then this is going to get really messy. If there’s a crypto-correction, non-HODLers could be left with tax liabilities they can’t cover.
[1] https://en.m.wikipedia.org/wiki/Like-kind_exchange
> 1) Someone who wants to sell $1M USD of BTC may be happy to take $1M USDT instead for legal/tax purposes.
Can you clarify that you mean for the purpose of tax evasion as opposed to tax avoidance? IANATL but it seems very unlikely that the IRS or any tax jusrisdiction that I’m aware of, would consider a trade into USDT a like-kind transaction [1]. It would still trigger capital gains.
If lots of people really are operating under a different belief then this is going to get really messy. If there’s a crypto-correction, non-HODLers could be left with tax liabilities they can’t cover.
[1] https://en.m.wikipedia.org/wiki/Like-kind_exchange
I've specifically seen folks discussing converting to tether now (on the fear that BTC will fall) and waiting til 2018 to redeem due to pending tax cuts. So this would be an avoidance strategy.
I have no idea on the legal specifics or whether or not Tether/Bitfinex are going to be providing reporting to governmental agencies (like Coinbase+IRS are doing). The discussions I've seen often cite Tether as a way to capture profits in USD and holding off on the "real" USD conversion at a later place or time (taxes or restrictive outflows like China's $50k USD/yr limit). Basically viewing it as a way to operate in USD without creating a banking paper trail.
If conversion to USDT causes a legally taxable event that's going to remove a significant portion of the proposed use-cases for tether.
> If lots of people really are operating under a different belief then this is going to get really messy.
I think "really messy" is a given at this point. I was in Starbucks a few days ago and overhead a non-tech savvy man say: "I need to figure out how to buy some of that bitcoin so I can get rich but all the websites I've found are crooks!"
I have no idea on the legal specifics or whether or not Tether/Bitfinex are going to be providing reporting to governmental agencies (like Coinbase+IRS are doing). The discussions I've seen often cite Tether as a way to capture profits in USD and holding off on the "real" USD conversion at a later place or time (taxes or restrictive outflows like China's $50k USD/yr limit). Basically viewing it as a way to operate in USD without creating a banking paper trail.
If conversion to USDT causes a legally taxable event that's going to remove a significant portion of the proposed use-cases for tether.
> If lots of people really are operating under a different belief then this is going to get really messy.
I think "really messy" is a given at this point. I was in Starbucks a few days ago and overhead a non-tech savvy man say: "I need to figure out how to buy some of that bitcoin so I can get rich but all the websites I've found are crooks!"
Isn’t selling btc for another crypto currency a taxable event?
Most likely in 2017 and the pending 2018 changes make it definitely taxable as both the House/Senate versions restrict IRS-1031 to real estate only. Based on all the discussions around tether, I don't think many cryptocurrency gamblers are currently aware (or care) of tax implications.
Thank you for this great explanation. I'm finally getting it.
The truth is that nobody knows. We'll have to wait for an audit or a lawsuit to learn the truth. People are sounding alarms based on the amount of Tether being transferred to exchanges, creating theories that they must be printed from thin air. "Look how much they transferred, it must be fake." Really? The large amount is your only "proof?" "There was a Tether hack, it must be an inside job." Really? Based on what? Nothing.
The Twitter user Bitfinex'd is pretty much solely responsible for starting this trend, with Emil Gun Sirer retweeting pretty much all Bitfinex'd tweets. Often, if you dig into this evidence, you find mostly FUD signals -- taking various data from the internet and interpreting it into something that it isn't.
Basically I don't know nor care if Tether and Bitfinex are fraudulent, but personally I've never seen clear evidence that it is, and people like Bitfinex'd and Emil Gun Sirer seem to push FUD backing their personal anti-Bitfinex agendas without proof.
The Twitter user Bitfinex'd is pretty much solely responsible for starting this trend, with Emil Gun Sirer retweeting pretty much all Bitfinex'd tweets. Often, if you dig into this evidence, you find mostly FUD signals -- taking various data from the internet and interpreting it into something that it isn't.
Basically I don't know nor care if Tether and Bitfinex are fraudulent, but personally I've never seen clear evidence that it is, and people like Bitfinex'd and Emil Gun Sirer seem to push FUD backing their personal anti-Bitfinex agendas without proof.
Well, and the more mainstream reporters who asked who Bitfinex's bankers were after Wells Fargo closed their accounts, and they refused to reveal, except under an NDA...
Another worrying development on the bitfinex story is that one of its employees has removed the warrant canary from his twitter profile.
https://twitter.com/el33th4xor/status/941707765910818816
I think this is a bearish signal until its clarified.
https://twitter.com/el33th4xor/status/941707765910818816
I think this is a bearish signal until its clarified.
One of the replies that made say "Oh Sh.." out loud:
https://twitter.com/logansease/status/941704416201183235
https://twitter.com/logansease/status/941704416201183235
Can you provide a source for this? Is there an easy way to view the transactions that create new USDT? My searches are just turning up old Reddit posts and news articles supported by imgur screenshots.
edit: This seems to show that $180 million was issued in the last 3 days: http://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC3...
edit: This seems to show that $180 million was issued in the last 3 days: http://omniexplorer.info/lookupadd.aspx?address=3MbYQMMmSkC3...
Yeah, I'd love to know who the unnamed bank is that's handling $60MM/day in deposits for Bitfinex that they refuse to name except under NDA...
they issued another $100 million 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?
If you look at Bitcoin, Litecoin, and Ethereum, all three kicked off their current bull market in April after Tether lost their banking relationships and stopped even trying to show that they had funds in reserve. I absolutely think that the Tether fraud kicked off this wave to the point that the general public would come in and hold the bag.
There is zero concrete proof, only people sharing their theories and beliefs so far.
Just 1 Billion so far.
Their audit was a couple months ago, but showed 1-1 backing at that time. Do you believe that was falsified?
That was not an audit. That was a memo.
They have yet to release an actual legal audit, by an official auditing company.
They have yet to release an actual legal audit, by an official auditing company.
https://en.wikipedia.org/wiki/Bank_Secrecy_Act
They may be fraudulent; they may be not. Regardless, they have a lot to lose by revealing their banking partners to the world. The United States probably used the Bank Secrecy Act to force large American banks to not send money to accounts associated with Bitfinex. If Bitfinex reveals its banking partners for Tether, then they risk getting cut off from those partners or those partners getting cut off from western banking.
They may be fraudulent; they may be not. Regardless, they have a lot to lose by revealing their banking partners to the world. The United States probably used the Bank Secrecy Act to force large American banks to not send money to accounts associated with Bitfinex. If Bitfinex reveals its banking partners for Tether, then they risk getting cut off from those partners or those partners getting cut off from western banking.
Yeah, no possible problems there for any Western investors, at all. Rely instead on the hope that the US government won't figure out where $60MM a day of deposits is ending up. It's not like the IRS and Treasury Department have forensic accountants or anything like that...
I'm not sure why that should give people the warm fuzzies about it.
From a NYC law office wasn't it? You believe that was falsified? It could be, sure, I just haven't seen any proof.
Seems like no amount of verification will ever be enough for a good chunk of the crypto community. The scars of Mt Gox and BFX socialized loss are too deep.
The market seems to think otherwise, you can unload your tether for $1.02 most days if you want.
Seems like no amount of verification will ever be enough for a good chunk of the crypto community. The scars of Mt Gox and BFX socialized loss are too deep.
The market seems to think otherwise, you can unload your tether for $1.02 most days if you want.
I don't believe it was falsified but it was missing a lot of things that an actual audit would include. Not just verifying that money was in accounts but verifying what purpose that money was for and what the banking relationship / terms of use of that money was. I do believe Tether had ~$40M in USD in April but I don't believe that they were 100% honest with their banks about their business model, which is why I think they lost their banking relationships and haven't allowed the public to deposit/redeem Tether since April.
I believe that the memo released was not an audit.
And I believe that if you want to prove to the world that you have a bunch of money then you should do a full, legal, audit.
That's the bar. If they have all the money, then a legal audit will prove them right.
And I believe that if you want to prove to the world that you have a bunch of money then you should do a full, legal, audit.
That's the bar. If they have all the money, then a legal audit will prove them right.
Not falsified. But literally stated "This is not in any way an audit and does not meet the requirements of an audit".
I’m confused by this bit:
> “But first, Coinbase...needs to legitimize itself -- and bring in revenue...”
Like it doesn’t have revenue? It’s daily volumes of BTC are around 30k. Sometimes a lot more. Plus ETH. Plus LTC. They must be making at least a million per day in trading fees. They’re a money printing machine at this point.
> “But first, Coinbase...needs to legitimize itself -- and bring in revenue...”
Like it doesn’t have revenue? It’s daily volumes of BTC are around 30k. Sometimes a lot more. Plus ETH. Plus LTC. They must be making at least a million per day in trading fees. They’re a money printing machine at this point.
On Dec 9, LTC's creator posted that GDAX/Coinbase made $2MM in fees on LTC alone that day:
https://twitter.com/SatoshiLite/status/939476331397390336
In the context of this article (Coinbase going after Wall Street, looking to join Big Finance), I would guess that $1MM/day isn't significant enough revenue to count. Especially if they have overhead. Lone traders can make as much with a computer and a few subscriptions.
For comparison, JPMorgan generates around $280MM/day of revenue and $74MM/day of profit.
For comparison, JPMorgan generates around $280MM/day of revenue and $74MM/day of profit.
Their website is often down, can't properly scale up and they expect trust? If you're Canadian, you can buy but can't sell cryptos, that's a red flag anywhere regarding investments.
It's interesting the negativity I read about Coinbase in this thread. Makes me wonder if those who do complain tried other exchanges? I've tried Kraken (down much more often), Bittrex (worst trading UI ever), CAvirtex (they are shutdown) ... Coinbase/ GDAX I have had a much better experience. If you want a fast money wire, pay the price for same day processing (30$), I always do and it usually takes a 2 hours.
The fact that other exchanges are worse doesn't make Coinbase any better though, that's the problem. It'd be interesting to see what % of coins is held by them. While I don't really care about Coinbase per se, I think that it could hurt the public perception of the whole crypto ecosystem if something went wrong and people were locked out of their accounts, lost funds, etc.
Coinbase has been one of the more poorly constructed sites I've used in the past couple years. I don't just mean the inability to handle volume.
I saw it riddled with HTML errors, there were buttons that didn't do anything, I got (html) responses that were false, which I only knew was the case because I looked directly at the API response.
I remember I 'sold' some litecoin on Coinbase that never sold. Took me to a couple days just to know it wasn't going to mysteriously disappear.
I find the fact that they want to add new coins even though they haven't solved any of their current issues very alarming.
I saw it riddled with HTML errors, there were buttons that didn't do anything, I got (html) responses that were false, which I only knew was the case because I looked directly at the API response.
I remember I 'sold' some litecoin on Coinbase that never sold. Took me to a couple days just to know it wasn't going to mysteriously disappear.
I find the fact that they want to add new coins even though they haven't solved any of their current issues very alarming.
I remember the problem they had a few years ago using MongoDB to do their financial transactions, people reported lots of double and triple withdrawals.
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. They'll be fine, they're just learning how to deal with alot of hard issues all at once.
The question was posed, what do you need to do to get institutional money and I answered.
To clarify...
Coinbase , atleast from a hedge funds perspective has 2 tasks.
1) prime broker or custodian, from this perspective you just can't be hacked and loose anyone's bitcoins.
Not sure how a hedge fund would tell its clients that they lost any amount of their funds due to an exchange being hacked, this is just so foreign to the way the markets currently work. I don't think the funds clients would be too accepting of a loss of any amount due to this.
2) as an exchange, This is probably easy for people to understand. When the volume picks up that's when you make your money. If Volume causes the exchange to go down, you can't make money.
Again this is very rare for most markets now to go down to volume and when it does it doesn't really matter too much because the concept of having your shares with an exchange doesn't really make sense in the equities market.
You'd just start trading at another exchange and none of your shares are actually held with the exchange, nor do you need to send shares to an exchange to trade, you just trade and settle at the end of the day.
EDIT END
I'll preface this by saying, what I'm asking for is hard, very hard, but being a grown up is hard..... You can't just ask people to invest billions of other peoples money and then claim "best efforts" if your exchange crashes under load.
Well what institutional investors want is pretty simple to understand, though very hard to implement.
1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf.
A hedge fund can't just go to their clients and say sorry, lost all our money, coinbase got hacked, the hedge fund itself and its principles would be sued into oblivion.
I mean if the Nasdaq, NYSE or prime broker ever got hacked, no one would expect to suddenly loose all their shares, or cash held with their prime broker.
2) The exchange can't go down, like at all. Once a year for 5 minutes is fine, or every day at midnight for 10 minutes is fine, but during regular trading hours you can't just throw your hand up and say "hey, best efforts here there just alot of volume right now, we'll be up in a few minutes"
Hedge funds make their money on volatility, which means the more volatile and busy the exchange is the more they'll want to trade. Going down when times are busy is just can't happen.
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. They'll be fine, they're just learning how to deal with alot of hard issues all at once.
The question was posed, what do you need to do to get institutional money and I answered.
To clarify...
Coinbase , atleast from a hedge funds perspective has 2 tasks.
1) prime broker or custodian, from this perspective you just can't be hacked and loose anyone's bitcoins.
Not sure how a hedge fund would tell its clients that they lost any amount of their funds due to an exchange being hacked, this is just so foreign to the way the markets currently work. I don't think the funds clients would be too accepting of a loss of any amount due to this.
2) as an exchange, This is probably easy for people to understand. When the volume picks up that's when you make your money. If Volume causes the exchange to go down, you can't make money.
Again this is very rare for most markets now to go down to volume and when it does it doesn't really matter too much because the concept of having your shares with an exchange doesn't really make sense in the equities market.
You'd just start trading at another exchange and none of your shares are actually held with the exchange, nor do you need to send shares to an exchange to trade, you just trade and settle at the end of the day.
EDIT END
I'll preface this by saying, what I'm asking for is hard, very hard, but being a grown up is hard..... You can't just ask people to invest billions of other peoples money and then claim "best efforts" if your exchange crashes under load.
Well what institutional investors want is pretty simple to understand, though very hard to implement.
1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf.
A hedge fund can't just go to their clients and say sorry, lost all our money, coinbase got hacked, the hedge fund itself and its principles would be sued into oblivion.
I mean if the Nasdaq, NYSE or prime broker ever got hacked, no one would expect to suddenly loose all their shares, or cash held with their prime broker.
2) The exchange can't go down, like at all. Once a year for 5 minutes is fine, or every day at midnight for 10 minutes is fine, but during regular trading hours you can't just throw your hand up and say "hey, best efforts here there just alot of volume right now, we'll be up in a few minutes"
Hedge funds make their money on volatility, which means the more volatile and busy the exchange is the more they'll want to trade. Going down when times are busy is just can't happen.
>1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf.
Coinbase is insured by AON Insurance for their hot wallet balance. However, we won't know how Coinbase/AON will handle that until it happens.
I believe any fiat balance is also insured by the FDIC, but I'm less sure about that.
>2) The exchange can't go down, like at all.
Yep. Crypto trades 24/7. It's really surprising they don't have regular planned downtime to address this.
Coinbase is insured by AON Insurance for their hot wallet balance. However, we won't know how Coinbase/AON will handle that until it happens.
I believe any fiat balance is also insured by the FDIC, but I'm less sure about that.
>2) The exchange can't go down, like at all.
Yep. Crypto trades 24/7. It's really surprising they don't have regular planned downtime to address this.
There's a deeper problem. Bitcoin is very deflationary and strictly limited in supply. What happens if Coinbase cannot obtain replacement bitcoins at a price near what the insurance pays out?
They can refund in fiat of course, but that's the point. If fiat didn't exist then this would be a potentially insurmountable problem if the theft were large enough.
Now what happens if the thief panics or screws up and deletes their keys. Those Bitcoins are now lost forever. The money supply just went down permanently.
... or ... a really smart thief with enough money behind them might not even need to steal any Bitcoins. They could just destroy cold wallet keys in a very stealthy way and profit from the appreciation of coins they hold elsewhere.
This whole system is just not ready for prime time.
They can refund in fiat of course, but that's the point. If fiat didn't exist then this would be a potentially insurmountable problem if the theft were large enough.
Now what happens if the thief panics or screws up and deletes their keys. Those Bitcoins are now lost forever. The money supply just went down permanently.
... or ... a really smart thief with enough money behind them might not even need to steal any Bitcoins. They could just destroy cold wallet keys in a very stealthy way and profit from the appreciation of coins they hold elsewhere.
This whole system is just not ready for prime time.
> a really smart thief with enough money behind them might not even need to steal any Bitcoins. They could just destroy cold wallet keys in a very stealthy way and profit from the appreciation of coins they hold elsewhere.
This is a cool idea but I'm not sure it works (or I don't understand it correctly). In order to reduce the supply enough to appreciably increase the value of the remaining coins, you'd need to freeze/destroy a lot of keys, or keys to wallets with large holdings. If the owners of those keys start reporting their losses and the news spreads, people could start to lose confidence in bitcoin itself and move to other assets, reducing demand.
This is a cool idea but I'm not sure it works (or I don't understand it correctly). In order to reduce the supply enough to appreciably increase the value of the remaining coins, you'd need to freeze/destroy a lot of keys, or keys to wallets with large holdings. If the owners of those keys start reporting their losses and the news spreads, people could start to lose confidence in bitcoin itself and move to other assets, reducing demand.
>There's a deeper problem. Bitcoin is very deflationary and strictly limited in supply. What happens if Coinbase cannot obtain replacement bitcoins at a price near what the insurance pays out?
By only promising depositors -- and only having insurance for the case that -- they will pay out some flat USD amount per bitcoin in the case of loss, so that anyone putting BTC in Coinbase wallets knows the possible downside.
Same logic as with most insurance: they don't write policies that promise to get you that a good-enough copy of that neat classic showerhead fitting when your house burns down, only the money to buy a replacement, even if it falls short of the sentimental value.
By only promising depositors -- and only having insurance for the case that -- they will pay out some flat USD amount per bitcoin in the case of loss, so that anyone putting BTC in Coinbase wallets knows the possible downside.
Same logic as with most insurance: they don't write policies that promise to get you that a good-enough copy of that neat classic showerhead fitting when your house burns down, only the money to buy a replacement, even if it falls short of the sentimental value.
>What happens if Coinbase cannot obtain replacement bitcoins at a price near what the insurance pays out?
People lose their bitcoins. It's as simple as that. That's a risk everyone should understand before buying.
They might be compensated in some other way, like fiat, and then the insurance company either picks up the bill or goes under. Then it's just business as usual as far as bankruptcy goes.
So yes, you have every reason to be wary of exchange solvency because of how new they are and how little support is provided to them by government and law enforcement compared to the banks. Every investor should understand that as critically as they understand how important their wallets are.
>This whole system is just not ready for prime time.
Yeah, it's one big experiment. I'm sure these problems were encountered before in economic history, but it seems like they are repeating a bunch of blunders within a short time frame, which to me, smells of manipulation (Satoshi probably didn't invent it to just manipulate people)
People lose their bitcoins. It's as simple as that. That's a risk everyone should understand before buying.
They might be compensated in some other way, like fiat, and then the insurance company either picks up the bill or goes under. Then it's just business as usual as far as bankruptcy goes.
So yes, you have every reason to be wary of exchange solvency because of how new they are and how little support is provided to them by government and law enforcement compared to the banks. Every investor should understand that as critically as they understand how important their wallets are.
>This whole system is just not ready for prime time.
Yeah, it's one big experiment. I'm sure these problems were encountered before in economic history, but it seems like they are repeating a bunch of blunders within a short time frame, which to me, smells of manipulation (Satoshi probably didn't invent it to just manipulate people)
> They might be compensated in some other way
Like how Mt Gox returnedt peoples coins...
/s
/s
"This whole system is just not ready for prime time."
Mature markets have thin margins, which is why you see financial institutions salivating over crypto right now. All these risks have been known for years now.
Mature markets have thin margins, which is why you see financial institutions salivating over crypto right now. All these risks have been known for years now.
> limited in supply
Limited? Uh, where did you get that idea? You can split a coin into ONE MILLION satoshi pieces
Uh... you can subdivide a single unit into a million pieces, but if the equilibrium price based on demand and supply rises because of scarcity, each individual million satoshi piece will also rise in value.
Hence its deflationary nature.
Hence its deflationary nature.
What if a Coinbase insider steals from the cold wallet?
The NYSE is not vulnerable to this kind of attack. Anyone dealing with BTC is.
The NYSE is not vulnerable to this kind of attack. Anyone dealing with BTC is.
>What if a Coinbase insider steals from the cold wallet?
That's the inherent risk with crypto. You have to resort to "leg-breaking" to get the thief to give up the coin. Otherwise you'd need undue influence on the development and forking of the blockchain to get them back (if I understand it right -- I may not).
That's why many will say to not keep your coins on an exchange, because they are weaker businesses compared to existing financial institutions.
That's not to say you can't secure your investments properly, but to many, it takes a lot of time and effort to get it right.
It really is a "let the buyer beware" landscape.
That's the inherent risk with crypto. You have to resort to "leg-breaking" to get the thief to give up the coin. Otherwise you'd need undue influence on the development and forking of the blockchain to get them back (if I understand it right -- I may not).
That's why many will say to not keep your coins on an exchange, because they are weaker businesses compared to existing financial institutions.
That's not to say you can't secure your investments properly, but to many, it takes a lot of time and effort to get it right.
It really is a "let the buyer beware" landscape.
> Coinbase is insured by AON Insurance for their hot wallet balance.
Insurance policies for bitcoins are very new and very tricky. This is not an FDIC or SPIC insurance unless AON is insuring cash balances you should treat this insurance as you would treat mob protection - hopefuly you won't need it because if you do you are kind of screwed and probably won't be able to collect.
Insurance policies for bitcoins are very new and very tricky. This is not an FDIC or SPIC insurance unless AON is insuring cash balances you should treat this insurance as you would treat mob protection - hopefuly you won't need it because if you do you are kind of screwed and probably won't be able to collect.
I don't know what reality you operate in, but hedge funds don't provide anywhere close to those types of guarantees. Exchanges do indeed go down, and when they do they shrug their shoulders and say "woops".
Source: I work for a hedge fund.
Source: I work for a hedge fund.
> I don't know what reality you operate in, but hedge funds don't provide anywhere close to those types of guarantees.
Strange comment, I think I've confused you.
All this was about exchanges and what hedge funds expect from them, not guarantees about what hedge funds provide.
And you are right, exchanges do go down, and its news when they do because they are so good at what they do that its very rare.
> I don't know what reality you operate in
I operate in the US Cash Equities and options markets. What I've asked for is par for the course there, in that no one mentions it because its the very lowest base, must have requirements.:)
When was the last time you heard of Goldman Sachs begin hacked and all the hedge funds that use them as a prime loosing all their money?
Strange comment, I think I've confused you.
All this was about exchanges and what hedge funds expect from them, not guarantees about what hedge funds provide.
And you are right, exchanges do go down, and its news when they do because they are so good at what they do that its very rare.
> I don't know what reality you operate in
I operate in the US Cash Equities and options markets. What I've asked for is par for the course there, in that no one mentions it because its the very lowest base, must have requirements.:)
When was the last time you heard of Goldman Sachs begin hacked and all the hedge funds that use them as a prime loosing all their money?
There's a pretty wide variety in standards between U.S. financial institutions.
I used to work for a startup that wrote software for hedge funds (this was back in 05-07). The guys from Fidelity would come in and they'd have a huge checklist of IT best practices that you need to adhere to, everything from security to backups to SLAs with financial penalties for violating them. The guys from Magnetar would come in and be like "Sure, we'll try anything that gives us an advantage in the markets."
I suspect that your idea of what's "par for the course" and the "very lowest base" is pretty far from what's actually the lowest base in the financial industry, and similarly I suspect that brndnmtthws's view of what's typical for a hedge fund isn't typical for all hedge funds.
I used to work for a startup that wrote software for hedge funds (this was back in 05-07). The guys from Fidelity would come in and they'd have a huge checklist of IT best practices that you need to adhere to, everything from security to backups to SLAs with financial penalties for violating them. The guys from Magnetar would come in and be like "Sure, we'll try anything that gives us an advantage in the markets."
I suspect that your idea of what's "par for the course" and the "very lowest base" is pretty far from what's actually the lowest base in the financial industry, and similarly I suspect that brndnmtthws's view of what's typical for a hedge fund isn't typical for all hedge funds.
Hedge funds do a better job of hiding their failures than something which operates on a public ledger, because everything is done behind closed doors. Furthermore, hedge funds are very good at finding creative ways to lose money, and they have great liberty in doing so. The reporting requirements for hedge funds are relatively lax compared to, say, an index fund.
I agree with everything you've just said.
And yet, it has absolutely nothing to do with what we are talking about:)
Which is what exchanges need to do to get institutional investors;)
And yet, it has absolutely nothing to do with what we are talking about:)
Which is what exchanges need to do to get institutional investors;)
[deleted]
> When was the last time you heard of Goldman Sachs begin hacked
Goldman Sachs is not an exchange.
> it has absolutely nothing to do with what we are talking about:)
Exactly. You are confusing others by giving GS as an example, while we're talking about exchanges.
Goldman Sachs is not an exchange.
> it has absolutely nothing to do with what we are talking about:)
Exactly. You are confusing others by giving GS as an example, while we're talking about exchanges.
Good question, I can see why you are confused.
Coinbase right now acts in two ways.
1) as an exchange who allows you to trade on it.
2) as a prime broker who holds your coins. In this capacity they are just like Goldman Sachs who can function as a prime broker for hedge funds.
(a prime broker is like a bank who holds your securities for you). So in this case Goldman is relevant as they do the same function that coinbase does with respect to holding securities on behalf of a client.
Does that help clear up the confusion?
Coinbase right now acts in two ways.
1) as an exchange who allows you to trade on it.
2) as a prime broker who holds your coins. In this capacity they are just like Goldman Sachs who can function as a prime broker for hedge funds.
(a prime broker is like a bank who holds your securities for you). So in this case Goldman is relevant as they do the same function that coinbase does with respect to holding securities on behalf of a client.
Does that help clear up the confusion?
> Does that help clear up the confusion?
No, it adds.
> So in this case Goldman is relevant as they do the same function that coinbase does with respect to holding securities on behalf of a client.
Then why did you write in your other message that Goldman Sachs has got nothing to do with this discussion? It seems to me that you are confused. Please decide whether you think the Goldman Sachs is relevant or not before proceeding.
No, it adds.
> So in this case Goldman is relevant as they do the same function that coinbase does with respect to holding securities on behalf of a client.
Then why did you write in your other message that Goldman Sachs has got nothing to do with this discussion? It seems to me that you are confused. Please decide whether you think the Goldman Sachs is relevant or not before proceeding.
Which other message? Now I'm confused. I saw gp say that a hedge fund failing or something has nothing to do with the discussion, but not that GS has nothing to do with the discussion.
> Exchanges do indeed go down, and when they do they shrug their shoulders and say "woops".
Yeah, no. Tape is reversed all the time in event of oops. Probably the most famous one was when Knight [NITE] had "oops" and started making markets in itself, tanked the stock, had millions of dollars executed against it and got NASDAQ to REVERSE completed transactions, including the ones painted via SOES.
Yeah, no. Tape is reversed all the time in event of oops. Probably the most famous one was when Knight [NITE] had "oops" and started making markets in itself, tanked the stock, had millions of dollars executed against it and got NASDAQ to REVERSE completed transactions, including the ones painted via SOES.
1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf.
This point may prove to be very sticky.
It might be solvable with smart contracts... consider ethereum's https://www.etherdelta.com, which operates as an auditable smart contract. Your money literally can't be stolen without your private key; even when it's held in escrow by the contract. (Of course, a bug in the contract code could let someone get through; but that's all out in the open, so easier to check for).
I could see something like that being done, with the individual trade data being signed, but held off-chain until the user wanted to make a transfer (then ALL signed movements related to them could be consolidated on the chain).
---
Short of that, a centralized exchange is gonna run into the fundamental issue that cryptocurrencies have value because of a few properties; Chief among them being that they can be moved atomically, and with non-repudiation. Those two alone make theft a LOT easier to get away with once achieved.
Being able to walk back such thefts would require general consensus of the network. For most coins, the majority of participants would see that as a fatal weakening of the protocol's guarantees, and drop out. The highest profile rollback I can think of was ETH's june 2017 DAO incident. Even that proved rather controversial: though the market voted in favor in the end, it was a messy out-of-band solution, which may not work again.
---
Conversely, some lesser coins such as NAV actually formalized "consensus voting" on such out-of-band issues as part of their network protocol. I could potentially see that being used as a final band-aid, though "tyranny of the majority" issues would seriously need solving. NAV uses proof-of-stake, though, which certainly helps keep their voting in the "put your money where your mouth is" territory.
All in all, I think there are potentially some trustless and "semi-trustless consensus" methods that could solve this issue in revolutionary ways. But none of them are tested... Coinbase may just have to get themselves massively insured using traditional methods, at least for a few more years as the tech expands.
This point may prove to be very sticky.
It might be solvable with smart contracts... consider ethereum's https://www.etherdelta.com, which operates as an auditable smart contract. Your money literally can't be stolen without your private key; even when it's held in escrow by the contract. (Of course, a bug in the contract code could let someone get through; but that's all out in the open, so easier to check for).
I could see something like that being done, with the individual trade data being signed, but held off-chain until the user wanted to make a transfer (then ALL signed movements related to them could be consolidated on the chain).
---
Short of that, a centralized exchange is gonna run into the fundamental issue that cryptocurrencies have value because of a few properties; Chief among them being that they can be moved atomically, and with non-repudiation. Those two alone make theft a LOT easier to get away with once achieved.
Being able to walk back such thefts would require general consensus of the network. For most coins, the majority of participants would see that as a fatal weakening of the protocol's guarantees, and drop out. The highest profile rollback I can think of was ETH's june 2017 DAO incident. Even that proved rather controversial: though the market voted in favor in the end, it was a messy out-of-band solution, which may not work again.
---
Conversely, some lesser coins such as NAV actually formalized "consensus voting" on such out-of-band issues as part of their network protocol. I could potentially see that being used as a final band-aid, though "tyranny of the majority" issues would seriously need solving. NAV uses proof-of-stake, though, which certainly helps keep their voting in the "put your money where your mouth is" territory.
All in all, I think there are potentially some trustless and "semi-trustless consensus" methods that could solve this issue in revolutionary ways. But none of them are tested... Coinbase may just have to get themselves massively insured using traditional methods, at least for a few more years as the tech expands.
>> 1) No counterparty risk. Everyone can get hacked, but coinbase being hacked shouldn't every, under any circumstances result in me loosing any bitcoin they hold on my behalf.
> This point may prove to be very sticky. It might be solvable with smart contracts...
Shouldn't be that hard, even using just the features available in Bitcoin today. You'd need a 2-of-2 multisignature wallet for each account holder, with one key held by Coinbase and the other by the user. When the user wants to spend some coins, he or she signs a transaction which Coinbase prepares and counter-signs; neither the user nor Coinbase—or an attacker with access to Coinbase's keys—can transfer the funds unilaterally.
The only thing missing is a convenient UI.
Shouldn't be that hard, even using just the features available in Bitcoin today. You'd need a 2-of-2 multisignature wallet for each account holder, with one key held by Coinbase and the other by the user. When the user wants to spend some coins, he or she signs a transaction which Coinbase prepares and counter-signs; neither the user nor Coinbase—or an attacker with access to Coinbase's keys—can transfer the funds unilaterally.
The only thing missing is a convenient UI.
That's pretty much exactly how the EtherDelta smart contract works. The contract can only move coins you've signed an order for, and only when it's properly paired with a matching counter-order.
I think the mainly catch would be scaling the speed (etherdelta is limited to the ETH network block rate). I don't know too much about lightning's details, but given that they've demonstrated atomic cross-chain swaps, I bet it's set up to handle something exactly like what's needed.
Which is quite exciting... I just always moderate my enthusiasm because for all complex software projects, the devil (and 80% of the work) is in the details :)
I think the mainly catch would be scaling the speed (etherdelta is limited to the ETH network block rate). I don't know too much about lightning's details, but given that they've demonstrated atomic cross-chain swaps, I bet it's set up to handle something exactly like what's needed.
Which is quite exciting... I just always moderate my enthusiasm because for all complex software projects, the devil (and 80% of the work) is in the details :)
This is what insurance is for.
If they can’t insure deposits, then that shows a fundamental weakness in the security model.
If they can’t insure deposits, then that shows a fundamental weakness in the security model.
That is one reason why I'm actually kinda wild about distributed exchange like etherdelta (as proof of concept, at least). The security model is such that it literally doesn't exist in any country, anywhere in the world; doesn't have servers that can be hacked, etc.
(Admittedly the website is housed somewhere, but it's little more than a GUI shell for signing procedure calls, you could run it locally or interact directly).
I think the big issue hindering that model is that they need something allowing users to pipe into traditional currencies. So far all the solutions to that have been IOU tokens like USDT tethers; which end up generating governance headaches of their own, as their value desyncs from their base currency due to arbitrage & supply issues.
(Admittedly the website is housed somewhere, but it's little more than a GUI shell for signing procedure calls, you could run it locally or interact directly).
I think the big issue hindering that model is that they need something allowing users to pipe into traditional currencies. So far all the solutions to that have been IOU tokens like USDT tethers; which end up generating governance headaches of their own, as their value desyncs from their base currency due to arbitrage & supply issues.
do you honestly think that smart contracts can't be hacked?
Oh, I definitely think they can. Didn't mean to imply otherwise!
I do think the surface area for attack is much more limited, since the code is innately public (unlike centralized trading houses).
That (in theory) should make them more secure, particularly if considered in terms of the transparency provided. I also think theorem proving, and languages amenable to it, can greatly reduce the surface area even further; reducing it down to a matter of reviewing what assertions the theorem prover was handed, along with trusting the VM's implementation itself. (The later is also helped by having multiple independant implementations).
But I don't think the tech is there yet. The languages currently being used aren't the greatest for theorem proving; no one's actually done much of that in practice anyways; there aren't "best practices" for upgrading your smart contract when a bug is found; and there's ALWAYS an assertion someone forgot to add to the test suite.
But I do think smart contracts could remove "server compromise" and "unauditable code" from the list of main dangers of an exchange, which does seem quite useful in the long term (once the ecosystem fleshes out a bit).
I do think the surface area for attack is much more limited, since the code is innately public (unlike centralized trading houses).
That (in theory) should make them more secure, particularly if considered in terms of the transparency provided. I also think theorem proving, and languages amenable to it, can greatly reduce the surface area even further; reducing it down to a matter of reviewing what assertions the theorem prover was handed, along with trusting the VM's implementation itself. (The later is also helped by having multiple independant implementations).
But I don't think the tech is there yet. The languages currently being used aren't the greatest for theorem proving; no one's actually done much of that in practice anyways; there aren't "best practices" for upgrading your smart contract when a bug is found; and there's ALWAYS an assertion someone forgot to add to the test suite.
But I do think smart contracts could remove "server compromise" and "unauditable code" from the list of main dangers of an exchange, which does seem quite useful in the long term (once the ecosystem fleshes out a bit).
Followup just to clarify: The reason smart contracts drastically mitigate "server compromise" is that compromising / altering the operation of the VM (and not merely exploiting a bug) requires a 51% attack on the entire network. That should generally be a MUCH more expensive undertaking than the value of any given smart contract (under the assumption that the network will be valued at least 2x more than any of it's participating apps).
You don't need to implement a 51% attack to hack a smart track, as evidenced by the dozens of smart contracts that have been emptied out on ethereum.
I looked at the Etherdelta code and I believe that's in a class of complexity which can indeed be made unhackable.
There's no insurance company that would write a blanked insurance policy for BTC. It is the other side of the "We are BTC! We are special! Rules of finance do not apply to us!" coin.
What do fellow infrastructure engineers and security experts think about their post on security practices? https://blog.coinbase.com/how-coinbase-builds-secure-infrast...
It's hard to tell how many layers of security you need when you're holding tens or hundreds of millions of digital assets that don't require a physical breaking and entering, and when the entire blackhat world is eyeing you as a target.
It's hard to tell how many layers of security you need when you're holding tens or hundreds of millions of digital assets that don't require a physical breaking and entering, and when the entire blackhat world is eyeing you as a target.
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.
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.
If I buy coins using a 3rd party service and they have yet to transfer them to my private wallet then I have counter party risk until they do.
All exchanges do this to one extent or another. To minimize risks they would need to accept cash and never accept bitcoins to their own wallet which would cause massive transaction fees.
All exchanges do this to one extent or another. To minimize risks they would need to accept cash and never accept bitcoins to their own wallet which would cause massive transaction fees.
If you buy coins, those coins are going to be transferred either from a wallet belonging to the exchange or a wallet from another exchange user which the exchange knows about. The difference between the two is a trade-off of speed vs reliability: if the source is an exchange hot-wallet, then the transfer happens immediately-ish and you, the purchaser of cryptocoin with fiat, can wait however long you wish to wait to confirm that legitimate nodes accept the transaction. If the transfer is from a third-party wallet, then you wait until the third-party authorizes the transfer, and the exchange then has a preset wait time to check that the transfer went through before transferring fiat to the third party. Either way, the counterparty risk is denominated in fiat, not cryptocurrency, and therefore much better understood, controllable, reversible, etc.
As you point out, this causes massive transaction fees, but that's built into the model. The transaction fees would be lower if they would increase the block size....
As you point out, this causes massive transaction fees, but that's built into the model. The transaction fees would be lower if they would increase the block size....
How does one eliminate counterparty risk? The only thing I could think of is insurance, and I'm guessing no insurance company will underwrite that sort of policy.
> 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.
No it is not. Coinbase has clients all over the globe. It is always regular trading hours.
Let me introduce you this amazing concept called "Maintenance Window"
https://en.wikipedia.org/wiki/Maintenance_window
https://en.wikipedia.org/wiki/Maintenance_window
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.
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.
I think the point was that there would be a _defined_ period where everybody knew that the service would be unavailable.
If that were peak-trading time for a particular locale that would be unfortunate, but the regularity would be preferred to failing under unexpected load at random times of the day.
If that were peak-trading time for a particular locale that would be unfortunate, but the regularity would be preferred to failing under unexpected load at random times of the day.
> I mean if the Nasdaq, NYSE or prime broker ever got hacked, no one would expect to suddenly loose all their shares, or cash held with their prime broker.
Actually, banks get hacked and lose cash. Permanently. It happens rarely, but it happens. For example in this SWIFT hack authorities were able to recover only $18 out of $81 million with the remainder $63 million permanently lost: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
Actually, banks get hacked and lose cash. Permanently. It happens rarely, but it happens. For example in this SWIFT hack authorities were able to recover only $18 out of $81 million with the remainder $63 million permanently lost: https://en.wikipedia.org/wiki/Bangladesh_Bank_robbery
1. Counterparty risk cannot be eliminated, only reduced. The only counterparty with zero risk is a government, which can print more currency if supply is insufficient, devaluing everyone else's currency.
2. Exchanges do go down, the only question is how often. If the exchange does go down, you want the exchange to say, "We're doing our best, but volume has exceeded our capacity. We'll be up as soon as we can." The alternative is to continue to accept trades and pretend that everything is okay. Honesty is good.
2. Exchanges do go down, the only question is how often. If the exchange does go down, you want the exchange to say, "We're doing our best, but volume has exceeded our capacity. We'll be up as soon as we can." The alternative is to continue to accept trades and pretend that everything is okay. Honesty is good.
This is childish and disingenuous. Yes, counterparty party risk can only be reduced. And only mathematical constants can actually be absolute. However for practical people operating in the real world there's an infinite difference between 20% risk and 0.005% risk. Infinite.
Same with your comment about exchanges - yes the NYSE and NASDAQ can go down. Once or twice a year. For 20 minutes. Coinbase (and Gemini and GDAX and Kraken and everyone) are going down for about x5 times that in any given week. Which is not a "a small qualitative difference". It's an infinite difference.
Same with your comment about exchanges - yes the NYSE and NASDAQ can go down. Once or twice a year. For 20 minutes. Coinbase (and Gemini and GDAX and Kraken and everyone) are going down for about x5 times that in any given week. Which is not a "a small qualitative difference". It's an infinite difference.
A long term viable cybercash exchange has to do more than guarantee you will keep your cybercash in the event of a hack, it has to make guarantees about execution time.
Getting your Bitcoin back after it drops to $5 isn't much consolation if you were unable to trade at $15,000.
Getting your Bitcoin back after it drops to $5 isn't much consolation if you were unable to trade at $15,000.
> I'm in no way upset at Coinbase for having growth issues.
you probably should... but it might haven gotten better in the last couple weeks.
you probably should... but it might haven gotten better in the last couple weeks.
You’re very literally recreating, step by step, the current centralized, trust-based system that cryptocurrencies are seeking to remedy. If you need someone to trust, you’re doing it wrong.
What I read sounds like OP is asking for uptime and service resiliency. That's a tenant of basic business practice. Cryptocurrencies have nothing to do with it.
> If you need someone to trust, you’re doing it wrong.
You can't do anything in crypto without having to rely on someone else. Trust is not irrelevant in cryptocurrencies - it matters just as much as in traditional markets.
> If you need someone to trust, you’re doing it wrong.
You can't do anything in crypto without having to rely on someone else. Trust is not irrelevant in cryptocurrencies - it matters just as much as in traditional markets.
I didn’t say trust is irrelevant. I said That if you require trust to transact in a cryptocurrency, you misunderstand a basic tenant of the thing. You can still choose to trust whoever you want. There’s a difference between “not needed” and “not allowed”.
Someone has to trust someone in order to do a transaction between a cryptocurrency and something else such as USD. That's because the transaction is actually two transfers, one of cryptocurrency and one of USD, that have different clearing and settlement properties.
What’s your point? I thought we were talking about cryptocurrency transactions and the need for uptime on exchanges.
You may not know this, but any stocks you own in your brokerage aren't owned by you. They're owned by your brokerage. In all likelihood, your shares are currently being lent to someone and used in short sales. It's entirely possible your brokerage will go bust, and you will lose every share of stock you own.
SIPC insurance will protect you up to a certain amount. Even then, though, you won't have your shares returned to you -- merely the dollar value of those shares will be reimbursed.
SIPC insurance will protect you up to a certain amount. Even then, though, you won't have your shares returned to you -- merely the dollar value of those shares will be reimbursed.
It is not easy to build a company/service like Coinbase; having said that, I think that Coinbase in its current state is slightly better than a joke, starting from their customer support.
Contacted their support 13 days ago about my account somehow being restricted (can't buy or sell). Not a peep besides the automated response. 13 days and counting...
Wonder if anyone has an outstanding ticket being ignored that's longer than that
Wonder if anyone has an outstanding ticket being ignored that's longer than that
Don't expect to get an answer. I had an issue as well, hasn't been resolved after 3 months. Their phone support is even a bigger joke. 2 hours of waiting and no answer then they just hang you up.
GDAX (owned by Coinbase) is the same, I wasn't able to download the statements because login was suspended for some reason.
Wow, they sound a lot like Cloud at Cost:
http://penguindreams.org/blog/cloud-at-cost-part-ii-the-unsu...
http://penguindreams.org/blog/cloud-at-cost-part-ii-the-unsu...
I like this article, "Bitcoin is none of the things it was supposed to be":
https://theoutline.com/post/2592/bitcoin-is-none-of-the-thin...
Bitcoin can't operate as a currency without having exchanges between it and other currencies, and those exchanges strip all the benefits of bitcoin.
Edit: show title of article.
https://theoutline.com/post/2592/bitcoin-is-none-of-the-thin...
Bitcoin can't operate as a currency without having exchanges between it and other currencies, and those exchanges strip all the benefits of bitcoin.
Edit: show title of article.
A few years ago, it was easy to say "well, all the issues are at the BTC <-> USD (or other fiat currency) boundaries". But today's bitcoin is nearly unusable even just within the confines of the bitcoin network. For small amount of bitcoin (less then $15) it is incredible impractical to make a single transaction. Fees are around $5 and often much higher, with confirmation times sometimes reaching 6+ hours.
Maybe there is hope with Bitcoin Cash (BCH), because it can piggyback on the existing bitcoin integration infrastructure. Or maybe Ethereum or Monero or some other altcoin will take the place of Bitcoin. But more and more, it's looking like the original cryptocurrency has failed to innovate and solve fundamental scaling issues and it's first-mover advantage won't last. If these altcoins can scale better than bitcoin, they only need to match bitcoin's integrations with the existing financial system to win.
Maybe there is hope with Bitcoin Cash (BCH), because it can piggyback on the existing bitcoin integration infrastructure. Or maybe Ethereum or Monero or some other altcoin will take the place of Bitcoin. But more and more, it's looking like the original cryptocurrency has failed to innovate and solve fundamental scaling issues and it's first-mover advantage won't last. If these altcoins can scale better than bitcoin, they only need to match bitcoin's integrations with the existing financial system to win.
I want coinbase to resolve its segwit issues.
Indeed. Considering the volume of transactions going to and from Coinbase, their adoption of Segwit would go a long way towards alleviating the current mempool situation, which would bring lower fees for everyone.
Underrated.
It's pretty amusing that Brian was willing to back an altcoin (B2X) that hadn't even performed basic testing before its spectacular failure, and yet coinbase can't manage to enable segwit. Did they implement their own Bitcoin and decide not to port segwit?
It's pretty amusing that Brian was willing to back an altcoin (B2X) that hadn't even performed basic testing before its spectacular failure, and yet coinbase can't manage to enable segwit. Did they implement their own Bitcoin and decide not to port segwit?
A good currency is fungible: It has a stable value and allows rapid exchange. Bitcoin does not meet these basic requirements. So many people forget that the original paper clearly states that Bitcoin is an experiment.
I've wondered about this. I haven't tried paying for any services with BTC, but I suspect many of them would change you the current real price (in euros, usd, gbp) and show you the equivalent btc in today's money.
So some of these servers that were wise have only paid everything (servers, wages, etc.) using the real currency that comes in via credit cards and paypal and have just held onto the btc .. which makes it extremely valuable.
But people don't set prices in btc. The prices are set in fiat currency and are paid for based on the price of btc that day .. meaning you could have spent 10euro for a service last year in btc that would have been worth 100euro .. or that could be worth 0.01 euro depending on where the market goes.
But yes you're right, unless services start pricing actual service in btc, it's not really fungible for goods. It's always going through that translation layer. If anything, if McDonalds started taking mBTC and charged x mBTC for a burger and didn't change that value with the market, you'd start to see bitcoin stabilize (although you might be paying $100 for a burger some days .. if you go by what the exchanges claim the value is).
So some of these servers that were wise have only paid everything (servers, wages, etc.) using the real currency that comes in via credit cards and paypal and have just held onto the btc .. which makes it extremely valuable.
But people don't set prices in btc. The prices are set in fiat currency and are paid for based on the price of btc that day .. meaning you could have spent 10euro for a service last year in btc that would have been worth 100euro .. or that could be worth 0.01 euro depending on where the market goes.
But yes you're right, unless services start pricing actual service in btc, it's not really fungible for goods. It's always going through that translation layer. If anything, if McDonalds started taking mBTC and charged x mBTC for a burger and didn't change that value with the market, you'd start to see bitcoin stabilize (although you might be paying $100 for a burger some days .. if you go by what the exchanges claim the value is).
I paid for a VPN service in 2011 for 0.19 BTC / (~5$ USD or something back then) which is now worth over $3300 USD at today's price...to me it shows that we are not dealing with a currency, if all you can do is hold and avoid spending it in fear of "losing" money then it has no real value except selling at the right time so someone else can buy your share, hold it and eventually sell it and so forth..
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?
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?
Please, ask away, it's easier to clear up things when you have access to the experts, like on HN. If you purchase Bitcoin through an exchange, typically you don't have the private key, you just trust the exchange to do all the nitty gritty for you.
If you generate a new address with a wallet software, it'll have a private key (that is much longer than the deliveryAddress.length) and you can move your funds from an exchange to this address (whereupon you'll have complete control).
If you lose the private key it's [basically] impossible to recover with brute force, which is the point. If someone takes the physical hard disk from you and you have no backup of the info, yes, it's gone.
If you somehow have your info stolen, but still remember it (via air-gapped pc text file or something) you can move the funds before they get swiped. Again, use wallet software to generate a new address with a new private key and repeat.
So either you have a really good way to store your private addresses so you can still use your coins in the future, or you trust an exchange to hold the coins and you don't play in that realm at all. Those are the most popular options currently.
If you generate a new address with a wallet software, it'll have a private key (that is much longer than the deliveryAddress.length) and you can move your funds from an exchange to this address (whereupon you'll have complete control).
If you lose the private key it's [basically] impossible to recover with brute force, which is the point. If someone takes the physical hard disk from you and you have no backup of the info, yes, it's gone.
If you somehow have your info stolen, but still remember it (via air-gapped pc text file or something) you can move the funds before they get swiped. Again, use wallet software to generate a new address with a new private key and repeat.
So either you have a really good way to store your private addresses so you can still use your coins in the future, or you trust an exchange to hold the coins and you don't play in that realm at all. Those are the most popular options currently.
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.
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.
https://copay.io/
An open source wallet by bitpay with good support for multi-sig transactions.
An open source wallet by bitpay with good support for multi-sig transactions.
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)
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.
Thanks! Reason Im asking is first ive Never traded btc and second I have friends who started and I can imagine they know anything about crypto, private keys, secrets etc. I might need to point this out to them if they continue with this.
Most crypto traders don't even hold their own bitcoin. The exchange holds it for them.
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.
> In traditional finance, custody banks like State Street Corp. hold securities, keep records and provide other services for investment advisers. A lack of similar offerings in the cryptocurrency world has kept many institutions on the sidelines.
>Coinbase has offered a solution: crypto custodial services, slated to roll out next year. Called Coinbase Custody, it'll be available to investors with at least $10 million in deposits.
Honestly, WTF?
>Coinbase has offered a solution: crypto custodial services, slated to roll out next year. Called Coinbase Custody, it'll be available to investors with at least $10 million in deposits.
Honestly, WTF?
What about this is WTF?
Please explain, in detail, how somebody with $10M in BTC should store it.
Please explain, in detail, how somebody with $10M in BTC should store it.
I think the WTF is that the original point of cryptocurrency was that it was supposed to be decentralized, with no big institutions that you must trust. Coinbase Custody is essentially reinventing the exact institutions that bitcoin was supposed to cut out of the loop.
You're supposed to store $10M in BTC on the blockchain, which - after all - records ownership of every bitcoin ever mined. And keep access to it in a paper wallet; control of those $10M lies in access to a private key, so if you keep the key secret, nobody can access them (like with Satoshi's $40B or so in Bitcoin).
That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of "trustless completely-distributed systems" should perhaps heed. This same dynamic comes up over and over again, from open-source to the Internet to P2P and now to cryptocurrency.
You're supposed to store $10M in BTC on the blockchain, which - after all - records ownership of every bitcoin ever mined. And keep access to it in a paper wallet; control of those $10M lies in access to a private key, so if you keep the key secret, nobody can access them (like with Satoshi's $40B or so in Bitcoin).
That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of "trustless completely-distributed systems" should perhaps heed. This same dynamic comes up over and over again, from open-source to the Internet to P2P and now to cryptocurrency.
Very well put. It is sort of funny, isn't it.
Bitcoin maximalist: "Bitcoin, no need to trust evil centralised institutions!"
Actual Bitcoin users: "Oh, hey, could you take care of my Bitcoin balance for me, please? And you have password recovery, right?"
Bitcoin maximalist: "Bitcoin, no need to trust evil centralised institutions!"
Actual Bitcoin users: "Oh, hey, could you take care of my Bitcoin balance for me, please? And you have password recovery, right?"
What I think is sort of funny is that you've just described two poles, but seemingly can't grasp the infinite gradient in between those poles where people with different risk tolerances and security requirements can exist.
What he's describing is that the overwhelmingly vast majority of people (who are supposed to replace fiat with ctypto in the future) reside on one end of the pole. The end with all the real-life, non-ideologically-constrained usability.
This is akin to assuming that internet users are a bunch of neckbeards and grad students who like to muck about configuring routers, just because that was where it started.
Who knows what will wind up being the dominant use case in the future, or who will be the dominant user population. Maybe the ones who drive early adoption, and who govern the philosophical and technical direction, will turn into a tiny faction of stakeholders in the end, but maybe they continue to dominate technical development because they are the best stewards of the idea. Or maybe they're overthrown and it turns into something else, run by small business owners. Or the governments of third world countries.
The point is that nobody knows how it will shake out. Acting like the current state of things is somehow 'wrong' is arrogant and historically uninformed.
Who knows what will wind up being the dominant use case in the future, or who will be the dominant user population. Maybe the ones who drive early adoption, and who govern the philosophical and technical direction, will turn into a tiny faction of stakeholders in the end, but maybe they continue to dominate technical development because they are the best stewards of the idea. Or maybe they're overthrown and it turns into something else, run by small business owners. Or the governments of third world countries.
The point is that nobody knows how it will shake out. Acting like the current state of things is somehow 'wrong' is arrogant and historically uninformed.
I still don't see the detailed answers I'm looking for here.
On a paper wallet? How do I generate that? How do I print it? Where should I store it?
A bootable Linux distro on an air gapped machine could solve the first one. An air gapped printer the second maybe. A cryptosteel the third.
I THINK that will make a safe place to store multiple millions (or billions, or trillions) of $ worth of crytocurrency.
I, unlike many others, don't want to make a $fortune dollar bet that I'm not going to make any sort of mistake (one I could have none about or not) when doing all of this stuff.
I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money.
The AMAZING WORLDCHANGING but much less dramatic, incremental improvement that bitcoin offers me is that now I don't have to. That's a BIG deal.
If my mom doesn't want to figure out what the hell an air gapped bootable Linux distro is, then coinbase is a fantastic solution for her.
On a paper wallet? How do I generate that? How do I print it? Where should I store it?
A bootable Linux distro on an air gapped machine could solve the first one. An air gapped printer the second maybe. A cryptosteel the third.
I THINK that will make a safe place to store multiple millions (or billions, or trillions) of $ worth of crytocurrency.
I, unlike many others, don't want to make a $fortune dollar bet that I'm not going to make any sort of mistake (one I could have none about or not) when doing all of this stuff.
I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money.
The AMAZING WORLDCHANGING but much less dramatic, incremental improvement that bitcoin offers me is that now I don't have to. That's a BIG deal.
If my mom doesn't want to figure out what the hell an air gapped bootable Linux distro is, then coinbase is a fantastic solution for her.
Like I said, "That people don't seem to want to do this is perhaps a lesson in human nature that crypto-anarchists and other aficionados of 'trustless completely-distributed systems' should perhaps heed." The people commenting in this sub-thread don't actually believe in the trustless utopia that initial Bitcoin aficionados did, we just have enough familiarity with the original Bitcoin technical paper to comment on the irony here. That may be why you're not seeing particularly compelling answers.
"I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money."
As someone with both a CoinBase account and a Vanguard account...your money is much, much safer in Vanguard. And that's the irony. When Bitcoin was distributed, people could at least point to the lack of a centralized institution as an advantage. Now that it has centralized institutions, they're inferior to the centralized institutions in the mainstream financial world.
And I certainly hope your mom isn't putting $10M into bitcoin on CoinBase. Regardless of security issues, that's a very good way to lose $10M.
(On second thought, yes, yes, she should absolutely put her life savings into Bitcoin, so I can take the other side of the trade and sell into this bubble. ;-))
"I trust coinbase not to run off with my money just like I trust vanguard not to run off with my money."
As someone with both a CoinBase account and a Vanguard account...your money is much, much safer in Vanguard. And that's the irony. When Bitcoin was distributed, people could at least point to the lack of a centralized institution as an advantage. Now that it has centralized institutions, they're inferior to the centralized institutions in the mainstream financial world.
And I certainly hope your mom isn't putting $10M into bitcoin on CoinBase. Regardless of security issues, that's a very good way to lose $10M.
(On second thought, yes, yes, she should absolutely put her life savings into Bitcoin, so I can take the other side of the trade and sell into this bubble. ;-))
Centralization offers many benefits that some people value. There is nothing whatsoever wrong with that.
Bitcoin offers the choice and makes trusting a 3rd party completely optional.
For some institutions, they already have legal departments and experience with valuable contracts, so this service presents nothing new. Securing the private keys of a cryptographic currency, however, is not something they have experience with.
There is certainly some truth about reality vs. the cypherpunk vision, but I also think this is largely a strawman; many people in the Bitcoin community don't believe in overthrowing governments or that everyone will participate in completely decentralized systems. Bitcoin can still offer value alongside traditional financial markets and the legal authority of the state.
Bitcoin offers the choice and makes trusting a 3rd party completely optional.
For some institutions, they already have legal departments and experience with valuable contracts, so this service presents nothing new. Securing the private keys of a cryptographic currency, however, is not something they have experience with.
There is certainly some truth about reality vs. the cypherpunk vision, but I also think this is largely a strawman; many people in the Bitcoin community don't believe in overthrowing governments or that everyone will participate in completely decentralized systems. Bitcoin can still offer value alongside traditional financial markets and the legal authority of the state.
Cryptocurrency is just going to converge on existing financial ecosystems and regulation. Blockchain can't fight sovereignty.
Monero and ZCash are attempting to do exactly that.
Yes, obviously nonrepudiable ledger schemes are natural allies with governments. But not all cryptocurrencies are the same.
Yes, obviously nonrepudiable ledger schemes are natural allies with governments. But not all cryptocurrencies are the same.
>Monero and ZCash are attempting to do exactly that.
Which is a great flag to never trust any major service's Monero and ZCash offerings.
Which is a great flag to never trust any major service's Monero and ZCash offerings.
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.
Do you realise the scale at which wall street/nasdaq/nyse all work? Have you ever looked at trading volume in large brokerage tools like TD Ameritrade. GDAX isn't there.
I think the point most people here are making is–this is the big leagues and if you want to be taken seriously, suspending trading mid-day is unacceptable (happened this week).
Nothing to do with web sockets IMO.
I think the point most people here are making is–this is the big leagues and if you want to be taken seriously, suspending trading mid-day is unacceptable (happened this week).
Nothing to do with web sockets IMO.
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.
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.
I've been trying to log into my account for over 3 weeks with no response from Coinbase. They need to handle their own support issue better if they want consumer trust.
In my case, I sent some ETH to "my" ETH wallet at Coinbase, received an email from Coinbase alerting me of the incoming transfer, and then - nothing, that ETH is nowhere to be found except on the blockchain (it's not showing in my ETH Coinbase account, and it's not shown under transactions).
Frankly, this (misplacing a transaction) is more concerning to me than delays or verification issues. Losing a transfer like that puts their whole transactional integrity into question.
Again, delays (something showing as "pending", etc) I could live with, considering their recent spike in usage. But, when a transaction is simply missing, while the ones before and after it are showing in Coinbase, is scary.
I agree with you that they need to handle their support much much better. The bulk of their cases (judging by the publicly visible mentions of @CoinbaseSupport on Twitter) can be handled by simply explaining the situation and telling people to wait. There are only 5 or 6 issue types that can be categorized and routed programmatically even. Instead, they are currently only responding to 0.5% (not a typo) of Support requests on Twitter (not counting DMs). I think that may be the lowest response rate I've ever seen from a company, especially a tech one.
Frankly, this (misplacing a transaction) is more concerning to me than delays or verification issues. Losing a transfer like that puts their whole transactional integrity into question.
Again, delays (something showing as "pending", etc) I could live with, considering their recent spike in usage. But, when a transaction is simply missing, while the ones before and after it are showing in Coinbase, is scary.
I agree with you that they need to handle their support much much better. The bulk of their cases (judging by the publicly visible mentions of @CoinbaseSupport on Twitter) can be handled by simply explaining the situation and telling people to wait. There are only 5 or 6 issue types that can be categorized and routed programmatically even. Instead, they are currently only responding to 0.5% (not a typo) of Support requests on Twitter (not counting DMs). I think that may be the lowest response rate I've ever seen from a company, especially a tech one.
I had a similar and frustrating issue where my 2 factor auth was re-enabled after I manually disabled when I knew I was giving up my phone. They eventually helped, but it took longer than I would like.
Maybe you should handle your own password management issue better if you want Coinbase to provide good support.
their ID system had not worked for MONTHs. https://status.coinbase.com/
i cant buy or sell while traveling outside the USA.
Why do you use the worst service available? There are way better players in this market than Coinbase imo.
who do u recommend? i need to connect a US bank account but i dont have a US cel or US driver's iD...just a US Passport.
everyone seems to ask for a Driver's ID or Cel.
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what is coinbase's stance on the future of cryptographic hash functions?
are they just trying to cash in as much as possible, like many of the investors, before the math is settled
or do they publicly state that they believe.. meaning without proof.. that p!=np?
are they resting their future, and the futures of all of their users.. and here apparently the economy writ large.. on faith?
are they just trying to cash in as much as possible, like many of the investors, before the math is settled
or do they publicly state that they believe.. meaning without proof.. that p!=np?
are they resting their future, and the futures of all of their users.. and here apparently the economy writ large.. on faith?
Coinbase.Gov
I'm sure you all have very insightful comments about why bitcoin is in a bubble and will fail.
Meanwhile, I ignored your comments years ago and I'm very, very comfortably retired now.
But please, do go on with your smart insightful comments.
Meanwhile, I ignored your comments years ago and I'm very, very comfortably retired now.
But please, do go on with your smart insightful comments.
Most of the comments here aren't about Bitcoin being in a bubble and falling, they're about Coinbase and varying aspects of their growing pains (security, scalability, lack of insurance and so forth).
Maybe becoming very, very comfortably retired as a bazillionaire has a deleterious effect on reading and attention.
Maybe becoming very, very comfortably retired as a bazillionaire has a deleterious effect on reading and attention.
Username checks out.
someguy112(1)
The Bitcoin "community" seems to try very hard to prevent that from happening, even if you ignore all of the shady activity various exchanges are engaged in.
Do the downvoters care to explain themselves instead of just trying to bury my post? Do you guys think the constant forks, obvious coordinated market manipulation, constantly changing story about what Bitcoin is supposed to be, and general obnoxiousness and ridiculous behavior of the majority of Bitcoin cultists makes Bitcoin look good to outsiders?
As someone who has been involved with and supportive of Bitcoin for several years (I started mining in 2011), the fact that it's impossible to point out any of the negative aspects of Bitcoin and the community surrounding it without just being downvoted or accused of "not holding any Bitcoin and being jealous" is starting to become incredibly tiresome. Denying the negative aspects of this sector is just going to encourage those negatives to continue. You guys are your own worst enemy.
I know a number of people who won't touch Bitcoin with a 500ft pole because of this shit. These are people with large sums of money that could be flowing into the sector, who are being chased away by the stupidity and shysterish behavior of the Bitcoin community and shady exchanges.
As someone who has been involved with and supportive of Bitcoin for several years (I started mining in 2011), the fact that it's impossible to point out any of the negative aspects of Bitcoin and the community surrounding it without just being downvoted or accused of "not holding any Bitcoin and being jealous" is starting to become incredibly tiresome. Denying the negative aspects of this sector is just going to encourage those negatives to continue. You guys are your own worst enemy.
I know a number of people who won't touch Bitcoin with a 500ft pole because of this shit. These are people with large sums of money that could be flowing into the sector, who are being chased away by the stupidity and shysterish behavior of the Bitcoin community and shady exchanges.
1) Wallstreet is pretty corrupt, so getting them to help you with trust issues is odd to me. I get that Wallstreet has "legitimacy credentials", so that you will get more old money and institutions investing in you if they saw it's safe.
I completely disagree with that. Wallstreet and big banks have lost trillions of dollars investing in "Safe" stuff before.
2) Coinbase needs to make sure they deliver what they say they can deliver. No hacking. No delivery issues. Minor to none technical issues.
That's how you build trust long term. Honestly, Wallstreet won't matter if your goal is to be around in 10 or 20 years.
3) This brings me to my last point, if you really are trying to do this thing long term, why would even care about Wallstreet? Asking them for help just screams to me, "We want to make a shit ton of money right now before everything falls apart"
I am seriously worried about the large exchanges ability to handle the amount and size of the transactions. Especially the growth.
I completely disagree with that. Wallstreet and big banks have lost trillions of dollars investing in "Safe" stuff before.
2) Coinbase needs to make sure they deliver what they say they can deliver. No hacking. No delivery issues. Minor to none technical issues.
That's how you build trust long term. Honestly, Wallstreet won't matter if your goal is to be around in 10 or 20 years.
3) This brings me to my last point, if you really are trying to do this thing long term, why would even care about Wallstreet? Asking them for help just screams to me, "We want to make a shit ton of money right now before everything falls apart"
I am seriously worried about the large exchanges ability to handle the amount and size of the transactions. Especially the growth.
> why would even care about Wallstreet?
> I am seriously worried about the large exchanges ability to handle the amount and size of the transactions.
One approach to solving hard problems is to enlist the help of people who have a great deal of experience in solving the same hard problems.
You don't have to, of course. It's possible that having a table tennis table is sufficient to help one muddle on through.
But it sounds like Coinbase are taking a more pragmatic path. In the circumstances, that's probably prudent. Unfortunate but prudent.
> I am seriously worried about the large exchanges ability to handle the amount and size of the transactions.
One approach to solving hard problems is to enlist the help of people who have a great deal of experience in solving the same hard problems.
You don't have to, of course. It's possible that having a table tennis table is sufficient to help one muddle on through.
But it sounds like Coinbase are taking a more pragmatic path. In the circumstances, that's probably prudent. Unfortunate but prudent.