Coinbase from YC to DPO(blog.ycombinator.com)
blog.ycombinator.com
Coinbase from YC to DPO
https://blog.ycombinator.com/coinbase-from-yc-to-ipo/
882 comments
Airbnb market cap is at 105 billion and Coinbase is currently at 86.
Personally I'm very sceptical that current valuation for Coinbase is justified. It is a great company for sure but there definitely arent similar network effects as with Airbnb. There's plenty of competition in the crypto exchange space.
Personally I'm very sceptical that current valuation for Coinbase is justified. It is a great company for sure but there definitely arent similar network effects as with Airbnb. There's plenty of competition in the crypto exchange space.
I bet Brian owns a much larger stake on coinbase than on airbnb
also airbnb is not dependent on the value of a speculative asset. There will always be demand for rentals.
There is 20 trillion of negative yielding debt floating around in govt bonds, luckily we can hedge against these horribly mismanaged house of cards before they fall on us. The demand is real.
Bitcoin is worthless without dollars backing it. It’s because you can turn Bitcoin into dollars that anyone wants it.
You can make the same argument about any asset class. The path from Bitcoin/gold/real estate/crops to other goods or assets goes through dollars out of convenience (because your destination is purchasable in dollars). Don't confuse convenience with necessity.
Actually it is out of necessity on some level. My landlord needs me to pay rent with dollars, because my landlord needs to repay a loan to the bank and the bank will only accept dollars. The bank only accepts dollars because if my landlord defaults on said loans the bank will go to court to resolve the matter, and the courts only deal in dollars. Similarly, we all must pay taxes of one form or another, and we must do so using something the government will accept, which is dollars and not Bitcoin.
(You can adjust the currency for whatever country you might be considering if dollars are not the local currency.)
Don't kid yourself -- without exchanges of some sort (including payment processors) cryptocurrency is basically worthless.
(You can adjust the currency for whatever country you might be considering if dollars are not the local currency.)
Don't kid yourself -- without exchanges of some sort (including payment processors) cryptocurrency is basically worthless.
The number of things I can exchange dollars for vastly outnumbers the number of things I can exchange Bitcoin for, by orders of magnitude.
In this case convenience is necessity, for practical, real-world definitions. Sure, in a theoretical sense, there is no reason why I couldn't use Bitcoin to buy food and clothing, make rent/mortgage payments, buy plane/train/bus tickets, buy furniture, tools, electronics, etc. But the reality is that I can't do it (with some narrow exceptions), and I don't see that materially changing within my lifetime, not to the point where using Bitcoin (or any other up-and-coming cryptocurrency) is more convenient that using fiat currency.
In this case convenience is necessity, for practical, real-world definitions. Sure, in a theoretical sense, there is no reason why I couldn't use Bitcoin to buy food and clothing, make rent/mortgage payments, buy plane/train/bus tickets, buy furniture, tools, electronics, etc. But the reality is that I can't do it (with some narrow exceptions), and I don't see that materially changing within my lifetime, not to the point where using Bitcoin (or any other up-and-coming cryptocurrency) is more convenient that using fiat currency.
Yes but that would obviously no longer be true if dollars no longer "worked" (let's say 10k% inflation for the sake of argument). There would be _something_ of value that things could be exchanged for.
Aren’t they firing a lot of folks due to the pandemic?
That was a year ago. Airbnb completely recovered and then some in terms of value. A few metro area like SF and NY were hit , but the overall picture is improving, and such setbacks will imho be temporary.
"Temporary value recovery" interesting way to contradict your original claim. All value fluctuates.
>also airbnb is not dependent on the value of a speculative asset.
What do you think US real estate is?
What do you think US real estate is?
Exactly! Airbnb is rent-seeking. Not adding any value just controlling and asset for yield. Same as Bitcoin and other crypto, pure speculation and the product of a decade of government money presses keeping inflation low.
Wealth shelters.
I can live in a house. I can't live in a Bitcoin.
Yes, but you also can't take your house with you stored in your brain if you have to flee the country.
Bitcoin as chaos insurance (or schmuck insurance as Chamath calls it) is the use case that makes the most sense to me.
Bitcoin as chaos insurance (or schmuck insurance as Chamath calls it) is the use case that makes the most sense to me.
do you really think if the sh*t hit the fan? the entire BTC network and the internet at large would still be working for you to transfer these units around?
this to me is where the comparison to gold falls off. i can hold physical gold and silver and trade it at will even without power, pricing updates, etc. this does not apply to crypto. considering cutting internet access is now a normal thing during unrest, being able to pay with anything that is not physical, probably wont work out.
this to me is where the comparison to gold falls off. i can hold physical gold and silver and trade it at will even without power, pricing updates, etc. this does not apply to crypto. considering cutting internet access is now a normal thing during unrest, being able to pay with anything that is not physical, probably wont work out.
You really think the entire world would shut off the internet?
It is much harder to transport gold and silver, and those can be easily confiscated. A mnemonic seed can be stored in your head, and you can add a passphrase as a salt on top of that to create an infinite number of permutations, each being their own wallet, and provide just one of those if under duress.
It is much harder to transport gold and silver, and those can be easily confiscated. A mnemonic seed can be stored in your head, and you can add a passphrase as a salt on top of that to create an infinite number of permutations, each being their own wallet, and provide just one of those if under duress.
What happens to crypto mining if electricity becomes 10x more expensive?
It depends on the scale of shit hitting the fan.
If the global internet goes down and stays down, then I think it's safe to say that global civilization is permanently collapsing, in which case billions of people are going to die in the resulting famine and the survivors probably won't be able to maintain enough technology to survive long term as climate change continues to snowball.
In this scenario, yeah bitcoin is worthless. But so is gold. The only thing worth stockpiling for this scenario is brass and lead (and a strong local community of other preppers who can organize into a new micro state after the collapse). And even then, you have to ask if the reward of surviving is even worth the cost of prepping.
If the global internet goes down and stays down, then I think it's safe to say that global civilization is permanently collapsing, in which case billions of people are going to die in the resulting famine and the survivors probably won't be able to maintain enough technology to survive long term as climate change continues to snowball.
In this scenario, yeah bitcoin is worthless. But so is gold. The only thing worth stockpiling for this scenario is brass and lead (and a strong local community of other preppers who can organize into a new micro state after the collapse). And even then, you have to ask if the reward of surviving is even worth the cost of prepping.
it wouldn't even take a global internet shortage, just your country to go offline, how you gonna pay someone to get you out(keep you safe, etc) if you cant transfer your crypto to them? A few ounces of gold on the other hand will take you anywhere you want to go. Crypto is far from a safe hedge in any type of crazy event.
you see, gold can still be traded without power and internet, as could cash or really anything physical, as the value is assigned by those trading it at that time for whatever use they have but BTC is totally useless, toilet paper would literally have more value. brass/lead(killing people) isn't the only way to survive.
you see, gold can still be traded without power and internet, as could cash or really anything physical, as the value is assigned by those trading it at that time for whatever use they have but BTC is totally useless, toilet paper would literally have more value. brass/lead(killing people) isn't the only way to survive.
just your country to go offline, how you gonna pay someone to get you out(keep you safe, etc).... A few ounces of gold on the other hand will take you anywhere you want to go
People keep using that argument about gold, but is it really realistic? If the SHTF and the USA goes dark for whatever reason, how good is gold really going to be?
First, how does someone know you're really giving them pure gold and not some worthless alloy that looks and feels like gold?
Second, how much is gold going to be worth? Will a gold bar buy you a house, or a loaf of bread? (probably not a good example, after a month or so, houses will probably be less valuable than food)
And without any government to enforce a stable market, how will you even trade safely when the guy who has all the stuff you want can just hit you over the head and take your gold and whatever other possessions you may have with you?
Eventually these things would be sorted out by forming some sort of communal groups for protection and resource gathering, and barter prices will eventually be set, but will the guy with the most gold be valuable, or the guy with real survival skills (or at least some more immediately usable possessions like weapons, farming tools, etc)?
For the short term disruptions that are far more likely (like a regional power outage), cash is probably going to be just as good or better than gold because it's got an accepted value and everyone knows what it is (product values may rise, but in a society that's not used to using gold as currency with infrastructure to do so, it's a lot easier to sell a loaf of bread for $60 than for a gram of gold)
People keep using that argument about gold, but is it really realistic? If the SHTF and the USA goes dark for whatever reason, how good is gold really going to be?
First, how does someone know you're really giving them pure gold and not some worthless alloy that looks and feels like gold?
Second, how much is gold going to be worth? Will a gold bar buy you a house, or a loaf of bread? (probably not a good example, after a month or so, houses will probably be less valuable than food)
And without any government to enforce a stable market, how will you even trade safely when the guy who has all the stuff you want can just hit you over the head and take your gold and whatever other possessions you may have with you?
Eventually these things would be sorted out by forming some sort of communal groups for protection and resource gathering, and barter prices will eventually be set, but will the guy with the most gold be valuable, or the guy with real survival skills (or at least some more immediately usable possessions like weapons, farming tools, etc)?
For the short term disruptions that are far more likely (like a regional power outage), cash is probably going to be just as good or better than gold because it's got an accepted value and everyone knows what it is (product values may rise, but in a society that's not used to using gold as currency with infrastructure to do so, it's a lot easier to sell a loaf of bread for $60 than for a gram of gold)
gold was just an example used, because the BTC fans like to compare the two. but you are right, gold isnt overly tradable either, since it has very little day to day use. my point was just that BTC would still be useless as it cant be traded without an internet, miners, etc.
I don't particularly believe BTC is the messiah, but if the internet in your country goes down, how do you imagine you're going to get the money in your bank account? You might rush to an ATM before they get swarmed, but you're definitely not withdrawing all your money and transferring won't be an option.
Right, because gold is really going to help when there are no police going around arresting thieves and murderers. I'm sure the guy who tells you he can get you out is not going to take your gold and do nothing to get you out, assuming he doesn't just kill you and take your gold, shoes, weapons, and whatever other supplies you are carrying.
Get real. When governments collapse gold is not even remotely as useful as people seem to assume. There is no hedge against a failure of civilization. When things break down like that, you need to think on your feet and start organizing people (or joining up with a group someone else organized) to stand guard against the roving gangs of murderers, rapists, and thieves. "Trade" beyond the level of barter involving food, fuel, medicine, and weapons does not enter the picture until some new form of government can be established and some semblance of order is restored.
Get real. When governments collapse gold is not even remotely as useful as people seem to assume. There is no hedge against a failure of civilization. When things break down like that, you need to think on your feet and start organizing people (or joining up with a group someone else organized) to stand guard against the roving gangs of murderers, rapists, and thieves. "Trade" beyond the level of barter involving food, fuel, medicine, and weapons does not enter the picture until some new form of government can be established and some semblance of order is restored.
Guns, ammo, and gold aren’t bad choices to hoard for an end of the world situation, but if you want to make out like a bandit when the shit hits the fan just stockpile spices - when people start having to eat squirrels they’re going to want some pepper :-)
Also, drugs.
The caffeine addicts will be desperate when the beans stop flowing.
The caffeine addicts will be desperate when the beans stop flowing.
good point! a working still would probably be useful as well.
It doesn't need to be usable through the crisis to still have value. Holding the private keys will still help preserve some of your wealth through to the other side so you don't have to start over with nothing.
You can flee with some gold, but I'd expect that to all be taken from you by the border guards or smugglers you have to pay off to get out. They can't take your bitcoin if they don't know you have it.
You can flee with some gold, but I'd expect that to all be taken from you by the border guards or smugglers you have to pay off to get out. They can't take your bitcoin if they don't know you have it.
Genuinely curious if you think the Bitcoin network (or any other crypto network) would be restarted after such a crisis and if anyone holding non-crypto assets would be interested in trading them for crypto post-crisis?
Blockstream has satellites in orbit for this eventuality.
[1] https://blockstream.com/satellite/
[1] https://blockstream.com/satellite/
>If the global internet goes down and stays down
It doesn't take anything this drastic. All it takes is the country you are in deciding to cut off access. This has happened in various unstable countries many times over the last decade so it's not unprecedented.
The very time you would need something more stable than a currency is the time when the local telecom infrastructure would mean you can't transfer bitcoin.
It doesn't take anything this drastic. All it takes is the country you are in deciding to cut off access. This has happened in various unstable countries many times over the last decade so it's not unprecedented.
The very time you would need something more stable than a currency is the time when the local telecom infrastructure would mean you can't transfer bitcoin.
The people who say that bitcoin is going to be useful when "shit hits the fan" have a very very specific definition of shit hitting the fan that is just so unrealistic.
Like hyperinflation and an economic crash? I'm not convinced either will happen, but they seem squarely within the realm of possibility.
...why would I want to accept Bitcoin in that case? Pretty sure I am going to want either some other country's currency -- because I still need to buy imported food or fuel or whatever -- or things have gotten so bad that I no longer hand reliable enough Internet service to make use of Bitcoin.
Because Bitcoin has not experienced the same inflation as USD? I'm not sure what point you're trying to argue honestly.
> Pretty sure I am going to want either some other country's currency -- because I still need to buy imported food or fuel or whatever
Explain why, just saying you want Euros or something isn't a very convincing argument. Importing cash Euros is non trivial, and good luck finding banks and credit cards that let you transact in them.
> Pretty sure I am going to want either some other country's currency -- because I still need to buy imported food or fuel or whatever
Explain why, just saying you want Euros or something isn't a very convincing argument. Importing cash Euros is non trivial, and good luck finding banks and credit cards that let you transact in them.
Then again, you rarely have to dig through a garbage dump for your house because you accidentally threw it out: https://www.cnbc.com/2021/01/15/uk-man-makes-last-ditch-effo...
True, but houses burn down all the time. Or get destroyed by "acts of god" that insurance won't cover.
If you backup your private key in a redundant way, multiple storage locations can be completely destroyed without any loss. If you were really paranoid, you could distribute it around the world to mitigate geographic and geopolitical risk.
If you backup your private key in a redundant way, multiple storage locations can be completely destroyed without any loss. If you were really paranoid, you could distribute it around the world to mitigate geographic and geopolitical risk.
People having to flee the country are not a big customer demographic for either of the companies.
In America, there may not be tons of people ready to flee, but we do have a culture of valuing the people having checks against government power (see second amendment).
So, that's what I think is more likely the mentality of western people holding long term. A check against incompetent government.
So, that's what I think is more likely the mentality of western people holding long term. A check against incompetent government.
people need shelter, they do not need crypto . There is huge demand for housing in metro areas even in spite of Covid, and regulation and other restrictions make it hard to increase supply, and landlords generally want to lock-in long-term rents with good credit scores due to difficulty of evicting, meaning more demand for short-term rentals. .
Airbnb doesn't provide "shelter", it's for travellers.
Agree, AirBnB is essentially serving a luxury travel market.
I don't think that's really true as a blanket statement. I stayed in what turned out to be a depressing, small, rental apartment in Denver for a weekend via airbnb, because it was something like $20/night. The place smelled like trash and there was no laundry on-site.
You might say that any type of travel is a luxury. Ok, I guess. This trip was for a funeral. The flight was under $100. While I'm fortunate to be able to afford such a thing, no part of the trip was "luxury travel".
Airbnb serves a wide variety of customers, via a large range of temporary housing options.
You might say that any type of travel is a luxury. Ok, I guess. This trip was for a funeral. The flight was under $100. While I'm fortunate to be able to afford such a thing, no part of the trip was "luxury travel".
Airbnb serves a wide variety of customers, via a large range of temporary housing options.
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Things precede shelter in the hierarchy of needs yet shelter is still valuable. Also there are shades of shelter. Most people might not want to live in the trailer park of money.
Bitcoin provides shelter for your wealth. Most people need that more than shelter for their person.
Bold assertion immediately following a pandemic in which the demand for rentals fell to... zero.
It took a significant pivot for AirBnB to recover and maintain revenues.
It took a significant pivot for AirBnB to recover and maintain revenues.
And yet the demand for rentals is recovering (I know someone whose Airbnb rental is already 85% booked through August), and will recover to previous levels. All that revenue will be back, and Airbnb will be more diversified in its revenue sources. Long-term (even medium-term) I think the pandemic will turn out to be a win for Airbnb.
Coinbase is not just a retail exchange for crypto, just like your bank is probably not just a retail bank.
There is a whole professional services coinbase for institutional investors, custody, etc that has a huge potential.
There is a whole professional services coinbase for institutional investors, custody, etc that has a huge potential.
you think coinbase is overvalued at those numbers but not airbnb? how do you justify airbnbs?
Airbnb doesn't have network effects, the value to users increases pretty linearly with the number of hosts, and doesn't really increase at all with the number of other users.
That's just cross-side network effects. More users is better for hosts which means more hosts which is better for users which means more users.
What you probably have in mind is "direct network effects", more like what you'd see with a chat app or social network (though social networks also have cross-side effects between users and advertisers).
What you probably have in mind is "direct network effects", more like what you'd see with a chat app or social network (though social networks also have cross-side effects between users and advertisers).
Of course it does, the date of last written review is a pretty good signal whether something shady is going on with an apartment/hotel.
Hotels have much more guest nights than apartments, so the network effects are much smaller there.
There were companies trying to compete with AirBnB, but I'm not sure if they are still used, at the same time with hotel sites I just find the cheapest one for the hotel that I like.
Hotels have much more guest nights than apartments, so the network effects are much smaller there.
There were companies trying to compete with AirBnB, but I'm not sure if they are still used, at the same time with hotel sites I just find the cheapest one for the hotel that I like.
Also ignoring most cities now are banning or highly regulating these illegal hotels in residential neighborhoods
Coinbase seems less threatened by regulations
Coinbase seems less threatened by regulations
Coinbase is directly and indirectly threatened by regulations. The direct threat is that the SEC, China, European regulators, etc. impose much stricter regulations on cryptocurrency exchanges like Coinbase, raising compliance costs until the business fails; indirectly, if the regulations are applied "downstream" to payment processors dealing in cryptocurrencies or to businesses accepting cryptocurrency payments. Another indirect threat is in the form of environmental regulations being more strictly applied to mining operations, which could be fatal for Bitcoin or any other PoW based system (yeah, sure, PoS, PoWhatever, but Bitcoin is half the market for cryptocurrency).
There is also an "inverse" regulatory risk for Coinbase. In the best case (where cryptocurrencies are actually being used as payment systems at any significant scale) cryptocurrencies fill a need that is not being filled by existing banks as a result of regulations on the financial industry. Instead of more stringent regulations being imposed on cryptocurrencies, less stringent regulations could be imposed on the mainstream financial system that would allow banks to create more convenient electronic payment systems. The need for a cryptocurrency exchange could implode if the relevant technologies (e.g. offline ecash) were deployed; you would "withdraw" or "deposit" money in the bank just like paper notes. There is even a case for such a system if banking regulations became stricter e.g. if banks were forced to deploy a less fraud-prone and more privacy-preserving system than the credit/debit card system in use today.
There is also an "inverse" regulatory risk for Coinbase. In the best case (where cryptocurrencies are actually being used as payment systems at any significant scale) cryptocurrencies fill a need that is not being filled by existing banks as a result of regulations on the financial industry. Instead of more stringent regulations being imposed on cryptocurrencies, less stringent regulations could be imposed on the mainstream financial system that would allow banks to create more convenient electronic payment systems. The need for a cryptocurrency exchange could implode if the relevant technologies (e.g. offline ecash) were deployed; you would "withdraw" or "deposit" money in the bank just like paper notes. There is even a case for such a system if banking regulations became stricter e.g. if banks were forced to deploy a less fraud-prone and more privacy-preserving system than the credit/debit card system in use today.
Generally speaking, regulation is most easily dealt with by the market leader. They have capital that can be used to meet requirements, and can engage with regulators to make sure the regulation can be achieved by them.
That actually improves the situation for them. (Similar to how GPDR improved Google and Facebook's position in the ad market against competitors)
That actually improves the situation for them. (Similar to how GPDR improved Google and Facebook's position in the ad market against competitors)
Did you read what you were replying to? Regulations elsewhere in the market could threaten Coinbase, regardless of their ability to handle compliance costs in their own niche. In their own filing Coinbase admitted that the value of their company is highly correlated with the value of Bitcoin and other cryptocurrency -- so any regulation that impacts Bitcoin will likely impact Coinbase, even if the impact is indirect.
It's more than that in my mind. Coinbase is embracing regulation and leveraging it as a differentiator. They are going to be in a better position than anyone to close the loop to regulatory capture.
Coinbase is hugely threatened by regulations.
They are, but at the same maybe they’ll get big enough to get small fines for big crimes like HSBC helping out the cartels.
I hate this meme. HSBC used their judgement about something for which the law said they had to use their judgement. Then their judgement turned out to be wrong and apparently that's now a crime. Foreign exchange has legitimate use cases, it's not remotely comparable to cryptocurrencies.
Turning a blind eye to money laundering especially when given chances to fix it, and given that money laundering is enabling criminal enterprise that fucks up everyones life, from a household name bank that used to be my high school bank (point is how they market themselves as a nice bank) well I don’t know what to say. Not a meme though.
It's a meme in the sense that it's propagated virally and the story has mutated as it goes. There's no evidence that HSBC were wilfully blind to anything.
oh boy, wait until you hear about Tesla
Please don't post unsubstantive and/or flamebait comments. It causes threads to go to repetitive (and often inflammatory) places, which is a failure mode for HN.
https://news.ycombinator.com/newsguidelines.html
https://news.ycombinator.com/newsguidelines.html
There's something pretty surreal about an actual multi-billionaire running the youtube investor guru schtick.
You know it's possible for people to start YouTube channels as a hobby/side project/whatever. Not everyone with a YouTube channel is trying to scam you. Billionaires are people too. Justin Kan has a YouTube channel for example. You should check it out :-)
At least he's not selling a course
"How I Made $2B By Doing Almost Nothing", on sale now for a limited time. Only $19.99! Order today. And don't forget to like and subscribe. That would really help me out.
The better title would be "How I made $2B on an educated $300k bet" because even the best startup investors will tell you that investing that early is essentially betting.
And early-stage help and intros are crucial for startups - between YC and Garry's network I'm sure a ton of that contributed to their success as well. At the end of the day still a bet, but just saying.
And early-stage help and intros are crucial for startups - between YC and Garry's network I'm sure a ton of that contributed to their success as well. At the end of the day still a bet, but just saying.
You're right, that would be a better title.
And in Brian had simply bought bitcoins with his $10.000 in 2012, when the price was $4-$12 per piece?
He could have bought 833-2500 bitcoins, with a current value of $5.2500.000 - $157.500.000.
He choose to do more than "HODL" and go through the hard work of building a product and a company, which in my book, makes him a true hero. Even though he went the casino/shitcoin rout later...
He could have bought 833-2500 bitcoins, with a current value of $5.2500.000 - $157.500.000.
He choose to do more than "HODL" and go through the hard work of building a product and a company, which in my book, makes him a true hero. Even though he went the casino/shitcoin rout later...
Would bitcoin be worth nearly as much as it now if Coinbase didn't exist?
Plenty of exchanges out there, so I would say yes.
but Gemini is the only other regulated US one. Coinbase is huge, even bigger than binance. Something like 50 million ppl have an account. Ppl wondered why the July 2020 Twitter hacker made so little. The reason is, coinabse blocked withdrawals to the hacker address, which if they hadn't, the hackers would have made 3x more..so let that sink in..
Because Coinbase succeeded others didn't pop up. If they didn't exist others would exist.
But could he have held the BTC through all the crazy volatility since 2011?
Wow. Assuming he put in just $10,000 (and I imagine it was probably more than that), 6000x return would be 60 million dollars.
Any early companies out there right now seem like it could potentially offer even a 10th of that in ~5-10 years?
Any early companies out there right now seem like it could potentially offer even a 10th of that in ~5-10 years?
Well I bought BTC at $1 and so did many others, now it trades at $60k...
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Did you cash in and get filthy rich? Or sell too early and mad ragrets.
Rich with ragrets rather than filthy rich.
Damn, no ragrets. Yo but how does it feel to be moderately rich off of crypto? I wonder if anything would change besides not having to work.
This is the biggest difference. Just not a constant stress of keeping up to ensure survival and fulfilment for the family. Now I wonder how best to allocate time and capital, and I have not come up with good answers yet, so I'm still working until I have a better answer. So really all that has changed is mental space has less stress, and I have a much more appropriate family car.
but did you hold it this long?
i dunno how people say VCs have a return of only 9% year when Ycombinator is absolutely crushing that even with a high failure rate. AirBNB, box, dropbox, coinbase, etc.
Paul stumbled on an absolute goldmine by just giving a bunch of promising companies with good founders 10k in exchange for a decent portion of equity and then some of these companies being worth billions.
NOw you know what those homes and are so expensive in Palo Also and elsehwre, You got of these guys making fortunes, and that money tricked down everywhere.
Paul stumbled on an absolute goldmine by just giving a bunch of promising companies with good founders 10k in exchange for a decent portion of equity and then some of these companies being worth billions.
NOw you know what those homes and are so expensive in Palo Also and elsehwre, You got of these guys making fortunes, and that money tricked down everywhere.
> i dunno how people say VCs have a return of only 9% year when Ycombinator is absolutely crushing that even with a high failure rate
YC is a massive outlier and they have insanely good deal flow because of their brand.
YC is a massive outlier and they have insanely good deal flow because of their brand.
*and the people running it. The brand comes from the success of the companies which comes, in large part, because of the partners and network.
You won't find a better group of truly qualified, highly accomplished people giving advice to startups, holding talks for cohorts, etc. in any other accelerator anywhere, period.
You won't find a better group of truly qualified, highly accomplished people giving advice to startups, holding talks for cohorts, etc. in any other accelerator anywhere, period.
There are a lot of VCs out there. Some do well, some don't.
But remember that unlike the stock market, investing in a VC means locking up your money for 10 years. Slightly beating the market is not worth the liquidity loss, you have to do a good bit better.
But remember that unlike the stock market, investing in a VC means locking up your money for 10 years. Slightly beating the market is not worth the liquidity loss, you have to do a good bit better.
Yeah I get it, assuming I did it (which is a big, big if, I don't really trust my judgement to pick winning companies or there being some legal jiggery pokery or bad luck that makes me get nothing or almost nothing back), it would be something I do in addition to buying crypto/gold/silver and putting money into a 401k.
> by just giving a bunch of promising companies with
Selection bias. There are a heap of other companies that tried the YC model, and failed. It isn’t “just” good founders and 10k.
Selection bias. There are a heap of other companies that tried the YC model, and failed. It isn’t “just” good founders and 10k.
What is the return like for Ycombinator?
They currently take 7% of the company for $125k per https://www.ycombinator.com/deal/
I know in the past though that, at a minimum, the amount of money was different. I'd say it's still safe to assume they own 7% though - so more than a billion USD on paper, not bad.
I know in the past though that, at a minimum, the amount of money was different. I'd say it's still safe to assume they own 7% though - so more than a billion USD on paper, not bad.
He actually put in $300k, so his shares are worth around 2.4 billion now
Did he?
If he simply bought bitcoins with his $300.000 in 2012 (average bitcoin price of $8) then his net worth now would be .... 37500 bitcoins or $2.362.500.000 ... 2 point 3 billion frigging dollars...
What do you mean? How is that any better than the 2.4 billion worth of Coinbase shares he has now?
You phrase it like he made a mistake and lost out on a huge profit but the ROI is exactly the same so really don't understand your comment.
You phrase it like he made a mistake and lost out on a huge profit but the ROI is exactly the same so really don't understand your comment.
Actually at one point Bitcoin had an equal fork, so that number should be double for Bitcoin.
Not quite equal. At its peak Bitcoin Cash was about 25% of Bitcoin, and at a much lower price too. If you reinvested it at exactly the right time, you could multiply total yield by 1.25, but that's a big if.
Yeah, Bitcoin Cash is nowhere near its peak ~4 years ago, when it was like $2500 (it's $824 a coin this morning). It has not kept up with Bitcoin at all this bull run (although it has gone up, just nowhere near at the same rate). So yeah it'd be nowhere near double today's Bitcoin value.
It is actually interesting thought pattern, which would be better investment? With owning private equity there is also lots of work involved I would guess, with BTC you just sit on it... Latter is of course very hard in volatile market, while PE you probably can't liquidate.
In theory yes.
In practice, cashing out billions of dollars worth of stocks is easier than cashing out billions of dollars worth of crypto.
In practice, cashing out billions of dollars worth of stocks is easier than cashing out billions of dollars worth of crypto.
You wouldn't be selling those on the open market, institutions have been able to acquire billions of dollars worth of crypto OTC without moving markets.
Another option is, now that it's becoming clear to people that Bitcoin is here to stay, you can just borrow against it to spend (avoid taxes, hold on to the upside). Case in point, this person/group borrowed 300M$ with about 1B$ net worth[1].
1: https://defiexplore.com/cdp/8463
Another option is, now that it's becoming clear to people that Bitcoin is here to stay, you can just borrow against it to spend (avoid taxes, hold on to the upside). Case in point, this person/group borrowed 300M$ with about 1B$ net worth[1].
1: https://defiexplore.com/cdp/8463
> institutions have been able to acquire billions of dollars worth of crypto OTC without moving markets.
This is misleading. The markets definitely move, they just don't show a massive spike in the charts.
This is misleading. The markets definitely move, they just don't show a massive spike in the charts.
I still don't completely get the borrowing against your bitcoin. You'll end up having to pay that back with interest, so it's going to end up costing you more assuming the price stays the same.
Are people just banking on the assumption that it's going to go up higher than how much they have to pay back over time? What if that stops being true 5 years from now somehow, like another coin becomes dominant? Not saying it's likely, I do think Bitcoin will probably still be doing well in 5 years, but I'm not certain of it.
Are people just banking on the assumption that it's going to go up higher than how much they have to pay back over time? What if that stops being true 5 years from now somehow, like another coin becomes dominant? Not saying it's likely, I do think Bitcoin will probably still be doing well in 5 years, but I'm not certain of it.
I'm new to this. Is the collateral locked into the contract and unspendable until the contract is closed?
It's also kind of unclear what the interest is from that page. edit: apparently it's 8.5% https://mkr.tools/governance/stabilityfee
It's also kind of unclear what the interest is from that page. edit: apparently it's 8.5% https://mkr.tools/governance/stabilityfee
The interest rate varies based on collateral: https://oasis.app/borrow/markets. Eth is between 3-9% depending on liquidation ratios, and wBTC is at around 4.5% and both of these numbers are drops in the bucket when you consider that the collateral has appreciated a lot more than that.
And one more thing, it's not technically an interest rate, it's a stability fee (which btw, gets burned, used to go back to stakers, but they removed that).
And one more thing, it's not technically an interest rate, it's a stability fee (which btw, gets burned, used to go back to stakers, but they removed that).
Okay, so I suppose the stability fee is paid in MKR, and Dai's stability ultimately is regulated by people who buy MKR, and because MKR is burned by the CDP, people who buy MKR receive the "interest" indirectly due to deflation of MKR? Though MKR is independently traded and seems to move far more from trading than deflation.
It's just a smart contact vault, you can put collateral, take it out whenever you want, you just need to make sure that at any given point in time you have at least 150% of your debts value in collateral in the vault. This person is at over 400%, so very conservative borrowing, can withdraw some collateral.
There are also centralized versions with blockfi if you prefer traditional loans.
There are also centralized versions with blockfi if you prefer traditional loans.
150% collateral (66.7% LTV) seems fairly risky for an asset like Bitcoin tbh
It handled the black swan event of complete market crash at the beginning of the pandemic pretty easily. And the other thing is Bitcoin's market cap is well over 1T$ now, as expected the volatility goes down as the market cap goes up. I suspect those ratios are going to come down significantly within couple of years.
I read a bit online after this, and saw various recommendations for people with CDPs to keep more like 300% collateral.
If it dips below 150% the contract is automatically liquidated. Should give ample time for the creditor to get their money back.
If it dips below 150% the contract is automatically liquidated. Should give ample time for the creditor to get their money back.
How so? For example coinbase is happy to convert your early bought coins to fiat if you want, and these days the liquidity is billions.
I haven't looked at Coinbase stock liquidity, but I would be it is worse as BTC liquidity.
I haven't looked at Coinbase stock liquidity, but I would be it is worse as BTC liquidity.
OTC private block trade
it's not like the btc must be sold on an exchange
it's not like the btc must be sold on an exchange
[deleted]
“Additionally, it’s worth celebrating that Coinbase was always a good business, i.e. it always made money.”
Why is that worth celebrating? A company made money. That is what companies are created to do. I suppose if you invested in Coinbase, you could celebrate it. Otherwise, who cares?
Why is that worth celebrating? A company made money. That is what companies are created to do. I suppose if you invested in Coinbase, you could celebrate it. Otherwise, who cares?
It's a big internet cliché to boo companies that don't (yet) make money. The flip side would be to yay companies that do.
Not that many humans are consistent in that way, but someone out there must be!
Not that many humans are consistent in that way, but someone out there must be!
Making a company that makes money is a huge accomplishment.
But why celebrate it? So is graduating college or buying a house, but I am not celebrating those accomplishments of random strangers. Unless I am personally invested in Coinbase, why should I celebrate their “accomplishment”?
The article is written by an investor in Coinbase.
Dividends to HN users? Joking aside congrats! I'm planning on picking up a share or two as I did with Digital Ocean.
Whenever something charges/pays $0, it’s probably not a perfect price :)
They did give 0.1 btc in the early days. Which if you did hold into them would be roughly $6500 by today's rate (you'd also have BCH, BCHN, BSV and BTG).
They also seem to have quietly closed early users' accounts and taken the holdings.
Can confirm that happened to me.
I got .03 btc from the early days sign up. It's almost $2k now. Thanks Brian!
Crazy I missed another boat there. More will come down the river and I'll jump on the right one eventually.
I just looked at my Coinbase balance for the first time in a few years.
Apparently I got $5 of free bitcoin at some point in 2016 and it's now worth $800. Sweet!
Apparently I got $5 of free bitcoin at some point in 2016 and it's now worth $800. Sweet!
Indeed, Coinbase is so good that it doesn't look like a cryptocurrency exchange (despite the fact that it doesn't appeal to the more anarchic uses of crypto). Exchanges usually feel half-baked and there are tons of cases of security issues with the loss of customers' money.
Kudos to the team!
Kudos to the team!
From startup to IPO in under a decade. Well played!
Congratulations!
Not to take anything away from this accomplishment -- this is more a point of interest -- the average time from formation to IPO for a company that's going to is 6.3 years [1]
[1] https://www.statista.com/statistics/320793/median-time-ventu...
[1] https://www.statista.com/statistics/320793/median-time-ventu...
Well, what's the average time to a $100B IPO?
Getting closer to infinity every day.
I echo this sentiment lol, in general, why would you? I think it's pretty barbell shaped. Either you're going public in the sub-20B range, or you wait until you hit $1T+ like Aramco. That's not to say there won't be folks in the middle. But why go through the reporting requirements if you have no trouble raising capital, and only have to answer to a small group of smart money? May as well just buy back shares from your employees at secondary.
I know there's certain pressures - like the 7 year clock on RSUs, and there's still a cap on outside investors right?
I know there's certain pressures - like the 7 year clock on RSUs, and there's still a cap on outside investors right?
I still prefer Binance who are exposed to users via actual crypto (BNB) than Coinbase who are trying to eat the trad investors exposure and banking on their preferential treatment from US regulators.
Not to mention that Binance has 9x the volume, much much more crypto and is pro-competition and lists Coin on day 1 while CB wouldn't even consider listing BNB or anything by competitors.
Not to mention that Binance has 9x the volume, much much more crypto and is pro-competition and lists Coin on day 1 while CB wouldn't even consider listing BNB or anything by competitors.
Well, Binance is, somehow, dramatically more of a fly-by-night bucket shop intentionally looking the other way to people opening multiple accounts to avoid KYC -- and they won't event tell you in which country they're domiciled.
They're one of Team Tether's top partners in crime.
How on earth can you believe their volume numbers haha.
They're one of Team Tether's top partners in crime.
How on earth can you believe their volume numbers haha.
>intentionally looking the other way to people opening multiple accounts to avoid KYC
That's blatantly false. Many have been caught trying to circumvent via VPN or similar, it's just impossible to catch quite everyone no matter how hard you try.
>which country they're domiciled.
Malta?
That's blatantly false. Many have been caught trying to circumvent via VPN or similar, it's just impossible to catch quite everyone no matter how hard you try.
>which country they're domiciled.
Malta?
They won't tell you where their headquarters are "because Bitcoin doesn't have one":
https://www.coindesk.com/binance-doesnt-have-a-headquarters-...
In fact "Malta ... question mark?" is about as much information as we have.
And the KYC evade is just based on opening more accounts before you reach their threshold. Because rather than operating like a real business, requiring everyone to provide KYC during onboarding, they just look the other way.
https://www.coindesk.com/binance-doesnt-have-a-headquarters-...
In fact "Malta ... question mark?" is about as much information as we have.
And the KYC evade is just based on opening more accounts before you reach their threshold. Because rather than operating like a real business, requiring everyone to provide KYC during onboarding, they just look the other way.
They do require KYC for any fiat deposits or withdraws and not requiring them for small amounts of crypro-only trading is not unusual nor illegal.
That is quite literally illegal nowadays in many jurisdictions.
https://coingeek.com/binance-not-licensed-to-operate-in-malt...
Binance has never been in Malta, in fact they are not located anywhere. I would be very cautious in dealing with them because to me that kind of approach to regulation doesnt sound healthy.
Binance has never been in Malta, in fact they are not located anywhere. I would be very cautious in dealing with them because to me that kind of approach to regulation doesnt sound healthy.
> For example, the company’s chief growth officer, Ted Lin, told Decrypt just a few days ago, “We have offices in Malta for customer services, and some compliance people there, but it’s not the headquarters per say [sic]. It’s the spiritual headquarters. It’s a name that people think about when they think about Binance.”
Oh my god lol.
Oh my god lol.
It's on the Binance wikipedia page.
Wikipedia cites a Malta Today article from 2019.
> [Binance established their headquarters in Malta] soon after the Maltese government passed laws that provided a regulatory framework for businesses operating in the Cryptocurrency and Blockchain industry. The regulation officially passed into a law on July 4th 2018. Malta remains the only country in the world to officially pass such laws.
The Coindesk article from 2020 states:
> Until February [of 2020], Binance was considered to be based in Malta. That changed when the island European nation announced that, no, Binance is not under its jurisdiction. Since then Binance has not said just where, exactly, it is now headquartered.
And quotes CZ:
> “Well, I think what this is is the beauty of the blockchain, right, so you don’t have to … like where’s the Bitcoin office, because Bitcoin doesn’t have an office.” [1]
The Wikipedia article is stale, and incorrect on the basis of the subsequent statements from executives involved.
The beauty of blockchain indeed.
[1] https://www.coindesk.com/binance-doesnt-have-a-headquarters-...
> [Binance established their headquarters in Malta] soon after the Maltese government passed laws that provided a regulatory framework for businesses operating in the Cryptocurrency and Blockchain industry. The regulation officially passed into a law on July 4th 2018. Malta remains the only country in the world to officially pass such laws.
The Coindesk article from 2020 states:
> Until February [of 2020], Binance was considered to be based in Malta. That changed when the island European nation announced that, no, Binance is not under its jurisdiction. Since then Binance has not said just where, exactly, it is now headquartered.
And quotes CZ:
> “Well, I think what this is is the beauty of the blockchain, right, so you don’t have to … like where’s the Bitcoin office, because Bitcoin doesn’t have an office.” [1]
The Wikipedia article is stale, and incorrect on the basis of the subsequent statements from executives involved.
The beauty of blockchain indeed.
[1] https://www.coindesk.com/binance-doesnt-have-a-headquarters-...
> How on earth can you believe their volume numbers haha.
They might be inflating their numbers but they are definitively huge. Everyone I know who is involved in Crypto is using them.
They might be inflating their numbers but they are definitively huge. Everyone I know who is involved in Crypto is using them.
I doubt they are inflating them and it's trivial to check by going on both CB and Binance, looking at the order books and executing a few orders against them.
Right, you know in a completely unregulated market, you can just put fake things on the books yeah?
Remember that ETF that was trying to list a few years ago said 95% of all volume in the crypto space was fake. [1] Now, at the time, they included Binance as a legitimate exchange but you know nobody's looking and they can do literally whatever they want.
That designation is especially suspect as:
> Of the 10 exchanges, only Binance isn’t a money services business (MSB)
Consider of course this was 2 years ago.
This whole space is utterly uninvestable.
So let me reverse the question -- on what basis do you believe these unregulated fly by night bucket shops are on the up and up? What have they done to prove their legitimacy to you?
[1] https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-o...
Remember that ETF that was trying to list a few years ago said 95% of all volume in the crypto space was fake. [1] Now, at the time, they included Binance as a legitimate exchange but you know nobody's looking and they can do literally whatever they want.
That designation is especially suspect as:
> Of the 10 exchanges, only Binance isn’t a money services business (MSB)
Consider of course this was 2 years ago.
This whole space is utterly uninvestable.
So let me reverse the question -- on what basis do you believe these unregulated fly by night bucket shops are on the up and up? What have they done to prove their legitimacy to you?
[1] https://cointelegraph.com/news/bitwise-calls-out-to-sec-95-o...
correct. the part that seems to evade people's mental model of this process is that the exchanges know which orders in the book are theirs, but the customers do not, so there's no risk whatsoever of the exchange filling an order that works against their balance sheet. it all looks perfectly organic from the outside.
I mean, how can what's on the book be be fake if my trades are executed faster, the spread is smaller and I can take advantage of the higher liquidity??
Those things aren't just arbitrary numbers with no effect, if you are trading it's pretty noticable where the volume is higher even if you don't look at the order book.
Those things aren't just arbitrary numbers with no effect, if you are trading it's pretty noticable where the volume is higher even if you don't look at the order book.
Sorry? They most certainly can be arbitrary numbers. [1]
You know 99% of all LTC trading on Coinbase was one account trading back and forth with itself a couple years ago. Spoof trading involves putting up a big order, then yanking it at the last second before it gets executed.
If you're the house, you can do literally anything if only the fox is watching the henhouse. As the peer response states, if you're the house, you know which orders are yours so there's zero risk of them accidentally getting filled. You put fake orders on the books, you fake close them, and report them as a real transaction in the log. The liquidity can just be pretend.
[1] https://www.complianceweek.com/regulatory-enforcement/cftc-f...
You know 99% of all LTC trading on Coinbase was one account trading back and forth with itself a couple years ago. Spoof trading involves putting up a big order, then yanking it at the last second before it gets executed.
If you're the house, you can do literally anything if only the fox is watching the henhouse. As the peer response states, if you're the house, you know which orders are yours so there's zero risk of them accidentally getting filled. You put fake orders on the books, you fake close them, and report them as a real transaction in the log. The liquidity can just be pretend.
[1] https://www.complianceweek.com/regulatory-enforcement/cftc-f...
.. Again that's all good in theory but in practice you can verify by trading. My orders do get filled faster on Binance, I can take advantage of the better spread and liquidity etc. The majority of orders aren't just disappearing randomly or anything.
It's especially obvious when trading higher amounts or trading a smaller liquidity token in the first place. Maybe I can't verify the actual numbers but I can very much verify there's more liquidity etc. than when I do the same transactions on a smaller exchange (and I'm on ~5 exchanges).
It's especially obvious when trading higher amounts or trading a smaller liquidity token in the first place. Maybe I can't verify the actual numbers but I can very much verify there's more liquidity etc. than when I do the same transactions on a smaller exchange (and I'm on ~5 exchanges).
No you cannot verify by trading lol, any more than you can verify the payout ratio of a slot machine at a rigged casino. They can synthesize opening and closing the orders, matching them internally, based off a feed from a legitimate exchange. Since they control everything they can easily ensure they don't accidentally get matched to an external order. This gives the illusion of liquidity.
>any more than you can verify the payout ratio of a slot machine at a rigged casino.
If I use a slot machine a million times and I get higher payouts than at the casino next door, why should I consider it rigged?
This is just nonsense. I am getting all the benefits of high liquidity and volume, my orders actually execute and I take advantage of the smaller spread. You can posit whatever you want, but the more likely explanation is that the volume is indeed higher.
If I use a slot machine a million times and I get higher payouts than at the casino next door, why should I consider it rigged?
This is just nonsense. I am getting all the benefits of high liquidity and volume, my orders actually execute and I take advantage of the smaller spread. You can posit whatever you want, but the more likely explanation is that the volume is indeed higher.
They have not provided you with any reason to believe them. They won't even tell you where they're located lol.
This was a common growth hack for exchanges. When a new exchange launched they wanted to feign liquidity to establish a sense of credibility. They literally copied feeds from peer exchanges until they bootstrapped.
After all, why would anyone trade at an illiquid exchange? How do you get the first people onboard? You pretend you already have a lot of people onboard. More volume = more credibility.
The question you should ask yourself is if nobody is looking, why would they ever stop?
[note] by "growth hack" I mean literally a felony in any other context, but in the crypto space shrug who cares I guess. After all in which jurisdiction would you even sue them lol. Thanks to the "beauty of the blockchain" they won't even tell you where they're based.
This was a common growth hack for exchanges. When a new exchange launched they wanted to feign liquidity to establish a sense of credibility. They literally copied feeds from peer exchanges until they bootstrapped.
After all, why would anyone trade at an illiquid exchange? How do you get the first people onboard? You pretend you already have a lot of people onboard. More volume = more credibility.
The question you should ask yourself is if nobody is looking, why would they ever stop?
[note] by "growth hack" I mean literally a felony in any other context, but in the crypto space shrug who cares I guess. After all in which jurisdiction would you even sue them lol. Thanks to the "beauty of the blockchain" they won't even tell you where they're based.
That's a feature. Willingness to avoid onerous regulation or even break the law to benefit users is a good thing.
Yeah, it's not lol, it screws over legitimate participants to benefit the house.
that's assuming non-users aren't getting hurt.
Binance is used everywhere, whilst CB is mostly used by Americans.
CB abides by regulators and doesn't list every crappy project that comes along. They're trying to bring legitimacy to crypto. Binance is the wild wild west still and BNB is a centralized useless ETH sidechain.
>BNB is a centralized useless ETH sidechain.
I dont agree and what you are incorrectly talking about is probably BSC, not BNB.
I dont agree and what you are incorrectly talking about is probably BSC, not BNB.
Agree. I was involved in integrating Rosetta with a blockchain and it was great to see their push for standardised interfaces and requirements to get listed with them.
The definition of legitimacy in cryptocurrencies is "can you send or receive this on the blockchain?"
Arbitrary gatekeeping in an attempt to avoid the regulatory banhammer is somewhat of a lame kludge, in my view.
There is a ton of value available on chains and in tokens that regulators don't like.
Arbitrary gatekeeping in an attempt to avoid the regulatory banhammer is somewhat of a lame kludge, in my view.
There is a ton of value available on chains and in tokens that regulators don't like.
They're listing a scam that is XRP though.
Coinbase delisted them.
why is XRP a scam?
the reasons that XRP is considered a scam involves an ambiguous new standard that would require all securities and everything in the equities market to also be called scam. Things like there being a centralized issuer (like all assets except for physical commodities), things like all of the asset being created in advance which is called a premine (like all assets before crypto, except newly authorized shares which are then sold)
as XRP aspires not to be within the securities framework, there is still a desire of the market for more forthcoming disclosure and many people (including myself) don't like prior - but extremely successful - marketing of XRP/Ripple that didn't separate Ripple Inc activities from XRP use
but in the crypto space, scam is not defined at all and has complete dilution of any meaning. it is typically rooted in ignoring market sectors, in favor of a general all encompassing single cryptocurrency attracting all capital in the world at all times in perpetuity, so any crypto asset that dilutes some of that capital is called a scam because it slows down the desired world view. obviously people outside of the crypto space consider all of that to be an absurdity. the "middle" view is that there are assets that share a technology feature set that are simply bearable by the market, like any commodity or equity they can attract trillions of value even while a different technology matures that better matches an ideology of elitist enthusiasts.
as XRP aspires not to be within the securities framework, there is still a desire of the market for more forthcoming disclosure and many people (including myself) don't like prior - but extremely successful - marketing of XRP/Ripple that didn't separate Ripple Inc activities from XRP use
but in the crypto space, scam is not defined at all and has complete dilution of any meaning. it is typically rooted in ignoring market sectors, in favor of a general all encompassing single cryptocurrency attracting all capital in the world at all times in perpetuity, so any crypto asset that dilutes some of that capital is called a scam because it slows down the desired world view. obviously people outside of the crypto space consider all of that to be an absurdity. the "middle" view is that there are assets that share a technology feature set that are simply bearable by the market, like any commodity or equity they can attract trillions of value even while a different technology matures that better matches an ideology of elitist enthusiasts.
Users are moving to Binance Smart Chain (BSC) and using BNB because Ethereum transaction fees are too expensive for people that aren't rich.
Aren't the BSC/BNB gonna go up if lots of people use it? If not, what technological advantage does it have? If it's because it's too centralized... doesn't that defeat the whole purpose?
https://www.bsc.news/post/binance-chain-mainnet-lowering-of-...
It may become more decentralized over time as more validators are added.
It may become more decentralized over time as more validators are added.
Binance is a total mess compared to Coinbase in terms of usability.
Coinbase will be in every fund that needs crypto exposure. I can’t see how this thing doesn’t reach 1k, and splits a few times by end of year.
There are at least 14 applications right now to operate crypto ETFs.
Well, “direct listing” apparently. I don’t think that counts as an IPO since there’s no offering?
It seems not to be trading yet, or at least Google and Yahoo don’t have it.
It seems not to be trading yet, or at least Google and Yahoo don’t have it.
Fidelity doesn't have it yet either. It gives an error, something about not being able to purchase it until its on the secondary market.
I came here with the same question. When is this thing actually going live?
"early afternoon" is when people expect the first trades to hit.
It will be interesting to see how Coinbase performs compared to a weighted average of the top 3 cryptos directly.
Anyway, Coinbase is a good case study on how UX/UI makes all the difference. I'll definitely study them in the future.
Anyway, Coinbase is a good case study on how UX/UI makes all the difference. I'll definitely study them in the future.
A friend of mine knows several "movers and shakers" in the crypto space, and he says they're all going to invest heavily in COIN stock because they understand that everyone else views it as a proxy for crypto in general.
edit: why the downvotes?
edit: why the downvotes?
I imagine it should be tightly correlated. Saying this, the stock market is a lot more regulated and has a different type of investor so I think it will end up being much more stable and less correlated.
I predict a slow, constant increase in value over time, not even going down when cryptocurrencies are going down, as people still want to buy/sell cryptocurrencies when prices go down, so Coinbase will still make a killing as a company no matter what.
> as people still want to buy/sell cryptocurrencies when prices go down
Is this true?
If you look back at the price graphs, there's typically a huge run up every 1-3 years, followed by a crash, followed by another run up 1-3 years later. We're in the middle of a run up.
The run up is when people get excited and buy. After the crash, I would guess that enthusiasm about crypto will lessen, until the next run up.
I think this is somewhat supported by the fact that Coinbase's most recent quarter brought in an insanely higher amount of revenue compared with previous quarters before the latest run up.
Is this true?
If you look back at the price graphs, there's typically a huge run up every 1-3 years, followed by a crash, followed by another run up 1-3 years later. We're in the middle of a run up.
The run up is when people get excited and buy. After the crash, I would guess that enthusiasm about crypto will lessen, until the next run up.
I think this is somewhat supported by the fact that Coinbase's most recent quarter brought in an insanely higher amount of revenue compared with previous quarters before the latest run up.
> Is this true?
Yes. Go here: https://coinmarketcap.com/charts/ and select before February this year (big spike in volume) and look at the transaction volume chart below the price chart. Steadily increasing rather than jumping, going down and jumping again. I'm guessing transaction volume for Coinbase looks the same way, as people need fiat money for cryptocurrencies and others place fiat money in cryptocurrencies no matter if the price goes up or down.
Yes. Go here: https://coinmarketcap.com/charts/ and select before February this year (big spike in volume) and look at the transaction volume chart below the price chart. Steadily increasing rather than jumping, going down and jumping again. I'm guessing transaction volume for Coinbase looks the same way, as people need fiat money for cryptocurrencies and others place fiat money in cryptocurrencies no matter if the price goes up or down.
I believe Karri Saarinen was the founding designer at Coinbase, and here's a relevant blog entry from them: https://karrisaarinen.com/posts/designing-coinbase/
See also: Metalab's showcase of their collab with the Coinbase design team: https://projects.metalab.com/coinbase
See also: Metalab's showcase of their collab with the Coinbase design team: https://projects.metalab.com/coinbase
This. Both Coinbase and Stripe are were they are today almost entirely because they have mastered UX/UI.
I've met Fred Ehrsam multiple times at conferences when he was around as a VC. He's a great guy! Well done!
Any idea what time COIN will start trading?
Just started! Immediately spiked to over $400 from the listing reference price of $250.
Privately it was going for 540 earlier this week
This is a claim that would need a citation.
There were no authorized private markets in the last week,and Coinbase's stock issuance documents forbid sales without company approval.
FTX was trading over $600 at one point, but that was a synthetic asset and based off of an inaccurate estimate of the share count. Was that what you were referring to?
There were no authorized private markets in the last week,and Coinbase's stock issuance documents forbid sales without company approval.
FTX was trading over $600 at one point, but that was a synthetic asset and based off of an inaccurate estimate of the share count. Was that what you were referring to?
Yes, you're right.
Coinbase is definitely a success story in how to appeal to the masses. There were always alternatives, but coinbase always came out on top despite the high fees and poor customer service.
I think Coinbase as a publicly traded company will be very interesting to follow. Not only is it a massively cyclical industry, but the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase. It's very success should be inverse to the goals of crypto, and over time, one would think the relationship can only get more fragile.
I think Coinbase as a publicly traded company will be very interesting to follow. Not only is it a massively cyclical industry, but the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase. It's very success should be inverse to the goals of crypto, and over time, one would think the relationship can only get more fragile.
> the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase
That was the pitch of crypto. In practice, people are buying it as a bet that it will go up. I suspect most people are only buying it because the value is going up. If bitcoin actually worked like a currency and traded between $8k and $12 for the past 5 years, no one would care.
That was the pitch of crypto. In practice, people are buying it as a bet that it will go up. I suspect most people are only buying it because the value is going up. If bitcoin actually worked like a currency and traded between $8k and $12 for the past 5 years, no one would care.
Except currencies have much bigger market caps, it wouldn't have worked as a currency in that range (outside of a very small economy). We are now in the initial phase where it's being used as a store of value, but sooner or later, it's going to reach roughly it's true value at which point, you would expect it to behave more like a currency rather than an asset with a huge upside.
Currencies don't have market caps, assets have market caps. The fact that people talk about crypto's "market cap" is as clear an indication that it's not and never will be a currency.
Currencies definitely have total supplies which can be measured in USD. Let's not be finicky with definitions. https://fiatmarketcap.com/
Global wealth is $400T. All crypto currency combined is worth about ~$2T at this point. So to store 0.5% of the world's wealth, we are using 0.6% of the world's energy.
Banks obviously don't use anywhere near this much energy. Bitcoin is estimated to use more energy than all other server farms put together.
So we are using 0.6% of the world's energy to store 0.5% of the world's wealth. And < 0.6% of the world's energy to store the other 99.5% of the world's wealth.
Doesn't seem like the ideal wealth storage technology.
Banks obviously don't use anywhere near this much energy. Bitcoin is estimated to use more energy than all other server farms put together.
So we are using 0.6% of the world's energy to store 0.5% of the world's wealth. And < 0.6% of the world's energy to store the other 99.5% of the world's wealth.
Doesn't seem like the ideal wealth storage technology.
The energy spent on bitcoin’s proof of work is not tied to the volume of transactions though. At a technical/protocol level, the same amount of mining would be needed if there was $100 trillion being stored or $1 being stored.
Although higher prices make larger mining operations more enticing and profitable.
Although higher prices make larger mining operations more enticing and profitable.
The energy is not spent on storing though, it's expended when verifying transaction, isn't it?
In the sense that verifying transactions is what keeps the bitcoin network alive.
Yeah but if people would mostly store their bitcoins, wouldn’t the energy needs go down?
Here is where Bitcoin's wasteful algorithm comes in. The vast majority of the energy expenditure comes from bitcoin miners burning compute cycles to bid for the right to add the next round of transactions to the ledger, which happens every 10 minutes. The more energy that the miner spends on computing SHA1 hashes, the higher the chance that they'll find a lucky hash that entitles them to a monetary reward from the transaction fees, plus freshly minted bitcoins.
The idea behind this proof-of-work scheme is that creating an alternative blockchain history becomes prohibitively expensive, pushing the network to achive a distributed consensus. However, it's tremendously wasteful because the energy isn't actually being spent on "useful" work.
The idea behind this proof-of-work scheme is that creating an alternative blockchain history becomes prohibitively expensive, pushing the network to achive a distributed consensus. However, it's tremendously wasteful because the energy isn't actually being spent on "useful" work.
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I like this reasoning in terms of global wealth
I would include the energy needed to maintain trust in other currencies including efforts to prevent counterfeits, which I might argue includes some portion of a nation's militaristic might. Trust is an even more ambiguous, yet crucial aspect of maintaining a currency's value, tied up in the "order" or predictability of the society using the currency, which involves various legal systems and at the most basic level, relationships between its peoples.
It takes a relatively minuscule amount of energy to maintain a database of numbers associated with certain people and entities, but quite a significant amount to make it mean something.
It takes a relatively minuscule amount of energy to maintain a database of numbers associated with certain people and entities, but quite a significant amount to make it mean something.
I don't really understand this argument. If militaries are part of the embodied infrastructure of a country's banking system, this would imply that replacing the banking system with something decentralized (like cryptocurrency) would cause countries across the world to reduce their military footprint.
I find it much more likely that military resources would be diverted to somewhere upstream of mining in the value chain. For example, if we continue relying on carbon-intensive proof-of-work blockchains, why wouldn't armies simply be diverted to secure energy resources?
I find it much more likely that military resources would be diverted to somewhere upstream of mining in the value chain. For example, if we continue relying on carbon-intensive proof-of-work blockchains, why wouldn't armies simply be diverted to secure energy resources?
Yes, similar to countries going all over the world to find gold in years past. In that sense, fiat would require less military since you don’t need to go conquer anyone, just being able to project enough of a threat to stop counterfeiting is enough.
Either way, it’s very convoluted and tough to tease out line item costs, but I don’t think comparing electricity usage is a good proxy.
Either way, it’s very convoluted and tough to tease out line item costs, but I don’t think comparing electricity usage is a good proxy.
My point is that, if a country no longer derives its power and wealth from controlling the banking system through military might, rather than freely giving up that power, it's going to flex that military might in other ways to ensure that it maintains that power and wealth. If crypto merely displaces military resources (as I think it would) instead of replacing them (as you seem to be arguing), then it's not really fair to count the military as part of the banking system's energy/carbon footprint.
If this were actually true, Coinbase would not need to exist with a market cap of $100B.
This implies that the energy required to store wealth in centralized databases is easily calculable.
It also implies that the goal of storing wealth is optimizing for low energy usage, which seems less important than security/safety, ease of transfer, taxation, automation, and other factors.
I’m not making an argument for or against PoW. Just want to point out it’s possible >.6% of humans energy output may in fact go towards banking and payments.
It also implies that the goal of storing wealth is optimizing for low energy usage, which seems less important than security/safety, ease of transfer, taxation, automation, and other factors.
I’m not making an argument for or against PoW. Just want to point out it’s possible >.6% of humans energy output may in fact go towards banking and payments.
This is a poorly reasoned comparison. The .6% figure was in reference to .5% of wealth; presumably much more energy would be required to store closer to 100% of wealth with crypto.
Given that we are nearing the irreversible destruction of our climate and that existing electronic systems offer all the benefits you mention, but with massively lower energy cost, your claim that energy “seems less important” is unsupported.
Given that we are nearing the irreversible destruction of our climate and that existing electronic systems offer all the benefits you mention, but with massively lower energy cost, your claim that energy “seems less important” is unsupported.
That's why we need centralized exchanges like coinbase to enable off chain transactions within their walled garden. Then we can have the worst of both worlds.
What's the total energy cost, including human capital, of keeping the petrodollar afloat via global wars/hegemony?
Even if it is greater than 0.6% (it's plausible) - dollar denominated wealth accounts for 25% or global wealth. Which is 52.5x the amount of wealth as all of crypto.
The US doesn't even use 20% of the world's energy. So you would need to think that 125% of the energy the US produces and consumes goes directly into fighting wars and "supporting the petro dollar" - which is absurd. Almost 50% of energy is spent on transportation and utilities alone...
In the most generous of worlds, Bitcoin is 10x less efficient than the current systems. It is probably closer to 1000x less efficient (or more).
The US doesn't even use 20% of the world's energy. So you would need to think that 125% of the energy the US produces and consumes goes directly into fighting wars and "supporting the petro dollar" - which is absurd. Almost 50% of energy is spent on transportation and utilities alone...
In the most generous of worlds, Bitcoin is 10x less efficient than the current systems. It is probably closer to 1000x less efficient (or more).
Well the US has killed over a million people in Iraq, Afghanistan, and Syria in the current wars. How are you calculating the cost of that million lives to prop up the dollar?
This is one of the biggest selling points of crypto, it’s not tied to a government that may decide to commit mass murder for its sake.
This is one of the biggest selling points of crypto, it’s not tied to a government that may decide to commit mass murder for its sake.
Sadly this is true other than "no one would care". Many would care, just mostly not in countries with stable fiat.
But the success of BNB which is basically just a corporate database on a blockchain shows there is a big part of the community that doesn't care about decentralization at all.
But the success of BNB which is basically just a corporate database on a blockchain shows there is a big part of the community that doesn't care about decentralization at all.
One factor of that appeal in the US is that you have to provide your SSN to the exchange you're using. There's a lot of intangibles that Coinbase brings that overcomes the activation energy required to punch in those numbers on a web form.
Just an anecdote but, much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily.
Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.
Just an anecdote but, much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily.
Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.
> much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily.
> Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.
So...you're happy now, right?
> Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.
So...you're happy now, right?
lol Yes! I feel like a member of the economy now. A guid in a database somewhere...i have value.
In the past, Bitcoin exchanges IMO felt shady. They frequently were run from foreign countries and got away with avoiding Know-Your-Customer banking laws.
Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging.
Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging.
Yep. I always wanted to buy bitcoin way back in the day, it's just every time I almost joined an exchange (like Mt. Gox) they always made me feel really nervous and like I was going to lose my money (didn't help that several of them got hacked and did lose everyone's money).
Coinbase was the first company that made the whole process feel pretty safe and reliable.
Coinbase was the first company that made the whole process feel pretty safe and reliable.
> Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging.
I could be wrong but to me this makes every shill for crypto that says "it's anonymous!" a joke.
I had to provide a driver's license and do checking account verification to be approved on Coinbase. Does that not remove the anonymity or am I missing something?
I could be wrong but to me this makes every shill for crypto that says "it's anonymous!" a joke.
I had to provide a driver's license and do checking account verification to be approved on Coinbase. Does that not remove the anonymity or am I missing something?
It does remove any question of who you are for coinbase, but bitcoin was only ever pseudonymous transactions, not fully anonymous. We can all see how each wallet behaves.
and in an "audit" or "government" scenario, your Coinbase wallet is linked to your driver's license + checking account, right?
Do we know if Coinbase would cooperate with US government in such a situation? I would imagine they would.
I'd imagine they are also going to be sending IRS 1099-like forms for all crypto transactions, right?
Do we know if Coinbase would cooperate with US government in such a situation? I would imagine they would.
I'd imagine they are also going to be sending IRS 1099-like forms for all crypto transactions, right?
Yeah - it's not anonymous, the shill people didn't understand the technology and are wrong.
Every transaction is part of the public ledger. If you ever want to get money in or out from fiat you need some point that is going to require ID.
You could try and avoid this doing in person and cash, but if make any mistake ever your entire history of transactions is known.
Some people have tried to do things to obscure this (coin mixing), some coins exist to do something clever to make it private, but BTC isn't and the other stuff doesn't really work.
Coinbase is great because the original exchanges like "Magic The Gathering Exchange" (Mt. Gox) were amateur hour, they were routinely hacked and lost everyone's money. Coinbase was the first real company that showed up and did what they were supposed to do. They also made things easy with good UI.
I think this is partly because in the Mt. Gox days it wasn't taken too seriously, (most) people were playing with it because they thought it was cool not because they expected it to grow in to a trillion dollar monster.
Every transaction is part of the public ledger. If you ever want to get money in or out from fiat you need some point that is going to require ID.
You could try and avoid this doing in person and cash, but if make any mistake ever your entire history of transactions is known.
Some people have tried to do things to obscure this (coin mixing), some coins exist to do something clever to make it private, but BTC isn't and the other stuff doesn't really work.
Coinbase is great because the original exchanges like "Magic The Gathering Exchange" (Mt. Gox) were amateur hour, they were routinely hacked and lost everyone's money. Coinbase was the first real company that showed up and did what they were supposed to do. They also made things easy with good UI.
I think this is partly because in the Mt. Gox days it wasn't taken too seriously, (most) people were playing with it because they thought it was cool not because they expected it to grow in to a trillion dollar monster.
Bitcoin CAN be used anonymously if you never use an online exchange to convert fiat to Bitcoin or vice versa.
But yeah, otherwise I agree with you. Once you've bought your Bitcoin from Coinbase, your name is attached to a Bitcoin address. Law enforcement might not know where the coins go once you spend them, but they could subpoena you or otherwise make some sort of legal demand to know who you sent them to if they suspected you of buying illegal things.
But yeah, otherwise I agree with you. Once you've bought your Bitcoin from Coinbase, your name is attached to a Bitcoin address. Law enforcement might not know where the coins go once you spend them, but they could subpoena you or otherwise make some sort of legal demand to know who you sent them to if they suspected you of buying illegal things.
> Bitcoin CAN be used anonymously if you never use an online exchange to convert fiat to Bitcoin or vice versa.
How do you get a Bitcoin wallet registered and get funds into it?
How do you get a Bitcoin wallet registered and get funds into it?
You don't need to "register" a Bitcoin wallet anywhere.
If you download the desktop client, you have a wallet, and you don't need to log in or register anywhere. You can then create a Bitcoin address and have Bitcoin sent to it.
If you download the desktop client, you have a wallet, and you don't need to log in or register anywhere. You can then create a Bitcoin address and have Bitcoin sent to it.
> coinbase always came out on top despite the high fees
Commissions tend to come down as markets mature (with some exceptions like real estate) so I will be curious to see if this occurs in the crypto market as well. I suspect that appeal to the masses will not be a long-term durable advantage.
Commissions tend to come down as markets mature (with some exceptions like real estate) so I will be curious to see if this occurs in the crypto market as well. I suspect that appeal to the masses will not be a long-term durable advantage.
Early on coinbase made it very easy to buy, even if it meant taking losses. They allowed people to trade with funds that were not yet cleared. This was a long time ago. Some ppl could withdrawal the coins and then cancel the deposit by contacting the bank. that did not last long.
>the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase.
Not necessarily, the point of crypto is to reduce reliance on fiat money, due to the high fees of crypto it makes sense to build centralized services on top backed by decentralized cryptocurrencies, these exchanges dont hold real power, as you can just switch exchanges (unlike credit card processors). Bitcoin is like the internet gold, but you dont buy stuff with gold.
Not necessarily, the point of crypto is to reduce reliance on fiat money, due to the high fees of crypto it makes sense to build centralized services on top backed by decentralized cryptocurrencies, these exchanges dont hold real power, as you can just switch exchanges (unlike credit card processors). Bitcoin is like the internet gold, but you dont buy stuff with gold.
> the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase
Yes, that is still the case? Decentralized exchanges like Uniswap are dominating (over $1B volumes daily) and growing very rapidly. Crypto is and always has been about decentralization.
Yes, that is still the case? Decentralized exchanges like Uniswap are dominating (over $1B volumes daily) and growing very rapidly. Crypto is and always has been about decentralization.
Unpopular opinion - Bitcoin would be better without Coinbase.
Not very valuable opinion if you dont have any arguments.
Frankly I think crypto would be hardly anything like it is today without Coinbase. They made it accessible.
Not really. The ship of a single exchange or wallet dominating Bitcoin or the crypto space has sailed. It's quite hard for Coinbase to have any significant control over the network. (ie: Bitpay tried that and now they are mostly history).
Coinbase provides a regulated environment for trading crypto-currencies as well as on-off ramps to traditional finance. It's definitively a plus to have them around.
Coinbase provides a regulated environment for trading crypto-currencies as well as on-off ramps to traditional finance. It's definitively a plus to have them around.
What's the reasoning behind your opinion?
Were you in the space before Coinbase became big? Because I've had crypto exchanges get hacked and run away with my money. There was zero trust (for good reason) in any of the sites that let you buy crypto. Without Coinbase, this likely would still be a sketchy ecosystem that wasn't taken seriously. Coinbase was the first slick, trustworthy exchange based in the US. I personally am not very comfortable buying from foreign exchanges, and when I have to I move them out of those exchanges as fast as possible.
I think Coinbase was absolutely crucial in changing the public opinion of "buying bitcoin is for criminals" and "you just get hacked and lose it all".
I think Coinbase was absolutely crucial in changing the public opinion of "buying bitcoin is for criminals" and "you just get hacked and lose it all".
I was. Most Bitcoin OGs have a lot of animosity towards Coinbase. Some of it is the "eternal September"[0] effect that Coinbase had bringing a lot of new people who didn't embrace Bitcoin's values and just wanted to gamble on crypto.
But some of it is based on Coinbase's actions against Bitcoin over the years. They've promoted and helped pump up a lot of s*t coins, including forks of Bitcoin. And they've done little to support or further the values Bitcoin was built on or core development.
[0] https://en.wikipedia.org/wiki/Eternal_September
But some of it is based on Coinbase's actions against Bitcoin over the years. They've promoted and helped pump up a lot of s*t coins, including forks of Bitcoin. And they've done little to support or further the values Bitcoin was built on or core development.
[0] https://en.wikipedia.org/wiki/Eternal_September
Ideologically, sure, but practically? Not a chance. Coinbase was instrumental in helping Bitcoin achieve its current stature.
I used to buy my coins on MtGox, I am still waiting on the closure of that lawsuit in Japan.
Happy to have done business with Coinbase back in 2015..
Of course later on I looked for a better and cheaper exchange, but really, Coinbase helped Bitcoin grow as much as Bitcoin helped Coinbase grow...
Today Coinbase is just one of many faceless shitcoin casinos but they had their use, once upon a time...
Happy to have done business with Coinbase back in 2015..
Of course later on I looked for a better and cheaper exchange, but really, Coinbase helped Bitcoin grow as much as Bitcoin helped Coinbase grow...
Today Coinbase is just one of many faceless shitcoin casinos but they had their use, once upon a time...
Bitcoin is an enormously wasteful ponzi scheme mind virus and YC should be ashamed of their involvement in it - not proud. I long for the day (which it seems may come soon!) when cryptocurrencies are outlawed and we can all move on with our lives.
Outlawed? I don't think that will be possible. Bitcoin is part of the US financial system already!
https://en.wikipedia.org/wiki/Executive_Order_6102
This was almost certainly a blatant due process violation, though. FDR was fond of those.
This was almost certainly a blatant due process violation, though. FDR was fond of those.
BTC is different. It will never go down from here.
I would say it is a new paradigm!
Your existence is wasteful. If you don't like it, just don't use it? Why do you feel the need to tell others what do to with their lives and money?
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I use coinbase to store eth mined along time ago and to rake in free crypto when I'm bored. Today I got $5 in something called CELO.
Congrats, to YC. The world is full of people who will discount the success of Brian and , but in just a few short years he's created one of the world's largest financial institutions.
In line with the ethos of crypto? No, not at all, but a bridge has been made between the old world and the new. This IPO will load the coffers of some of the most innovative VCs, engineers, and people who took the risk of investing in, and working at Coinbase.
In line with the ethos of crypto? No, not at all, but a bridge has been made between the old world and the new. This IPO will load the coffers of some of the most innovative VCs, engineers, and people who took the risk of investing in, and working at Coinbase.
You would think they would raise for BTC/Cryptos instead of USD via IPO.
Really says a lot of their faith in Crypto's future.
Really says a lot of their faith in Crypto's future.
That's a disingenuous argument.
Just because you won't accept your salary in Euros, doesn't mean you don't have faith in the future of it.
Just because you won't accept your salary in Euros, doesn't mean you don't have faith in the future of it.
How so?
You would think the currency of the future would be liquid enough to provide capital for their growth no?
Why resort to raising USD?
You would think the currency of the future would be liquid enough to provide capital for their growth no?
Why resort to raising USD?
Coinbase did a direct listing and didn’t raise money from this event. They provided liquidity for their shareholders.
Again why not do it BTC if it is indeed the future?
This is a direct listing. Sure they could open up a private market so their investors could sell for Bitcoin, but:
1. I bet most shareholders already have plenty of crypto and should diversify.
2. Opening up a private market for Bitcoin-only sales really doesn’t help liquidity much.
It’s important to remember - this wasn’t a move for Coinbase to raise money, it was to enable people who have shares in Coinbase to be able to more easily sell.
1. I bet most shareholders already have plenty of crypto and should diversify.
2. Opening up a private market for Bitcoin-only sales really doesn’t help liquidity much.
It’s important to remember - this wasn’t a move for Coinbase to raise money, it was to enable people who have shares in Coinbase to be able to more easily sell.
It’s a cash out while they still can
I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream. It has significantly worse externalities than just about any company I can think of (including defense contractors/vaping companies), and, if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming. We are going to bestow a world that will be significantly worse than the one we inherited to our children, and, it's not like the carbon emissions that crypto is creating are used in the service of creating valuable technology - it's literally useless proof of work.
I've worked in tech for a long time now, and I believe the stereotype about amoral techies is completely untrue - yet seeing the adoption of crypto among my peers is really depressing. I'm not sure how so many of my peers who would never ever work for a defense contractor or a vaping company are willing to work in crypto at this point. My objections are not ideological - if someone invented a cryptocurrency that was completely green and it would take over the market, I'd be totally in favor of it.
I would genuinely like someone to explain it to me, because, the kinds of essays I've read that try to argue that crypto is actually good for global warming are so shoddy that I can't believe people would take them seriously absent a huge dose of motivated reasoning.
I've worked in tech for a long time now, and I believe the stereotype about amoral techies is completely untrue - yet seeing the adoption of crypto among my peers is really depressing. I'm not sure how so many of my peers who would never ever work for a defense contractor or a vaping company are willing to work in crypto at this point. My objections are not ideological - if someone invented a cryptocurrency that was completely green and it would take over the market, I'd be totally in favor of it.
I would genuinely like someone to explain it to me, because, the kinds of essays I've read that try to argue that crypto is actually good for global warming are so shoddy that I can't believe people would take them seriously absent a huge dose of motivated reasoning.
I would be worried more about living in a country with high inflation and been able to use cryptos. Can you share your specific concerns about environmental impact?
What do you think about computers that are always on 24/7? Or TVs that never turn off (even if the screen is off)?
(ETA: 23% of household energy use is by always-on devices. The scale of this waste is MASSIVE.)
Devices in our life consume energy 24/7 when we're not even using them or needing them to be on. Energy conservation has a LONG way to go.
In fact, one could argue that the current stock market system is a huge waste of energy compared to the benefit it actually brings to "raising money for companies".
(ETA: 23% of household energy use is by always-on devices. The scale of this waste is MASSIVE.)
Devices in our life consume energy 24/7 when we're not even using them or needing them to be on. Energy conservation has a LONG way to go.
In fact, one could argue that the current stock market system is a huge waste of energy compared to the benefit it actually brings to "raising money for companies".
We should do a much better job of building energy efficient devices, but, the amount of energy that's "wasted" by things like TVs that never turned off is really tiny compared to the energy footprint of the crypto ecosystem.
Further, I worry that crypto will grow massively. If that happens, all bets are off. In its current state, crypto consumes more energy than several large countries - imagine a world where that's 10x or 100x and we've still not moved off of proof of work. What's global warming going to look like?
Further, I worry that crypto will grow massively. If that happens, all bets are off. In its current state, crypto consumes more energy than several large countries - imagine a world where that's 10x or 100x and we've still not moved off of proof of work. What's global warming going to look like?
"A study by the Natural Resources Defense Council found that the energy use from Always On devices across the US accounts for 23% of power consumption in the average household, or a quarter of any given electricity bill. Our own research confirms this."
23% of energy used by households is by always on devices.
Not "tiny".
23% of energy used by households is by always on devices.
Not "tiny".
Two wrongs don't make a right.
Yes, unnecessary energy waste of other devices is bad and should be reduced. Fortunately, we're making strides to reduce electronics inefficiency all of the time.
Proof-of-work cryptocurrencies are uniquely bad because they become less efficient with each additional miner. The maximum number of Bitcoin transactions was the same a decade ago as it is now, but the energy consumption is many orders of magnitude higher and continues to increase.
When someone adds an additional server to a server rack or buys a new laptop, we also get a net increase in value. The new technology is likely to be more efficient, so we get a net increase in efficiency. Proof-of-work is the only technology that gets worse and worse over time, and literally pays people to continue making it worse.
Yes, unnecessary energy waste of other devices is bad and should be reduced. Fortunately, we're making strides to reduce electronics inefficiency all of the time.
Proof-of-work cryptocurrencies are uniquely bad because they become less efficient with each additional miner. The maximum number of Bitcoin transactions was the same a decade ago as it is now, but the energy consumption is many orders of magnitude higher and continues to increase.
When someone adds an additional server to a server rack or buys a new laptop, we also get a net increase in value. The new technology is likely to be more efficient, so we get a net increase in efficiency. Proof-of-work is the only technology that gets worse and worse over time, and literally pays people to continue making it worse.
Idle CPU !== full-blast GPU.
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Proof of stake is here in Ethereum 2.0 and it works great. Invest in that because this is the last hurrah for Bitcoin. The next cycle will be the “Ethereum is the new better Bitcoin” cycle. I say that as someone with almost all my net worth in Bitcoin but it has miserable transaction speed and energy usage. History has shown us that not innovating has never worked out for any company I can think of.
I've been reading a few of the white papers about this, but I'd absolutely love to go deeper in this. Do you have any suggestions?
I am especially interested in assessment about CO2 emissions from credible sources (please, no VCs with zero training in physical sciences posting thought leadership pieces, I beg you).
I am especially interested in assessment about CO2 emissions from credible sources (please, no VCs with zero training in physical sciences posting thought leadership pieces, I beg you).
Maybe I'm a huge cynic, it certainly wouldn't surpris me, but I think the people pumping up crypto this cycle aren't necessarily the kind that care about the difference. If anything they'll stay away from ETH because it lacks a long term cap.
One of the changes going into the July update is a transaction fee change that burns (throws away) part of the transaction fees. That will put some deflationary pressure on total issuance, while at the same time, when they switch to the staking chain total new issuance will be drastically cut since running a validator is far more efficient then mining.
What the long term inflation rate will be then is really set by the demand for transactions and how much congestion there will be on their network, driving up transaction prices and fees burned (or not).
What the long term inflation rate will be then is really set by the demand for transactions and how much congestion there will be on their network, driving up transaction prices and fees burned (or not).
So you are saying your money is not where your mouth is?
Incorrect, Ethereum is still using PoW.
If all you care about is energy usage and transaction speed, the traditional finance system still wins.
Unless people are actively trading bitcoin enough where the transaction cost because an issue, there's little reason to trade in their tulip bulbs for iris bulbs. A bet on a cryptocurrency is a bet that people will think it's worth more money, not an investment in the underlying technology.
Unless people are actively trading bitcoin enough where the transaction cost because an issue, there's little reason to trade in their tulip bulbs for iris bulbs. A bet on a cryptocurrency is a bet that people will think it's worth more money, not an investment in the underlying technology.
> If all you care about is energy usage and transaction speed, the traditional finance system still wins
Does it though? There are so many things to consider when talking about the "energy usage" of traditional money. All the vans moving money around, manufacturing, items to support PoS systems, sorting, protecting the money and so on.
Does it though? There are so many things to consider when talking about the "energy usage" of traditional money. All the vans moving money around, manufacturing, items to support PoS systems, sorting, protecting the money and so on.
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> There are so many things to consider when talking about the "energy usage" of traditional money.
Yes, so many things that BTC will never do. It's vastly less efficient and offers nothing like the range of services and products of the existing finance system.
Yes, so many things that BTC will never do. It's vastly less efficient and offers nothing like the range of services and products of the existing finance system.
Any idea where I can keep my money and generate 10 - 20% passive income like you can with DeFi in the traditional system? Most savings account have negative interest rates currently.
It's coming, but it's not there yet; you can't buy PoS ETH on any exchange I know. May be anywhere from 1-3 more years, but hopefully sooner. There have been coordinated efforts by the ETH miners to prevent the transition which has resulted in a political clusterfuck in the Ethereum landscape.
Cardano is the top cryptocurrency currently on PoS, and while I agree that the next cycle will be the ETH cycle, I think the one after that could be the ADA cycle.
Cardano is the top cryptocurrency currently on PoS, and while I agree that the next cycle will be the ETH cycle, I think the one after that could be the ADA cycle.
Bitcoin allows you to convert excess energy into money. Because it can be mined anywhere at any time, it's priced to the global low cost of energy. It doesn't make sense to use expensive energy sources.
Much of energy production is meant to meet peak demand and storage is difficult. Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste.
If you want to price energy or put a tax, by all means. But you shouldn't discriminate against particular usages of energy. You're angry at the wrong thing
Much of energy production is meant to meet peak demand and storage is difficult. Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste.
If you want to price energy or put a tax, by all means. But you shouldn't discriminate against particular usages of energy. You're angry at the wrong thing
"Excess energy" is a myth.
It's 2021, and transmitting energy across the power grid is easier and more efficient than ever before. No one is building hydroelectric dams in the middle of nowhere without a way to transmit that energy to somewhere else. It's still better to send the energy somewhere where they can replace coal-fired power plants than it is to burn it up mining cryptocurrency.
> Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste.
It's exceedingly rare for energy to "go to waste".
Miners do not really care about anything other than profit. As long as the profit out of their operations is greater than the cost of electricity going in, the machines will be running.
It's 2021, and transmitting energy across the power grid is easier and more efficient than ever before. No one is building hydroelectric dams in the middle of nowhere without a way to transmit that energy to somewhere else. It's still better to send the energy somewhere where they can replace coal-fired power plants than it is to burn it up mining cryptocurrency.
> Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste.
It's exceedingly rare for energy to "go to waste".
Miners do not really care about anything other than profit. As long as the profit out of their operations is greater than the cost of electricity going in, the machines will be running.
Across most of the world there are at least brief moments when the price of electricity goes negative. It happens because some energy sources cannot quickly be shut down (eg. Nuclear), so it makes financial sense to pay to get rid of electricity for brief periods.
These negative prices don't coincide worldwide, indicating that there is not sufficient electrical transmission capacity.
These negative prices don't coincide worldwide, indicating that there is not sufficient electrical transmission capacity.
> Miners do not really care about anything other than profit. As long as the profit out of their operations is greater than the cost of electricity going in, the machines will be running.
Exactly my point. That's why they choose the global lowest cost of energy provider. And if you allow the price system to work, this would be the least valuable undesirable energy. Anything else would be uneconomical.
Exactly my point. That's why they choose the global lowest cost of energy provider. And if you allow the price system to work, this would be the least valuable undesirable energy. Anything else would be uneconomical.
or they just bribe a local official and make profit on what would otherwise be 'desirable' energy.
This and - literally millions of office worker drones power a PC for MS Office/Excel whole day long for no net effective social or global benefit which the likes of Bitcoin will weed out eventually. And then one day we will replace Bitcoin with something even more effective.
this implies some sort of perfect price for energy which (regardless of the fossil fuels v. renewable angle) is a myth.
"Bitcoin mining is a great way to monetize energy that has a low market value and would likely go to waste."
Mining BTC is literally a waste.
There is no value creation at all.
Though some individuals may value it - it's not actually useful. The world economy does not grow one bit due to BTC or BTC mining - lives are not improved, products are not developed or made, or enabled etc..
Even if BTC were a very useful currency, it would still be wasteful to use considerable electricity to support it, because it's not necessary - it just happens to be the mechanism chosen to mine new coins.
Mining BTC is literally a waste.
There is no value creation at all.
Though some individuals may value it - it's not actually useful. The world economy does not grow one bit due to BTC or BTC mining - lives are not improved, products are not developed or made, or enabled etc..
Even if BTC were a very useful currency, it would still be wasteful to use considerable electricity to support it, because it's not necessary - it just happens to be the mechanism chosen to mine new coins.
You imply good will of bitcoin miners. Once it becomes big enough for state actors, people in power will burn the Amazon forest or dry up entire rivers to mine bitcoin. Our civilization is all about ruthless greed and bitcoin exploits this nicely.
>I'm horrendously worried about crypto gaining more marketshare as long as proof of work crypto remains mainstream.
It's not really remaining mainstream. Bitcoin is soon going to be the only big project (in terms of electricity used) with it. The industry as a whole is moving away from it quite fast at this rate, with ETH (second biggest) moving to PoS within a year, and almost every new project being a or on a non-PoW chain.
It's not really remaining mainstream. Bitcoin is soon going to be the only big project (in terms of electricity used) with it. The industry as a whole is moving away from it quite fast at this rate, with ETH (second biggest) moving to PoS within a year, and almost every new project being a or on a non-PoW chain.
The problem is that Bitcoin miners and investors have a huge incentive to keep the status quo.
Bitcoin is no longer the scrappy renegade alternative currency. It's big business now, with big institutional money behind it. The investors in these Bitcoin businesses do not want to see Bitcoin fall out of favor, and they're going to do everything in their power to keep it popular and profitable to mine.
Bitcoin is no longer the scrappy renegade alternative currency. It's big business now, with big institutional money behind it. The investors in these Bitcoin businesses do not want to see Bitcoin fall out of favor, and they're going to do everything in their power to keep it popular and profitable to mine.
Sure, but that's a Bitcoin problem not a crypto as a whole problem.
And let's face it - all the projects being built on crypto which can cause it to grow much further cannot be built on Bitcoin in the first place.
And let's face it - all the projects being built on crypto which can cause it to grow much further cannot be built on Bitcoin in the first place.
STX - Stacks is built on top of Bitcoin and allows smart contracts through proof of transfer.
Bitcoin and Ethereum are two entirely different value propositions. Ethereum is a lot more controlled by a central body, moves a lot faster and is optimized for entirely different things (flexibility, scale, building apps, etc).
You can't substitute one for the other. Both will likely continue to exist indefinitely.
You can't substitute one for the other. Both will likely continue to exist indefinitely.
Eth is always moving to POS ---> THIS YEAR.\
Believe it when I see it.
Believe it when I see it.
It is already live since December 1st, 2020 https://beaconcha.in. The next step is to perform the actual "merge" from PoW to PoS which will happen this year
PoW is on it’s way out - Ethereum is moving away from it and there is no reason for other cryptos to not follow.
The major player in PoW will remain Bitcoin, which won’t change.
But as soon as solar/wind become cheaper than coal, it will switch to green without a blink of an eye.
A random thought - I’m genuinely surprised Bitcoin folks didn’t yet crowdfund building a nuclear reactor for mining purposes ;) They crowdfunded first ASIC production lines which are 1000x cheaper, but at the time when Bitcoin was 1000x cheaper as well :)
The major player in PoW will remain Bitcoin, which won’t change.
But as soon as solar/wind become cheaper than coal, it will switch to green without a blink of an eye.
A random thought - I’m genuinely surprised Bitcoin folks didn’t yet crowdfund building a nuclear reactor for mining purposes ;) They crowdfunded first ASIC production lines which are 1000x cheaper, but at the time when Bitcoin was 1000x cheaper as well :)
Ethereum is quite centralised - people will follow the main developers.
Bitcoin probably wouldn't switch - there is no single person or group who could get majority support to force such a change.
Bitcoin probably wouldn't switch - there is no single person or group who could get majority support to force such a change.
Ethereum's development structure is only "centralized" in the same way that linux kernel development is "centralized". There is a big process that generates consensus across the community from a lot of different parties. By the time a change get into a pending hard fork, it's been through multiple rounds of establishing buy-in. Were the developers to push a major change in that didn't enjoy the support of the broader community, it would be abundantly apparent.
BTC is already mostly powered by green
The study I think you’re referring to came from a crypto company. It’s the equivalent of when cigarette companies released studies saying smoking was good for your health.
The green energy used by bitcoin miners would be used by others if bitcoin didn't exist. Instead those others use dirty electricity.
It's weird seeing this argument that green energy is somehow free and infinite energy.
And yet, look at the market for Nvidia and AMD GPUs right now. The miners already know that gamers have been pushed out of the high end GPU market. Supply and demand doesn't go away. People still need electricity for doing things other than mining Bitcoin. All that happens is their electricity rates go up.
And yet, look at the market for Nvidia and AMD GPUs right now. The miners already know that gamers have been pushed out of the high end GPU market. Supply and demand doesn't go away. People still need electricity for doing things other than mining Bitcoin. All that happens is their electricity rates go up.
it has been 5 years an ethereum is still a long way form any sort of POS adoption
The Beacon chain went live in December, 2020 and has been running without issues.
It now has about 4 Million ETH locked and staking which cannot be withdrawn - that's almost $8 billion worth of ETH locked until the move to PoS happens. Which means now there is some real pressure to make it happen soon enough (between 8-15 months).
The situation now with the Beaconchain live and running is very different from the past 4 years of research and planning.
https://beaconcha.in/
It now has about 4 Million ETH locked and staking which cannot be withdrawn - that's almost $8 billion worth of ETH locked until the move to PoS happens. Which means now there is some real pressure to make it happen soon enough (between 8-15 months).
The situation now with the Beaconchain live and running is very different from the past 4 years of research and planning.
https://beaconcha.in/
Bitcoin can only be demonstrably free of government controls by continuing to operate after being made illegal. I wonder if its creators actually intended to make it a target for legal sanction by building in conspicuous environmental costs.
Could there be an equilibrium where energy efficiency is achieved because miners have avoid using a noticeable amount of electricity to avoid legal trouble?
Could there be an equilibrium where energy efficiency is achieved because miners have avoid using a noticeable amount of electricity to avoid legal trouble?
2 links:
- In today’s news: https://www.zerohedge.com/crypto/critics-claim-bitcoin-threa...
- From earlier: https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...
- In today’s news: https://www.zerohedge.com/crypto/critics-claim-bitcoin-threa...
- From earlier: https://pomp.substack.com/p/bitcoin-mining-is-good-for-the-e...
These are two great examples of just how thin and self-serving the counter-arguments to crypto being an energy hog are. I'll save you some time...
The premise of the first article is that the carbon footprint of fiat currency needs to include the impact of an endless cycle of debt, inflation, recessions, and wars that fiat currency enables. Regardless of whether or not that cycle is true and driven by fiat currency is one thing... assuming that cycle would end if we could flip over to crypto is solidly ridiculous.
The second article talks about the fact that 75% of miners use renewable energy. Dig a level deeper into the source they cite and you see that it's 75% of miners who use renewable energy as a part of their "energy mix" (LOL) - and that it's more like 39% of the energy used in mining is renewable. They go on to talk about Great American Mining's efforts to mine using captured methane emissions from oil & gas production. It's an intriguing concept but it's literally in its infancy, and the source they are focused on looks like it accounts for less than 1/3 of methane emissions - https://www.epa.gov/ghgemissions/overview-greenhouse-gases#m...
The fact that the reasoning is so very thin in both of these examples tells me everything I need to know. People just want a headline to point to.
The premise of the first article is that the carbon footprint of fiat currency needs to include the impact of an endless cycle of debt, inflation, recessions, and wars that fiat currency enables. Regardless of whether or not that cycle is true and driven by fiat currency is one thing... assuming that cycle would end if we could flip over to crypto is solidly ridiculous.
The second article talks about the fact that 75% of miners use renewable energy. Dig a level deeper into the source they cite and you see that it's 75% of miners who use renewable energy as a part of their "energy mix" (LOL) - and that it's more like 39% of the energy used in mining is renewable. They go on to talk about Great American Mining's efforts to mine using captured methane emissions from oil & gas production. It's an intriguing concept but it's literally in its infancy, and the source they are focused on looks like it accounts for less than 1/3 of methane emissions - https://www.epa.gov/ghgemissions/overview-greenhouse-gases#m...
The fact that the reasoning is so very thin in both of these examples tells me everything I need to know. People just want a headline to point to.
You are right but you need to substitute "proof of work" for "crypto" when you talk about energy hogs. Proof of Stake is also crypto and does not need to guzzle power.
Interesting the mental gymnastics people are going through to defend their interests.
The cryptofolks are trying for gaslighting and Firehose of Falsehoods to cover up for their energy wastage projects.
The cryptofolks are trying for gaslighting and Firehose of Falsehoods to cover up for their energy wastage projects.
Well, I’ll tell ya, and this is just me.
But last night, I re-watched Waterworld. It was the first time in quite a while.
And I found myself thinking, “Man, that life would be pretty cool. Global warming would be pretty cool. Why haven’t the ice caps melted yet?”
Honestly, I remember they were supposed to be totally melted by 2007. And then it got pushed up to 2014. And then 2018. And now here we are in 2021 with the same thick, boring ice caps, and Dryland is still not a myth.
I don’t know about you, but I’m getting tired of our boring pre-apocalyptic world.
If Bitcoin is now what will bring about the Waterworld, then I’ll tell you what: I’m all for it.
Just call me “The Mariner.” ‘Cause I’ll be marinatin’ in BTC awaiting the end of this world, and the dawning of a far more watery one.
But last night, I re-watched Waterworld. It was the first time in quite a while.
And I found myself thinking, “Man, that life would be pretty cool. Global warming would be pretty cool. Why haven’t the ice caps melted yet?”
Honestly, I remember they were supposed to be totally melted by 2007. And then it got pushed up to 2014. And then 2018. And now here we are in 2021 with the same thick, boring ice caps, and Dryland is still not a myth.
I don’t know about you, but I’m getting tired of our boring pre-apocalyptic world.
If Bitcoin is now what will bring about the Waterworld, then I’ll tell you what: I’m all for it.
Just call me “The Mariner.” ‘Cause I’ll be marinatin’ in BTC awaiting the end of this world, and the dawning of a far more watery one.
Couldn't agree more.
I struggle to comprehend how an energy obliterating and (relatively speaking) primitive technology like Bitcoin is the top dog in this space. Sure, first mover advantage counts for something, but come on - how has superior tech not yet left it in the rearview.
In a space that moves at such rapid pace with heavy investment and buckets of innovation, at some point the crowd surely will migrate en masse to a PoS based blockchain like (most likely but won't be fully operational until ~2022) Eth2, or (less likely but still in with a shout) Algorand, Tezos, etc.
I struggle to comprehend how an energy obliterating and (relatively speaking) primitive technology like Bitcoin is the top dog in this space. Sure, first mover advantage counts for something, but come on - how has superior tech not yet left it in the rearview.
In a space that moves at such rapid pace with heavy investment and buckets of innovation, at some point the crowd surely will migrate en masse to a PoS based blockchain like (most likely but won't be fully operational until ~2022) Eth2, or (less likely but still in with a shout) Algorand, Tezos, etc.
PoS is yet to be proven, I'm really hoping eth2 shows that it actually works, because the other ones with PoS aren't that heavily used or tested in adversarial ways.
When it comes to money and value, the utmost important thing is security, that's the tradeoff that Bitcoin makes and that's what people are buying into. Everything else is secondary.
When it comes to money and value, the utmost important thing is security, that's the tradeoff that Bitcoin makes and that's what people are buying into. Everything else is secondary.
cardano is completely distributed PoS 46 billion market cap (5th largest crypto) - I'm not sure what you mean by "yet to be proven"
it also theoretically supports 1MM tx/second - to put that into perspective VISA does somewhere in the ballpark of 2k tx/second (but theoretically can do much more than that I'm sure)
it also theoretically supports 1MM tx/second - to put that into perspective VISA does somewhere in the ballpark of 2k tx/second (but theoretically can do much more than that I'm sure)
As much as I like Cardano and as much as I have faith that it will succeed, I think you might be overstating what has been accomplished so far.
- The network is decentralised and running Proof of State.
- The network is not currently running automated peering. Block producing peers are manually selected by stake pool operators at the moment. This doesn't necessarily make the network more centralised but it exposes certain risks. A node update (and I believe a protocol update as well) will be coming out in the next 2-3 months that will transition SPOs to running automated peering.
- The network currently sits around 250-300tx/s max.
- A near term (next 6 or so months) protocol revision will be raising that limit to around 1k tx/s.
- Hydra (isomorphic state channels) allows 1k tx/s to be processed per state channel (which then periodically checkpoints against the network) and was demonstrated to maintain these performance metrics up to 1k state channels.
So the network is decentralised and it is doing very well however it is not currently capable or currently theoretically capable of handling 1MM tx/s. It can however handle an impressive amount of transactions compared to many other decentralised networks at the moment. The protocol revisions that will allow close to the stated 1MM tx/s are completed with corresponding papers (containing formal proofs and simulations to support tx rate and security claims) already accepted to or well received at cryptography conferences.
Cardano is doing very well and moving at a solid pace however overstating where the project is and what it is capable of will only serve to undermine outside perception of the project.
- The network is decentralised and running Proof of State.
- The network is not currently running automated peering. Block producing peers are manually selected by stake pool operators at the moment. This doesn't necessarily make the network more centralised but it exposes certain risks. A node update (and I believe a protocol update as well) will be coming out in the next 2-3 months that will transition SPOs to running automated peering.
- The network currently sits around 250-300tx/s max.
- A near term (next 6 or so months) protocol revision will be raising that limit to around 1k tx/s.
- Hydra (isomorphic state channels) allows 1k tx/s to be processed per state channel (which then periodically checkpoints against the network) and was demonstrated to maintain these performance metrics up to 1k state channels.
So the network is decentralised and it is doing very well however it is not currently capable or currently theoretically capable of handling 1MM tx/s. It can however handle an impressive amount of transactions compared to many other decentralised networks at the moment. The protocol revisions that will allow close to the stated 1MM tx/s are completed with corresponding papers (containing formal proofs and simulations to support tx rate and security claims) already accepted to or well received at cryptography conferences.
Cardano is doing very well and moving at a solid pace however overstating where the project is and what it is capable of will only serve to undermine outside perception of the project.
No, Cardano is still centrally coordinated, with an intention to go actual PoS some day.
I'd be curious what you mean by centrally coordinated and not PoS?
There are certain ways that Cardano is not yet fully decentralised to be sure but the network is operating as a proper decentralised PoS network.
The network has been transitioning from Federated nodes to Decentralised nodes (transferring by about 2% every 5 to 10 days) for the past few months. The d parameter (marking the transfer from 100% federated(1.0) to 100% decentralised(0.0)) ticked down to 0 at the end of last month and block production is fully decentralised.
Where it is still centralised:
- Peering between block producing nodes is currently manual however automatic peering will be enabled before the end of the quarter.
- Development is largely controlled by the Cardano Foundation, IOG, and EMURGO. This isn't unusual in the decentralised software space however the plan is to transition to handling development/feature contracts via on-chain voting and treasury disbursement (and this is already being trialled through Project Catalyst as a decentralised accelerator program) within a year or so. All feature integration and HFC event mechanics however are properly decentralised.
There are certain ways that Cardano is not yet fully decentralised to be sure but the network is operating as a proper decentralised PoS network.
The network has been transitioning from Federated nodes to Decentralised nodes (transferring by about 2% every 5 to 10 days) for the past few months. The d parameter (marking the transfer from 100% federated(1.0) to 100% decentralised(0.0)) ticked down to 0 at the end of last month and block production is fully decentralised.
Where it is still centralised:
- Peering between block producing nodes is currently manual however automatic peering will be enabled before the end of the quarter.
- Development is largely controlled by the Cardano Foundation, IOG, and EMURGO. This isn't unusual in the decentralised software space however the plan is to transition to handling development/feature contracts via on-chain voting and treasury disbursement (and this is already being trialled through Project Catalyst as a decentralised accelerator program) within a year or so. All feature integration and HFC event mechanics however are properly decentralised.
Thank you for providing technical details.
Not anymore, it's fully decentralized since recently
no it's not, where would you even come up with the idea that it was?
What would be the criteria for saying 'eth2 works' in your view ?
Bitcoin is the only cryptocurrency that is very hard to change. This property is critical for sound money, including for the emission schedule.
Other coins are easy to change and so cannot be relied upon to preserve any properties, including emission schedule.
Vast majority of coins is also not decentralized at all and being so prone to get effectively regulated.
Other coins are easy to change and so cannot be relied upon to preserve any properties, including emission schedule.
Vast majority of coins is also not decentralized at all and being so prone to get effectively regulated.
This is just plain incorrect. Every cryptocurrency's rules can be changed via hard fork. Bitcoin doesn't have any magic property that guarantees there won't be a hard fork affecting the emission schedule.
Bitcoin actually has this "magic" property of being very, very hard to change. It is derived from community extremism against changes and from the huge number of players who would need to agree and then huge number of existing deployments that are very slow to upgrade.
Bitcoin is hard to change the similar way TCP/IP protocol stack is hard to change.
Bitcoin is hard to change the similar way TCP/IP protocol stack is hard to change.
It's easier than you think. Just five organizations command >50% of hashpower[0]. I don't think it's likely to change soon but it's not out of the realm of possibility, and it's not even the most decentralized cryptocurrency in terms of difficulty to enforce new network rules.
[0] https://news.bitcoin.com/5-mining-50-btc-hashrate/ (I fully understand this is a pro-BCH site but their sources are accurate)
[0] https://news.bitcoin.com/5-mining-50-btc-hashrate/ (I fully understand this is a pro-BCH site but their sources are accurate)
Bitcoin's "magic property" is the faith that the miners have. It has been hardforked, but the majority of computing power has chosen to stay on Bitcoin.
I fully understand that, but sentiment can change. It's disingenuous to say it won't change in the future because it hasn't yet changed.
> Sure, first mover advantage counts for something, but come on - how has superior tech not yet left it in the rearview.
To me it demonstrates perfectly that this market is largely speculation based on brand recognition and number-go-up-tech rather than any use of the currency. If it was based on use and capabilities then yes, we would expect BTC to be superseded by its more capable cousins.
But it's not.
To me it demonstrates perfectly that this market is largely speculation based on brand recognition and number-go-up-tech rather than any use of the currency. If it was based on use and capabilities then yes, we would expect BTC to be superseded by its more capable cousins.
But it's not.
I largely agree. It's specifically because Bitcoin is perceived to be a place to hide capital from inflation - and the world is comically flooded with capital right now, chasing anything and everything - while all the central banks are busy vaporizing their garbage fiat. Bitcoin is not a currency. It's bizarre that people keep calling it that, years after it became obvious that it's not. If it were a currency, Bitcoin would collapse rapidly toward zero, because it's wildly impractical as a currency.
The Forbes list of world billionaires features 2755 names. They gained $5 trillion in wealth over the past year. Bitcoin is a trivial toy next to the wealth in the world today. A fun little token play thing, a place to hedge a couple of bucks, it goes in the basket.
The Forbes list of world billionaires features 2755 names. They gained $5 trillion in wealth over the past year. Bitcoin is a trivial toy next to the wealth in the world today. A fun little token play thing, a place to hedge a couple of bucks, it goes in the basket.
Which seems to me exactly like the sort of thing that will work out great, until it doesn't.
Best of luck.
Best of luck.
Tether is how BTC stays at the top.
I've often thought that, maybe, PoW crypto could be the Great Filter.
I feel like there is a good sci-fi book here. Bitcoin continues to gain speculators, continues to rise in "value", and humans are largely powerless to stop it. It ends up forcing humans to produce more and more electricity, thus heating up the planet in a horrible feedback loop. A crypto twist on the nanontech "gray goo" threat.
I feel like there is a good sci-fi book here. Bitcoin continues to gain speculators, continues to rise in "value", and humans are largely powerless to stop it. It ends up forcing humans to produce more and more electricity, thus heating up the planet in a horrible feedback loop. A crypto twist on the nanontech "gray goo" threat.
I think the sci-fi end state is an interstellar civilization that exists largely to grow an ever-expanding system of Dyson Spheres, harnessing entire stars solely to fuel proof-of-work cryptocurrencies.
Just put a carbon tax on everything that has environmental externalities, it's as simple as that, it doesn't make sense to target a specific industry, especially one that uses stranded/renewable energy.
This is the simple answer. In the unlikely event Bitcoin moves to PoS, miners will just redirect their hardware to other coins
The simple solve: price the externality.
The simple solve: price the externality.
broad-based consumption taxes are the best theoretical response, but politically no one is going to impose them at the levels needed to discourage consumption, and they almost always get perverted in their application with carve-outs and exemptions. Plus where does that money go? At best it's an inefficient recycling paradigm when what we really need is an at-source reduction in consumption in the first place.
I think the idea is that it discourages certain kinds of consumption, and that's carbon-based consumption. Once upon a time, that could have been construed as a broad-based consumption tax simply because there were no non-carbon alternatives. Today, in 2021, that's not the case. Solar is already the cheapest source of electricity, and the relatively higher price of CO2 emitting energy is already a market-based "consumption tax". A carbon-tax just exacerbates and speeds up what's already happening. That's probably acceptable because time is of the essence as far as the climate goes.
The goal should not be to discourage consumption, the goal should be carbon neutrality.
Any industry such as fossil fuel power plants must buy carbon offset credits/tokens from industries or companies that sequester carbon. Then let the market solve the problem. The credits/tokens may turn out to be very cheap.
Any industry such as fossil fuel power plants must buy carbon offset credits/tokens from industries or companies that sequester carbon. Then let the market solve the problem. The credits/tokens may turn out to be very cheap.
No credible way to decouple production/consumption from emissions has been found. So no, we do need to start curbing consumption, especially among people in the top wealth quantiles (because they consume the most).
Cap-n-trade was a very successful program for reducing nox and sox emissions. If you create the right incentives, markets tend to find a way.
They still aren't decoupled from emissions. IIRC Emissions actually grow faster than GDP, so it's actually worse than a simple coupling: it's a feedback coupling.
All studies that have looked at seeming decoupling of emissions from the economy have found that they decoupling was due to outsourcing the emissions to other countries. Markets cannot solve emissions as long as value is a function of production.
All studies that have looked at seeming decoupling of emissions from the economy have found that they decoupling was due to outsourcing the emissions to other countries. Markets cannot solve emissions as long as value is a function of production.
Countries that tax emissions should simply levy a proportional tariff on goods imported from countries that do not tax emissions.
Wouldn't this eliminate the incentive to outsource the emissions? You could even add some margin to the tariff such that it is more economical for countries to tax the emissions themselves rather than pay the tariff.
Wouldn't this eliminate the incentive to outsource the emissions? You could even add some margin to the tariff such that it is more economical for countries to tax the emissions themselves rather than pay the tariff.
> we do need to start curbing consumption
You do that by increasing the cost of consumption. Everyone has, even wealthy people, have a price point beyond which something is too expensive for them.
You do that by increasing the cost of consumption. Everyone has, even wealthy people, have a price point beyond which something is too expensive for them.
I agree, and what better way than to impose a tax on consumption after X dollars. Or perhaps even a general luxury tax for goods that aren't absolutely necessary for your welfare.
Still better would be to start taxing natural resource usage, or even setting quotas with strict penalties. But it's hard to see politicians going along with it and I don't know if it can be monitored sensibly.
Still better would be to start taxing natural resource usage, or even setting quotas with strict penalties. But it's hard to see politicians going along with it and I don't know if it can be monitored sensibly.
> start taxing natural resource usage
I'd go with taxing fossil fuel extraction. Every barrel of oil, liter of nat gas, or ton of coal is taxed. The revenue from these taxes should go towards either a) carbon capture or b) tax credits for lower-income households or c) UBI. The costs of these taxes will propagate throughout the economy and everyone will adjust their consumption accordingly.
I'd go with taxing fossil fuel extraction. Every barrel of oil, liter of nat gas, or ton of coal is taxed. The revenue from these taxes should go towards either a) carbon capture or b) tax credits for lower-income households or c) UBI. The costs of these taxes will propagate throughout the economy and everyone will adjust their consumption accordingly.
The goal should perhaps even be carbon negativity. Structure our economic systems such that removing pollution pays.
> politically no one is going to impose them at the levels needed to discourage consumption
This seems like one of those Overton-window true-if-and-only-if-the-media-say-it's-true things, like the supposed taboo against vaccine challenge trials which was recently falsified in a poll.
> where does that money go?
To the low-income people who are supposed to be the insuperable political obstacle to carbon taxes in the first place?
Politics is hard, yes, but this Overton-window kind of reasoning just drags at any real solution to anything. It's not worth any allegiance.
This seems like one of those Overton-window true-if-and-only-if-the-media-say-it's-true things, like the supposed taboo against vaccine challenge trials which was recently falsified in a poll.
> where does that money go?
To the low-income people who are supposed to be the insuperable political obstacle to carbon taxes in the first place?
Politics is hard, yes, but this Overton-window kind of reasoning just drags at any real solution to anything. It's not worth any allegiance.
"it doesn't make sense to target a specific industry"
Normally, we wouldn't want to target one line of business over another because we want the market to figure out where the most value creation is, but it's not always the case.
In this case it makes sense to target people who are literally wasting electricity for supporting a Ponzi scheme. Even if BTC or Crypto is eventually a useful medium of exchange, there's still no reason at all to waste energy in it's proliferation.
Electricity transportation, and to some extent production - is partly socialized in most countries.
The market is not 'all knowing', it's full of asymmetries, we regulate all sorts of things for that reason.
Normally, we wouldn't want to target one line of business over another because we want the market to figure out where the most value creation is, but it's not always the case.
In this case it makes sense to target people who are literally wasting electricity for supporting a Ponzi scheme. Even if BTC or Crypto is eventually a useful medium of exchange, there's still no reason at all to waste energy in it's proliferation.
Electricity transportation, and to some extent production - is partly socialized in most countries.
The market is not 'all knowing', it's full of asymmetries, we regulate all sorts of things for that reason.
I wouldn't be too worried. The industrial revolution brought us many things which were just as disastrous, for example certain chemicals, but these things can get regulated. DDT is no longer used like it was used in the 70s.
Let Bitcoin be Bitcoin, let the G7 (or whoever finds himself responsible) quickly regulate the power consumption issue, then PoW will likely disappear for mainstream applications. Luckily there are alternatives.
Let Bitcoin be Bitcoin, let the G7 (or whoever finds himself responsible) quickly regulate the power consumption issue, then PoW will likely disappear for mainstream applications. Luckily there are alternatives.
As someone quite involved in the Ethereum ecosystem - I totally agree. I also believe the Ethereum network will switch entirely to Proof of Stake this year.
I was thinking of trying to make a coin/token that would fight global warming to help counter that stuff. Basically if you buy it the money goes into a fund some of which goes to carbon capture / anti warming causes, some is retained for buying back coins for liquidity. Anyone think that's a good idea?
A dissenting opinion. If those in power really cared about global warming, the WH would have codified work from home into law. Right now the big corps are pulling workers back to offices, so millions of office workers are going to drive back and forth again. Obviously, the media prefers to talk about the bad bitcoin instead.
Naive related question from a crypto n00b that a lazygoogle failed to answer:
I just plotted some Chia. I left my laptop open to do this. Usually I would just put the laptop in power save mode all night.
My understanding is that to actually make any Chia, I would need to wait ~1 year with my one 100GB plot with full-power mode enabled. Vs mostly with the case closed, as it is now, while I do other things.
And this doesn't even account for the rare elements etc needed to fabricate my hard disk.
So, general naive questions:
1. Vs Proof of Work, just how much better are Proof of Space/Proof of Stake/$HDOS_SUPER_AWESOME_PROOF in terms of energy consumption but also other standard measures of environmental impact?
2. How much worse, if at all, are they vs the null hypothesis of "modern" pre-crypto finance?
Has anyone run credible numbers on these things?
I just plotted some Chia. I left my laptop open to do this. Usually I would just put the laptop in power save mode all night.
My understanding is that to actually make any Chia, I would need to wait ~1 year with my one 100GB plot with full-power mode enabled. Vs mostly with the case closed, as it is now, while I do other things.
And this doesn't even account for the rare elements etc needed to fabricate my hard disk.
So, general naive questions:
1. Vs Proof of Work, just how much better are Proof of Space/Proof of Stake/$HDOS_SUPER_AWESOME_PROOF in terms of energy consumption but also other standard measures of environmental impact?
2. How much worse, if at all, are they vs the null hypothesis of "modern" pre-crypto finance?
Has anyone run credible numbers on these things?
Proof of stake has no mining, no datacenters. If proof of stake ends up working it would probably be almost as effective as Visa currently is. Visa is always going to be more efficient due to it's centralized nature. Currently one bitcoin transaction uses the same amount of energy as driving a tesla 2000 miles, so POS is quite an improvement.
Proof of stake still requires cryptographic validation of each block by each node, so it uses much less energy than PoW, but not none.
I think "no miners, still (distributed) datacenters" would be more accurate.
I think "no miners, still (distributed) datacenters" would be more accurate.
Proof of stake is not secure, there is no way to recover from a 51% attack. Proof of work and proof of space are much better.
Proof of space/time is a bad idea and you're right, it will put incentives on manufacture and hoarding of storage space.
Proof of stake involves using staking of cryptocurrency to secure the currency. In theory it avoids the resource usage of the other types of proof. In theory.
Proof of stake involves using staking of cryptocurrency to secure the currency. In theory it avoids the resource usage of the other types of proof. In theory.
Like a lot of bubbles, there is FOMO and lack of understanding of the technology. It is easy to compare crypto to the internet. When the internet first started out a lot of people didn't invest in GOOG because it was not obvious where the revenue would come from.
People are afraid of making the same mistake here as well. "I don't know how BTC will generate cashflow outside of being a Ponzi scheme, but I assume the technology will advance and revolutionize finance" so they buy.
People are afraid of making the same mistake here as well. "I don't know how BTC will generate cashflow outside of being a Ponzi scheme, but I assume the technology will advance and revolutionize finance" so they buy.
GOOG was a good investment because nobody invested in it. If everyone had invested in GOOG, it would not have been as good an investment since its success would already be priced in.
If the number has already gone up, you are too late. If everyone is talking about it, you are too late.
If the number has already gone up, you are too late. If everyone is talking about it, you are too late.
I don't know what BTC will do, but this is a banality and mostly wrong in any way that's important.
"The number has gone up" for Google almost since it has gone public.
If you bought BTC at $1 and it went to $10 - is $10 too late? The number went up.
The hard part is it's hard to know the underlying value of things and a lot of value is socially determined by how others value something.
Why is gold traded as an expensive commodity? It has some tiny practical uses, but is that why the price fluctuates? People trade it because they think other people will trade it and use it as a store of value when other stuff is volatile.
Some people think BTC's scarcity guarantees provide a similar digital version of that. It's volatile now because it's still early and uncertain, but if that's true then BTC's price could be very high and it's hard to know if you're too late.
For other Non-BTC coins unlikely to get the same level of social buy-in their value is a lot more questionable imo. ETH has some real underlying applications (uniswap decentralized exchange, powering contracts, other tokens etc.). The privacy coins maybe can leverage that for a reason for people to use them. The others seem like even more fringe bets and more likely to be FOMO bubbles.
"The number has gone up" for Google almost since it has gone public.
If you bought BTC at $1 and it went to $10 - is $10 too late? The number went up.
The hard part is it's hard to know the underlying value of things and a lot of value is socially determined by how others value something.
Why is gold traded as an expensive commodity? It has some tiny practical uses, but is that why the price fluctuates? People trade it because they think other people will trade it and use it as a store of value when other stuff is volatile.
Some people think BTC's scarcity guarantees provide a similar digital version of that. It's volatile now because it's still early and uncertain, but if that's true then BTC's price could be very high and it's hard to know if you're too late.
For other Non-BTC coins unlikely to get the same level of social buy-in their value is a lot more questionable imo. ETH has some real underlying applications (uniswap decentralized exchange, powering contracts, other tokens etc.). The privacy coins maybe can leverage that for a reason for people to use them. The others seem like even more fringe bets and more likely to be FOMO bubbles.
That's what everyone thought about Bitcoin back when it hit the crazy high of $800.
The function that BTC provides is a deflationary hedge. If you look at the big existing things for that, gold and silver etc... check out their market cap and you see btc has a ways more to go.
I'm skeptical of proof-of-stake, proof-of-work seems like the main innovation of cryptocurrencies that differentiates them from the standard financial industry?
If you swap out POW for POS (or worse clearing house type trust orgs like Stellar) then aren't you just putting trust into some incentive based system no different than existing financial systems? Just instead a government you're trusting some other entity. You get faster throughput and less energy waste, but you lose the mathematical guarantee that was kind of the entire point?
I think climate change is a serious issue that would lead to change (likely bad), but I'm not sure it's a true e-risk or that cryptocurrency POW changes the tide that much. Feels like an irrelevant (somewhat identity-ish/political) side debate to me? (see Matt Yglesias' comments in this: http://rationallyspeakingpodcast.org/show/episode-251-the-ca...)
Happy to think about arguments that would change my mind.
If you swap out POW for POS (or worse clearing house type trust orgs like Stellar) then aren't you just putting trust into some incentive based system no different than existing financial systems? Just instead a government you're trusting some other entity. You get faster throughput and less energy waste, but you lose the mathematical guarantee that was kind of the entire point?
I think climate change is a serious issue that would lead to change (likely bad), but I'm not sure it's a true e-risk or that cryptocurrency POW changes the tide that much. Feels like an irrelevant (somewhat identity-ish/political) side debate to me? (see Matt Yglesias' comments in this: http://rationallyspeakingpodcast.org/show/episode-251-the-ca...)
Happy to think about arguments that would change my mind.
And this is exactly why I'm so skeptical of cryptocurrencies in general. There doesn't appear any viable way to make them work as currencies that doesn't either have horrendous externalities, simply replicate what existing currencies already do (often poorly and with many downsides), or often both.
I don't think it's a coincidence that even a decade plus later, the primary use cases for crypto still seem to be grey/black market deals, speculative investments, and pyramid schemes.
I don't think it's a coincidence that even a decade plus later, the primary use cases for crypto still seem to be grey/black market deals, speculative investments, and pyramid schemes.
> way ... that doesn't either have horrendous externalities
The CO2 emission externality need have nothing to do with Bitcoin or any other proof-of-work chain. Tax carbon at whatever level makes sense and Bitcoin will adjust. (As I understand it, even currently Bitcoin mining mainly uses renewable energy, because it's cheaper; and it's trending cheaper still.)
The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.
The CO2 emission externality need have nothing to do with Bitcoin or any other proof-of-work chain. Tax carbon at whatever level makes sense and Bitcoin will adjust. (As I understand it, even currently Bitcoin mining mainly uses renewable energy, because it's cheaper; and it's trending cheaper still.)
The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.
> Tax carbon at whatever level makes sense and Bitcoin will adjust.
> The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.
How would that work? Applying the same carbon tax on farming as on bitcoin? You always need to differentiate on use. Otherwise we could also just have a single income tax and be done with it. However taxing food as much as a Ferrari doesn't really make sense.
> The externality is at the power plant, not the use. Banning a use is like basing your server's security on client-side Javascript.
How would that work? Applying the same carbon tax on farming as on bitcoin? You always need to differentiate on use. Otherwise we could also just have a single income tax and be done with it. However taxing food as much as a Ferrari doesn't really make sense.
The whole purpose of taxing carbon is to reduce carbon emission to the efficient level and shift energy consumers away from uses that are not worth the cost in carbon emission.
Say you're a bitcoin miner powered by a coal plant. A carbon tax is imposed. The price of your power goes up. Your competitors, powered by solar, are unaffected. Maybe you keep going at the higher price; more likely, if the tax was set at anything like the genuine externality, you shut down. Possibly you keep going for a while, winding down your ops at this location but moving any new ones to find affordable power. Sucks to be you if you didn't anticipate the tax (which seems implausible, they won't announce it effective next Monday), but Bitcoin itself will hardly notice.
Say you're a farmer also in coal-plant-land. Aren't farmers powered more by internal-combustion engines than grid power? That should be carbon-taxed too in this world, and that's good: you want farming, where it's climatically most expensive, to shift to less-CO2-costly methods and crops. Farming spends energy on a much wider set of tasks, some of them more essential to the output than others, and some outputs more inelastically demanded than others. For some of them you adjust, for some you continue and pay the higher price. The ones you adjust were not worth the carbon cost; the ones you don't were. You have to charge your customers some amount more, depending on how essential the coal turns out to be in your case. Maybe, like the bitcoin miner, you stop farming, or shift to some sort of less-intensive organic farming; maybe you don't. Either way, it's more likely the right decision for the planet! We stopped pretending that dumping carbon is side-effect free.
You don't "differentiate on use" by politicians and bureaucrats deciding what's naughty or nice. They don't even know! It's an incredibly complicated problem! They further have no real incentive to do it even vaguely right, rather the opposite: any competent politician can look to the public like they're public-spirited while favoring concentrated interests. Was the FDA just stupid for banning the J&J vaccine the other day? No, they're fundamentally misaligned with the public interest.
Re painting cryptocurrency as a nobody-needs-it Ferrari, see https://news.ycombinator.com/item?id=26654767
Say you're a bitcoin miner powered by a coal plant. A carbon tax is imposed. The price of your power goes up. Your competitors, powered by solar, are unaffected. Maybe you keep going at the higher price; more likely, if the tax was set at anything like the genuine externality, you shut down. Possibly you keep going for a while, winding down your ops at this location but moving any new ones to find affordable power. Sucks to be you if you didn't anticipate the tax (which seems implausible, they won't announce it effective next Monday), but Bitcoin itself will hardly notice.
Say you're a farmer also in coal-plant-land. Aren't farmers powered more by internal-combustion engines than grid power? That should be carbon-taxed too in this world, and that's good: you want farming, where it's climatically most expensive, to shift to less-CO2-costly methods and crops. Farming spends energy on a much wider set of tasks, some of them more essential to the output than others, and some outputs more inelastically demanded than others. For some of them you adjust, for some you continue and pay the higher price. The ones you adjust were not worth the carbon cost; the ones you don't were. You have to charge your customers some amount more, depending on how essential the coal turns out to be in your case. Maybe, like the bitcoin miner, you stop farming, or shift to some sort of less-intensive organic farming; maybe you don't. Either way, it's more likely the right decision for the planet! We stopped pretending that dumping carbon is side-effect free.
You don't "differentiate on use" by politicians and bureaucrats deciding what's naughty or nice. They don't even know! It's an incredibly complicated problem! They further have no real incentive to do it even vaguely right, rather the opposite: any competent politician can look to the public like they're public-spirited while favoring concentrated interests. Was the FDA just stupid for banning the J&J vaccine the other day? No, they're fundamentally misaligned with the public interest.
Re painting cryptocurrency as a nobody-needs-it Ferrari, see https://news.ycombinator.com/item?id=26654767
Not to even mention the even more useless buzzword application of blockchains to business to pump up stock prices. I'd go as far to say that cryptocurrency is the most "useful" application of blockchain to date. And even then, it appears only truly useful for dark web transactions and pyramid schemes. Why else would we use a wildly fluctuating currency that takes 20 minutes to send a payment?
Dollar hegemony has many horrendous externalities as well.
While that -might- be true, the question is whether the dollar, the RMB, the CAD, and every other currency have anything like the -direct- pollution cost of bitcoin, which my understanding is that they do not
I think the dollar undoubtedly has several orders of magnitude lower direct pollution costs, but also have several orders of magnitude higher indirect costs.
It's a pretty tangly web, so hard to know what to lump in as a comparison but in the superlative case consider: the federal reserve, many bank/FI departments tasked with securing and transferring money safely, auditing (public ledger has many benefits for transparency and reporting), money transfer industry, international relations, lobbyism, US military dominance, etc.
Bitcoin has zero employees, probably only thousands of people working on Bitcoin-interfaced systems. The network uses a large amount of electricity, but that's kind of it - there are few other costs to account for. All of those industries above collectively employ millions of people - should we account for only organizational energy consumption or do we also account for salaries and thus private energy consumption of all of the individuals necessary to support dollar hegemony?
I think it would be really interesting to find a number for "for each dollar in existence, how much is spent per year preserving the dollar's position as the global reserve currency?" How does this number compare to inflation? If it is greater than inflation, does that mean that dollar hegemony is unstable and its fall is inevitable?
It's a pretty tangly web, so hard to know what to lump in as a comparison but in the superlative case consider: the federal reserve, many bank/FI departments tasked with securing and transferring money safely, auditing (public ledger has many benefits for transparency and reporting), money transfer industry, international relations, lobbyism, US military dominance, etc.
Bitcoin has zero employees, probably only thousands of people working on Bitcoin-interfaced systems. The network uses a large amount of electricity, but that's kind of it - there are few other costs to account for. All of those industries above collectively employ millions of people - should we account for only organizational energy consumption or do we also account for salaries and thus private energy consumption of all of the individuals necessary to support dollar hegemony?
I think it would be really interesting to find a number for "for each dollar in existence, how much is spent per year preserving the dollar's position as the global reserve currency?" How does this number compare to inflation? If it is greater than inflation, does that mean that dollar hegemony is unstable and its fall is inevitable?
Can you share how Bitcoin has a direct pollution cost?
Last I checked BTC primarily uses excess electricity in the cheapest regions of the world. What if BTC only ran on solar power?
Last I checked BTC primarily uses excess electricity in the cheapest regions of the world. What if BTC only ran on solar power?
Of the estimates I've read, it seems like BTC uses about 60% green energy. Which is about double the 'green-ness' of the broader energy economy, but it's still a significant amount of 'direct pollution' from carbon sources.
I remain cautiously optimistic about the underlying idea and core technology (even if there's a lot of pyramid scheme snake oil surrounding it).
Interesting applications do exist: https://news.ycombinator.com/item?id=24242005
Its applications are more interesting in countries that have unreliable governments and inflationary currencies (for now).
It also does provide something new (one way 'cash' transfers across a decentralized network).
Interesting applications do exist: https://news.ycombinator.com/item?id=24242005
Its applications are more interesting in countries that have unreliable governments and inflationary currencies (for now).
It also does provide something new (one way 'cash' transfers across a decentralized network).
I don't see any reason to be skeptical of proof-of-stake. The ethereum beacon network has been up and running fine for months. And POS negates the power usage objection to POW.
I don't think anyone debates that POS is more power efficient than POW. The controversy over POS is whether the game theory incentives of POS will be sufficient deterrent for bad actors at scale.
The biggest argument is the other coin networks that have been running for years in production without proof of work.
Nano and EOS have interesting consensus models. Nano manages to remove all inflation and transaction fees and is just a base level currency. EOS has an account fee and you have to rent resources but can do code execution on transactions (smart contracts). They both rely on accounts voting for representatives and have had similar problems with spam.
Nano has been running for > 4 years and EOS for > 1 years.
For the uninformed, what mathematical guarantees does POW have that POS doesn’t?
PoW is open-membership, because the means of coin production are not tied to owning coins already. All you need to contribute is computing power, and you can start earning coins at a profit.
PoS is closed-membership with a veneer of open-membership, because the means of coin production are tied to owning a coin already. What this means in practice is that no rational coin-owner is going to sell you coins at a fast enough rate that you'll be able to increase your means of coin production. Put another way, the price you'd pay for the increased means of coin production will meet or exceed the total expected revenue created by staking those coins over their lifetime. So unless you know something the seller doesn't, you won't be able to profit by buying your way into staking.
Overall, this makes PoS less resilient and less egalitarian than PoW. While both require an up-front capital expenditure, the expenditure for PoS coin-production will meet or exceed the total expected revenue of those coins at the point of sale. So, the system is only as resilient as the nodes run by the people who bought in initially, and the only way to join later is to buy coins from people who want to exit (which would only be viable if these folks believed the coins are worth less than what you're buying them for, which doesn't bode well for you as the buyer).
PoS is closed-membership with a veneer of open-membership, because the means of coin production are tied to owning a coin already. What this means in practice is that no rational coin-owner is going to sell you coins at a fast enough rate that you'll be able to increase your means of coin production. Put another way, the price you'd pay for the increased means of coin production will meet or exceed the total expected revenue created by staking those coins over their lifetime. So unless you know something the seller doesn't, you won't be able to profit by buying your way into staking.
Overall, this makes PoS less resilient and less egalitarian than PoW. While both require an up-front capital expenditure, the expenditure for PoS coin-production will meet or exceed the total expected revenue of those coins at the point of sale. So, the system is only as resilient as the nodes run by the people who bought in initially, and the only way to join later is to buy coins from people who want to exit (which would only be viable if these folks believed the coins are worth less than what you're buying them for, which doesn't bode well for you as the buyer).
One important difference in favour of PoS that isn't brought up often is the financial cost to pull off an attack. Pulling off an attack in most PoS protocols results in coin slashing for the attacker ("deletion" of coins used in the attack) and on top of that can (and likely will) result in coin devaluation as well. This makes a successful attack against a PoS system very very expensive. The resource is spent and actually burned.
With PoW however the GPUs or ASICs don't disappear or lose value after the attack (caveat that the ASICs can lose value if networks switch away from the algorithm it is built for). The hardware can be used to attack "competitor" networks or used again in another attack against the network or other networks in the future.
In this sense, I suspect that PoS networks are able to properly recover from successful attacks far easier as well as dissuade attacks from the offset.
With PoW however the GPUs or ASICs don't disappear or lose value after the attack (caveat that the ASICs can lose value if networks switch away from the algorithm it is built for). The hardware can be used to attack "competitor" networks or used again in another attack against the network or other networks in the future.
In this sense, I suspect that PoS networks are able to properly recover from successful attacks far easier as well as dissuade attacks from the offset.
It's far easier to break a PoS chain -- you simply knock the coin-holding nodes offline. Knock enough offline, and you can no longer reach quorum. If offline nodes' coins get slashed in order to reach quorum and restart block production, and the system permits forking, then why would offline nodes rejoin the original fork? They're incentivized to only consider forks where they're not slashed. If the system does not permit forking, then the system breaks once the attackers (1) stake a nominal amount of coins, and (2) knock enough other nodes offline such that they are the majority staker.
This isn't really an attack unique to Proof of Stake. If a node goes offline they can lose rewards or even in rare cases have their coins slashed to some extent but that isn't inherent to a Proof of Stake overall. A decent number of Proof of Stake systems instead place reward penalties on pools/nodes that go offline. The idea being that it is a penalty for not maintaining sufficient infrastructure while also not being so severe that it could be leveraged in such an attack.
Most PoS algorithms I've seen instead reserve stake slashing as a penalty for malicious behaviour. Going offline isn't by any means inherently malicious. There are however plenty of actively malicious actions that can be detected and reacted against. Often for the more severe penalties it will require some level of community involvement in the recovery stage to limit opportunities for abuse.
Additionally, it shouldn't be easy to take a block producer offline and Stake Pool(or node) Operators should be preparing for these types of attacks. I've been watching some of the work being done in the Cardano Stake Pool Operator community and the various SPO guilds have decently sophisticated architectures. "Nodes"/"Pools" are broken up into Relays, Producers, and sometimes additionally Key Generators. Key Generators produce the periodically expiring KES keys and pass them to the Producers on a schedule (to minimise potential attack surfaces). The Producers actually engage in the consensus using the keys provided by the key generators and communicate through the relays. The Relays handle the throughput and communication. This allows the producers (and by extension the key generators if used) to be largely shielded from the open net. This also allows producers and relays to have a certain amount of redundancy/failover. An architecture like that may cost more (and eat into rewards a bit more) however they are far more difficult to DDoS or compromise.
Since the barrier for the hardware is so low, a 1x2x2 or 1x2x3 (keygen x producer x relay) architecture can still be more than profitable (retaining 25% to 75% of the SPO rewards as profit). Additionally this has the advantage that various other income streams can be integrated in (state channel operation, compute nodes, storage nodes, etc) over time and the operation can be scaled up without compromising security or requiring a significant re-architecture.
Proof of Stake can be just as secure as Proof of Work but it requires that the incentives be structured properly and sufficiently hedged against potential risks.
Most PoS algorithms I've seen instead reserve stake slashing as a penalty for malicious behaviour. Going offline isn't by any means inherently malicious. There are however plenty of actively malicious actions that can be detected and reacted against. Often for the more severe penalties it will require some level of community involvement in the recovery stage to limit opportunities for abuse.
Additionally, it shouldn't be easy to take a block producer offline and Stake Pool(or node) Operators should be preparing for these types of attacks. I've been watching some of the work being done in the Cardano Stake Pool Operator community and the various SPO guilds have decently sophisticated architectures. "Nodes"/"Pools" are broken up into Relays, Producers, and sometimes additionally Key Generators. Key Generators produce the periodically expiring KES keys and pass them to the Producers on a schedule (to minimise potential attack surfaces). The Producers actually engage in the consensus using the keys provided by the key generators and communicate through the relays. The Relays handle the throughput and communication. This allows the producers (and by extension the key generators if used) to be largely shielded from the open net. This also allows producers and relays to have a certain amount of redundancy/failover. An architecture like that may cost more (and eat into rewards a bit more) however they are far more difficult to DDoS or compromise.
Since the barrier for the hardware is so low, a 1x2x2 or 1x2x3 (keygen x producer x relay) architecture can still be more than profitable (retaining 25% to 75% of the SPO rewards as profit). Additionally this has the advantage that various other income streams can be integrated in (state channel operation, compute nodes, storage nodes, etc) over time and the operation can be scaled up without compromising security or requiring a significant re-architecture.
Proof of Stake can be just as secure as Proof of Work but it requires that the incentives be structured properly and sufficiently hedged against potential risks.
Okay, so instead of knocking your nodes offline, the attacker only has to commandeer them for just long enough to commit a slashable offense. That's usually easier anyway.
This is fundamentally a double-edged sword -- the harsher your penalties are for bad behavior, the easier it is for someone to use a zero-day and kill your staking coins. But the laxer your penalties are, the more damage a buggy or malicious node can do with impunity.
Either way, the resilience of PoS comes down to the resilience of the majority of its staking nodes, because once you lose that, the system is dead. Once you control majority stake, it doesn't matter how many other offline coins exist -- you, as the majority staker, simply never mine their transactions.
This isn't true for PoW systems. A PoW system can always be brought back to life, even after an arbitrarily long amount of inactivity, and even if all the previous miners cease mining. All you need is one miner, somewhere, that has a copy of the chainstate, and the system makes forward progress.
This is fundamentally a double-edged sword -- the harsher your penalties are for bad behavior, the easier it is for someone to use a zero-day and kill your staking coins. But the laxer your penalties are, the more damage a buggy or malicious node can do with impunity.
Either way, the resilience of PoS comes down to the resilience of the majority of its staking nodes, because once you lose that, the system is dead. Once you control majority stake, it doesn't matter how many other offline coins exist -- you, as the majority staker, simply never mine their transactions.
This isn't true for PoW systems. A PoW system can always be brought back to life, even after an arbitrarily long amount of inactivity, and even if all the previous miners cease mining. All you need is one miner, somewhere, that has a copy of the chainstate, and the system makes forward progress.
At least on Cardano, slashing is extraordinarily unlikely and only occurs during recovery from a successful attack. The idea being that the community forks from the moment before the attack and slashes the funds from the attacker. In the case of a zero-day or other attack where the stake pools are forced into being unwilling attackers due to circumstances excluding negligence, KES keys are invalidated/regenerated and the pools don't have their funds slashed. Additionally, delegators either end up taking a leap of faith with their existing pool or more likely move to uncompromised pools.
Recovery is an inherently manual process as either stake pools or miners must actively choose to switch to the new fork (at least initially). This doesn't return to an automated process until the ball actually starts rolling again. I say this is inherently manual as all 51% attacks violate the proof (of work, stake, or any other resource) that allows untrusted collaboration. Instead the community is required to cooperate momentarily based on the collective investment and trust that has been built parallel to the operation of the network.
The difference with PoS compared to PoW during this recovery process is that in a pure attack (i.e. one not due to a software bug/zero day), the resource is permanently burned (slashed) and the recovery can occur. With PoW however the resource doesn't disappear and can always either come back or come from another ecosystem for a second attack.
Outside of the bootstrap and the recovery phase, PoS and PoW are effectively equivalent in security. PoS is slightly weaker in the bootstrap phase and PoW is slightly weaker in the recovery phase. This isn't inherently bad for either system, it's just a matter of trade-offs. Arguably I'd say this is why transitions from PoW to PoS will be much safer than a clean bootstrap. The existing network strength from the PoW era is able to protect the PoS segment while it works through the bootstrap phase.
Recovery is an inherently manual process as either stake pools or miners must actively choose to switch to the new fork (at least initially). This doesn't return to an automated process until the ball actually starts rolling again. I say this is inherently manual as all 51% attacks violate the proof (of work, stake, or any other resource) that allows untrusted collaboration. Instead the community is required to cooperate momentarily based on the collective investment and trust that has been built parallel to the operation of the network.
The difference with PoS compared to PoW during this recovery process is that in a pure attack (i.e. one not due to a software bug/zero day), the resource is permanently burned (slashed) and the recovery can occur. With PoW however the resource doesn't disappear and can always either come back or come from another ecosystem for a second attack.
Outside of the bootstrap and the recovery phase, PoS and PoW are effectively equivalent in security. PoS is slightly weaker in the bootstrap phase and PoW is slightly weaker in the recovery phase. This isn't inherently bad for either system, it's just a matter of trade-offs. Arguably I'd say this is why transitions from PoW to PoS will be much safer than a clean bootstrap. The existing network strength from the PoW era is able to protect the PoS segment while it works through the bootstrap phase.
Hi, notice that I'm not proactively bringing up any specific cryptocurrencies, let alone the same cryptocurrency over and over in the same thread. This is because I'm not a bagholder.
I have no interest in talking to bagholders. The science and engineering details of cryptocurrency design and implementation are by definition beyond a bagholder's comprehension. The act of holding bags precludes formulating a dispassionate understanding of cryptocurrencies -- as Upton Sinclair put it, "It is difficult to get a man to understand something when his salary depends on his not understanding it."
You see, if I was a bagholder, I would have a hard time comprehending why it's a terrible idea to fall back to the "community" trying to decide which fork is valid. If the community members had high enough trust in one another that they don't need the blockchain (specifically, a fork-ranking protocol) to come to a valid majoritarian decision on which fork is the right fork, then we really don't need the blockchain in the first place! The same sinews of trust can be used to decide what everyone's balance is at all times, since after all, the community members already trust one another to decide which transaction histories (out of many) is the true ledger. But thankfully, I'm not a bagholder, which means I can see that this assumption about the community is not viable.
Also, if I was a bagholder, I would have a hard time comprehending why attackers don't just try and buy 51% of the stake. It would be difficult for me to understand that attackers are going to take the path of least-effort, which would be the act of knocking nodes offline and/or exploiting zero-days on nodes hosting staking coins in a bid to get the network to slash enough of the honest coins that quorum can no longer be met. But thankfully, I'm not a bagholder, which means I understand this weakness.
In addition, if I was a bagholder, I would have a hard time understanding that PoW and PoS security in their "happy paths" is irrelevant. The resilience of blockchains is determined by their unhappy path behaviors. PoW requires less proactive trust and coordination between community members than PoS -- and thus is better able to recover from both liveness and safety failures -- precisely because it both (1) provides a computational method for ranking fork quality, and (2) allows anyone to participate in producing a fork at any time. If the canonical chain is 51%-attacked, and the attack eventually subsides, then the canonical chain can eventually be re-established in-band by honest miners simply continuing to work on the non-attacker chain. In PoS, block-producers have no such protocol -- such a protocol cannot exist because to the rest of the network, it looks like the honest nodes have been slashed for being dishonest. Any recovery procedure necessarily includes block-producers having to go around and convince people out-of-band that they were totally not dishonest, and were slashed due to a "hack" (and, since there's lots of money on the line, who knows if they're being honest about this?). But thankfully, I'm not a bagholder, so I understand the difference.
It's great to know that you, too, are not a bagholder, and you're continuously bringing up Cardano solely because it's a motivating but misguided example, and has nothing to do with how many Cardano tokens you own. Otherwise, I'd have nothing to say to you at all, and if HN had the feature, I'd have simply blocked you already.
I have no interest in talking to bagholders. The science and engineering details of cryptocurrency design and implementation are by definition beyond a bagholder's comprehension. The act of holding bags precludes formulating a dispassionate understanding of cryptocurrencies -- as Upton Sinclair put it, "It is difficult to get a man to understand something when his salary depends on his not understanding it."
You see, if I was a bagholder, I would have a hard time comprehending why it's a terrible idea to fall back to the "community" trying to decide which fork is valid. If the community members had high enough trust in one another that they don't need the blockchain (specifically, a fork-ranking protocol) to come to a valid majoritarian decision on which fork is the right fork, then we really don't need the blockchain in the first place! The same sinews of trust can be used to decide what everyone's balance is at all times, since after all, the community members already trust one another to decide which transaction histories (out of many) is the true ledger. But thankfully, I'm not a bagholder, which means I can see that this assumption about the community is not viable.
Also, if I was a bagholder, I would have a hard time comprehending why attackers don't just try and buy 51% of the stake. It would be difficult for me to understand that attackers are going to take the path of least-effort, which would be the act of knocking nodes offline and/or exploiting zero-days on nodes hosting staking coins in a bid to get the network to slash enough of the honest coins that quorum can no longer be met. But thankfully, I'm not a bagholder, which means I understand this weakness.
In addition, if I was a bagholder, I would have a hard time understanding that PoW and PoS security in their "happy paths" is irrelevant. The resilience of blockchains is determined by their unhappy path behaviors. PoW requires less proactive trust and coordination between community members than PoS -- and thus is better able to recover from both liveness and safety failures -- precisely because it both (1) provides a computational method for ranking fork quality, and (2) allows anyone to participate in producing a fork at any time. If the canonical chain is 51%-attacked, and the attack eventually subsides, then the canonical chain can eventually be re-established in-band by honest miners simply continuing to work on the non-attacker chain. In PoS, block-producers have no such protocol -- such a protocol cannot exist because to the rest of the network, it looks like the honest nodes have been slashed for being dishonest. Any recovery procedure necessarily includes block-producers having to go around and convince people out-of-band that they were totally not dishonest, and were slashed due to a "hack" (and, since there's lots of money on the line, who knows if they're being honest about this?). But thankfully, I'm not a bagholder, so I understand the difference.
It's great to know that you, too, are not a bagholder, and you're continuously bringing up Cardano solely because it's a motivating but misguided example, and has nothing to do with how many Cardano tokens you own. Otherwise, I'd have nothing to say to you at all, and if HN had the feature, I'd have simply blocked you already.
Thank you very much for this discussion
It seems like your contention is that PoS coins are priced based on discounted cash flow, correct? I think that's a reasonable model, but it's hardly unique to PoS coins, and it doesn't really seem problematic.
> the system is only as resilient as the nodes run by the people who bought in initially
This point applies to any assets that generate cash flow, like stocks, yet they seem to have plenty of trading volume. And looking at some numbers on CoinMarketCap, it doesn't seem like PoS coins have lower trading volume than PoW coins. As one example, XTZ seems to have ~double BTC's turnover in the past 24h.
> these folks believed the coins are worth less than what you're buying them for, which doesn't bode well for you as the buyer
This could be said about most assets, even ones without cash flow like PoW coins. In practice there are other reasons for selling, like wanting to offset gains/losses for tax purposes, or wanting to buy food.
> the system is only as resilient as the nodes run by the people who bought in initially
This point applies to any assets that generate cash flow, like stocks, yet they seem to have plenty of trading volume. And looking at some numbers on CoinMarketCap, it doesn't seem like PoS coins have lower trading volume than PoW coins. As one example, XTZ seems to have ~double BTC's turnover in the past 24h.
> these folks believed the coins are worth less than what you're buying them for, which doesn't bode well for you as the buyer
This could be said about most assets, even ones without cash flow like PoW coins. In practice there are other reasons for selling, like wanting to offset gains/losses for tax purposes, or wanting to buy food.
> It seems like your contention is that PoS coins are priced based on discounted cash flow, correct? I think that's a reasonable model, but it's hardly unique to PoS coins, and it doesn't really seem problematic.
It's very problematic if the system's liveness is tied to owning a coin. If I can knock PoS nodes offline, I can not only cause a quorum failure, but also I can cause the offline nodes's coins to get slashed (which is usually how PoS chains deal with this problem). Moreover, there's no recovery from this -- the temporarily-offline nodes are forever slashed, even if they come online later. (EDIT: I'm not limited to knocking nodes offline -- if I can commandeer them through a zero-day, the effect is the same: I make your nodes commit a slashable offense).
Contrast this to PoW, where even if you manage to knock a majority of miners offline, you ultimately have to keep them offline in order to prevent them from later generating and broadcasting a better chain than the one you want to exist. Even if you can physically destroy the majority of miners, the chain still lives on, and new miners can be built and brought online elsewhere.
> This point applies to any assets that generate cash flow, like stocks, yet they seem to have plenty of trading volume
Trading volume is easily faked in crypto-land -- a whale just sends coins to themselves. I'd like to see some hard evidence that the volumes are not from wash-trading. Also, this isn't relevant at all to the system's resilience.
> In practice there are other reasons for selling, like wanting to offset gains/losses for tax purposes, or wanting to buy food.
I didn't say you don't sell coins. I said you don't sell enough of them that the buyer can use them to increase their rate of coin production.
It's very problematic if the system's liveness is tied to owning a coin. If I can knock PoS nodes offline, I can not only cause a quorum failure, but also I can cause the offline nodes's coins to get slashed (which is usually how PoS chains deal with this problem). Moreover, there's no recovery from this -- the temporarily-offline nodes are forever slashed, even if they come online later. (EDIT: I'm not limited to knocking nodes offline -- if I can commandeer them through a zero-day, the effect is the same: I make your nodes commit a slashable offense).
Contrast this to PoW, where even if you manage to knock a majority of miners offline, you ultimately have to keep them offline in order to prevent them from later generating and broadcasting a better chain than the one you want to exist. Even if you can physically destroy the majority of miners, the chain still lives on, and new miners can be built and brought online elsewhere.
> This point applies to any assets that generate cash flow, like stocks, yet they seem to have plenty of trading volume
Trading volume is easily faked in crypto-land -- a whale just sends coins to themselves. I'd like to see some hard evidence that the volumes are not from wash-trading. Also, this isn't relevant at all to the system's resilience.
> In practice there are other reasons for selling, like wanting to offset gains/losses for tax purposes, or wanting to buy food.
I didn't say you don't sell coins. I said you don't sell enough of them that the buyer can use them to increase their rate of coin production.
Open membership is arguably a worse problem than stake requirements, as PoW participants do not have a vested interest in preserving the integrity of the chain. Ethereum 2 actually throttles validator entries and exits for exactly this reason.
As an example, any sufficiently powerful entity can temporarily and affordably commandeer computational resources with the intention of disrupting the chain.
Under PoS doing so would devalue your (presumably enormous) stake, so participants are at least incentivized to act in the interest of the chain.
As an example, any sufficiently powerful entity can temporarily and affordably commandeer computational resources with the intention of disrupting the chain.
Under PoS doing so would devalue your (presumably enormous) stake, so participants are at least incentivized to act in the interest of the chain.
Open membership means that the chain stays alive as long as anyone in the world wants it to. This isn't true for PoS chains -- you must to acquire tokens to keep the chain alive.
> As an example, any sufficiently powerful entity can temporarily and affordably commandeer computational resources with the intention of disrupting the chain.
A sufficiently powerful entity can DoS enough staked nodes that quorum can't be reached, and thereby force a PoS chain offline indefinitely for far less energy. If they're clever, they'll buy some PoS coins first, so that once the offline nodes all get slashed, they'll be the majority staker.
> As an example, any sufficiently powerful entity can temporarily and affordably commandeer computational resources with the intention of disrupting the chain.
A sufficiently powerful entity can DoS enough staked nodes that quorum can't be reached, and thereby force a PoS chain offline indefinitely for far less energy. If they're clever, they'll buy some PoS coins first, so that once the offline nodes all get slashed, they'll be the majority staker.
It's worth investigating Algorand's Pure Proof-of-Stake model and seeing how it compares to other POS implementations: https://algorand.foundation/algorand-protocol/about-algorand...
If the means of coin production require owning coins, you have these problems that PoW does not have. Definitely true for Algorand.
Owning coins is a means of validating the network and appending to the blockchain, not producing new coins.
Try reading the paper: https://people.csail.mit.edu/nickolai/papers/gilad-algorand-...
You have to own coins to produce blocks.
You have to own coins to produce blocks.
> If the means of coin production require owning coins, you have these problems that PoW does not have
Producing blocks != coin production
Producing blocks != coin production
If you're producing blocks, you're getting paid (otherwise what's the point). If the probability you get picked to produce a block is proportional to how many coins you own, then you're getting paid proportional to how many coins you own.
I don't care for Algorand's shell game of trying to say that all tokens have been minted already, and are just being distributed. If it's the case that nodes who stake more coins are getting paid more coins, then all of my analysis holds.
I don't care for Algorand's shell game of trying to say that all tokens have been minted already, and are just being distributed. If it's the case that nodes who stake more coins are getting paid more coins, then all of my analysis holds.
> If it's the case that nodes who stake more coins are getting paid more coins, then all of my analysis holds
Thats fine, but it's an important clarification. All the tokens _have_ been minted already, and _are_ just being distributed. The mechanics are different. Owning 1 coin is one potential vote in a lottery to determine the validity of a proposed block. This is not the generation of new coins.
In any case, regarding nodes and payment, that process is being phased out by their new governance model which was just released the other day: https://algorand.foundation/the-algo/algo-governance.
Thats fine, but it's an important clarification. All the tokens _have_ been minted already, and _are_ just being distributed. The mechanics are different. Owning 1 coin is one potential vote in a lottery to determine the validity of a proposed block. This is not the generation of new coins.
In any case, regarding nodes and payment, that process is being phased out by their new governance model which was just released the other day: https://algorand.foundation/the-algo/algo-governance.
I'm glad we agree, then, that Algorand is just as vulnerable as all the rest of the PoS systems.
Staking rewards for new block generation is inflationary, so you are just not losing value by staking. Additional value is generated by fees and store of value.
With PoW coin you are constantly devaluing your share of the blockchain by paying some third parties operating giant gpu farms and hydroelectric dams.
With PoW coin you are constantly devaluing your share of the blockchain by paying some third parties operating giant gpu farms and hydroelectric dams.
> block generation is inflationary
> store of value.
I stopped reading at this point.
I stopped reading at this point.
Good to know.
Thanks for this little tangent, it was pretty informative. what's your opinions on nominated proof of stake?
This is the best (and also approachable well-written) book on the topic that I've found: https://bitcoinbook.cs.princeton.edu/
My (possibly incorrect) understanding is that POW is computationally expensive because that large investment of computation is what creates a chain of successive blocks (the blockchain). This prevents someone from rewriting history of transactions on the public chain (which would allow them to 'double-spend' or to take their money back).
POW currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51%. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like BTC) are harder to do a hostile take over of because it's harder to get that much compute (though mining centralization is a risk).
POS relies on some variant individuals 'staking' coins to enable transactions, this means putting them up in escrow sort of in the network (they are paid small fees for this based on how much they stake) and if abuse is attempted, the system takes those staked coins away. There are no mathematical guarantees outside of this incentive.
POS is not as standardized across different currencies so I may be missing important bits in my understanding.
My (possibly incorrect) understanding is that POW is computationally expensive because that large investment of computation is what creates a chain of successive blocks (the blockchain). This prevents someone from rewriting history of transactions on the public chain (which would allow them to 'double-spend' or to take their money back).
POW currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51%. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like BTC) are harder to do a hostile take over of because it's harder to get that much compute (though mining centralization is a risk).
POS relies on some variant individuals 'staking' coins to enable transactions, this means putting them up in escrow sort of in the network (they are paid small fees for this based on how much they stake) and if abuse is attempted, the system takes those staked coins away. There are no mathematical guarantees outside of this incentive.
POS is not as standardized across different currencies so I may be missing important bits in my understanding.
> POW currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51%. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like BTC) are harder to do a hostile take over of because it's harder to get that much compute (though mining centralization is a risk).
Couldn't this be re-written as:
> POS currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51% of the staked currency. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like ETH) are harder to do a hostile take over of because it's harder to get that much stake (though validator centralization is a risk).
My (non-expert) interpretation is that staking is just an abstraction of mining, and they are secured by the same incentive system
Couldn't this be re-written as:
> POS currencies are guaranteed to prevent this kind of abuse unless any individual entity is able to get more than 51% of the staked currency. There's an incentive in addition to this because corrupting the integrity of the network would also devalue the currency. Larger networks (like ETH) are harder to do a hostile take over of because it's harder to get that much stake (though validator centralization is a risk).
My (non-expert) interpretation is that staking is just an abstraction of mining, and they are secured by the same incentive system
This comment above does a better job than I did at explaining why the staking incentive is somewhat flawed: https://news.ycombinator.com/item?id=26810686
> PoS is closed-membership with a veneer of open-membership, because the means of coin production are tied to owning a coin already. What this means in practice is that no rational coin-owner is going to sell you coins at a fast enough rate that you'll be able to increase your means of coin production
It seems to me like they're arguing that PoW is more egalitarian/decentralized, which may be a fair point. But using the same argument, attackers being forced to buy stake in the open market should make PoS even more secure against 51% attacks than PoW.
I think this is a good post explaining the tradeoffs: https://vitalik.ca/general/2020/11/06/pos2020.html
It seems to me like they're arguing that PoW is more egalitarian/decentralized, which may be a fair point. But using the same argument, attackers being forced to buy stake in the open market should make PoS even more secure against 51% attacks than PoW.
I think this is a good post explaining the tradeoffs: https://vitalik.ca/general/2020/11/06/pos2020.html
Why would they need to buy 51% stake? Just buy x% and then knock the remaining staking nodes offline so that less than 2x% stake remains participating. That's often much cheaper.
PoW is anchored in some real-world value, the cost of electricity. PoS is not. Most of PoW’s security and tamper-resistance advantages derive from that characteristic.
Ultimately, proof of stake has the same property. The value of the network that the stake protects is rooted in some kind of real world value. The tokens from the network can be traded for fiat money that is worth something. So, unless the value of the network being protected falls to zero, the stakes themselves are worth something. An attack on a proof of stake network still requires the resources to procure the attacking stakes. So, you still have a direct relationship between the item being protected and the cost of the protection.
I would add - by focusing on using the economic value of electricity and stacks of special semiconductors to secure your network, you actually are making the network vulnerable to folks that can effectively create arbitrage on those specific narrow resources. In contrast, proof of stake can leverage a much broader range of economic resources that have far fewer arbitrage opportunities.
I am surprised a workable IPv4 based POS coin has not been produced. The consensus protocols are already using IPv4
That is one IPv4 address -> one unit of vote
Difficulty adjusts based on how many IPv4 addresses participate
Sure, it gives advantage to Apple, MIT or anyone with /8 block and disadvantages citizens from some countries with very small allocations but otherwise it could be scaled to whole world while staying truly green.
I suppose the hard part is figuring out the stake when multiple people on the same IP address want to participate.
That is one IPv4 address -> one unit of vote
Difficulty adjusts based on how many IPv4 addresses participate
Sure, it gives advantage to Apple, MIT or anyone with /8 block and disadvantages citizens from some countries with very small allocations but otherwise it could be scaled to whole world while staying truly green.
I suppose the hard part is figuring out the stake when multiple people on the same IP address want to participate.
The staking rewards for block generation are inflationary. So you are penalized by not staking and it does not matter how long how stake your tokens your share of the blockchain does not increase. You also have to pay taxes for staking rewards in most countries so you have to sell at least that much. In the context of a bc with smart contracts you are basically owning and operating a share of a cloud for financial services. Those customers pay fees which get distributed with the staking rewards.
This does sound a lot saner to me than having some cabals operating giant computer farms and hydroelectric dams to generate new blocks. Their interests are different than those of token holders and having to pay for all those gpus and electricity is just stupid.
What mathematical properties are you losing?
This does sound a lot saner to me than having some cabals operating giant computer farms and hydroelectric dams to generate new blocks. Their interests are different than those of token holders and having to pay for all those gpus and electricity is just stupid.
What mathematical properties are you losing?
And I still have yet to understand why should the rest of society who hasn't bought into Bitcoin shoulder higher energy costs because Bitcoin are driving up demand?
This could be said about any commodity. Like because of gold hoarding banks/individuals driving up the demand rest of the society has to pay high price of gold for jewelry.
You're right, that's a moot point: it all boils down to unnecessarily, unreasonably transferring wealth from later adopters to earlier supporters (left holding the bag) in what amounts to very unsophisticated "investing" - whereby buying a stock of a company or say gold is buying for something very specific, contextualized, with annual reports and laws in place to attempt to lead to integrity within those organizations; not an apple to apple comparison that people consistently try to make.
Complaining about externalities of PoW cryptocurrencies is like complaining about the fastest function that exists in your code and is magnitudes more efficient than anything else.
Externalities that pollute the ocean, air, rivers and cities are not present in crypto at all in the amounts that other industries and human activities produce.
There will be more people jumping on carnivorous and meat heavy diets than there will be people using electricity powered cryptocurrencies. Keto is trending more than cryptocurrencies.
The amount of destruction that factory farming will inflict on this world and is inflicting will never be reached by cryptocurrencies. There will be no deforestation, no waste mismanagement, no fertilizer drain, nothing.
Externalities that pollute the ocean, air, rivers and cities are not present in crypto at all in the amounts that other industries and human activities produce.
There will be more people jumping on carnivorous and meat heavy diets than there will be people using electricity powered cryptocurrencies. Keto is trending more than cryptocurrencies.
The amount of destruction that factory farming will inflict on this world and is inflicting will never be reached by cryptocurrencies. There will be no deforestation, no waste mismanagement, no fertilizer drain, nothing.
People always complain about Bitcoin's environmental effects.
What about Gold's, the current financial system's?
https://www.zerohedge.com/crypto/critics-claim-bitcoin-threa...
What about Gold's, the current financial system's?
https://www.zerohedge.com/crypto/critics-claim-bitcoin-threa...
Bitcoin is already terrible and it’s structured to get ever more terrible.
1. whataboutism
2. Most currencies are fiat, not gold-backed
2. Most currencies are fiat, not gold-backed
1. No it isn't, not if bitcoin can be a replacement for gold.
2. You didn't read my link
2. You didn't read my link
BTC wastes more power as it becomes more valuable.
This is the opposite of other major currencies.
BTC is an environmental travesty.
This is the opposite of other major currencies.
BTC is an environmental travesty.
The problem is that you are solving the issue from the wrong direction. Like getting people to stop littering, the answer is to regulate the producers of the waste, not the end users doing the wasting.
The answer is to lobby governments for green energy, not rail against people doing PoW. People who fold at home are using a lot of energy also.
The answer is to lobby governments for green energy, not rail against people doing PoW. People who fold at home are using a lot of energy also.
Yet the Producer of Waste here is coinbase no?
Not Coinbase, the miners. The arms race dynamic makes electricity cost the only real limit on mining, and unfortunately the more a single BTC is worth the more kWh you can profitably burn to mine one.
It's not the miners, it's the power companies.
Power companies have been burning shitty fuel to save money forever, and it's astounding that they've managed to shift the blame to consumers.
Power companies have been burning shitty fuel to save money forever, and it's astounding that they've managed to shift the blame to consumers.
A green crypto will not work unless it’s tied to BTC. BTC is basically a ponzi scheme built on top of ponzi schemes on top of ponzi schemes. I too was optimistic about cryptocurrencies back in 2013-14. I thought we’d eventually have a global currency that’s beneficial for all parties involved. But no. There’s simply no interest in doing that. Everyone is just in it for the money.
Agree and I can’t support companies that are putting their weight behind it (Tsla, sq). It incentivizes global warming, as a feature not a bug. Insane.
Worse externalities than the fiat standard which brought us genocides, nuclear war, and mass murder? Bitcoin could eradicate democide.
I feel the similar. There are innovations out there and things that change the world and improve the way we think and, work and develop together, and there is this world of essentially greed, where we all just want to get out of where we are - because, why? We have to sell someone else the ticket out, to get richer ourselves.
Thankfully, this is a bonafied bubble and in a few months, it'll all tank again.
Thankfully, this is a bonafied bubble and in a few months, it'll all tank again.
did you dismiss this one already? https://www.yahoo.com/entertainment/could-bitcoin-solve-oil-...
If Coinbase gets sufficiently mainstream, I suspect it will mitigate a lot of this.
A transfer of BTC between two Coinbase users can happen off-chain, which means skipping the work necessary to mine a block including the given transaction.
A transfer of BTC between two Coinbase users can happen off-chain, which means skipping the work necessary to mine a block including the given transaction.
Doesn't that defeat the entire purpose of cryptocurrency
Which then negates the espoused benefits of Bitcoin, no?
So..... a bank?
Does a Bitcoin (for the $ value it represents) cost more to manufacture than an equivalent US $1? After all, a $1 of US currency represents some creation of work too, doesn't it?
Capital/currency represents someone doing work, something being dug out of the ground, something being created -- because these things cannot be created out of thin air. When the Fed creates money, it is doing so in tandem with some physical output of the economy (unless they are purely inflating unbacked by actual goods/services activity).
A US $ is not without cost as well, isn't that right? Currency is based on scarcity of something. Is it possible to have scarcity limited currency without some kind of work involved?
Capital/currency represents someone doing work, something being dug out of the ground, something being created -- because these things cannot be created out of thin air. When the Fed creates money, it is doing so in tandem with some physical output of the economy (unless they are purely inflating unbacked by actual goods/services activity).
A US $ is not without cost as well, isn't that right? Currency is based on scarcity of something. Is it possible to have scarcity limited currency without some kind of work involved?
This is a fascinating topic to me and something I've been casually studying for over a decade so bear with me if I come across as blunt or whatever... I just mean to answer your questions directly and expound a little.
>Does a Bitcoin (for the $ value it represents) cost more to manufacture than an equivalent US $1?
Yes, because it costs quote a lot of electricity. And...
>After all, a $1 of US currency represents some creation of work too, doesn't it?
Nope. Costs effectively nothing. Not at all tied to anything tangible - even electricity - whatsoever. Via fractional reserve banking - for some reason we just...let banks do this - they create it with a keystroke and it costs nothing whatsoever.
It's why we have inflation every year. Banks are constantly creating USD and then charging interest for the privilege they were given to do so.
>A US $ is not without cost as well, isn't that right?
Nope. Gets made up out of thin air every day. A bank creates a loan. How do you think we got to $14 trillion USD? The treasury has never printed that much money. Only ~10% of USD physically exists (according to the Fed itself), and that's counting $100 bills minted decades ago. And banks only have to have 10% of the money to cover their loans. The number being the same right now is just a coincidence.
>Currency is based on scarcity of something.
Currency is based on whether or not people will accept it in trade. There are countless examples that prove that that is the sole criterion. Even stupid, shitty, hard to use currencies get used if they're what's accepted. Getting initial buy in for USD was based on gold. Then silver, and then in 1971, literal faith in the US government and nothing else whatsoever:
"and the unilateral cancellation of the direct international convertibility of the United States dollar to gold." (https://en.wikipedia.org/wiki/Nixon_shock)
>Is it possible to have scarcity limited currency without some kind of work involved?
Not in my opinion. Gold requires mining. BTC requires computing. But USD isn't a scarcity limited currency.
>Does a Bitcoin (for the $ value it represents) cost more to manufacture than an equivalent US $1?
Yes, because it costs quote a lot of electricity. And...
>After all, a $1 of US currency represents some creation of work too, doesn't it?
Nope. Costs effectively nothing. Not at all tied to anything tangible - even electricity - whatsoever. Via fractional reserve banking - for some reason we just...let banks do this - they create it with a keystroke and it costs nothing whatsoever.
It's why we have inflation every year. Banks are constantly creating USD and then charging interest for the privilege they were given to do so.
>A US $ is not without cost as well, isn't that right?
Nope. Gets made up out of thin air every day. A bank creates a loan. How do you think we got to $14 trillion USD? The treasury has never printed that much money. Only ~10% of USD physically exists (according to the Fed itself), and that's counting $100 bills minted decades ago. And banks only have to have 10% of the money to cover their loans. The number being the same right now is just a coincidence.
>Currency is based on scarcity of something.
Currency is based on whether or not people will accept it in trade. There are countless examples that prove that that is the sole criterion. Even stupid, shitty, hard to use currencies get used if they're what's accepted. Getting initial buy in for USD was based on gold. Then silver, and then in 1971, literal faith in the US government and nothing else whatsoever:
"and the unilateral cancellation of the direct international convertibility of the United States dollar to gold." (https://en.wikipedia.org/wiki/Nixon_shock)
>Is it possible to have scarcity limited currency without some kind of work involved?
Not in my opinion. Gold requires mining. BTC requires computing. But USD isn't a scarcity limited currency.
There’s an article in the NYTimes today on the environmental impact of NFTs and I personally find the whole thing deeply upsetting. I care a lot about the climate. It’s maybe my number one concern long-term, especially as my kids are concerned.
I saw the buzz around NFTs, and thought - “hey, cool! A new way for artists to make some money directly from their fans.” Sounds great. Minted a few NFTs to learn how it all works.
And then I read incredibly distressing figures - some comparing the cost to a years’ worth of family carbon emissions. From clicking a button and waiting a few minutes!
I haven’t been able to get a straight answer on how true these stats are. But the possibility that minting a few tokens caused that much damage frankly makes me want to cry.
You might say, well, that’s stupid — but honestly, when you care about something deeply like the climate and you take pains to reduce emissions and do things to try and help — well, it’s incredibly upsetting.
I saw the buzz around NFTs, and thought - “hey, cool! A new way for artists to make some money directly from their fans.” Sounds great. Minted a few NFTs to learn how it all works.
And then I read incredibly distressing figures - some comparing the cost to a years’ worth of family carbon emissions. From clicking a button and waiting a few minutes!
I haven’t been able to get a straight answer on how true these stats are. But the possibility that minting a few tokens caused that much damage frankly makes me want to cry.
You might say, well, that’s stupid — but honestly, when you care about something deeply like the climate and you take pains to reduce emissions and do things to try and help — well, it’s incredibly upsetting.
The problem is those emissions aren't being properly accounted for. Those causing them aren't paying the true cost.
I’m more worried about a hostile state actor like China using its dominance in Bitcoin and other crypto coins weaponizing it against our economies. Say crash the coins wiping out big actors causing domino effects in the markets.
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the problem will fix itself after the bubble bursts. Bitcoin doesn't provide anything of much value. It is just a speculative instrument.
If you haven't seen the DeFi space you are missing out. 10-20% interest on crypto holdings. If you know where to get interest rates like that...
I think we've given this proof-of-work experiment plenty of room to run, and it's time to end it as a failure through governments making it illegal.
The algorithm sort of worked, but the costs are too high. In the end those high costs led to efficiencies of scale leading to a few large miners controlling the whole blockchain. So it never lived up to the decentralized dream anyway.
Now it mostly serves to fuel rampant speculation and crime. It enabled a whole new category of crime through cyberlocker attacks (well not new, but made it so, so much more successful.)
The harm well outweighs the good. If it continues unabated proof-of-work crypto could double the energy requirements of the planet in just a few decades. It's not worth that. Kill it now before the consequences get worse.
The algorithm sort of worked, but the costs are too high. In the end those high costs led to efficiencies of scale leading to a few large miners controlling the whole blockchain. So it never lived up to the decentralized dream anyway.
Now it mostly serves to fuel rampant speculation and crime. It enabled a whole new category of crime through cyberlocker attacks (well not new, but made it so, so much more successful.)
The harm well outweighs the good. If it continues unabated proof-of-work crypto could double the energy requirements of the planet in just a few decades. It's not worth that. Kill it now before the consequences get worse.
Why are you so worried about cryptocurrencies, and seemingly not worried about energy companies who actually are the ones who are creating the carbon emissions?
Using electricity and emitting CO2 are only loosely correlated, and in the case of cryptocurrencies are even less correlated because cryptocurrencies are dis-proportionally mined with energy from hydroelectric dams.
All of these articles about the ecological impact of cryptocurrencies only exist to divert public and regulatory attention away from the energy companies that are actually doing all the damage.
Oil companies did the same thing in the 70s when there was public outcry about plastic pollution, so they funded the "reduce reuse recycle" campaigns, and the crying Indian commercial etc, all to divert responsibility from the companies manufacturing the plastics to the consumers who use them.
There is a documentary called "The Story of Plastic" which covers this strategy, and how successful it has been for them in the past.
Using electricity and emitting CO2 are only loosely correlated, and in the case of cryptocurrencies are even less correlated because cryptocurrencies are dis-proportionally mined with energy from hydroelectric dams.
All of these articles about the ecological impact of cryptocurrencies only exist to divert public and regulatory attention away from the energy companies that are actually doing all the damage.
Oil companies did the same thing in the 70s when there was public outcry about plastic pollution, so they funded the "reduce reuse recycle" campaigns, and the crying Indian commercial etc, all to divert responsibility from the companies manufacturing the plastics to the consumers who use them.
There is a documentary called "The Story of Plastic" which covers this strategy, and how successful it has been for them in the past.
Cardano is PoS and has been live for a while now.
It's slowly chipping away at Ethereum's use case and with smart contracts coming soon that are backwards compatible with Ethereum solidity code, it will overtake Ethereum over time.
There's other PoS blockchains that work and solve the concerns you have outlined.
It's slowly chipping away at Ethereum's use case and with smart contracts coming soon that are backwards compatible with Ethereum solidity code, it will overtake Ethereum over time.
There's other PoS blockchains that work and solve the concerns you have outlined.
It's a false equivalence (energy consumption, therefore bad). What if Bitcoin is solving a true market need (that is, preserving wealth in a truly decentralized way)? Would that make it worth the energy consumption?
You only need to look at what the current monetary system is based on -- the petro-dollar. Backed by the might of the US military, consuming crazy amounts of energy. What if Bitcoin eliminates the need for this?
You only need to look at what the current monetary system is based on -- the petro-dollar. Backed by the might of the US military, consuming crazy amounts of energy. What if Bitcoin eliminates the need for this?
Having mined cryptocurrency a long long time ago when it was still a novelty, it's really good to appreciate just how bad the externalities are for cryptocurrencies. The incentives are created for people to buy the cheapest energy possible and just burn it up for a made up financial instrument [0], even when that comes with a significant carbon footprint. Even if mining is only a tenth as bad as the University of Cambridge thinks [1]. On a much more minor note, it takes up energy generation (renewable and otherwise) and chip production resources that could be spent on actual production instead of yet another financial instrument.
I'd be in favor of banning the trade of all PoW cryptocurrencies for this reason alone. There is no proper way of banning mining in general, and neither should anyone desire to ban specific types of computation. Banning its trade to strongly disincentivize the sheer senseless resource consumption is more important and much more clear cut than any financial arguments to do it.
I realize this would utterly devastate the current cryptocurrency market, but that's the point (at least for anything that isn't proof of stake). We should get this over with before our dependency on it further increases and the environmental damage gets worse.
The zeitgeist around this has changed substantially. PoW cryptocurrencies really aren't credibly grassroots and have been captured by whales. And there really isn't any application of PoW ledger designs outside of cryptocurrencies with significant mindshare either. For all of this - proof-of-stake cryptocurrencies should be an alternative. Not a direct replacement, but able to cover most use cases.
Coinbase was founded under a different zeitgeist and I don't blame them for jumping into this market. But I think that banning PoW cryptocurrencies should be strongly advocated, and once this realization catches up at the right level, they have a significant liability on their hands.
[0]: For the record, all financial instruments are "made up". PoW cryptocurrencies are the only one that come with blatant resource consumption however.
[1]: https://techcrunch.com/2021/03/21/the-debate-about-cryptocur...
(For the record, if a ban on PoW cryptocurrencies would come into effect today I'd lose money over it.)
I'd be in favor of banning the trade of all PoW cryptocurrencies for this reason alone. There is no proper way of banning mining in general, and neither should anyone desire to ban specific types of computation. Banning its trade to strongly disincentivize the sheer senseless resource consumption is more important and much more clear cut than any financial arguments to do it.
I realize this would utterly devastate the current cryptocurrency market, but that's the point (at least for anything that isn't proof of stake). We should get this over with before our dependency on it further increases and the environmental damage gets worse.
The zeitgeist around this has changed substantially. PoW cryptocurrencies really aren't credibly grassroots and have been captured by whales. And there really isn't any application of PoW ledger designs outside of cryptocurrencies with significant mindshare either. For all of this - proof-of-stake cryptocurrencies should be an alternative. Not a direct replacement, but able to cover most use cases.
Coinbase was founded under a different zeitgeist and I don't blame them for jumping into this market. But I think that banning PoW cryptocurrencies should be strongly advocated, and once this realization catches up at the right level, they have a significant liability on their hands.
[0]: For the record, all financial instruments are "made up". PoW cryptocurrencies are the only one that come with blatant resource consumption however.
[1]: https://techcrunch.com/2021/03/21/the-debate-about-cryptocur...
(For the record, if a ban on PoW cryptocurrencies would come into effect today I'd lose money over it.)
You never explicitly stated, but is your argument that the energy consumption of bitcoin is the negative externality?
First of all energy is not fungible, not in time and not in space. There are times where consuming electricity is actually beneficial for renewables and the environment. I think the main mental block people have is that are trained to "save electricity" and that "all energy usage is negative." I would argue that using electricity during periods of wind or solar oversupply is actually positive for the environment. Because of this non-fungibility of energy, proof of work mining can be a positive sum game for the environment. Let me explain:
Back in the days where all our electricity came from fossil fuels, I completely agree that marginal electricity usage was bad for the environment. However I think that thought has persisted with us even though it is no longer true 100% of the time. With renewables sometimes the marginal cost of electricity to our environment is near 0 or even negative (eg, during periods of higher winds and lower demand)
I predict that in the future as bitcoin mining becomes more and more of an efficiency game that you will see bitcoin mining be kind of a load balancer for the grid, effectively turning off during peak demand (or low supply) times and contributing to the base load during regular times. Of course this would be distributed across the globe, and you would see more plants running midday (with solar oversupply) and overnight (with wind oversupply) than you would during early morning and evening peak hours.
For example, it may even help the economics of building new wind plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant.
Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve.
It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying power, you force the grid to build more renewable capacity (that the miners are paying for) that you use except in peak periods, where you turn off and effectively provide the grid with more power.
Here are 2 articles of a bitcoin mining company doing just this: https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-m... https://www.forbes.com/sites/christopherhelman/2020/05/21/ho...
First of all energy is not fungible, not in time and not in space. There are times where consuming electricity is actually beneficial for renewables and the environment. I think the main mental block people have is that are trained to "save electricity" and that "all energy usage is negative." I would argue that using electricity during periods of wind or solar oversupply is actually positive for the environment. Because of this non-fungibility of energy, proof of work mining can be a positive sum game for the environment. Let me explain:
Back in the days where all our electricity came from fossil fuels, I completely agree that marginal electricity usage was bad for the environment. However I think that thought has persisted with us even though it is no longer true 100% of the time. With renewables sometimes the marginal cost of electricity to our environment is near 0 or even negative (eg, during periods of higher winds and lower demand)
I predict that in the future as bitcoin mining becomes more and more of an efficiency game that you will see bitcoin mining be kind of a load balancer for the grid, effectively turning off during peak demand (or low supply) times and contributing to the base load during regular times. Of course this would be distributed across the globe, and you would see more plants running midday (with solar oversupply) and overnight (with wind oversupply) than you would during early morning and evening peak hours.
For example, it may even help the economics of building new wind plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant.
Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve.
It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying power, you force the grid to build more renewable capacity (that the miners are paying for) that you use except in peak periods, where you turn off and effectively provide the grid with more power.
Here are 2 articles of a bitcoin mining company doing just this: https://www.bloomberg.com/news/articles/2020-09-01/bitcoin-m... https://www.forbes.com/sites/christopherhelman/2020/05/21/ho...
> if it grows larger before we have clean energy, then we virtually guarantee we won't be able to tackle global warming
I stopped reading here.
I stopped reading here.
Bitcoin mining uses less energy than video gaming. And because mining can happen anywhere, it tends to use clean energy or energy trapped at power plants that would otherwise go to waste, so it's CO2 footprint is much, much less than video gaming.
Other things that contribute more to global warming than Bitcoin include: the meat industry, Christmas lights, and the mining and supply chain around gold.
Other things that contribute more to global warming than Bitcoin include: the meat industry, Christmas lights, and the mining and supply chain around gold.
I was an early user of coinbase. I only bought a fraction of a coin because of Paul Graham and YC's reputation. Well .. I was wrong. I was not an active trader. It seems they have closed by account and liquidated the btc within (if there were actually btc in my name). I am deeply disappointed that they don't have a telephone number I can call to help figure out the situation. Pretty disappointed.
Coinbase customer service has always been tragic. I remember my BTC being locked up until I could "verify" my identity by submitting a photo of my passport, but their site kept glitching out and zero response from customer service. This went on for months.
Pulled all my coins out and will never use this scummy product again.
Pulled all my coins out and will never use this scummy product again.
Pretty neat trick right? Super easy to “buy” coins. Impossible to take them out. Quite the moat.
> It seems they have closed by account and liquidated the btc within
This might not be completely legal. How much Bitcoin was it and what it is the date of liquidation?
This might not be completely legal. How much Bitcoin was it and what it is the date of liquidation?
yeah right, they likely have the account closed but the assets still held
As other people have alluded to, this might be California "escheating" you out of the account if you haven't logged in for a couple years (in which case Coinbase doesn't have a say in it). You should look into what's in California's unclaimed property registry: https://www.sco.ca.gov/upd_msg.html
Eh, maybe a month ago I found a Coinbase account from 2013 that I had forgotten about, and it still had everything in it. Your story makes no sense. Coinbase support has always been pretty good for every problem I've ever had. Why talk to someone on the phone when you can click a button and have a live chat with a support agent instantly?
https://help.coinbase.com/en/contact-us
https://help.coinbase.com/en/contact-us
Is this a plant? coinbase support is notoriously horrible, even my friend who works at the company thinks it's bad.
I've needed support maybe four times in my 8 or so years using them, and each time they've resolved my problem quickly.
The complaints I've seen about Coinbase support are usually people who withdraw coins to the wrong address or something and are upset that Coinbase won't reimburse them for their own fuckups.
I have had several cryptocurrency exchanges straight up steal money from me and then ghost me. Coinbase has been a pleasure to work with relative to everything else in the crypto space.
The complaints I've seen about Coinbase support are usually people who withdraw coins to the wrong address or something and are upset that Coinbase won't reimburse them for their own fuckups.
I have had several cryptocurrency exchanges straight up steal money from me and then ghost me. Coinbase has been a pleasure to work with relative to everything else in the crypto space.
If half the company isn't reading this thread I would be shocked. They came from YC and they're mostly a bunch of nerds like us.
I accidentally sent a wire from my business account instead of my personal account into coinbase. Since my account wasn't verified to be a business account they contacted me, sent the money back and reimbursed me the $30 wire fee. I found the customer service to be great.
I've been trading crypto for a while and exchanges are as sketchy as it gets. Sometimes, you have anecdotal experiences that bubble up on the internet but i truly believe coinbase is the most trust-worthy exchange.
I've been trading crypto for a while and exchanges are as sketchy as it gets. Sometimes, you have anecdotal experiences that bubble up on the internet but i truly believe coinbase is the most trust-worthy exchange.
That sounds like they didn’t want to get in trouble. Doubtful they would do the same for an average joe.
How much did you have? A ton or just a little
Not a lot, I think I had like 10 dollars in there, which is why I forgot about it, and it was up to a couple thousand. I did randomly find a few BTC in a paper wallet when cleaning out my office a couple years ago, that was fun.
I highly doubt this is true.
Since this is a direct listing, imagine making the first trade. There's no price for it. You might be an institutional investor who negotiated a price beforehand with large shareholders. Or maybe it's a bunch of people yoloing it with limit orders.
For anyone interested, they have a listing day page[1] and are doing a cofounder Q&A live in a bit[2].
1: https://www.coinbase.com/listingday 2: https://www.youtube.com/watch?v=FuqkjklLSCY
1: https://www.coinbase.com/listingday 2: https://www.youtube.com/watch?v=FuqkjklLSCY
thank you! shared that to a lot of people
Is there any way of knowing how much YC made on the IPO? Ballpark/order of magnitude?
Always curious to see what a win looks like from the accelerator side.
Always curious to see what a win looks like from the accelerator side.
Not sure about YC, but Andreessen-Horowitz seems to have made about $14B from their $2M investment? Assuming I'm reading this SEC filing correctly. And Union Square Ventures appears to have turned $13M into about $7B?
https://www.sec.gov/Archives/edgar/data/1679788/000162828021...
https://www.sec.gov/Archives/edgar/data/1679788/000162828021...
If they wanted to realize those gains, they would have to sell right? causing the price to plummet?
Yes. As far as I can tell those two firms hold 21% of the stock.
But that's true of pretty much any IPO. All the biggest winners are winners mostly on paper, they can't really dump it all on day one.
My understanding is that there are firms that specialize in buying up assets from VCs that need to close out their funds, so things like this or private companies that they've held for 10+ years already, stuff like that.
There are probably ways to sell all the shares from one entity to another all at once that won't tank the shares, but I'm not totally sure.
But that's true of pretty much any IPO. All the biggest winners are winners mostly on paper, they can't really dump it all on day one.
My understanding is that there are firms that specialize in buying up assets from VCs that need to close out their funds, so things like this or private companies that they've held for 10+ years already, stuff like that.
There are probably ways to sell all the shares from one entity to another all at once that won't tank the shares, but I'm not totally sure.
Mental numbers.
YC currently takes 7% when they invest https://www.ycombinator.com/deal/
I know, at a minimum, the dollar amount has changed over the years (gone up) but I'm not certain if the percentage has changed.
So if they can realize all of that at current price, a lot. Enough to keep running for many years.
I know, at a minimum, the dollar amount has changed over the years (gone up) but I'm not certain if the percentage has changed.
So if they can realize all of that at current price, a lot. Enough to keep running for many years.
So much BTC FUD on HN - it's kind of disgusting.
I'm not sure what I'm more amazed at: The foresight of Coinbase's founder starting the company so early on, or my personal total lack of foresight having read with interest about Bitcoin from the beginning and yet not bothering to buy a single coin at any point over the past decade.
I know lots of really smart software people who avoided crypto because it didnt and still doesnt “make sense”. But we all didnt invest on the merit of the technology. We forgot the whole “how will people behave” part and lost out on millions.
It still makes no sense to me. It makes sense in the sense that if people believe in it it becomes real. But I don't get why people believe in it. And frankly I'm still pretty skeptical that it's being floated by more than money laundering.
From something I wrote above, this was my ah-ha moment:
Not all cryptos are like this, but for bitcoin and other ones that have the incentives right: bitcoin's massive breakthrough is a protocol that can send verifiably discrete entities across a network, without a central party needing to verify the discrete-ness. This is a huge breakthrough in a lot of ways, but basically consider if you network could send payments as exactly as easily as it does HTTP packets, and w/o a client-server model, just p2p. HTTP changed the world, and that's the idea behind bitcoin's value. If you could somehow buy a slice of HTTP in 1997, or TCP/UDP, now knowing how important and valuable those became (valued by the size of the internet economy), would you?
Not all cryptos are like this, but for bitcoin and other ones that have the incentives right: bitcoin's massive breakthrough is a protocol that can send verifiably discrete entities across a network, without a central party needing to verify the discrete-ness. This is a huge breakthrough in a lot of ways, but basically consider if you network could send payments as exactly as easily as it does HTTP packets, and w/o a client-server model, just p2p. HTTP changed the world, and that's the idea behind bitcoin's value. If you could somehow buy a slice of HTTP in 1997, or TCP/UDP, now knowing how important and valuable those became (valued by the size of the internet economy), would you?
The only distinction between crypto and just HTTPS is the distributed concept. Something that I don't really think is valuable and neither do most consumers. Crypto exchanges get robbed more often than banks. The notion of investing in "http" is akin to investing in "blockchain" which isn't a thing. Anyone who saw the value of the internet would have been buying Apple, Google and Amazon because they were providing goods and services. Not tokens. I'm heavily invested in reddit karma, but it's still not fungible.
It's not so much the distributed concept, but it's the "verifiably discrete" packets that behave like a global internet protocol concept. I don't think you know the tech under the hood vs. existing tech, it sounds like. There has been no way, prior to now, to verify that my packet I'm sending over a network is a discrete entity, unless you use something like a certificate authority, and that's not really the same ballpark/use case. It's worth digging in that direction if you actually have an open mind about it.
Only a engineer would say that
One thing is, crypto is at the intersection of many disciplines at once, tech/finance/economy/psychology/game theory, etc.
I'd if you try to start with a clean slate and no biases against it from the get go, spend some time researching and understanding it alonside what money is and it's history, etc. You'll probably start to see some usefulness to it.
I'd if you try to start with a clean slate and no biases against it from the get go, spend some time researching and understanding it alonside what money is and it's history, etc. You'll probably start to see some usefulness to it.
I understand a lot of that stuff. I think the last 10 years have very thoroughly vindicated fiat currencies and central banking. The fact that we powered through the last financial crisis without inflation and the biggest pain was inflicted by austerity policies in Europe made it all pretty unequivocal. Crypto is powering close to zero of the mainstream economy. Nobody got a bitcoin bailout. The "money" isn't flowing. I've seen multiple big Wall Street banks say they're going to start using blockchains for whatever and fail to get any traction. It's great for avoiding taxes or buying drugs but I haven't seen any other practical application. The game theory aspect is probably very relevant. There's a lot of FOMO driving speculators into the frenzy.
> The fact that we powered through the last financial crisis without inflation...
If you trust those metrics, yes everything is perfect. Prices at grocery might not have inflated, but assets certainly have, real estate is crazy expensive, stock market P/E ratios have also exploded. For the working class whose income has relatively stayed stable, it means life is a lot harder.
The money is very much flowing in the crypto world, just look at DeFi, it has more or less the equivalent services available elsewhere, but everyone has access, you don't need trust, it has large volumes and billions of dollars in capital in these protocols.
It's great if you want a predictable global monetary system not controlled by any single entity. If you don't see any value in that (as in you really trust your gov and the politicians/bankers), I don't think there's anything I could tell you to convince you otherwise.
If you trust those metrics, yes everything is perfect. Prices at grocery might not have inflated, but assets certainly have, real estate is crazy expensive, stock market P/E ratios have also exploded. For the working class whose income has relatively stayed stable, it means life is a lot harder.
The money is very much flowing in the crypto world, just look at DeFi, it has more or less the equivalent services available elsewhere, but everyone has access, you don't need trust, it has large volumes and billions of dollars in capital in these protocols.
It's great if you want a predictable global monetary system not controlled by any single entity. If you don't see any value in that (as in you really trust your gov and the politicians/bankers), I don't think there's anything I could tell you to convince you otherwise.
I feel myself as value investor. That is why cryptos or Tesla and many other tech companies never made sense to me... I might be right one day, but currently it seems that market is what market is.
To me, value investing is when you already have a good idea of what something is worth, but it's trading below that value. That's great strategy if you know and understand a certain sector.
It's very difficult to value futuristic things, it might succeed beyond our wildest dreams or completely flop.
It's very difficult to value futuristic things, it might succeed beyond our wildest dreams or completely flop.
Everything seems so overinflated right now. As a value investor, what looks good currently?
$NET if you're looking for slightly undervalued tech stocks.
The recently announced products to take on zscaler, crowdstrike et al looks commendable whilst they are also at the same time going after the cloud incumbents with Workers. I'd reckon, they've got the engineering chops and the infrastructure to bat both those out of the park.
The recently announced products to take on zscaler, crowdstrike et al looks commendable whilst they are also at the same time going after the cloud incumbents with Workers. I'd reckon, they've got the engineering chops and the infrastructure to bat both those out of the park.
That was me. But tbh I do now see the value of Bitcoin specifically, in a zero-sum deflationary sense. But the environmental cost doesn't really make it worth it.
Defi could make sense... but I think people underestimate the value of a physical bank with real people running the show. But a lot of rent extraction too... so idk.
Defi could make sense... but I think people underestimate the value of a physical bank with real people running the show. But a lot of rent extraction too... so idk.
TradeHill was founded a year earlier and failed due to lack of demand. Gemini was founded after Coinbase and never caught up. It really looks like Coinbase got the timing right.
I still don’t see what the upside is to their valuation? It’s all baked in AFAICT.
Very little. This is a result of the private equity market growing so large that companies can put off going public for very long (Coinbase raised $800 million and the last round was "Series E").
10-15 years ago, it was much more difficult for companies to raise this much before going public, which forced companies to go public much earlier, before all upside was realized by private investors.
The result is private equity and VC funds benefit from the early gains, and by the time the company becomes public (and is accessible to retail investors) there's typically not much of a lucrative near-term upside opportunity.
The same thing will happen with Stripe once they finally IPO. They'll debut at an insane valuation, and there won't be much upside opportunity for retail investors to benefit from. Because if there were, they would be able to more easily raise the capital from private investors rather than the public market.
10-15 years ago, it was much more difficult for companies to raise this much before going public, which forced companies to go public much earlier, before all upside was realized by private investors.
The result is private equity and VC funds benefit from the early gains, and by the time the company becomes public (and is accessible to retail investors) there's typically not much of a lucrative near-term upside opportunity.
The same thing will happen with Stripe once they finally IPO. They'll debut at an insane valuation, and there won't be much upside opportunity for retail investors to benefit from. Because if there were, they would be able to more easily raise the capital from private investors rather than the public market.
That said. it is interesting how most of the unicorn companies have reached above their valuations in the current market.
Exit valuation of uber was 82.4$Billion, which we considered as insanely high then. Now it sits at 100.2 Market cap.
I have been aggregating some of them in my google sheet. Its very peculiar https://docs.google.com/spreadsheets/d/1IPIyrn-36GpepXXkfoLF...
Exit valuation of uber was 82.4$Billion, which we considered as insanely high then. Now it sits at 100.2 Market cap.
I have been aggregating some of them in my google sheet. Its very peculiar https://docs.google.com/spreadsheets/d/1IPIyrn-36GpepXXkfoLF...
This may be starting to shift as companies are getting much higher valuations on the public markets than they are from VCs.
Coinbase is getting a 10x valuation from public markets compared to what they got from private markets just two years ago. In theory, they've left a lot of money on the table by waiting so long to go public and raising from VCs instead.
(The price is dropping, so who knows if this will be true for very long.)
Coinbase is getting a 10x valuation from public markets compared to what they got from private markets just two years ago. In theory, they've left a lot of money on the table by waiting so long to go public and raising from VCs instead.
(The price is dropping, so who knows if this will be true for very long.)
> Because if there were, they would be able to more easily raise the capital from private investors rather than the public market
Coinbase isn’t raising capital though because it’s a direct listing.
Coinbase isn’t raising capital though because it’s a direct listing.
This is assuming valuations are based off fundamentals. The market is absolutely disconnected from what companies can actually deliver, and instead has become a place to park the surplus of money in the system.
Yeah. I was trained as a fundamental analyst. Multiple expansion doesn’t even explain the relative valuations. It feels like a popularity contest sometimes.
Coinbase was a great idea, considering what a mess mt gox was! Congratulations to the team!
Coinbase is very profitable and has huge cash reserves for a company of its size. I don't see any reason why they would feel the need to IPO if not to take advantage of people's FOMO.
Also to provide liquidity to their employees.
Paying for a lobbying org seems like a pretty good reason: https://seekingalpha.com/news/3679495-square-fidelity-coinba...
I expect Coinbase becoming a publicly traded company benefits them to a greater extent in reducing the chance of regulatory destruction than they benefit from additional access to capital.
At a certain point people want to stop being billionaires on paper and to become billionaires with actual liquidity.
And the timing seems right -- Bitcoin is sky-high and could crash tomorrow. (I'm presuming here that Coinbase and BTC will be highly correlated, but who knows.)
And the timing seems right -- Bitcoin is sky-high and could crash tomorrow. (I'm presuming here that Coinbase and BTC will be highly correlated, but who knows.)
This is the correct take, IMO. This feels to me like a lot of higher-ups at Coinbase are sensing the peak of a crypto hype wave and want to take advantage of the moment to cash out and spread their risk around. Plus they have privileged access to real-time data on crypto market movement (I assume); they’ll know if a btc sell off is brewing long before anyone else. The fact that BTC only jumped to 64k is telling...
This is nonsense. Coinbase didn’t IPO, it was a direct listing. They didn’t issue or sell any shares.
Can you translate for someone who has zero knowledge in this area?
Surely they made the decision to IPO back when BTC was half of what it is now.
It's a tiny bit pedantic, but the Coinbase offering today was not actually an IPO, I learned, but a DPO (Direct Public Offering). It was not a fundraising event for Coinbase, only a liquidity event for shareholders, and unlike an IPO no explicit valuation process occurred to select an offering price.
What difference does it make? Shares trading openly on the market is as explicit a valuation process as it gets.
Banks rip off companies in IPOs by underpricing the stock so their investors get a kickback.
That's the least charitable way to write it, but it's somewhat close to the truth (the other part of the truth is that pricing is hard which is why we have markets).
DPOs allow companies to list at a reference price without losing out on money - they can sell at the true price later.
Banks naturally make up a bunch of reasons why this is bad, but it's mostly nonsense.
When one side does many of these types of transactions per year (banks) and one side may only do one or two in a lifetime (founders) expect the side with more experience to both tilt the deal in their favor and to have a compelling narrative of why it's actually better for you.
See: https://podcasts.apple.com/us/podcast/bill-gurley-direct-lis...
There's a funny story (I searched briefly, but couldn't find) that when Elon took Tesla public via an IPO and the bankers told him the initial price he just said "no, at least $XX or no deal". I think the bank price was $17 and he said at least $19, but I could be off on the numbers. They did his price and that price was still too low.
It's a mistake for any company to IPO from now on imo, SPACs are even worse really (unless you're running a fraud in which case SPACs are great).
That's the least charitable way to write it, but it's somewhat close to the truth (the other part of the truth is that pricing is hard which is why we have markets).
DPOs allow companies to list at a reference price without losing out on money - they can sell at the true price later.
Banks naturally make up a bunch of reasons why this is bad, but it's mostly nonsense.
When one side does many of these types of transactions per year (banks) and one side may only do one or two in a lifetime (founders) expect the side with more experience to both tilt the deal in their favor and to have a compelling narrative of why it's actually better for you.
See: https://podcasts.apple.com/us/podcast/bill-gurley-direct-lis...
There's a funny story (I searched briefly, but couldn't find) that when Elon took Tesla public via an IPO and the bankers told him the initial price he just said "no, at least $XX or no deal". I think the bank price was $17 and he said at least $19, but I could be off on the numbers. They did his price and that price was still too low.
It's a mistake for any company to IPO from now on imo, SPACs are even worse really (unless you're running a fraud in which case SPACs are great).
DPO is the same though right? If you do the capital raise before the DPO or a capital raise in an IPO there isn't much difference.
If you're doing a capital raise privately before the public offering then you can set the terms you think are fair, but this isn't really required for a direct listing unless you need to raise money.
You can list and put up shares on the market later.
I think there's something new where you can list directly and then sell to the public too without the bank underwriting rip off thing, but that's the edge of my knowledge. I'm not super confident here, so definitely possible I'm wrong about specifics.
You can list and put up shares on the market later.
I think there's something new where you can list directly and then sell to the public too without the bank underwriting rip off thing, but that's the edge of my knowledge. I'm not super confident here, so definitely possible I'm wrong about specifics.
There are a number of important differences, in fact the only meaningful comparison is that they are selling shares to the public.
The title is wrong, there is no IPO. Presumably "IPO" is meant as "public offering." If there's a place to be specific about these things, isn't this thread it?
The title is wrong, there is no IPO. Presumably "IPO" is meant as "public offering." If there's a place to be specific about these things, isn't this thread it?
I don't know much about finance but based on what GP said, the biggest difference (aside from the acronym) is that one is a fund-raising event and the other is a liquidation event for shareholders. I read the latter as Coinbase's investors said at a board meeting, "Ok, we're ready to cash out now." so they held the DPO.
Kinda. In a normal IPO the big banks will agree to underwrite (that is, buy from the company and then immediately sell to investors) all the shares at an initial "offering price", and this is agreed upon in writing a little bit before the launch day. I don't believe this happens in the direct listing format, it just starts floating with no underwriting process.
So there is a difference in structure, but to your point immediately after launch it does not really matter to the general investing public
So there is a difference in structure, but to your point immediately after launch it does not really matter to the general investing public
The basic difference:
In an IPO the company puts private shares in the open market and gets money from it, priced at the IPO price. Whoever has (private) shares now has public shares and can trade whenever they want.
In a Direct Listing the company often already traded shares "openly" but not in a "public" way, but now wants it listed publicly so retail investors can trade it, and there's no immediate need of capital so the objective isn't to get a funding from offering shares in an IPO.
In an IPO the company puts private shares in the open market and gets money from it, priced at the IPO price. Whoever has (private) shares now has public shares and can trade whenever they want.
In a Direct Listing the company often already traded shares "openly" but not in a "public" way, but now wants it listed publicly so retail investors can trade it, and there's no immediate need of capital so the objective isn't to get a funding from offering shares in an IPO.
Its not pedantic at all, it's the most interesting part of this IPO, because this is a new way to do IPOs.
Spotify and Slack went public through direct listings as well.
Yeah, I wonder if this will become a trend. I always thought the underwriting agency in an IPO was a form institutional gate keeping / toll booth on the road to going public.
It will be a trend for heavy VC funded companies that are not really profitable (not speaking about Coinbase specifically). DPO's allow VC to recoup investments at around the 10 year mark for company's that do not make financial sense on paper.
Why does that matter here? Profitability is not a prerequisite for an IPO, and any IPO let's investors recoup their money.
It used to be that you could not IPO unless you were profitable, and furthermore the point of an IPO was to raise money needed to fund growth. But today these companies have raised enough money from VC's that they don't need any more from the public markets. By listing shares and letting these insiders sell, there is more limited supply and great demand, so they can sell tiny stakes for inflated prices. It's really great for VC's and other insiders.
> It used to be that you could not IPO unless you were profitable
Citation please. Lots of companies IPO while losing money.
If this was a thing, it's ancient history and not relevant to IPO vs DPO discussion.
Citation please. Lots of companies IPO while losing money.
If this was a thing, it's ancient history and not relevant to IPO vs DPO discussion.
I don't think it matters. I think the main difference is an IPO is typically used to raise money to grow, where as a DPO is mainly used to shift risk from VC to the main street and allow VC to recoup money from a non profitable entity. A magic trick really. IPO's do that too, but with a DPO there isn't the expense and the risk dog and pony show. Similar but different.
Also Palantir and Roblox - I think it's the way forward for most companies. Spotify was the first and the others have had slight variation to terms, but the core idea is good.
1. Keep valuable growth companies private for as long as possible where only accredited investors (rich people) can invest in them.
2. Open up to the public market only once you've reached the max theoretical valuation. The company is still hugely overvalued on hype and future growth is unlikely. Ideally, you quickly make it into the S&P 500 so you can hand off the bag to passive index holders who have very predictable buy rate (mostly retirement savings).
3...
4. The rich profit of the plebs like always.
2. Open up to the public market only once you've reached the max theoretical valuation. The company is still hugely overvalued on hype and future growth is unlikely. Ideally, you quickly make it into the S&P 500 so you can hand off the bag to passive index holders who have very predictable buy rate (mostly retirement savings).
3...
4. The rich profit of the plebs like always.
Let's start having companies mint fungible tokens so anyone can invest in them early on. It's like ICO's but hopefully it goes better this time
Yeah, capital > labor as Thomas Piketty pointed out quite nicely.
Just FYI, that's just a theory, and in the decade since his book was published, there have been several rebuttals and refutations pointing out that this theoretical mechanism doesn't match the empirical data.
https://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf
> Using a sample of 19 advanced economies spanning over 30 years, I find no empirical evidence that dynamics move in the way Piketty suggests. Results are robust to several alternative estimates of r-g.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546668
> Recent influential work finds large increases in inequality in the U.S. based on measures of wealth concentration that notably exclude the value of social insurance programs. This paper revisits this conclusion by incorporating Social Security retirement benefits into measures of wealth inequality. We find that top wealth shares have not increased in the last three decades when Social Security is properly accounted for. This finding is robust to assumptions about how taxes and benefits may change in response to system financing concerns.
Auten & Splinter came out with the most widely accepted[1] rebuttal, which showed that Piketty's theoretical model was based on a reality that ignored major taxes and transfers, and once you account for those, the effect goes away completely.
http://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequali...
> Top income share estimates based only on individual tax returns, such as Piketty and Saez (2003), are biased by tax-base changes, major social changes, and missing income sources. Addressing these issues requires numerous assumptions, especially for broadening income beyond that reported on tax returns. This paper shows the effects of adjusting for technical tax issues and the sensitivity to alternative assumptions for distributing missing income sources. Our results suggest that top income shares are lower than other tax-based estimates, and since the early 1960s, increasing government transfers and tax progressivity resulted in little change in after-tax top income shares.
[1] https://www.economist.com/briefing/2019/11/28/economists-are...
https://www.imf.org/external/pubs/ft/wp/2016/wp16160.pdf
> Using a sample of 19 advanced economies spanning over 30 years, I find no empirical evidence that dynamics move in the way Piketty suggests. Results are robust to several alternative estimates of r-g.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3546668
> Recent influential work finds large increases in inequality in the U.S. based on measures of wealth concentration that notably exclude the value of social insurance programs. This paper revisits this conclusion by incorporating Social Security retirement benefits into measures of wealth inequality. We find that top wealth shares have not increased in the last three decades when Social Security is properly accounted for. This finding is robust to assumptions about how taxes and benefits may change in response to system financing concerns.
Auten & Splinter came out with the most widely accepted[1] rebuttal, which showed that Piketty's theoretical model was based on a reality that ignored major taxes and transfers, and once you account for those, the effect goes away completely.
http://davidsplinter.com/AutenSplinter-Tax_Data_and_Inequali...
> Top income share estimates based only on individual tax returns, such as Piketty and Saez (2003), are biased by tax-base changes, major social changes, and missing income sources. Addressing these issues requires numerous assumptions, especially for broadening income beyond that reported on tax returns. This paper shows the effects of adjusting for technical tax issues and the sensitivity to alternative assumptions for distributing missing income sources. Our results suggest that top income shares are lower than other tax-based estimates, and since the early 1960s, increasing government transfers and tax progressivity resulted in little change in after-tax top income shares.
[1] https://www.economist.com/briefing/2019/11/28/economists-are...
Thanks for sharing, I was unaware of that.
Capital > labor, still. But I guess not as badly as I thought.
Capital > labor, still. But I guess not as badly as I thought.
It's actually debatable if capital is even > labor.
https://taxfoundation.org/labor-share-net-income-within-hist...
https://taxfoundation.org/labor-share-net-income-within-hist...
Also interesting. Although I mean in this case that I'd much rather be capital than labor if I had the choice.
its not interesting this is just another way stock markets are more about gambling instead of a way to raise capital. Previously you had startups doing their best to get sold to big companies instead of becoming profitable companies. Now they are going this route.
I don't know what your argument actually is, or what it has to do with what I said. You're just complaining under my comment because you objected to the word interesting.
A traditional IPO does not have to be a fundraising event. This was an IPO, just one structured as a direct public offering instead of negotiated sales the day before.
Doesn't the Coinbase treasury create/hold un-issued Coinbase shares? Do we know they didn't sell any of those?
Ok, we've DPO'd the title above.
The distinctions you are making are not exclusive to IPOs
They just opened up a share selling shop on the stock exchange, instead of selling it to banks (that already have shops) at wholesale price.
Any shareholder can sell through that shop window, including the company.
They just opened up a share selling shop on the stock exchange, instead of selling it to banks (that already have shops) at wholesale price.
Any shareholder can sell through that shop window, including the company.
If you have employee shares, it's very much not pedantic since there's no lockup period.
Waiting to see that option chain...
Anyone know if the 60 employees, who didn't agree with the mission focused approach, kept their shares?
https://blog.coinbase.com/a-follow-up-to-coinbase-as-a-missi...
https://blog.coinbase.com/a-follow-up-to-coinbase-as-a-missi...
They had the option to exercise whatever options they had vested, yes, subject to the company's normal rules.
Employees who had been with the company two years or more would have seven years to exercise. Those who had been there between one and two years would have 90 days.
Employees who had not yet been there a year would not have reached the vesting cliff, and would not have had vested options available to exercise.
Employees who had been with the company two years or more would have seven years to exercise. Those who had been there between one and two years would have 90 days.
Employees who had not yet been there a year would not have reached the vesting cliff, and would not have had vested options available to exercise.
This isn't accurate. All employees, regardless of tenure, got 7 years to exercise their shares that had vested up until that point.
That's surprisingly generous. Startups in Silicon Valley usually have a 30-90 day exercise window.
I guess if the point was to get rid of people then reducing the financial disincentive is a prudent move.
Armstrong is based, I'm not trying to bring in politics here or start any flamenation, I just love this clarity of the juxtaposition (the paradox of undermining something you pretend to support) in this quote from Greendwald's invective about using woke ideology, and abusing other people's suffering, as a disingenuous disguise:
In the wake of the George Floyd killing last summer, it became virtually obligatory for every large corporation to proclaim support for the #BlackLivesMatter agenda even though many, if not most, had never previously evinced the slightest interest in questions of racial justice or policing.
One of the very few companies that refused to do so was the Silicon Valley-based cryptocurrency exchange platform called Coinbase — which announced that it would remain apolitical and not involve itself in partisan debates or causes of social justice unrelated to its core business mission. When announcing that policy of political neutrality, the company’s co-founder Brian Armstrong explained that “the reason is that while I think these efforts are well intentioned, they have the potential to destroy a lot of value at most companies, both by being a distraction, and by creating internal division.” That once-anodyne announcement — to stay out of politics as a corporate entity — produced instant backlash. And exactly two months after, the notoriously censorious and politicized “tech reporters” of The New York Times punished the company for its heresy of neutrality with a lengthy article depicting Coinbase as a bastion of racism and toxic bigotry (the company was also savaged by journalists because of its audacity to reveal and respond to the NYT’s allegations in advance of the paper’s decision to publish).
In the wake of the George Floyd killing last summer, it became virtually obligatory for every large corporation to proclaim support for the #BlackLivesMatter agenda even though many, if not most, had never previously evinced the slightest interest in questions of racial justice or policing.
One of the very few companies that refused to do so was the Silicon Valley-based cryptocurrency exchange platform called Coinbase — which announced that it would remain apolitical and not involve itself in partisan debates or causes of social justice unrelated to its core business mission. When announcing that policy of political neutrality, the company’s co-founder Brian Armstrong explained that “the reason is that while I think these efforts are well intentioned, they have the potential to destroy a lot of value at most companies, both by being a distraction, and by creating internal division.” That once-anodyne announcement — to stay out of politics as a corporate entity — produced instant backlash. And exactly two months after, the notoriously censorious and politicized “tech reporters” of The New York Times punished the company for its heresy of neutrality with a lengthy article depicting Coinbase as a bastion of racism and toxic bigotry (the company was also savaged by journalists because of its audacity to reveal and respond to the NYT’s allegations in advance of the paper’s decision to publish).
Right now Coinbase is trading around 350 making it worth about 100B, the total value of bitcoin is about 1.000B and all cryptocurrencies that are tradeable on Coinbase is maybe 1.500B.
So the ratio between the value of the exchange is about 1/10 - 1/15 of the total value of the market it trades. (For comparison take say Interactive Broker's market value to the market value of the total stock market.)
And Coinbase far from the only exchange out there. With this valuation I bet the value of the exchanges is higher than the value of the total cryptocurrency market.
So the ratio between the value of the exchange is about 1/10 - 1/15 of the total value of the market it trades. (For comparison take say Interactive Broker's market value to the market value of the total stock market.)
And Coinbase far from the only exchange out there. With this valuation I bet the value of the exchanges is higher than the value of the total cryptocurrency market.
It is already down to $330...
This is not an issue since they make money from per trade.
It's not even nearly the biggest exchange!
Binance trades 10x the volume, so if Coinbase is worth 1/10 of the crypto market, is Binance worth 1x the crypto market?
Yep. It seems crazy - if you take all the stock market brokers and exchanges and compare it to the full stock market, their value is only a tiny part.
However for crypto exchanges ... well ... what is going on here?
However for crypto exchanges ... well ... what is going on here?
One reason certainly is that Coinbase charges very high fees, namely around 0.6% of the traded amount. The other reason is that crypto is traded a lot. If 1/6 of the entire crypto market cap trades on Coinbase every quarter (and that seems to be the case), then Coinbase has earnings of 0.1% of the entire crypto market cap every quarter, or 0.4% per annum. Apply a 25 P/E ratio, and you get a value for Coinbase of 10% of the crypto market cap.
Maybe because traditional investments have a lot of uses. Since crypto is pretty much just speculative right now, it makes sense that the exchanges are the ones capturing that value.
>what is going on here?
FOMO.
FOMO.
Comparing the Coinbase market cap and the total market value of Bitcoin is not comparing apples to apples. Just in the last 24 hours $74B worth of Bitcoin has traded hands. The entire purpose of Coinbase is to facilitate that exchange and take a cut for doing so. If the trade rate doesn't change the entire "market cap" dollar value of bitcoin will trade hands every two weeks. Being responsible for facilitating a sizeable percent of those transactions is pretty awesome and very valuable.
With that said, I think they are overvalued at $100B. Not because of the total market cap size of crypto, but because their revenue doesn't justify a valuation that high.
With that said, I think they are overvalued at $100B. Not because of the total market cap size of crypto, but because their revenue doesn't justify a valuation that high.
I think a more relevant metric would be the velocity of the Cypto market rather than the total value of the number of coins out there. Since Coinbase is taking a % of every transaction, if you send .1 bitcoin once then they get .5% of that. But if you send .1 bitcoin 10 times then they get .5% of 10*.1 (not the real % obviously).
I've seen numbers around 250k to 350k transactions per day for Bitcoin and more than 1 million for Ethereum. So if Coinbase can capture a decent percent of that market then you're talking about tens of millions in revenue per day (if not more).
From a quick search it looks like Coinbase had around $1.8 billion in revenue in the first quarter. That could/should grow along with popularity of crypto in general.
I've seen numbers around 250k to 350k transactions per day for Bitcoin and more than 1 million for Ethereum. So if Coinbase can capture a decent percent of that market then you're talking about tens of millions in revenue per day (if not more).
From a quick search it looks like Coinbase had around $1.8 billion in revenue in the first quarter. That could/should grow along with popularity of crypto in general.
for what it's worth, I would not invest in it
Netscape moment…' says Mike Novogratz — Is that a scary quote or what? Netscape did their IPO in 1995 and IE 6 killed them in 2001 but the "body" was finally buried in 2008. It sounds like a self-inflicted curse tempting Goldman or JP Morgan to become their "IE6." YMMV.
https://cointelegraph.com/news/coinbase-listing-is-crypto-s-...
https://cointelegraph.com/news/coinbase-listing-is-crypto-s-...
Netscape might have died, but it kickstarted the internet revolution in a major way.
my $250 order didn't go through...
Does anyone know what percentage of their business is in Bitcoin vs Etherium vs other crypto currencies? I have not been able to find that out and I think it would be a helpful thing to know in terms of forecasting their business. Does anyone know how I can find that out?
Thank you anyone who can help.
Thank you anyone who can help.
probably in their s1 or other sec docs
You're right, it is in the S1. Thank you dogman144!!
In case anyone curious, S1 page 99:
Historically, a significant portion of Trading Volume and transaction fee revenue has been driven by the purchase, sale, and trading of Bitcoin and Ethereum, and in 2019, Litecoin. For example, for the year ended December 31, 2019, Bitcoin, Ethereum, Litecoin, and other crypto assets represented approximately 58%, 14%, 10%, and 18% of Trading Volume and 60%, 11%, 8%, and 21% of our transaction revenue, respectively, and for the year ended December 31, 2020, Bitcoin, Ethereum, and other crypto assets represented approximately 41%, 15%, and 44% of Trading Volume and 44%, 12%, and 44% of our transaction revenue, respectively.
In case anyone curious, S1 page 99:
Historically, a significant portion of Trading Volume and transaction fee revenue has been driven by the purchase, sale, and trading of Bitcoin and Ethereum, and in 2019, Litecoin. For example, for the year ended December 31, 2019, Bitcoin, Ethereum, Litecoin, and other crypto assets represented approximately 58%, 14%, 10%, and 18% of Trading Volume and 60%, 11%, 8%, and 21% of our transaction revenue, respectively, and for the year ended December 31, 2020, Bitcoin, Ethereum, and other crypto assets represented approximately 41%, 15%, and 44% of Trading Volume and 44%, 12%, and 44% of our transaction revenue, respectively.
Nice!
And down bitcoin goes. $3k off the highs. If given a choice between 1 million to invest in in a large cap growth stock portfolio vs. Bitcoin, I would choose the stock portfolio every time. Crypto too volatile relative to upside. Airbnb and other big tech growth stocks have much smoother returns which can be magnified with some leverage strategies.
As Powell announced cryptocurrencies ‘vehicles for speculation’. It is mind blowing the cryptocurrencies are making bets and are valued without any sound reasoning behind them. How many companies actually use them at regular place? How hard is the barrier of entry?
I'm not sure what you mean by "cryptos making bets."
Valid points on use, but paypal adoption might cause a jump and a few others in that direction, but still small.
Barrier to entry, paypal or not, is fairly small actually. Good wallet and transaction ecosystem that works via QR code. Depending on what way CB and places like BlockFi go, links to dollar economy get a lot stronger too.
What sound reasoning is behind all this: bitcoin's massive breakthrough is a protocol that can send verifiably discrete entities across a network, without a central party needing to verify the discrete-ness. This is a huge breakthrough in a lot of ways, but basically consider if you network could send payments as exactly as easily as it does HTTP packets. HTTP changed the world, and that's the idea behind bitcoin's value. If you could somehow buy a slice of HTTP in 1997, or TCP/UDP, now knowing how important and valuable those became (valued by the size of the internet economy), would you?
Valid points on use, but paypal adoption might cause a jump and a few others in that direction, but still small.
Barrier to entry, paypal or not, is fairly small actually. Good wallet and transaction ecosystem that works via QR code. Depending on what way CB and places like BlockFi go, links to dollar economy get a lot stronger too.
What sound reasoning is behind all this: bitcoin's massive breakthrough is a protocol that can send verifiably discrete entities across a network, without a central party needing to verify the discrete-ness. This is a huge breakthrough in a lot of ways, but basically consider if you network could send payments as exactly as easily as it does HTTP packets. HTTP changed the world, and that's the idea behind bitcoin's value. If you could somehow buy a slice of HTTP in 1997, or TCP/UDP, now knowing how important and valuable those became (valued by the size of the internet economy), would you?
USD doesn't have sound reasoning behind them either (anymore). It's based on faith in the system.
I mean realistically it's how you pay taxes to the US Government which represents the United States, probably the most innovative and industrial nation ever to exist.
If you want to operate with/within the US, you pay the dollar. That's fairly "sound" reasoning.
Btw im invested heavily in crypto but just saying.
If you want to operate with/within the US, you pay the dollar. That's fairly "sound" reasoning.
Btw im invested heavily in crypto but just saying.
It is backed by the U.S. Army.
Why? Lol. If your risk/reward profile is such, it's a fine investment. Super liquid, volatile, upward trend.
Yeah if you're 70 years old, don't throw in half of your net worth.
Yeah if you're 70 years old, don't throw in half of your net worth.
BTC has a pretty amazing Sharpe ratio. If you want smooth returns, then reduce your allocation?
That's exactly why you don't even have 1 million, lol.
“crypto too volatile”. Jesus Christ people are stubborn. On the day Coinbase stock falls 30% and Bitcoin drops just a few percent people still claim crypto too volatile
What is coinbase's moat? Not sure I understand how they arrived at the valuation.
Inspired by Coinbase, I wrote an essay on decentralization just now. A remarkable day today! https://notonlyluck.com/2021/04/12/the-compelling-vision-of-...
Really is! From Charlie Shrem going to prison to a IPO in ~7 years. Space has come so far and has such a history.
The NYSEs parent company Intercontinental Exchange Inc (ICE) is worth 66.40B. Today's IPO puts Coinbase at 100B+. The NYSE has been in operation since 1817. Coinbase has been in operation since 2012. The value of all crypto is < 1T. The value of the US stock market is 50T.
Trading fees in the crypto-world are getting more competitive as more established players support crypto. I don't see a defensible market position here, let alone established track record or strong potential for growth in future earnings.
This is all feeling very dotcom bubble 2.0.
Trading fees in the crypto-world are getting more competitive as more established players support crypto. I don't see a defensible market position here, let alone established track record or strong potential for growth in future earnings.
This is all feeling very dotcom bubble 2.0.
>This is all feeling very dotcom bubble 2.0.
How many dotcom era companies had net income of $800mil in a single quarter?
How many dotcom era companies had net income of $800mil in a single quarter?
I don't know exactly. Yahoo was one, adjusted for inflation.
Man, almost forgot how it's spelled it's been so long.
Man, almost forgot how it's spelled it's been so long.
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Do you know the answer and are trying to prove your point? Or are you assuming none and asking a question you don't actually know.
The comparison with NYSE is indeed very convincing.
Agreed. As I've pointed out elsewhere, Coinbase trading fees are about 60x those of NYSE, Nasdaq, etc.; and Coinbase siphons off about 0.4% of the entire crypto market cap per annum.
I don't see how that is sustainable at all.
I don't see how that is sustainable at all.
It's not. But it doesn't have to be sustainable to justify the current valuation. Indeed if it were sustainable, Coinbase would be worth many many times what it is now.
What P/E ratio do you calculate with?
IIRC, a normal valuation (not predicated on growth) would value it at a quarter of what it is now.
No retail investor has accounts directly with the NYSE. Coinbase directly holds the customer relationship and if more government regulation comes down on crypto it will be a better moat for them against competitors.
I think Coinbase may still be overvalued but don't think it is directly comparable to NYSE or other major exchanges.
I think Coinbase may still be overvalued but don't think it is directly comparable to NYSE or other major exchanges.
> I think Coinbase may still be overvalued but don't think it is directly comparable to NYSE or other major exchanges.
I would agree; Coinbase is competing against traditional brokerages and fintech (PayPal, Cash app), who can run their own nodes and key/wallet infra (as the network is the global exchange). Traditional brokerages can even identity proof their customers IRL with their branches and provide an appropriate level of customer service.
Alternatively, it would be somewhat humorous if Coinbase becomes the DTC and Cede & Co of digital assets (for brokerages who would rather pay and plug in vs build their own custody systems). What is old is new again.
I would agree; Coinbase is competing against traditional brokerages and fintech (PayPal, Cash app), who can run their own nodes and key/wallet infra (as the network is the global exchange). Traditional brokerages can even identity proof their customers IRL with their branches and provide an appropriate level of customer service.
Alternatively, it would be somewhat humorous if Coinbase becomes the DTC and Cede & Co of digital assets (for brokerages who would rather pay and plug in vs build their own custody systems). What is old is new again.
«No retail investor has accounts directly with the NYSE»
That's a good point. So a fairer comparison would be to compare Coinbase to the market cap of NYSE ($66B) + a stock broker who has roughly the same userbase as Coinbase. For example Schwab ($127B) has about half as many accounts as Coinbase. So NYSE+Schwab = $193B. Suddenly Coinbase valued at $100B while having twice as many accounts and trading fees per dollar transacted ten-fold higher than NYSE+Schwab seems like a bargain... !
That's a good point. So a fairer comparison would be to compare Coinbase to the market cap of NYSE ($66B) + a stock broker who has roughly the same userbase as Coinbase. For example Schwab ($127B) has about half as many accounts as Coinbase. So NYSE+Schwab = $193B. Suddenly Coinbase valued at $100B while having twice as many accounts and trading fees per dollar transacted ten-fold higher than NYSE+Schwab seems like a bargain... !
Why stop there? Let's add in Visa too. If we're gonna add Visa, let's add Mastercard. What about banks though? Maybe we add in JP Morgan?
If Coinbase has network effects, they're incredibly weak. I'll drop my Coinbase account tomorrow if I find a cheaper, safe place to buy coins. Schwab on the other hand has inarguably the best checking account out there, incredible customer service, and a great brokerage.
Coinbase is in a race to the bottom and they're gonna get smashed against the floor by established, defensible financial services. Grandma ain't making a Coinbase checking account. That's my thinking anyways.
If Coinbase has network effects, they're incredibly weak. I'll drop my Coinbase account tomorrow if I find a cheaper, safe place to buy coins. Schwab on the other hand has inarguably the best checking account out there, incredible customer service, and a great brokerage.
Coinbase is in a race to the bottom and they're gonna get smashed against the floor by established, defensible financial services. Grandma ain't making a Coinbase checking account. That's my thinking anyways.
«Coinbase is in a race to the bottom»
90%+ of industries are. It's what capitalism is all about. It's not unique to Coinbase.
«Grandma ain't making a Coinbase checking account»
She already did. They have 56 million verified user accounts. Twice more than Schwab. A lot of grandmas in this user base :)
90%+ of industries are. It's what capitalism is all about. It's not unique to Coinbase.
«Grandma ain't making a Coinbase checking account»
She already did. They have 56 million verified user accounts. Twice more than Schwab. A lot of grandmas in this user base :)
> 90%+ of industries are
This is a very simple understanding of economics that's ~100 years outdated. Most of the world's largest companies sell goods and services with relatively inelastic demand and/or significant barriers to market entry. What IP does Coinbase have that makes their service/good inelastic? Tomorrow when all coins are supported on Robinhood, Cash app, and Venmo, why use Coinbase? COIN investors haven't given me a good answer here. It just comes off delusional to me.
> They have 56 million verified user accounts.
This is a deceptive number. Coinbase has ~6M monthly active users at a time when crypto grew in value 10x. Average account duration is, I'm sure, very low. Schwab has ~30M active brokerage accounts. These are actual, comparable numbers. 56M is pretty much anyone that made an account with a linked email, no?
This is a very simple understanding of economics that's ~100 years outdated. Most of the world's largest companies sell goods and services with relatively inelastic demand and/or significant barriers to market entry. What IP does Coinbase have that makes their service/good inelastic? Tomorrow when all coins are supported on Robinhood, Cash app, and Venmo, why use Coinbase? COIN investors haven't given me a good answer here. It just comes off delusional to me.
> They have 56 million verified user accounts.
This is a deceptive number. Coinbase has ~6M monthly active users at a time when crypto grew in value 10x. Average account duration is, I'm sure, very low. Schwab has ~30M active brokerage accounts. These are actual, comparable numbers. 56M is pretty much anyone that made an account with a linked email, no?
The value of all crypto is over 2T now
Bitcoin alone is worth over 1T, so your statement that all of crypto is worth less than 1T is a bit silly. The goal posts keep moving for crypto...next year it'll be that crypto is worth less than 5T, etc.
I looked at the NYSE daily volumes...unless I'm reading them wrong, they did $800m USD worth of trades today. Coinbase did $5b USD worth of trades today. So if you compare a company that's almost 200 years olds volume against a 9 year old company, and find that the startup is doing more than 5 times the volume of the incumbent (with zero lock in, since clients are free to trade cryptos on any exchange), then I'd say your comparison is actually a ringing endorsement for Coinbase.
I looked at the NYSE daily volumes...unless I'm reading them wrong, they did $800m USD worth of trades today. Coinbase did $5b USD worth of trades today. So if you compare a company that's almost 200 years olds volume against a 9 year old company, and find that the startup is doing more than 5 times the volume of the incumbent (with zero lock in, since clients are free to trade cryptos on any exchange), then I'd say your comparison is actually a ringing endorsement for Coinbase.
You are reading them wrong. The NYSE traded 971 million shares of stock today worth $51 billion. That's just the NYSE, too. ARCA and ICE are owned by them as well.
https://www.nasdaqtrader.com/trader.aspx?id=FullVolumeSummar...
https://www.nasdaqtrader.com/trader.aspx?id=FullVolumeSummar...
"I looked at the NYSE daily volumes...unless I'm reading them wrong, they did $800m USD worth of trades today"
You are orders of magnitude off here. If you really think the stock market is that small you probably shouldn't be here commenting about it
You are orders of magnitude off here. If you really think the stock market is that small you probably shouldn't be here commenting about it
FWIW, I think that total of $800m is purely stock trades and not the sum total of money moving through NYSE. According to wikipedia they were moving $130bn in 2013.
https://en.wikipedia.org/wiki/New_York_Stock_Exchange
https://en.wikipedia.org/wiki/New_York_Stock_Exchange
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The value of all crypto is ~2.27Tn at the time of writing:
https://www.coingecko.com/en/global_charts
Roughly 1Tn of that from 01/01/2021.
https://www.coingecko.com/en/global_charts
Roughly 1Tn of that from 01/01/2021.
Coinbase is... not a stock exchange?
Compare it to the CME then, which is a commodities/futures/derivitives exchange, as Bitcoin is designated as a commodity by the US government. $74B market cap.
https://www.cmegroup.com/
https://www.cmegroup.com/
Compare it to Visa. $475B market cap.
I mean it’s not really like any of these things, the comparisons are totally arbitrary.
I mean it’s not really like any of these things, the comparisons are totally arbitrary.
Comps are a fundamental part of establishing fair valuation. Comparing Coinbase to the NYSE doesn't seem arbitrary to me. How likely do you think it is Coinbase becomes a household name like Visa, really? How many retailers process payments per day with Coinbase? How long did it take Visa to build its network? How consistent is Coinbase usership?
I don't see Coinbase having a future in payment processing. Not unless cryptocurrencies become drastically more stable and energy efficient. Even then, you're hoping for the goodwill of the government not to implement serious restriction.
I don't see Coinbase having a future in payment processing. Not unless cryptocurrencies become drastically more stable and energy efficient. Even then, you're hoping for the goodwill of the government not to implement serious restriction.
Comps may be meaningful (usually mostly for market sizing and multiple) but these are all bad comps. Coinbase is just too unique.
> This is all feeling very dotcom bubble 2.0.
Dotcom bubble was unique among other market crashes, because the main prediciton that fueled the dotcom bubble — that internet is the future and internet-based companies will be worth a lot of money — turned out to be completely right.
Dotcom bubble was unique among other market crashes, because the main prediciton that fueled the dotcom bubble — that internet is the future and internet-based companies will be worth a lot of money — turned out to be completely right.
That's actually not so weird. Biggest bubbles are usually rooted in reality.
you should be able to understand that even the possibility of that becoming the new ICE has to be priced in, of course you are free not to do it though.
Priced in, only if you're completely insane. Have you priced in the risk that the SEC shuts down the offramps before it gets there?
Obviously both of those possibilities are priced in. Investors aren't stupid, Gamestop notwithstanding.
> Investors aren't stupid
I think it's pretty clear by now that they are.
We just hope that the stupidity on the buy and sell sides more or less balances out, and what's left to determine the price is people with some real insight.
I think it's pretty clear by now that they are.
We just hope that the stupidity on the buy and sell sides more or less balances out, and what's left to determine the price is people with some real insight.
Investors in the aggregate are not stupid, and if you disagree, you can make yourself a fortune and prove yourself right.
I think severe regulation is more likely than Coinbase becoming the next NYSE, but the valuation suggests investors think the opposite.
All that the valuation suggests is that Coinbase is a company with 1 bn in revenue last year, and 1.8 bn just last quarter. By virtue of upsides being unbounded while downsides are bounded by the money you invest, the downside case really doesn't matter with a good enough upside case. Coinbase going down in flames may be the most likely outcome. That doesn't matter as long as you're not YOLOing your entire portfolio into Coinbase. What matters is the average outcome. And the average outcome is pretty good despite Coinbase failing in 9 out of 10 scenarios.
the bet is whether US regulators have the panache to regulate a financial market anymore.
I would point you to Matt Levine’s column today to maybe help you understand the type of thinking that drives the stock market. I would say you are guilty of looking in the rear view mirror and stating the obvious as opposed to looking to the future.
ICE is just one part of coinbase as they have integrated clearing, broking and an exchange
If you add up all the brokers/investment banks, clearing companies that are related to ICE you get to a way larger number.
If you add up all the brokers/investment banks, clearing companies that are related to ICE you get to a way larger number.
[deleted]
> dotcom bubble
where can I buy things with my beenz and flooz?
where can I buy things with my beenz and flooz?
Probably better to compare to other financials. PNC Bank has market cap of $76 billion. 50,000 employees, $16 bil revenue.
> This is all feeling very dotcom bubble 2.0.
Yeah, what a shame, that Internet thing never really took off.
Yeah, what a shame, that Internet thing never really took off.
I remember hesitating on a ETH trade because of Coinbase's high fees and losing money because of it. Ever since I've felt like Coinbase is a scam wrapped up in pretty UI.
For reference, BP the number five global oil behemoth with 200B in revenues in 2020, has a market cap of 85B. Coinbase that sells pumped speculation for a fee has a market cap of 100B.
Markets are efficient.
Markets are efficient.
There is lots of speculation now but I think eventually real-world applications will be made with crypto. At the very least, it will be likely that the bigger cryptos will start to be accepted by major companies to buy goods/services.
Crypto doesn't make a good currency for average consumers due to its instability. Who would do day to day purchases w/ funds that fluctuate +/- 10 percent? This is why you want centralization.
Store of wealth? Aight, you got me. Solid arguments to be made for it as a new anti-fiat. Its recent divergence from gold concerns me though. That seems bubbly.
As a settlement protocol between nations and financial institutions? Already well proven out and in use. No argument to be made.
Store of wealth? Aight, you got me. Solid arguments to be made for it as a new anti-fiat. Its recent divergence from gold concerns me though. That seems bubbly.
As a settlement protocol between nations and financial institutions? Already well proven out and in use. No argument to be made.
Literally compare COIN to any other market maker or financial institution. I would love to hear some justification here.
https://www.advratings.com/banking/worlds-top-banks-by-marke... : it's in the top 10-20.
Does anyone know what the value of assets under management by Coinbase is?
Does anyone know what the value of assets under management by Coinbase is?
AUM is the absolute wrong metric to measure for an exchange. This is why I tell everyone to never pretend they understand a subject the moment you read the first Wikipedia page you come across.
USD 90 billion "assets on platform" (which, as has been pointed out, is not a good metric for an exchange at all). That's about 5-12% of total crypto assets (depending on the time of day) [1].
By the way, Coinbase revenue in the last quarter was nearly 0.1% of the entire crypto market cap.
So, Coinbase took around 60$ of any 10,000$ traded on Coinbase, and 10$ of any 10,000$ crypto market cap, which implies that 1/6 of the entire crypto market cap traded through Coinbase once this quarter, unless I'm mistaken.
See the second story in Matt Levine's Money Stuff: https://www.bloomberg.com/opinion/articles/2021-04-14/good-a...
[1] more likely, the percentage is fairly constant, while the USD value fluctuates a lot with crypto prices, so "AUM" might be around USD 200 billion now (as crypto market cap is USD 2 tr).
By the way, Coinbase revenue in the last quarter was nearly 0.1% of the entire crypto market cap.
So, Coinbase took around 60$ of any 10,000$ traded on Coinbase, and 10$ of any 10,000$ crypto market cap, which implies that 1/6 of the entire crypto market cap traded through Coinbase once this quarter, unless I'm mistaken.
See the second story in Matt Levine's Money Stuff: https://www.bloomberg.com/opinion/articles/2021-04-14/good-a...
[1] more likely, the percentage is fairly constant, while the USD value fluctuates a lot with crypto prices, so "AUM" might be around USD 200 billion now (as crypto market cap is USD 2 tr).
The fundamentals of Coinbase aren't actually that far off if you assume that their $730-$800 million Q1 income is sustainable.
Worth $1B tops.
How do you justify your $100m valuation of a company that generated $700m of PROFIT in a single quarter?
Nice edit.
How do you justify your $1000m valuation of a company that generated $700m of PROFIT in a single quarter?
How do you justify your $1000m valuation of a company that generated $700m of PROFIT in a single quarter?
q4 2020 and q1 2021 were anomalies. The government put $900B in stimulus money into individuals pockets. There is probably no single company that got more benefit from those payments than Coinbase. The fear of inflation from unfettered spending drove investors into crypto with the idea that it was a hedge against inflation. I don't buy that value proposition for crypto but it did drive prices higher. The stimulus also put money directly into individuals pockets many of whom were hoping to cash in on the boom.
Coinbase did $1.28B revenue in 2020 with something like half of it coming in q4. This was before Venmo, Cashapp, Paypal, etc. started selling crypto. The cost for customer acquisition is about to skyrocket at the same time fees are about to plummet.
There's a reason Coinbase is rushing to DPO right now. The stars are perfectly aligned for them to get out while the getting is good.
Coinbase did $1.28B revenue in 2020 with something like half of it coming in q4. This was before Venmo, Cashapp, Paypal, etc. started selling crypto. The cost for customer acquisition is about to skyrocket at the same time fees are about to plummet.
There's a reason Coinbase is rushing to DPO right now. The stars are perfectly aligned for them to get out while the getting is good.
So if their business model is raking it in by selling pumped-up speculation, and the pumped-up speculation market is a growing sector, then that's what is called an efficient business model which has nothing to do with the fact that markets are 'efficient'.
Also, since when does anyone care if casino's business is based on pumped up gambling. As long as there are millions of transactions going on, the business model will stay 'efficient'.
Also, since when does anyone care if casino's business is based on pumped up gambling. As long as there are millions of transactions going on, the business model will stay 'efficient'.
Unfortunately this is right. It doesn't matter whether it's rational or not, but it's definitely profitable. At the moment.
Given we have financial crises in the global economy on roughly a decade basis, and the last one was 2008, there might be another one soon ..
Given we have financial crises in the global economy on roughly a decade basis, and the last one was 2008, there might be another one soon ..
Not really. We already had one - COVID + decade of economy reset cycle - combined rolled into one. Next one - will not happen (probably) until at least 2027\2028
Getting people to overpay for entertainment is a great business model.
> As long as there are millions of transactions going on, the business model will stay 'efficient'.
I have a timeshare to sell you.
I have a timeshare to sell you.
Last time I checked timeshares were a shrinking sector. My advice to you is: consider pivoting your biz model to crypto brokerage.
That's a saturated market.
The real money is in crypto-timeshares.
We have all the advantages of a timeshare business, and also blockchain.
The real money is in crypto-timeshares.
We have all the advantages of a timeshare business, and also blockchain.
I mean, re-read that 2-3 times.
With the emergence of a new group of people that have massive crypto reserves at their disposal, paying for a timeshare in crypto would make that asset accessible to them natively.
It’s not a bad idea. If crypto is a new paradigm, the world will need crypto-XYZ to appeal to that crowd. Cars (Tesla), and timeshares are among them.
With the emergence of a new group of people that have massive crypto reserves at their disposal, paying for a timeshare in crypto would make that asset accessible to them natively.
It’s not a bad idea. If crypto is a new paradigm, the world will need crypto-XYZ to appeal to that crowd. Cars (Tesla), and timeshares are among them.
To Predict the Future: Think of the dorkiest idea you can.
In the 2000s this was:
* Completely made up digital money with no government backing that you have to convince some sucker to take so they give you two free pizzas.
In the 90s this would be:
* Keeping track of your friends on your computer!
* Carrying a computer around that you use to take pictures of yourself and send them to friends!
In the 80s this was
* Electronic music without words.
* Reading books on your computer
* Completely made up digital money with no government backing that you have to convince some sucker to take so they give you two free pizzas.
In the 90s this would be:
* Keeping track of your friends on your computer!
* Carrying a computer around that you use to take pictures of yourself and send them to friends!
In the 80s this was
* Electronic music without words.
* Reading books on your computer
>> Markets are efficient.
They are certainly great at turning air into gold. Maybe that was always their true purpose.
They are certainly great at turning air into gold. Maybe that was always their true purpose.
No they are turning gold into bitcoin. :)
Would you rather own crude or DOGE, the official currency of Mars?
the salt on this board when it comes to crypto only gets worse as time goes on
Yes, perhaps this is correlated with the fact that the successive number of years that crypto has been hyped and failed to deliver anything of value only grows as time goes on.
I would reply to you and describe the burgeoning ecosystem of economic activity and the speed at which the entire sector is growing, but I have a feeling that convo will not go anywhere. Crypto is eating finance. It's going to eat everything else too. The longer you fight that, the harder the 21st century is going to be for you.
What problem does crypto solve apart from being a digital alternative to gold? It's not anonymous (except Monero which is centralized), transaction fees and times tend to be high (depends on which currency and exchange you're using), there's zero recourse for stolen funds currently (which makes it ripe for fraud). And in addition to that, at least for Bitcoin, it's an environmental disaster.
What do you think makes crypto useful?
What do you think makes crypto useful?
Yeah but how does Crypto make stuff happen in the real world? Like a bank can repossess people's houses and stuff and have the law applied. Crypto only has power over what's on that specific blockchains contracts.
On blockchain, the code is the law, for better or worse. It brings a lot of powerful advantages but certainly comes with some tradeoffs. Loans on DeFi today, tend to be overcollateralized, so that a loan's collateral can be liquidated by a "watcher" if the loan goes into default or is at risk of becoming undercollateralized.
Arbitration, insurance, etc. can also be recreated on-chain and already exist to some extent although it is quite early days still.
Arbitration, insurance, etc. can also be recreated on-chain and already exist to some extent although it is quite early days still.
And also that people are starting to seriously worry for the energy consumption of something that provides no useful value.
At its bare bones crypto is a perimissionless payments system, you dont see any value here?
And I think there are good reasons for that:
1) The energy consumption of bitcoin mining alone is estimated to have reached the levels of entire countries (Argentina was the latest country I've heard it being compared to), while actual usage of bitcoin (except for speculation) is still a fringe niche thing
2) When shown that the coins do not scale, instead of moving on to an improved version, those coins continue to grow. Instead of 'okay, proof of concept done, it does not scale, let's move on to an improved version', the bonanza just continues.
There are probably more reasons like these, but I think it would be straight-up weird if the technically versed audience of HN would disregard the reasons above as much as the current crypto-markets do.
1) The energy consumption of bitcoin mining alone is estimated to have reached the levels of entire countries (Argentina was the latest country I've heard it being compared to), while actual usage of bitcoin (except for speculation) is still a fringe niche thing
2) When shown that the coins do not scale, instead of moving on to an improved version, those coins continue to grow. Instead of 'okay, proof of concept done, it does not scale, let's move on to an improved version', the bonanza just continues.
There are probably more reasons like these, but I think it would be straight-up weird if the technically versed audience of HN would disregard the reasons above as much as the current crypto-markets do.
I have distanced myself from hn GREATLY over the last year. The decline is seemingly exponential.
Your definition of efficient is anything but?
BP, being an oil extractor, might have higher expenses and so a comparison purely by revenues might provide less insight than desired.
Yeah it sucks that the valuation for a company that inefficiently mines a resource that's going to be stored forever and mostly used to speculate, with only a small part of it ever put to productive use has such a high valuation.
But yeah the valuation for Coinbase is also insane!
But yeah the valuation for Coinbase is also insane!
a company that inefficiently mines a resource that's going to be stored forever and mostly used to speculate
Oil is "mined" very efficiently, and I bet most of the production each year is used pretty quickly.
Oil is mined super inefficiently except for shallow wells, it has tight margins. Some operations, specially fracking, actually shut down pretty often when the barrel price goes down near 60 which is were we are now.
If you look at production vs. consumption in the world there's usually a bit more consumption than production. If you look per country on the US there's more production than consumption. That's because "extraction" is heavily played with to speculate with the price.
If you look at production vs. consumption in the world there's usually a bit more consumption than production. If you look per country on the US there's more production than consumption. That's because "extraction" is heavily played with to speculate with the price.
The efficient market hypothesis means that valuation of Coinbase reflects all available information. I'd wager that this is true. It doesn't mean that the services Coinbase provides actually are actually worth that much or will ever be in the future.
> Fee for speculation
Well first of all everything is speculation, it goes both ways, you mentioned BP, well people use barrels of oil today because they think it won't be worth more tomorrow
Coinbase takes a fee for every transaction in the assets traded on the platform.
The asset in question is the one which people choose as the asset to hold on to express their fears of inflation
This is not unlike 2010 when people like Stanley Druckenmiller and libertarians alike predicted hyperinflation due to QE.
Normies are where Druckenmiller was back in 2010, they have an irrational fear of inflation and they express it by buying BTC.
Coinbase is perfectly positioned to gain from this movement which emerged, and it will only continue given that like anything the more authorities tell humans what to do (in this case to spend) the more they rebel by doing the opposite
Well first of all everything is speculation, it goes both ways, you mentioned BP, well people use barrels of oil today because they think it won't be worth more tomorrow
Coinbase takes a fee for every transaction in the assets traded on the platform.
The asset in question is the one which people choose as the asset to hold on to express their fears of inflation
This is not unlike 2010 when people like Stanley Druckenmiller and libertarians alike predicted hyperinflation due to QE.
Normies are where Druckenmiller was back in 2010, they have an irrational fear of inflation and they express it by buying BTC.
Coinbase is perfectly positioned to gain from this movement which emerged, and it will only continue given that like anything the more authorities tell humans what to do (in this case to spend) the more they rebel by doing the opposite
So this pretty much legitimizes Bitcoin right? I can't imagine the US government deciding to crack down on it after such a high-profile IPO.
The whole mission of Coinbase is legitimizing cryptocurrency when you break it down. They are like Windows 95 to the internet, it is how many people will use the market.
People also asking why a company would go to the public stock market when they are an alternative market, well part of it is to legitimize it and reduce the chance for regulation. Once enough people are making money from it then it becomes harder to put back in the bottle. It is also part marketing, many people will for the first time hear about cryptocurrency soon because of it even though it has been around a decade+. It also makes the investors rich and fuels more cryptocurrency investments. This event alone will create many wealthy crypto entrepreneurs.
Coinbase is like cryptocurrency being merged into Wall Street main/master on git. This is the moment that truly merges the Wall Street investment world with cryptocurrency, for better or worse. The roller coaster has reached the precipice, no turning back now.
People also asking why a company would go to the public stock market when they are an alternative market, well part of it is to legitimize it and reduce the chance for regulation. Once enough people are making money from it then it becomes harder to put back in the bottle. It is also part marketing, many people will for the first time hear about cryptocurrency soon because of it even though it has been around a decade+. It also makes the investors rich and fuels more cryptocurrency investments. This event alone will create many wealthy crypto entrepreneurs.
Coinbase is like cryptocurrency being merged into Wall Street main/master on git. This is the moment that truly merges the Wall Street investment world with cryptocurrency, for better or worse. The roller coaster has reached the precipice, no turning back now.
No, it’s not. And this isn’t an IPO. It’s liquidity for investors before they lose their hair.
How can I trade USD for BTC without paying these big fees to someone like coinbase?
Pay someone with BTC cash or paypal or something.
I don't know of a better way.
I don't know of a better way.
coinbase pro purchase cuts fees a ton, you'll be able to access pro if you can access normal cb
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Congratulations to coinbase and the team ! Crypto and blockchain technology are the 800 pound gorilla that will disrupt everything in society ! We are coming !
Compare Coinbase to say a major exchange like the NYSE. Realize that crypto is a space that could be damaged by gov intervention at any time. Realize that there is very little lock in effect on these markets, and fees are becoming less and less over time.
How does Coinbase ever manage to justify a valuation this high? 100B....
Ping me when the stock price is under $100.
How does Coinbase ever manage to justify a valuation this high? 100B....
Ping me when the stock price is under $100.
This IPO significantly weakened the "gov will ban it" argument, it's like too big to fail now that it's in the hands of millions of retail and institutional investors alike.
The exchange game as it was with stocks and bonds is all about consolidation (and resulting revenue base). People are betting that coinbase will consolidate the market. I don’t buy it but that’s the “story”.
Coinbase does things that have no NYSE parallel, for example running a centralized ETH staking service (they keep 50% of the profits, which are 5+% of staked ETH so it's very high margin).
Of course anybody can run a service like that, but Coinbase has the brand name and a leg up on compliance/legal so they'll get to charge a big premium on this stuff.
Of course anybody can run a service like that, but Coinbase has the brand name and a leg up on compliance/legal so they'll get to charge a big premium on this stuff.
> How does Coinbase ever manage to justify a valuation this high? 100B....
How is Doordash "worth" ~$50B?
We're all in a delusion when it comes to public markets.
We're not ALL in a delusion, but market movers certainly seem to be.
How is Doordash "worth" ~$50B?
We're all in a delusion when it comes to public markets.
We're not ALL in a delusion, but market movers certainly seem to be.
If FAANG can be worth > $ 1T, then $50B starts to seem fairly reasonable. I really don't know what justifies either evaluation though.
> could be damaged by gov intervention at any time
Less likely as time goes on, especially now with a $100B US company on the books.
> How does Coinbase ever manage to justify a valuation this high?
Millions of active users, strong financials.
https://investor.coinbase.com/news/news-details/2021/Coinbas...
Less likely as time goes on, especially now with a $100B US company on the books.
> How does Coinbase ever manage to justify a valuation this high?
Millions of active users, strong financials.
https://investor.coinbase.com/news/news-details/2021/Coinbas...
A few arguments to justify the valuation:
- Government intervention tends to benefit incumbents.
- Coinbase employs a lot of lawyers [1].
- Coinbase invests a lot in lobbying [2].
- While fees are lowering for international exchanges, those who serve US customers are still able to get away with very high fees.
- People are less sensitive to fees when the assets they are buying are very volatile.
- NYSE serves brokers, that then themselves serve the final clients. Coinbase is able to serve customers directly, thus it can keep all the fees for themselves.
[1] https://news.bloomberglaw.com/business-and-practice/coinbase...
[2] https://seekingalpha.com/news/3679495-square-fidelity-coinba...
- Government intervention tends to benefit incumbents.
- Coinbase employs a lot of lawyers [1].
- Coinbase invests a lot in lobbying [2].
- While fees are lowering for international exchanges, those who serve US customers are still able to get away with very high fees.
- People are less sensitive to fees when the assets they are buying are very volatile.
- NYSE serves brokers, that then themselves serve the final clients. Coinbase is able to serve customers directly, thus it can keep all the fees for themselves.
[1] https://news.bloomberglaw.com/business-and-practice/coinbase...
[2] https://seekingalpha.com/news/3679495-square-fidelity-coinba...
Meet Kevin also did an analysis https://www.youtube.com/watch?v=waTWaNqI23Y
There is no way that Coinbase has a stronger lobbying base than the established financial players. They can get into this game, block it with tighter regs, and dig into their deep base of clients to offer similar products. I don’t see a moat here.
The second largest donor to the Biden campaign was SBF, the CEO of FTX, another crypto exchange. The crypto ecosystem is spending a lot of money on lobbying.
https://www.coindesk.com/cryptocurrency-ceo-donated-second-l...
https://www.coindesk.com/cryptocurrency-ceo-donated-second-l...
Established financial players like AXA who invested in Blockstream which controls the development of BTC?
Aren't very high fees antithetical to crypto, also centralization?
Antithetical? High fees are all but a feature :)
I'm not so sure. Western governments could had intervened and banned or heavily regulated crypto currencies at any time over the past several years. In particular, the Silk Road and Alpha Bay take-downs would have been the perfect opportunities - but they didn't take them.
Now we have crypto currency companies floating as public companies, and others (e.g. Tesla) heavily invested, speculatively, in Bitcoin - maybe crypto currency had now reached a point where it's too big to fail?
OTOH, some western governments and their security apparatus are all-in on mass surveillance and privacy invasion, and they are going to hate any real degree of currency anonymity, so more regulation could still be on the cards, but perhaps in (secret) consultation with the likes of CoinBase. The likes of Monero and Zcash are likely targets.
Now we have crypto currency companies floating as public companies, and others (e.g. Tesla) heavily invested, speculatively, in Bitcoin - maybe crypto currency had now reached a point where it's too big to fail?
OTOH, some western governments and their security apparatus are all-in on mass surveillance and privacy invasion, and they are going to hate any real degree of currency anonymity, so more regulation could still be on the cards, but perhaps in (secret) consultation with the likes of CoinBase. The likes of Monero and Zcash are likely targets.
Bitcoin is perfect for mass surveillance and privacy invasion.
It's as if all transactions, of any size, can be perpetually tracked, with a courtroom-ready digital signature reducing evidence doubt about who made a transaction.
It's as if all transactions, of any size, can be perpetually tracked, with a courtroom-ready digital signature reducing evidence doubt about who made a transaction.
Also, unlike traditional banks, there is absolutely nothing preventing someone from reviewing that transaction record. No need to ask a judge for permission, no need to ask the bank to reveal records, no need to let anyone -- anyone -- know what you are up to.
I believe it takes relatively sophisticated analysis (ie the kind of real world snooping that state actors do) to tie someone to a particular address without them publishing it. Just because there is this huge theoretical vulnerability doesn’t mean most blockchain transactions aren’t secret from even smaller states.
Governments love crypto because it is easier to track than cash once it is used for a fiat exchange. Not sure why they would be against it.
Because they can’t control the supply.
Not necessarily, you can see lots of governments explicitly (or discreetly?) starting crypto currencies to effectively increase supply.
ipos in recent years seem more like unload-on-the-bag-holder events than fundraising events.
maybe they were always like this, but recently the valuations seem bloated by various measures.
maybe they were always like this, but recently the valuations seem bloated by various measures.
It will never be under $100 again! Like BTC will never be under $50k again. Well I have no plan about the price of Coinbase, this is more about the value it brings to the crypto market. To the liberation of money, wealth and power to the "normal" people.
It's a revolution and we as IT sector have been sleeping on it (at least it feels like there is a lot of negative feedback concerning this technology). We are good people, but we refused to follow that hype since 2009 as any RDBM could do the same ... nearly ... on a local scale. Well, not really imho
Now it's there and it wont go away. Tesla, VISA, Master, Coinbase, ... (I'm just from the west and know these, look at Asia, they are the future. They are much further than us)
There will be billions if not trillions pumping into that market. And it will continue, as the industrial revolution in late 19th century. It's a paradigm shift and nothing less!
That is a transparent market. NYSE will no be able to compete with it. Even thought it 100x more old and established. It'll look like a little shop in no time compared to Coinbase, Binance, TFX ....
There have been pseudo "mafia" structures for so long in traditional finance. DeFi and Crypto will show/shows the world how much money can be made handling money. Basically banks have been earning more than all money in the world combined, and they did NOTHING!!! They just got richer, while generating no value for society. They even harmed the society and we accepted it as we had no option.
Now we can shift that over generating value to the normal person. This is not less "crazy", generating value from basically nothing, but it's the only way to show that the current system is flawed.
Any gov. trying forbid with crypto will fail. It's too late! There is no way of shutting anything like ETH down. It's technically impossible if there is enough incentive for the mines/staker!
We need a better world! If the cost for doing so is to burn down NYSE (not literally), we should do so today. And not wait another 50 years.
It's a revolution and we as IT sector have been sleeping on it (at least it feels like there is a lot of negative feedback concerning this technology). We are good people, but we refused to follow that hype since 2009 as any RDBM could do the same ... nearly ... on a local scale. Well, not really imho
Now it's there and it wont go away. Tesla, VISA, Master, Coinbase, ... (I'm just from the west and know these, look at Asia, they are the future. They are much further than us)
There will be billions if not trillions pumping into that market. And it will continue, as the industrial revolution in late 19th century. It's a paradigm shift and nothing less!
That is a transparent market. NYSE will no be able to compete with it. Even thought it 100x more old and established. It'll look like a little shop in no time compared to Coinbase, Binance, TFX ....
There have been pseudo "mafia" structures for so long in traditional finance. DeFi and Crypto will show/shows the world how much money can be made handling money. Basically banks have been earning more than all money in the world combined, and they did NOTHING!!! They just got richer, while generating no value for society. They even harmed the society and we accepted it as we had no option.
Now we can shift that over generating value to the normal person. This is not less "crazy", generating value from basically nothing, but it's the only way to show that the current system is flawed.
Any gov. trying forbid with crypto will fail. It's too late! There is no way of shutting anything like ETH down. It's technically impossible if there is enough incentive for the mines/staker!
We need a better world! If the cost for doing so is to burn down NYSE (not literally), we should do so today. And not wait another 50 years.
Agreed.
I'm doing a little side project with my brokerage account where I pick 20 good socks and 20 bad stocks. Sell the bad ones short and double down on the good ones.
That's how hedge funds work. It's interesting because as long as your picks are mostly right you can make money regardless of of the market is going up or down. Plus it'll be fun to say I started a hedge fund at parties.
Coinbase is my number 1 bad pick.
I'm doing a little side project with my brokerage account where I pick 20 good socks and 20 bad stocks. Sell the bad ones short and double down on the good ones.
That's how hedge funds work. It's interesting because as long as your picks are mostly right you can make money regardless of of the market is going up or down. Plus it'll be fun to say I started a hedge fund at parties.
Coinbase is my number 1 bad pick.
I remember a guy telling me he was shorting Google after it IPO’d because of the volatility in yahoo at the time. I told him that was a bad idea.
Yeah, that was a terrible idea in hindsight.
For coinbase to ever grow into it's valuation crypto would have to become an integral part of society at large.
After 12 years, it's still largely useless and offers no advantages over centralized financial solutions. The only advantage it had is it is decentralized. But in practice this turned out to be false. So what concrete use case could it have that can't be done better with a traditional database?
My bet is this is a bubble, and it will pop sooner or later. Having some short exposure to that is desirable. Especially if it's not in bitcoin which could rise a lot, but an overvalued company that would take a long time to grow into its valuation.
For coinbase to ever grow into it's valuation crypto would have to become an integral part of society at large.
After 12 years, it's still largely useless and offers no advantages over centralized financial solutions. The only advantage it had is it is decentralized. But in practice this turned out to be false. So what concrete use case could it have that can't be done better with a traditional database?
My bet is this is a bubble, and it will pop sooner or later. Having some short exposure to that is desirable. Especially if it's not in bitcoin which could rise a lot, but an overvalued company that would take a long time to grow into its valuation.
The difference is that NYSE doesn't make that much in the end by operating the market. Coinbase is crypto first company, has lot of different things going for them. The buy/sell ramp, exchange, they are the defacto listing platform for new coins, they hold assets, they provide custody of assets (which you need as a fund/company) and they are positioned to do almost anything that crypto does. More the crypto industry grows, the more they can grow.Now as a public company they are positioned to acquire companies much more cheaply.
Most companies or banks offering crypto are not really built on it, they are just UI brokerages and buy the coins somewhere else. Same way they handle other assets. The trades are "free" because they take portion on off the spread. They buy a coin for $99 on the market and sell it to you for $100. It's easy to do but something Coinbase didn't want to do because it's not transparent and honest.
Ironically finance and banking institution are the worst at tech. Building on top of crypto is hard. Crypto trading is hard. Crypto security is hard. Financial instigation security is based on the fact that you can always fix things manually, call and fax in changes. That doesn't work for crypto.
And it's not like you can build all these capabilities and the legal framework over night or over months. Competition has been there from the very beginning but they are still the market leader in the western world.
Overall bullish on Coinbase in the long run. It's more of a platform than it is bank or an exchange.
Disclaimer: ex-Coinbase employee.
Most companies or banks offering crypto are not really built on it, they are just UI brokerages and buy the coins somewhere else. Same way they handle other assets. The trades are "free" because they take portion on off the spread. They buy a coin for $99 on the market and sell it to you for $100. It's easy to do but something Coinbase didn't want to do because it's not transparent and honest.
Ironically finance and banking institution are the worst at tech. Building on top of crypto is hard. Crypto trading is hard. Crypto security is hard. Financial instigation security is based on the fact that you can always fix things manually, call and fax in changes. That doesn't work for crypto.
And it's not like you can build all these capabilities and the legal framework over night or over months. Competition has been there from the very beginning but they are still the market leader in the western world.
Overall bullish on Coinbase in the long run. It's more of a platform than it is bank or an exchange.
Disclaimer: ex-Coinbase employee.
I'm not bullish on Coinbase, but the upside case is the market cap of Visa, Mastercard, Ant Financial, Paypal, Square, Stripe, Payment Processors, Bank, Asset Managers, etc -- not just the NYSE.
Again, I don't think this will ever happen, ever. But NYSE isn't a great comparison.
Again, I don't think this will ever happen, ever. But NYSE isn't a great comparison.
I mean, Minecraft was purchased for what 2.5 billion... And that was just 1 game, that had no monetization in it. Coinbase...these fuckers charge an arm and a leg in transaction fees. I believe the hype, that company prints money (and you get to pick your choice)....
It would be really interesting to see an article about biggest companies YC passed on around that time in the crypto space. We hear about the YC success stories but I think the “could have been”s are also equally interesting
One thing I find hilarious, btw:
The antiquated low-tech equity exchanges charge less than 1 bp in trading fees on average, if I'm not mistaken.
The hip new high-tech crypto exchange charges between 50 and 200 bp in trading fees (unless you trade a lot), around 60 bp on average, it seems.
So, crypto trading on Coinbase is two orders of magnitude more expensive than good old fashioned equity. Yay for progress!
The antiquated low-tech equity exchanges charge less than 1 bp in trading fees on average, if I'm not mistaken.
The hip new high-tech crypto exchange charges between 50 and 200 bp in trading fees (unless you trade a lot), around 60 bp on average, it seems.
So, crypto trading on Coinbase is two orders of magnitude more expensive than good old fashioned equity. Yay for progress!
Why do IPO announcements always get upvoted so much?
Coinbase is not for crypto people. It is for people who only care about hodling some crypto for profit and want an easy on-ramp. It is not for traders either as it is incredibly expensive to deposit and trade. I'd take Binance over Coinbase any day of the week. If I use Coinbase I pay 2% only for depositing which is insane. If I use Binance for example deposit is free, withdraw is 0.75 EUR and I pay 0.2% (note the zero) for transactions.
As many other recent IPO, this valuation is just out of this world.
Also, Coinbase is not the only player in the space.
Many also use Binance.us; it offers stacking, cheaper fees and usually lists more alt coins.
I must admin that I bought my first cryptos on Coinbase but soon realized how expensive it was and looked for alternatives.
I don't understand what is so unique about Coinbase and why this insane valuation. I am skeptical and not going to buy, at least not at this price.
Long term I expect exchanges to having to drop fees like stock exchanges. At that point, unless they can offer juicy interests rates like Celsius, how would they make money ?
I must admin that I bought my first cryptos on Coinbase but soon realized how expensive it was and looked for alternatives.
I don't understand what is so unique about Coinbase and why this insane valuation. I am skeptical and not going to buy, at least not at this price.
Long term I expect exchanges to having to drop fees like stock exchanges. At that point, unless they can offer juicy interests rates like Celsius, how would they make money ?
I think the trick here is just better design. I’ve used both. Coinbase is “prettier”. Though certainly harder to use.
I trust Coinbase a lot more than Binance. Their fees on the Coinbase Pro exchange are actually more reasonable than the simple user facing app Coinbase app that they push. Especially once you start reaching certain volumes (above 50M$), their fees for market makers drop to 0%. So those heavy traders aren't affected by fees.
And they are very well integrated and trusted within the US financial system.
And they are very well integrated and trusted within the US financial system.
Nitpick: this was not an IPO, but a DPO (Direct Public Offering). In other words no new capital was raised today. Coinbase's existing shareholders (investors and employees) were simply allowed to sell their shares on the public market.
Remember how cryptocurrencies were supposed to eliminate the need for intermediaries who added cost to transactions?
I mean, you can swap without a centralized exchange. In fact, for my PA account I would never use a CEX to swap coins.
Sure, but if you use coinbase you’re locked it. And in some cases unless you produce an ID you can’t even get the money out. Pretty weird you can dump as much money in as you want but getting it out isn’t as easy.
That's the biggest problem with crypto exchanges. They need to be brought under the same rules as other broker/dealers. The Know Your Customer rules are applied when you open the account, not when you withdraw.
Fails to process a withdrawal within specified time limits gets a broker in serious trouble. Institutional clients stop dealing with you within hours. See Drexel Burnam Lambert for an example. Then FINRA lands on you.
Fails to process a withdrawal within specified time limits gets a broker in serious trouble. Institutional clients stop dealing with you within hours. See Drexel Burnam Lambert for an example. Then FINRA lands on you.
Fun trivia: Brian Armstrong was looking for a co-founder on HN back in 2012: https://news.ycombinator.com/item?id=3754664
I spoke to him on the phone within a few hours of that post, as I had already prototyped an app to do what was described.
I didn't launch mine, nor participate in his (obviously). I suggested that a business in that space, if successful, would result in a similar outcome as happened to other founders of international money transmission systems that weren't under direct government control: i.e. swatting.
He was not dissuaded, to his credit. Score one for the "founders must have grit" camp.
To be honest, I'm still not sure why the hammer hasn't come down on something like Coinbase by now. It seems that cryptocurrencies in general are the exact opposite of the regime outlined by the BSA, PATRIOT, et c. My unsubstantiated theory is that it has something to do with pmarca, but that's just a guess. The founder of Kraken has expressed his feelings that it's coming soon.
I'm glad that Coinbase has permitted so many to participate in the ecosystem, but I wonder about how much of a benefit heavily regulated, custodial wallets bring to the ecosystem as a whole. It seems to me that Bitcoin existed to replace banks, and here we have a bank serving as the Bitcoin equivalent of gmail, re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace. The fact that they're listed on a stock exchange and not as an ERC-20 or other permissionless token tells the whole story, in my view.
I have a special respect for those who can function in heavily regulated, guilty-until-proven-innocent style markets like financial services in the USA. I personally would not be able to handle it.
I didn't launch mine, nor participate in his (obviously). I suggested that a business in that space, if successful, would result in a similar outcome as happened to other founders of international money transmission systems that weren't under direct government control: i.e. swatting.
He was not dissuaded, to his credit. Score one for the "founders must have grit" camp.
To be honest, I'm still not sure why the hammer hasn't come down on something like Coinbase by now. It seems that cryptocurrencies in general are the exact opposite of the regime outlined by the BSA, PATRIOT, et c. My unsubstantiated theory is that it has something to do with pmarca, but that's just a guess. The founder of Kraken has expressed his feelings that it's coming soon.
I'm glad that Coinbase has permitted so many to participate in the ecosystem, but I wonder about how much of a benefit heavily regulated, custodial wallets bring to the ecosystem as a whole. It seems to me that Bitcoin existed to replace banks, and here we have a bank serving as the Bitcoin equivalent of gmail, re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace. The fact that they're listed on a stock exchange and not as an ERC-20 or other permissionless token tells the whole story, in my view.
I have a special respect for those who can function in heavily regulated, guilty-until-proven-innocent style markets like financial services in the USA. I personally would not be able to handle it.
If the last few decades tell us anything, it’s once you’re large and have a lot employees, you’re above any regulation that would put you out of business. Slaps on the wrist are the worst you can expect.
My hunch is that it has more to do with the amount of money you've taken from prominent/powerful/connected Rich Guys than how strictly large you are or how many you employ.
There's a lot of hidden soft power in the USA amongst the ultra-wealthy, I've come to learn.
(Note that this is not a criticism specifically against Coinbase, per se; more an indictment of the lack of equal protection under the law in the USA in general. All animals are equal, but some animals are more equal than others.)
There's a lot of hidden soft power in the USA amongst the ultra-wealthy, I've come to learn.
(Note that this is not a criticism specifically against Coinbase, per se; more an indictment of the lack of equal protection under the law in the USA in general. All animals are equal, but some animals are more equal than others.)
Arthur Andersen and their ~85,000 employees would like a word.
After rubber stamping the squandering of California's energy market into a complete fraud of a company. I think that's a very high bar to cross, requiring damaging a lot of rich people in the process to call attention to it, to be punished.
Backpage was pretty big when it was deep sixed by the Feds.
> I'm still not sure why the hammer hasn't come down on something like Coinbase by now
Perhaps you have a answered yourself: “re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace”.
Perhaps you have a answered yourself: “re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace”.
If compromising the permissionlessness of Bitcoin is the only way for Bitcoin to come to a certain market, then perhaps it would be better for companies like Coinbase not to exist, and people who want to use Bitcoin should have to take the steps involved in self-custody.
To me, it's a shame to see. Now that Gmail and Coinbase have captured so much of their markets, they (or anyone who can coerce them) are now free to start censoring what goes in or out, turning a federated, permissionless system into effectively a dictatorship.
https://cryptobriefing.com/bitstamp-begins-track-off-exchang...
I really hope that's not what ends up happening. It's a bummer that financial services in the global west engage in such legally-mandated gatekeeping, locking billions out of the most lucrative payments markets. The internet and cryptocurrencies present a new opportunity there, and re-using the same decades old regulation to segregate the technology into the haves and have-nots is, to me, a tragedy.
To me, it's a shame to see. Now that Gmail and Coinbase have captured so much of their markets, they (or anyone who can coerce them) are now free to start censoring what goes in or out, turning a federated, permissionless system into effectively a dictatorship.
https://cryptobriefing.com/bitstamp-begins-track-off-exchang...
I really hope that's not what ends up happening. It's a bummer that financial services in the global west engage in such legally-mandated gatekeeping, locking billions out of the most lucrative payments markets. The internet and cryptocurrencies present a new opportunity there, and re-using the same decades old regulation to segregate the technology into the haves and have-nots is, to me, a tragedy.
The coins stored on Coinbase (and other crypto exchanges for that matter) are at all time lows, people are self-custodying their coins and using them on decentralized protocols where they don't have to trust centralized 3rd parties. Coinbase is just one player in the whole space.
Coinbase is custodying 760k BTC or so... thats more than 5% of all BTC in existence.
They claimed that they were holding about 11% of crypto market cap on their exchange.
I hope you're a) right, and b) it stays that way.
I fear that neither is true.
I fear that neither is true.
>censored by the exact system it was built to replace
Bitcoin was designed to replace fiat money, it can't replace swats.
Bitcoin was designed to replace fiat money, it can't replace swats.
You see no benefit to a flat system in crypto where everyone can participate equally, vs traditional finance / stock brokerages where large institutions like hedge funds automatically get a better deal vs any retail trader?
Credit to him for following through with his vision, and standing his ground in his replies to all the comments in that thread.
Looking back now, it's certainly evidence of a group bias and the "If the opportunity was that great, X company would be doing it by now" way of thinking.
Props are owed for bringing some true innovation to the space.
I'd love to know how this turned out. Did he eventually find a co-founder? Or did he continue in his YC application as a sole-founder?
For those that don't want to click through: There are replies in that thread such as..
- "No thanks. I'd rather sell sugared water."
- "Because bitcoin worked out so well. Have fun with that, dude."
Props are owed for bringing some true innovation to the space.
I'd love to know how this turned out. Did he eventually find a co-founder? Or did he continue in his YC application as a sole-founder?
For those that don't want to click through: There are replies in that thread such as..
- "No thanks. I'd rather sell sugared water."
- "Because bitcoin worked out so well. Have fun with that, dude."
How did he follow thru with his vision? Read his other comments to get better picture - he was angry at the system of Credit Cards, PayPals etc that charge outraged fees just to be able to use their network. He wanted to build network that performs exchange at zero fee. Instead, he ended up building and owning one of the most expensive crypto exchanges in the USA.
Sure props to him to pull it off, you don't get net worth of $20B by accident or pure luck... but in terms of his vision of the world more united where it is easier to send and receive money without paying outrages fees, he definitely failed on that promise.
Sure props to him to pull it off, you don't get net worth of $20B by accident or pure luck... but in terms of his vision of the world more united where it is easier to send and receive money without paying outrages fees, he definitely failed on that promise.
>> but in terms of his vision of the world more united where it is easier to send and receive money without paying outrages fees, he definitely failed on that promise. <<
It was Bitcoin that failed to deliver that promise, not him.
It was Bitcoin that failed to deliver that promise, not him.
Or both. Bitcoin and Coinbase each have outrageous fees.
Depends on the kind of transaction you are doing. For bigger transactions it is actually nice not having to pay percentual fee as with Bitcoin. However with coinbase I believe they are high percentually.
You can easily buy fee free on coinbase if you use buy orders instead of market buys.
This changed in 2019 (https://ethereumworldnews.com/end-of-coinbase-pro-introduces...).
At this point, there is no way to trade for free on Coinbase or Coinbase Pro. However, maker orders do still have a lower fee vs taker orders on Coinbase Pro, depending on the pricing tier / how much you trade per month (https://help.coinbase.com/en/pro/trading-and-funding/trading...).
At this point, there is no way to trade for free on Coinbase or Coinbase Pro. However, maker orders do still have a lower fee vs taker orders on Coinbase Pro, depending on the pricing tier / how much you trade per month (https://help.coinbase.com/en/pro/trading-and-funding/trading...).
A lot of the US crypto exchanges have high fees. They can get away with it due to US laws preventing US citizens from legally trading on asian exchanges, which have much more competitive fees (i.e. Binance.com, not Binance.US). Gemini has even more ridiculous fees than Coinbase. Also if you use Coinbase Pro, which is more like a stock brokerage account for crypto, you get a lot better fees than Coinbase.com. Gemini also has an equivalent to Coinbase Pro, except they call it ActiveTrader. Kraken, another reputable US crypto exchange, has decent fees in general. US securities laws are preventing US citizens from getting the best deal and US crypto exchanges are getting away with higher fees based on that.
I regularly tell people this - that Coinbase really could have "died being the hero" but instead has "lived long enough to see yourself become the villain"
Now he charges 4% each way to buy and sell bitcoin..
>Did he eventually find a co-founder? Or did he continue in his YC application as a sole-founder?
IIRC, he did - they met on Reddit.
IIRC, he did - they met on Reddit.
They met through a reddit post or some other way?
kinda ironic how in his post he's trying to compete on fees
Coinbase doesnt have 2.5% fees so it is ironic that it is extremely competitive
Their retail platform has a 1% withdrawal fee unless you are using USDC in which case it is 0%
And their trading platforms have 20 basis points and less commissions
Their retail platform has a 1% withdrawal fee unless you are using USDC in which case it is 0%
And their trading platforms have 20 basis points and less commissions
Coinbase charges a spread of about one-half of one percent (0.50%) for cryptocurrency purchases and cryptocurrency sales. However, the actual spread may be higher or lower due to market fluctuations in the price of cryptocurrency on Coinbase Pro between the time we quote a price and the time when the order executes.
We also charge a Coinbase Fee (in addition to the spread), which is the greater of (a) a flat fee or (b) a variable percentage fee determined by region, product feature, and payment type. The flat fees are set forth below:
If the total transaction amount is less than or equal to $10, the fee is $0.99 If the total transaction amount is more than $10 but less than or equal to $25, the fee is $1.49 If the total transaction amount is more than $25 but less than or equal to $50, the fee is $1.99 If the total transaction amount is more than $50 but less than or equal to $200, the fee is $2.99
Edit: There's another section about how they charge 4% to deposit dollars unless you use ACH (and wait 1 week) or wire transfer (then they charge you $10 to deposit or $25 to withdraw)
We also charge a Coinbase Fee (in addition to the spread), which is the greater of (a) a flat fee or (b) a variable percentage fee determined by region, product feature, and payment type. The flat fees are set forth below:
If the total transaction amount is less than or equal to $10, the fee is $0.99 If the total transaction amount is more than $10 but less than or equal to $25, the fee is $1.49 If the total transaction amount is more than $25 but less than or equal to $50, the fee is $1.99 If the total transaction amount is more than $50 but less than or equal to $200, the fee is $2.99
Edit: There's another section about how they charge 4% to deposit dollars unless you use ACH (and wait 1 week) or wire transfer (then they charge you $10 to deposit or $25 to withdraw)
And then someone says "just look at Square or Venmo, they do fine connecting to your bank or whatever, adding Bitcoin to the mix just adds another layer of complication"
Amazing to see.
But what I find interesting is that his vision was way off- crypto is nowhere near replacing credit cards, now or in the future.
But he did build a huge company because crypto became a speculative asset bubble instead.
But what I find interesting is that his vision was way off- crypto is nowhere near replacing credit cards, now or in the future.
But he did build a huge company because crypto became a speculative asset bubble instead.
Scott Sumner has an interesting argument that it's not a bubble.
Similar for the so called 'tech bubble' around the start of the millennium: if you bought all the tech stocks back then and held them until today, you would have made an OK return.
(Of course, many companies have gone out of business, but there were a few outsized winners to make up for it.
Any individual tech stock was extremely risky, but the overall sentiment that 'tech is the future' was right on the money.
If anything, it's not the high valuations of the 'dot-com bubble' that seem off, but the low valuations of the bust.
Similar for the so called 'tech bubble' around the start of the millennium: if you bought all the tech stocks back then and held them until today, you would have made an OK return.
(Of course, many companies have gone out of business, but there were a few outsized winners to make up for it.
Any individual tech stock was extremely risky, but the overall sentiment that 'tech is the future' was right on the money.
If anything, it's not the high valuations of the 'dot-com bubble' that seem off, but the low valuations of the bust.
Except 75% or so of this bubble is mined in China and more American firms keep buying into it...
This story doesn’t likely have a happy ending.
This story doesn’t likely have a happy ending.
Proof of Work crypto is mined where energy is cheap.
And energy is cheap where it is subsidised or in abundance. The first is often 'China'. The second, currently often hydro.
A lot of mining is now moving to Iceland, Canada etc. Where energy is becoming cheaper than CPC funded energy.
And energy is cheap where it is subsidised or in abundance. The first is often 'China'. The second, currently often hydro.
A lot of mining is now moving to Iceland, Canada etc. Where energy is becoming cheaper than CPC funded energy.
> This story doesn’t likely have a happy ending.
And that's exactly what you would expect when extrapolating from the economic argument above!
To come back to the analogy with dot-com companies:
In a field where a winners might give you outsized 100x returns, you expect perhaps 99 out of 100 companies to be total garbage losers that go bust. So that the average return from investing in all companies in that field is something normal.
Otherwise, rational investors will keep pumping money into that field and funding more and more companies until that's true.
Same here: even if you believe that in 20 years cryptocurrencies will dominate the world economies (just like 20 years after the dot-com boom and bust, internet companies like Amazon and Google dominate economies), still most almost all cryptocurrencies will fail.
The political risks, that you are alluding to, fit this argument just like any other risk would.
Thanks to eg bitcoin futures, it's not relatively easy to go shortsell (something like) bitcoins, so I expect the market price to be roughly in line with the best forecasts possible.
(Only 'roughly', because the market for bitcoin is still pretty tiny, and not very developed, compared to eg US inflation forecasting markets like https://fred.stlouisfed.org/series/T5YIE )
And that's exactly what you would expect when extrapolating from the economic argument above!
To come back to the analogy with dot-com companies:
In a field where a winners might give you outsized 100x returns, you expect perhaps 99 out of 100 companies to be total garbage losers that go bust. So that the average return from investing in all companies in that field is something normal.
Otherwise, rational investors will keep pumping money into that field and funding more and more companies until that's true.
Same here: even if you believe that in 20 years cryptocurrencies will dominate the world economies (just like 20 years after the dot-com boom and bust, internet companies like Amazon and Google dominate economies), still most almost all cryptocurrencies will fail.
The political risks, that you are alluding to, fit this argument just like any other risk would.
Thanks to eg bitcoin futures, it's not relatively easy to go shortsell (something like) bitcoins, so I expect the market price to be roughly in line with the best forecasts possible.
(Only 'roughly', because the market for bitcoin is still pretty tiny, and not very developed, compared to eg US inflation forecasting markets like https://fred.stlouisfed.org/series/T5YIE )
Why doesn't it have a happy ending?
"China" isn't one people either.
Plus all the Tether shady stuff.
> crypto is nowhere near replacing credit cards, now or in the future.
Bitcoin - not. On the other hand, modern altcoins who are faster, PoS-based, low fees, etc are on the path to exactly this.
Bitcoin - not. On the other hand, modern altcoins who are faster, PoS-based, low fees, etc are on the path to exactly this.
Which coin has a functional, non-exploitable PoS algorithm implemented?
Proof of Stake has yet to demonstrate as much resistence to adversarial attacks as Proof of Work.
An expert in the space, Andreas Antonopoulos, speaks to this topic here: https://www.youtube.com/watch?v=U0T49duRt74&t=2720s
An expert in the space, Andreas Antonopoulos, speaks to this topic here: https://www.youtube.com/watch?v=U0T49duRt74&t=2720s
There is a very strong incentive for Bitcoin proponents to push this narrative but it doesn't stand up to scrutiny.
Proof of Stake is more secure than Proof of Work because it's not possible to use external resources to take control of the system. The cost of hijacking PoS is exponential, not linear.
With PoW, someone who has no stake in the network could buy or rent mining hardware using fiat and take control of the network for a linear cost - This is because, unlike cryptocurrency tokens, hardware is not a scarce resource; it's always possible to produce more of it.
With PoS, the only way to take control of the network is to buy more than 50% of all tokens. The cost of acquiring 50% of all tokens is non-linear since tokens become more expensive as the attacker purchases more. This is because the attacker will generate continuous demand against fixed supply of tokens; in accordance with the law of supply and demand, the price will keep increasing as they buy more tokens. Also, the incentive to follow through on the attack decreases as the attacker accumulates more tokens.
Proof of Stake is more secure than Proof of Work because it's not possible to use external resources to take control of the system. The cost of hijacking PoS is exponential, not linear.
With PoW, someone who has no stake in the network could buy or rent mining hardware using fiat and take control of the network for a linear cost - This is because, unlike cryptocurrency tokens, hardware is not a scarce resource; it's always possible to produce more of it.
With PoS, the only way to take control of the network is to buy more than 50% of all tokens. The cost of acquiring 50% of all tokens is non-linear since tokens become more expensive as the attacker purchases more. This is because the attacker will generate continuous demand against fixed supply of tokens; in accordance with the law of supply and demand, the price will keep increasing as they buy more tokens. Also, the incentive to follow through on the attack decreases as the attacker accumulates more tokens.
Also, most of the drawbacks that Andreas mentioned in the video are not related to PoS in general; perhaps it is more specific to certain older implementations of it. Most current PoS blockchains do provide guarantees of immutability since all transactions must be signed and the signatures must match sender public keys.
This is interesting. I am curious, which PoS coin implementations do you like?
If an attacker wanted to not raise the price of a coin, couldn't they use crypto OTC markets to buy large amounts while not raising the price (i've seen OTC at least marketed that way)?
Aren't cryptocurrencies also only a scarce resource if they have a hard supply cap? Or do you figure in something like inflation vs coin burning to this as well?
I do understand your point that the incentive to follow through on the attack decreases as the attacker accumulates more tokens, since it would be in their interest for the network to function properly at that point due to how many tokens / how much stake they have in the network.
The only reason I could see the attack making financial sense at that point would be if it was a competitor who was trying to kill a competing PoS network and it was worth it to them to do so in order to promote their own network (or maybe it could be a government trying to protect their fiat currency)?
If an attacker wanted to not raise the price of a coin, couldn't they use crypto OTC markets to buy large amounts while not raising the price (i've seen OTC at least marketed that way)?
Aren't cryptocurrencies also only a scarce resource if they have a hard supply cap? Or do you figure in something like inflation vs coin burning to this as well?
I do understand your point that the incentive to follow through on the attack decreases as the attacker accumulates more tokens, since it would be in their interest for the network to function properly at that point due to how many tokens / how much stake they have in the network.
The only reason I could see the attack making financial sense at that point would be if it was a competitor who was trying to kill a competing PoS network and it was worth it to them to do so in order to promote their own network (or maybe it could be a government trying to protect their fiat currency)?
>> This is interesting. I am curious, which PoS coin implementations do you like?
I've been involved with Lisk (LSK) for several years. It's Delegated Proof of Stake though so you can use your LSK to vote for block forgers who offer a good % share of their block rewards and earn interest that way.
>> If an attacker wanted to not raise the price of a coin, couldn't they use crypto OTC markets to buy large amounts while not raising the price
Yes, that can happen in theory but in practice it's not feasible. In DPoS especially, whales would rarely agree to sell more than 50% of their own stake because if they did they could lose their forging delegate spot (which yields higher rewards than just voting). Because the blockchain is public, delegates all watch each other's on-chain activity and they can lose votes if they try to sell too many tokens (doesn't matter if it's OTC or exchange).
>> Aren't cryptocurrencies also only a scarce resource if they have a hard supply cap? Or do you figure in something like inflation vs coin burning to this as well?
If there is inflation, it doesn't affect the security of the blockchain because the attacker must acquire 50% of all tokens in any case. The more tokens there are in total, the more tokens the attacker needs to buy to get to 50%.
>> The only reason I could see the attack making financial sense at that point would be if it was a competitor who was trying to kill a competing PoS network and it was worth it to them to do so in order to promote their own network
Early days of any blockchain are always more risky. That said, the early days of most PoW blockchains are even more precarious than those of PoS. This is because with PoW, the community has no say over who can start forging blocks on its new blockchain (anyone who owns some crypto mining hardware can compete to produce blocks on potentially any PoW blockchain).
If just a tiny % of Bitcoin's miners were temporarily repurposed (e.g. minor software changes) to mine any new PoW blockchain, those miners could easily take over the new blockchain and create any transaction they want. With PoS, in the early days, the community gets to decide who will receive the initial tokens; so outsiders cannot highjack the network unless then find a way to buy more than 50% of the tokens from existing token holders.
I've been involved with Lisk (LSK) for several years. It's Delegated Proof of Stake though so you can use your LSK to vote for block forgers who offer a good % share of their block rewards and earn interest that way.
>> If an attacker wanted to not raise the price of a coin, couldn't they use crypto OTC markets to buy large amounts while not raising the price
Yes, that can happen in theory but in practice it's not feasible. In DPoS especially, whales would rarely agree to sell more than 50% of their own stake because if they did they could lose their forging delegate spot (which yields higher rewards than just voting). Because the blockchain is public, delegates all watch each other's on-chain activity and they can lose votes if they try to sell too many tokens (doesn't matter if it's OTC or exchange).
>> Aren't cryptocurrencies also only a scarce resource if they have a hard supply cap? Or do you figure in something like inflation vs coin burning to this as well?
If there is inflation, it doesn't affect the security of the blockchain because the attacker must acquire 50% of all tokens in any case. The more tokens there are in total, the more tokens the attacker needs to buy to get to 50%.
>> The only reason I could see the attack making financial sense at that point would be if it was a competitor who was trying to kill a competing PoS network and it was worth it to them to do so in order to promote their own network
Early days of any blockchain are always more risky. That said, the early days of most PoW blockchains are even more precarious than those of PoS. This is because with PoW, the community has no say over who can start forging blocks on its new blockchain (anyone who owns some crypto mining hardware can compete to produce blocks on potentially any PoW blockchain).
If just a tiny % of Bitcoin's miners were temporarily repurposed (e.g. minor software changes) to mine any new PoW blockchain, those miners could easily take over the new blockchain and create any transaction they want. With PoS, in the early days, the community gets to decide who will receive the initial tokens; so outsiders cannot highjack the network unless then find a way to buy more than 50% of the tokens from existing token holders.
PoS is not as secure as PoW. If it was, bitcoin's consensus algorithm could be changed as well. So, bitcoin wins anyway.
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Some observations:
1. Armstrong was so concerned about privacy that he used a throwaway, but ended up giving his identity away anyway.
2. Those responses! The negativity on Bitcoin has been there from the start on HN especially for some reason.
3. That whole payment angle has not worked out the way most people thought. Most enthusiasts in 2012 saw Bitcoin as a PayPal replacement. Instead, Bitcoin has taking its own path, confounding the predictions of skeptics, professional economists, and enthusiasts alike.
1. Armstrong was so concerned about privacy that he used a throwaway, but ended up giving his identity away anyway.
2. Those responses! The negativity on Bitcoin has been there from the start on HN especially for some reason.
3. That whole payment angle has not worked out the way most people thought. Most enthusiasts in 2012 saw Bitcoin as a PayPal replacement. Instead, Bitcoin has taking its own path, confounding the predictions of skeptics, professional economists, and enthusiasts alike.
1. See 2.
2. Bitcoin was always a dumb idea from the perspective of building a business or an economy on it.
3. Anyone who really looked at Bitcoin in 2012 could see it was not a realistic replacement for PayPal unless you were thinking about paying on a place like SilkRoad.
2. Bitcoin was always a dumb idea from the perspective of building a business or an economy on it.
3. Anyone who really looked at Bitcoin in 2012 could see it was not a realistic replacement for PayPal unless you were thinking about paying on a place like SilkRoad.
Fiat systems have such infernal UX, bitcoin can win on that metric alone. The FUD spread by the regulator is the only reason we're here.
By infernal you mean they comply with AML regulations like KYC?
Not following the law is not a "metric" legitimate businesses usually brag about.
Anybody who use FUD as an argument for something is pushing some kind of snake oil. FUD stands for "Fear, uncertainty, doubt." Why does FUD exist? Because historically when we did dumb things there were consequences. Is fearing consequences an irrational thing?
Not following the law is not a "metric" legitimate businesses usually brag about.
Anybody who use FUD as an argument for something is pushing some kind of snake oil. FUD stands for "Fear, uncertainty, doubt." Why does FUD exist? Because historically when we did dumb things there were consequences. Is fearing consequences an irrational thing?
2nd post down... doxxed ooof.
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Ah the good old days, when people talked about Bitcoin solving too high credit card fees. It’s now $15+ per transaction in fees but it’s now a store of value so it doesn’t matter!
The $15 is debatable, mempool.space is closer to $5 for confirming within 60 minutes, which is many factors faster than what Mastercard do in the traditional world.
I would argue though that the magic of Crypto isn't buying coffees. After Silkroad we have seen very little interest in using Crypto as money, and even with "high" fees, alternatives have not become desirable for their ability to transact cheaply. I would also point out that even the likes of Coinbase have a 0.5% fee before spreads. Using crypto over cash or card (at least in Europe) isn't a cheaper of faster process end to end.
IMHO Bitcoin IS an offshore account, and the ability to move wealth anywhere in the world, without a middle man, entirely permission-less and trust-less for even at $15 is a massive achievement. Don't get me wrong, it can be cheaper, but what Bitcoin can do, and how individuals from retail investors to publicly listed companies are holding Bitcoin its a massive signal in terms of whats actually desired.
I would argue though that the magic of Crypto isn't buying coffees. After Silkroad we have seen very little interest in using Crypto as money, and even with "high" fees, alternatives have not become desirable for their ability to transact cheaply. I would also point out that even the likes of Coinbase have a 0.5% fee before spreads. Using crypto over cash or card (at least in Europe) isn't a cheaper of faster process end to end.
IMHO Bitcoin IS an offshore account, and the ability to move wealth anywhere in the world, without a middle man, entirely permission-less and trust-less for even at $15 is a massive achievement. Don't get me wrong, it can be cheaper, but what Bitcoin can do, and how individuals from retail investors to publicly listed companies are holding Bitcoin its a massive signal in terms of whats actually desired.
There are other cryptocurrencies that have higher tps and lower per-transaction fees.
Bitcoin has low transaction fees compared to US domestic wire transfers or compared to using a credit card on a purchase of $1000 or more.
Bitcoin has low transaction fees compared to US domestic wire transfers or compared to using a credit card on a purchase of $1000 or more.
Thats cheap transaction fee for buying my yacht or private island with BTC
https://news.ycombinator.com/item?id=3755073
I wonder if he's kicking himself now for not taking the job.
I wonder if he's kicking himself now for not taking the job.
Threads like that are a big reason I'm not very active here on HN anymore. So much negativity masquerading as "constructive feedback".
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Casinos should be able to convert their business into crypto exchanges and list on the stock exchange with similar valuation. All remote too so they’d be pandemic proof :)
The irony; Bernard Madoff dies, but his spirit lives on.
I know I’ll probably get banned for calling this out but I find it disgusting that silicon valley was crucifying Brian Armstrong for his “no politics at work” stance but now everyone is back to kissing the ring now that he’s made everyone and their grandma millions of dollars.
Almost always when I see a statement of the form "people in group X are doing two contradictory things", it's very likely that it's different people in group X that said those things. You're creating strawmen.
In this case, even if the same person criticized Brian Armstrong then later congratulated him, I don't see the issue. Humans sometimes achieve things, sometimes do controversial things, it's as mundane as it gets.
In this case, even if the same person criticized Brian Armstrong then later congratulated him, I don't see the issue. Humans sometimes achieve things, sometimes do controversial things, it's as mundane as it gets.
How much would a staff engineer have made?
Poorly regulated casino for the information age.
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more like HN to NYSE
I would buy a crypto ETF before I would buy $COIN... what do you think DANG
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It is a day of true irony: https://twitter.com/RichardHeartWin/status/13823814747338219...
I just realized that at travala.com , it is possible to book hotels and pay with crypto. Another point that indicates just how much the revolution is here.
Coinbase is actually like Vanguard. It offers "investment funds".
Main difference: Instead of ETFs, you buy the different crypto coins.
The similarities are actually extensive:
1. People go to Coinbase mainly to invest their money. Sure, maybe, one day, in the distant future, perhaps, coins will be used for commercial purposes; but now and in the foreseeable future they are investment (speculation) vehicles
2. Vanguard has a direct relationship with consumers; you can open an account, wire money, and buy Vanguard funds. Same with Coinbase (and not the case with stock exchanges as some have suggested)
3. There is a certain amount of trust in the brand that makes people want to buy the funds/assets or wire their money to these brands. But that has limited power (see point below)
4. Vanguard's products are commodities, just like crypto coins are (you can buy the same bitcoin in many places, and you can buy essentially the same S&P 500 ETF from many platforms)
The difference is that Vanguard is successful thanks to a focus on low cost funds; Coinbase still rides first movers advantage. But inevitably it'll have to compete on cost.
Vanguard is managing $6+ T of actual assets; that's many times the total market cap of all cryptos.
And now here's the question: if they had the same valuation, would you put your money on Vanguard or Coinbase?
Main difference: Instead of ETFs, you buy the different crypto coins.
The similarities are actually extensive:
1. People go to Coinbase mainly to invest their money. Sure, maybe, one day, in the distant future, perhaps, coins will be used for commercial purposes; but now and in the foreseeable future they are investment (speculation) vehicles
2. Vanguard has a direct relationship with consumers; you can open an account, wire money, and buy Vanguard funds. Same with Coinbase (and not the case with stock exchanges as some have suggested)
3. There is a certain amount of trust in the brand that makes people want to buy the funds/assets or wire their money to these brands. But that has limited power (see point below)
4. Vanguard's products are commodities, just like crypto coins are (you can buy the same bitcoin in many places, and you can buy essentially the same S&P 500 ETF from many platforms)
The difference is that Vanguard is successful thanks to a focus on low cost funds; Coinbase still rides first movers advantage. But inevitably it'll have to compete on cost.
Vanguard is managing $6+ T of actual assets; that's many times the total market cap of all cryptos.
And now here's the question: if they had the same valuation, would you put your money on Vanguard or Coinbase?
>Vanguard is managing $6+ T of actual assets; that's many times the total market cap of all cryptos.
Well, 3 times more.
>And now here's the question: if they had the same valuation, would you put your money on Vanguard or Coinbase?
Depends on what the bet is. For growth of stock price? Obviously coinbase. The company that is more likely to last another hundred years? Probably Vanguard.
Well, 3 times more.
>And now here's the question: if they had the same valuation, would you put your money on Vanguard or Coinbase?
Depends on what the bet is. For growth of stock price? Obviously coinbase. The company that is more likely to last another hundred years? Probably Vanguard.
Why does title changed from IPO to DPO?
Is Coinbase the largest ever company that has no physical HQ or offices?
So we missed Dropbox, Airbnb and coinbase. What idea do we all think is bad? ISAs?
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Bitcoin, Palantir.
Between your examples and Bitcoin, would betting against the HN hivemind a winning strategy?
Between your examples and Bitcoin, would betting against the HN hivemind a winning strategy?
Well, yeah. Did you see the comments on pg's recent essay? It was the first time I was like, I don't identify with any of these people.
But that's okay. The world is large, and we're free to all feel however we feel. There also isn't a "hive mind," just a lot of people with surprisingly similar viewpoints and feelings that don't necessarily match the reality of how to build businesses over long periods of time.
At one point, I was an ardent opponent of Coinbase, having lost most of my money in the (at the time) recent implosion of Mt Gox. But time has proven me wrong. So, it's also not so easy to distance yourself from "the hivemind," you see – it's surprisingly easy to fall into the same patterns.
But that's okay. The world is large, and we're free to all feel however we feel. There also isn't a "hive mind," just a lot of people with surprisingly similar viewpoints and feelings that don't necessarily match the reality of how to build businesses over long periods of time.
At one point, I was an ardent opponent of Coinbase, having lost most of my money in the (at the time) recent implosion of Mt Gox. But time has proven me wrong. So, it's also not so easy to distance yourself from "the hivemind," you see – it's surprisingly easy to fall into the same patterns.
Maybe? I discounted Roblox too.
I mean, I have an NFT of the only known recording of my father's voice. He passed in 1998 when I was a kid. Rumor on the street is that NFT is going to be worth eleventy trillion galactic credits some day ;P
What’s the current status on what % of BTC owners control >50% of the active pool?
Last I read it basically matches the income inequality of the world.
Last I read it basically matches the income inequality of the world.
Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10
It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.