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>which is not at all what it's like. Coinbase isn't the only source to buy/sell BCC. I think it's ridiculous that a company could be sued because they don't off

>which is not at all what it's like. Coinbase isn't the only source to buy/sell BCC. I think it's ridiculous that a company could be sued because they don't offer a new service. As it happens, it's slightly more complicated than what you make it out to be. It's not a question of them simply not offering to support the new service. You see, when you hold your bitcoins inside Coinbase they have a private address of your wallet which they don't disclose to you. You can of course withdraw the bitcoins at any time (we'll get back to this later) and transfer them into a wallet of your choice. Now when the fork happens you, as the owner of the private key to your wallet now own the same amount of bitcoins on both blockchains. Both, as it appears have market value. However, because coinbase is the sole entity possessing private keys in this case and because they have announced that they won't support BCC they are effectively pocketing the entire market value of the BCC bitcoins that their customers have entrusted them with, which is likely to be in millions of dollars. When they announced that they wouldn't support BCC a lot of people rushed to withdraw their money from Coinbase into other wallets. However, a lot of people were unable to do so due to a variety of reasons and Coinbase is notorious for having atrocious customer service in matters like this. Hence the outrage.

tytso 9y ago
When you hold your bitcoins inside Coinbase, they aren't part of "your" wallet. Coinbase works like a bank. When you deposit $100, they don't mark those bills as being yours. Instead they are commingled with everyone else and the bank gives you a promise that when you ask for your $100, you'll get your $100 back. Not that if you gave them a $100 bill, you'll get back that exact same bill. Coinbase works exactly the same way. This means that you can transfer Bitcoins between two Coinbase accounts (a) instantly, and (b) without incurring any transaction fees --- because such a transfer doesn't actually go through the blockchain. BTW, Coinbase and other similar companies claim to be a full reserve bank, but unless there's an audit, there is no way to tell from external observation that they aren't playing a Mt. Gox game of being a fractional reserve bank without bothering to tell their customers. So how does this relate to BCC/BCH? Since each Bitcoin customer doesn't have their BTC in a separate wallet, in order for Coinbase to support BCH, or any other random fork of Bitcoin that might take place in the future, they would have to track when your BTC was credited to your account, and then create a separate BCH account to track the BCH. Then if you ask to withdraw your BCH in USD, just as you are entitled to do with BTC held in a Coinbase account, Coinbase would have to find an exchange that supports BCH, and sell some number of BCH on your behalf. Coinbase has elected not to do this, and gave all of their customers ample notice that if they wanted to participate in the BCH experiment, they would have to ask Coinbase to transfer their BTC into their own private wallet. (I'm not a lawyer, but I'm sure the fact that they did give notice is going to be something that will be mentioned as part of their defense if and when a lawsuit is actually filed.) When I withdrew all of my BTC from Coinbase last week, the transaction which Coinbase executed to transfer "my" BTC into my own wallet had "change" that went back to a Coinbase private key. That's another clear indication that "my" BTC were not held in a separate wallet, but rather commingled with other Coinbase customers' accounts.
- DennisP 9y ago
  Coinbase gave notice, but some customers probably weren't able to act on it due to withdrawal limits.
- milcron 9y ago
  How much notice is ample? The email wasn't sent until Jul 27. That's not even one week.
MichaelGG 9y ago
No, when you hold "bitcoins" with Coinbase, Coinbase just marks that down in their MongoDB database. You don't have a Bitcoin wallet on Coinbase at all. Coinbase has various wallets that they'll use in order to honour their MongoDB records of who they owe what.

tytso 9y ago

When you hold your bitcoins inside Coinbase, they aren't part of "your" wallet. Coinbase works like a bank. When you deposit $100, they don't mark those bills as being yours. Instead they are commingled with everyone else and the bank gives you a promise that when you ask for your $100, you'll get your $100 back. Not that if you gave them a $100 bill, you'll get back that exact same bill. Coinbase works exactly the same way. This means that you can transfer Bitcoins between two Coinbase accounts (a) instantly, and (b) without incurring any transaction fees --- because such a transfer doesn't actually go through the blockchain. BTW, Coinbase and other similar companies claim to be a full reserve bank, but unless there's an audit, there is no way to tell from external observation that they aren't playing a Mt. Gox game of being a fractional reserve bank without bothering to tell their customers. So how does this relate to BCC/BCH? Since each Bitcoin customer doesn't have their BTC in a separate wallet, in order for Coinbase to support BCH, or any other random fork of Bitcoin that might take place in the future, they would have to track when your BTC was credited to your account, and then create a separate BCH account to track the BCH. Then if you ask to withdraw your BCH in USD, just as you are entitled to do with BTC held in a Coinbase account, Coinbase would have to find an exchange that supports BCH, and sell some number of BCH on your behalf. Coinbase has elected not to do this, and gave all of their customers ample notice that if they wanted to participate in the BCH experiment, they would have to ask Coinbase to transfer their BTC into their own private wallet. (I'm not a lawyer, but I'm sure the fact that they did give notice is going to be something that will be mentioned as part of their defense if and when a lawsuit is actually filed.) When I withdrew all of my BTC from Coinbase last week, the transaction which Coinbase executed to transfer "my" BTC into my own wallet had "change" that went back to a Coinbase private key. That's another clear indication that "my" BTC were not held in a separate wallet, but rather commingled with other Coinbase customers' accounts.

DennisP 9y ago
Coinbase gave notice, but some customers probably weren't able to act on it due to withdrawal limits.
milcron 9y ago
How much notice is ample? The email wasn't sent until Jul 27. That's not even one week.

MichaelGG 9y ago

No, when you hold "bitcoins" with Coinbase, Coinbase just marks that down in their MongoDB database. You don't have a Bitcoin wallet on Coinbase at all. Coinbase has various wallets that they'll use in order to honour their MongoDB records of who they owe what.