6 ms·

As others have said, it really depends on the value of the fork. If you make a fork worth nothing, nobody's going to care. But as right now Bitcoin Cash is wor

by lawn 9y ago

As others have said, it really depends on the value of the fork. If you make a fork worth nothing, nobody's going to care. But as right now Bitcoin Cash is worth $634 and regular Bitcoin $2727 per coin according to coinmarketcap.com. That's 23% the customers are loosing out on instantly. And the defense that the users should be responsible to withdraw your coins if you want to keep it on both forks is disingenuous. There are withdrawal limits and requests for raising the limit goes unanswered for months due to high demand. Those users have literally no course of action. Also Coinbase issued their stance on Bitcoin Cash 10 days before the fork, this doesn't leave much leeway for customers on vacation for example.

Cthulhu_ 9y ago
But there's other cryptocurrencies with a nontrivial market cap out there; Coinbase only supports three. Then there's fiat currency, of which Coinbase's support is also limited. Again, where do they draw the line?
- lawn 9y ago
  It's irrelevant if Coinbase supports trading of the coin. What they should do is allow the customers to withdraw their Bitcoin Cash coins. What other cryptocurrencies have been forked of another coin gaining such a large value, placing the exchanges in the same spot? I can think of only one: Ethereum and Ethereum Classic. The same thing happened there. Coinbase was forced to allow the customers to withdraw their Ethereum Classic coins. > Again, where do they draw the line? If a forking chain survives and gains a significant share they should allow withdrawal of their coins. Not keep them, as they are doing now.
  - yebyen 9y ago
    The fork has literally existed for 36 hours only. It is easily too soon to say whether it will survive. You may have read or done technical analysis that came back supporting the conclusion that it will survive, but if Coinbase is taking the position that it won't survive, IMHO it is much too soon to say whether or not the same thing is happening here. As a matter of fact, this can't be the same thing... Ethereum Classic was the original chain. Ethereum(') is what the developers answered with, after the famed failure of the DAO, before 28 days had passed and the damage would become irreversible. If anything, your comparison is reversed, but in my opinion it is nowhere near close to the same thing. Eth Classic tokens are called classic because it was the original chain (with the bug in it, "just like we agreed to," if I understood the story fully.)
    - lawn 9y ago
      > It is easily too soon to say whether it will survive. I agree. That's why Coinbase should have said that they will wait and see if the fork will survive or not. If Bitcoin Cash continues to have a non trivial value and the fork survives Coinbase will either have to give in and give the customers their Bitcoin Cash or they will get sued and loose. > Ethereum Classic was the original chain. Ethereum(') is what the developers answered with, after the famed failure of the DAO, before 28 days had passed and the damage would become irreversible. It doesn't really matter which chain was the original. After the fork Ethereum(') became Ethereum and only after the fact did the Ethereum Classic movement begin (as you say). > If anything, your comparison is reversed Majority hash power and the market decides the "real" coin. Ethereum and Bitcoin are the real chains and Ethereum Classic and Bitcoin Cash are the spinoffs/altcoins. The fact is Coinbase weren't going to credit the customers their Ethereum Classic, but had to give in. I see history repeating itself.
      - yebyen 9y ago
        Well, BCC has about 13 blocks on their chain in 24 hours. I understand there's a technical reason for the delays, but if you thought Bitcoin Classic had a problem with transaction delays, BCC absolutely still has yet to prove it can even remotely help with that. I welcome the diversity, and a chain that has lower difficulty will be most welcome for miners as well. Hearing about some of the issues with withdrawal limits, I will not be surprised if there is a lawsuit against CoinBase. I'm personally just glad to see that, on the Bitcoin price graph, this whole event has so far been a complete non-event. (Even though I sold mine before the Hard Fork. I'm betting on ETH.)
        lawn 9y ago
        That's a good balanced view. Note that the difficulty will be reduced, to about 20%, after the next 6 blocks. So the transaction delays should resolve themselves during the next 12-24 hours or so.
- colordrops 9y ago
  They should quit representing themselves as bank holding your coins/private keys, which is not what they are doing. They are issuing IOUs for a certain amount on a particular blockchain. It would be more honest to be explicit about this in their marketing and website copy, and would avoid this problem, but that's not sexy and doesn't get VC funding. I have no sympathy for their plight.
  - marcc 9y ago
    When you put your fiat currency into a traditional bank, the bank doesn't hold it for you either. They also issue IOUs. Coinbase is more similar to a bank than it is to a wallet.
    - SilasX 9y ago
      Well, if you want to extend the analogy... Let's say that JimBob came along offering a lollipop to everyone for every $1000 they could prove they held in a US bank on a particular day. (The BCH network is offering credits to everyone on the BTC network in proportion to how much BTC they can prove they had on a particular day.) You, as a customer, tell your bank, "yes, confirm to JimBob that I had $30,000 in my account on that day!" (You provide notarized authorization, etc.) The bank says no. Would that fly? Maybe. Instead, they call up JimBob and say, "Look, we have $3 million in our bank vault. Give us our 3,000 lollipops." Would that fly? I don't think so. (Though Coinbase hasn't done that last part ... yet.)
      - bdonlan 9y ago
        Well, really, the problem is that JimBob is in total control of the interaction here. Maybe your bank says, "Sure, here's an affidavit showing you had $30,000 on date X", but that's not good enough for JimBob; he needs to see the actual, physical bills and needs proof that _those specific bills_ were in your bank's vault at the time. This process puts a fair amount of burden on the "bank", because they need to deal with JimBob's byzantine lollipop claims process _directly_ with their own cash, rather than issuing a standard affidavit that'll work equally well for MarySue's pop-tart claims process. Or, in more technical terms, _every time_ anyone comes up with a new coin, coinbase would have to dust off the cold vault, generate the proofs of ownership, reassign them to the new owners, then move the bitcoin over into newly generated cold addresses to restore the security posture of the cold vault coins. Moreover, creating new types of altcoins is a process that can be easily automated, and at little cost to whoever is instigating this creation process. Of course, most of these coins won't ever gain any popularity or value - but then what's the threshold? At what level of popularity does a broker need to do anything? What happens if a coin is totally unpopular initially but gains popularity later - do brokers need to backfill? What if the key material has been rotated away and destroyed in the meantime? For that matter, how do we measure popularity? Volume? It's easy to spam volume if you control the first exchange for your altcoin. Market cap? It's easy to fake market cap and unrealized gains when nobody can transfer coins yet. Hashrate? Who knows when that'll settle down. In any case, it's not the sort of thing that can really be objectively determined too quickly after a split. These don't become an issue with normal securities because, in normal stock market securities there is only one authorized issuer who is able to issue splits, and this issuer incurs real, significant administrative costs for doing so. They also must involve credentialed third parties, and all participants face regulatory scrutiny, fines, or even jail time if they deliberately set out to abuse the system. Compare to the creation of an altcoin, where the costs of creating a new altcoin are tiny, but the costs of dealing with the fallout by brokers can be quite large. And, of course, there is effectively zero regulation that would give penalties to deliberate abusers. There's therefore a large cost and risk imbalance between altcoin creators and brokers who have to deal with the new altcoins. This sort of cost/risk imbalance results in, effectively, a sort of denial of service threat against bitcoin brokers if it's allowed to stand. For this reason, the precedent set by this split is going to be of great importance in the future of bitcoin and altcoin brokers - if brokers must deal with splits, it will mean that they will need to segregate coins and keep them online ("hot") at all times in order to be able to deal with any split immediately and/or retroactively. This in turn will hurt the security posture of these currencies substantially. The risk of screwing a split up will also hang over any service that holds *-coins on behalf of their customers or other third parties. This will also impact the legal feasibility of off-chain transaction aggregation schemes (e.g. lightning) not feasible, as there's no guarantee that the next harebrained altcoin split will be able to deal with redeeming the complex transaction scripts involved with e.g. an unsettled lightning channel - and if it doesn't, who is liable? So, in short, _requiring_ brokerages to deal with altcoin splits and redemptions opens up a huge legal can of worms that is probably best left closed, for the viability of the overall altcoin landscape. Yes, it sucks that coinbase didn't do something for this particularly public split, but if they did they'd have to be processing splits every other day, or perhaps even more frequently. Disclaimer: I have no position, long or short, in bitcoin or any other similar "altcoin" assets, nor do I have any plans to open such a position in the forseeable future. However, I do find it fascinating to watch this legal/economic experiment evolve from a safe distance.
- deleted 9y ago
  [deleted]
- olegkikin 9y ago
  Other cryptocurrencies don't share the original blockchain with bitcoin.
  - nosuchthing 9y ago
    Which is better because the original blockchain rewarded the majority of bitcoins to very low difficulty early adopters running nothing more then a 3GHz CPU. Why would you want to keep an old blockchain and keep raising the difficulty? Why not keep the difficulty high and announce the date of the new chain without premining? Because it's a ponzi scheme, and it's easy to hide behind the technical jargon and hype propaganda that all the speculators are publishing. Thousands of other BTC was rewarded to protocol hackers who exploited the empty block rewards and submitted useless "Proof of Work" to the network. Mining pools have also reaped plenty of bitcoins on the "original blockchain" by manipulating their stance as overseers of a vast swath of the mining activity in the network where they could simply prioritize their transactions and rewards over the slaves in their mining pool. This is not even mentioning the inherent slowness and susceptibility to ASIC attacks, and overall antiquated design of both BTC and BCC network designs.
    - olegkikin 9y ago
      You have no idea what you're talking about, your argument is not even coherent, it's just a bunch of talking points stringed together. As I explained, the reason Bitcoin Cash situation is different is because the blockchain / private keys are shared. It's not the case with the altcoins. That's why Coinbase is in the wrong. Plus it would cost them very little to fix the situation, compared to how much of the users' money they are holding.
Alex3917 9y ago
> That's 23% the customers are loosing out on instantly. That's not even remotely true. Right now there are zero exchanges that support depositing BCH. The only BCH that are trading are the ones that were created by the exchanges. So unless you're arguing that Coinbase should be liable for not creating an exchange for BCH then the argument that anyone has lost out on money has zero merit. Even if Coinbase had already given everyone BCH, no one would have been able to sell on any exchange.
- lawn 9y ago
  As I said, that's measured using coinmarketcap and of course the exact value is only speculation. But it's currently far from negligible. > So unless you're arguing that Coinbase should be liable for not creating an exchange for BCH then the argument that anyone has lost out on money has zero merit. That's only with the assumption that no exchanges will ever allow BCH deposits, that you cannot sell them OTC nor buy things with it.
- placeybordeaux 9y ago
  Not to mention 80% of the hash power seems to be controlled by one entity. They could roll back tx arbitrarily.

by lawn 9y ago

Cthulhu_ 9y ago

But there's other cryptocurrencies with a nontrivial market cap out there; Coinbase only supports three. Then there's fiat currency, of which Coinbase's support is also limited. Again, where do they draw the line?

lawn 9y ago
It's irrelevant if Coinbase supports trading of the coin. What they should do is allow the customers to withdraw their Bitcoin Cash coins. What other cryptocurrencies have been forked of another coin gaining such a large value, placing the exchanges in the same spot? I can think of only one: Ethereum and Ethereum Classic. The same thing happened there. Coinbase was forced to allow the customers to withdraw their Ethereum Classic coins. > Again, where do they draw the line? If a forking chain survives and gains a significant share they should allow withdrawal of their coins. Not keep them, as they are doing now.
- yebyen 9y ago
  The fork has literally existed for 36 hours only. It is easily too soon to say whether it will survive. You may have read or done technical analysis that came back supporting the conclusion that it will survive, but if Coinbase is taking the position that it won't survive, IMHO it is much too soon to say whether or not the same thing is happening here. As a matter of fact, this can't be the same thing... Ethereum Classic was the original chain. Ethereum(') is what the developers answered with, after the famed failure of the DAO, before 28 days had passed and the damage would become irreversible. If anything, your comparison is reversed, but in my opinion it is nowhere near close to the same thing. Eth Classic tokens are called classic because it was the original chain (with the bug in it, "just like we agreed to," if I understood the story fully.)
  - lawn 9y ago
    > It is easily too soon to say whether it will survive. I agree. That's why Coinbase should have said that they will wait and see if the fork will survive or not. If Bitcoin Cash continues to have a non trivial value and the fork survives Coinbase will either have to give in and give the customers their Bitcoin Cash or they will get sued and loose. > Ethereum Classic was the original chain. Ethereum(') is what the developers answered with, after the famed failure of the DAO, before 28 days had passed and the damage would become irreversible. It doesn't really matter which chain was the original. After the fork Ethereum(') became Ethereum and only after the fact did the Ethereum Classic movement begin (as you say). > If anything, your comparison is reversed Majority hash power and the market decides the "real" coin. Ethereum and Bitcoin are the real chains and Ethereum Classic and Bitcoin Cash are the spinoffs/altcoins. The fact is Coinbase weren't going to credit the customers their Ethereum Classic, but had to give in. I see history repeating itself.
    - yebyen 9y ago
      Well, BCC has about 13 blocks on their chain in 24 hours. I understand there's a technical reason for the delays, but if you thought Bitcoin Classic had a problem with transaction delays, BCC absolutely still has yet to prove it can even remotely help with that. I welcome the diversity, and a chain that has lower difficulty will be most welcome for miners as well. Hearing about some of the issues with withdrawal limits, I will not be surprised if there is a lawsuit against CoinBase. I'm personally just glad to see that, on the Bitcoin price graph, this whole event has so far been a complete non-event. (Even though I sold mine before the Hard Fork. I'm betting on ETH.)
      - lawn 9y ago
        That's a good balanced view. Note that the difficulty will be reduced, to about 20%, after the next 6 blocks. So the transaction delays should resolve themselves during the next 12-24 hours or so.
colordrops 9y ago
They should quit representing themselves as bank holding your coins/private keys, which is not what they are doing. They are issuing IOUs for a certain amount on a particular blockchain. It would be more honest to be explicit about this in their marketing and website copy, and would avoid this problem, but that's not sexy and doesn't get VC funding. I have no sympathy for their plight.
- marcc 9y ago
  When you put your fiat currency into a traditional bank, the bank doesn't hold it for you either. They also issue IOUs. Coinbase is more similar to a bank than it is to a wallet.
  - SilasX 9y ago
    Well, if you want to extend the analogy... Let's say that JimBob came along offering a lollipop to everyone for every $1000 they could prove they held in a US bank on a particular day. (The BCH network is offering credits to everyone on the BTC network in proportion to how much BTC they can prove they had on a particular day.) You, as a customer, tell your bank, "yes, confirm to JimBob that I had $30,000 in my account on that day!" (You provide notarized authorization, etc.) The bank says no. Would that fly? Maybe. Instead, they call up JimBob and say, "Look, we have $3 million in our bank vault. Give us our 3,000 lollipops." Would that fly? I don't think so. (Though Coinbase hasn't done that last part ... yet.)
    - bdonlan 9y ago
      Well, really, the problem is that JimBob is in total control of the interaction here. Maybe your bank says, "Sure, here's an affidavit showing you had $30,000 on date X", but that's not good enough for JimBob; he needs to see the actual, physical bills and needs proof that _those specific bills_ were in your bank's vault at the time. This process puts a fair amount of burden on the "bank", because they need to deal with JimBob's byzantine lollipop claims process _directly_ with their own cash, rather than issuing a standard affidavit that'll work equally well for MarySue's pop-tart claims process. Or, in more technical terms, _every time_ anyone comes up with a new coin, coinbase would have to dust off the cold vault, generate the proofs of ownership, reassign them to the new owners, then move the bitcoin over into newly generated cold addresses to restore the security posture of the cold vault coins. Moreover, creating new types of altcoins is a process that can be easily automated, and at little cost to whoever is instigating this creation process. Of course, most of these coins won't ever gain any popularity or value - but then what's the threshold? At what level of popularity does a broker need to do anything? What happens if a coin is totally unpopular initially but gains popularity later - do brokers need to backfill? What if the key material has been rotated away and destroyed in the meantime? For that matter, how do we measure popularity? Volume? It's easy to spam volume if you control the first exchange for your altcoin. Market cap? It's easy to fake market cap and unrealized gains when nobody can transfer coins yet. Hashrate? Who knows when that'll settle down. In any case, it's not the sort of thing that can really be objectively determined too quickly after a split. These don't become an issue with normal securities because, in normal stock market securities there is only one authorized issuer who is able to issue splits, and this issuer incurs real, significant administrative costs for doing so. They also must involve credentialed third parties, and all participants face regulatory scrutiny, fines, or even jail time if they deliberately set out to abuse the system. Compare to the creation of an altcoin, where the costs of creating a new altcoin are tiny, but the costs of dealing with the fallout by brokers can be quite large. And, of course, there is effectively zero regulation that would give penalties to deliberate abusers. There's therefore a large cost and risk imbalance between altcoin creators and brokers who have to deal with the new altcoins. This sort of cost/risk imbalance results in, effectively, a sort of denial of service threat against bitcoin brokers if it's allowed to stand. For this reason, the precedent set by this split is going to be of great importance in the future of bitcoin and altcoin brokers - if brokers must deal with splits, it will mean that they will need to segregate coins and keep them online ("hot") at all times in order to be able to deal with any split immediately and/or retroactively. This in turn will hurt the security posture of these currencies substantially. The risk of screwing a split up will also hang over any service that holds *-coins on behalf of their customers or other third parties. This will also impact the legal feasibility of off-chain transaction aggregation schemes (e.g. lightning) not feasible, as there's no guarantee that the next harebrained altcoin split will be able to deal with redeeming the complex transaction scripts involved with e.g. an unsettled lightning channel - and if it doesn't, who is liable? So, in short, _requiring_ brokerages to deal with altcoin splits and redemptions opens up a huge legal can of worms that is probably best left closed, for the viability of the overall altcoin landscape. Yes, it sucks that coinbase didn't do something for this particularly public split, but if they did they'd have to be processing splits every other day, or perhaps even more frequently. Disclaimer: I have no position, long or short, in bitcoin or any other similar "altcoin" assets, nor do I have any plans to open such a position in the forseeable future. However, I do find it fascinating to watch this legal/economic experiment evolve from a safe distance.
deleted 9y ago
[deleted]
olegkikin 9y ago
Other cryptocurrencies don't share the original blockchain with bitcoin.
- nosuchthing 9y ago
  Which is better because the original blockchain rewarded the majority of bitcoins to very low difficulty early adopters running nothing more then a 3GHz CPU. Why would you want to keep an old blockchain and keep raising the difficulty? Why not keep the difficulty high and announce the date of the new chain without premining? Because it's a ponzi scheme, and it's easy to hide behind the technical jargon and hype propaganda that all the speculators are publishing. Thousands of other BTC was rewarded to protocol hackers who exploited the empty block rewards and submitted useless "Proof of Work" to the network. Mining pools have also reaped plenty of bitcoins on the "original blockchain" by manipulating their stance as overseers of a vast swath of the mining activity in the network where they could simply prioritize their transactions and rewards over the slaves in their mining pool. This is not even mentioning the inherent slowness and susceptibility to ASIC attacks, and overall antiquated design of both BTC and BCC network designs.
  - olegkikin 9y ago
    You have no idea what you're talking about, your argument is not even coherent, it's just a bunch of talking points stringed together. As I explained, the reason Bitcoin Cash situation is different is because the blockchain / private keys are shared. It's not the case with the altcoins. That's why Coinbase is in the wrong. Plus it would cost them very little to fix the situation, compared to how much of the users' money they are holding.

Alex3917 9y ago

> That's 23% the customers are loosing out on instantly. That's not even remotely true. Right now there are zero exchanges that support depositing BCH. The only BCH that are trading are the ones that were created by the exchanges. So unless you're arguing that Coinbase should be liable for not creating an exchange for BCH then the argument that anyone has lost out on money has zero merit. Even if Coinbase had already given everyone BCH, no one would have been able to sell on any exchange.

lawn 9y ago
As I said, that's measured using coinmarketcap and of course the exact value is only speculation. But it's currently far from negligible. > So unless you're arguing that Coinbase should be liable for not creating an exchange for BCH then the argument that anyone has lost out on money has zero merit. That's only with the assumption that no exchanges will ever allow BCH deposits, that you cannot sell them OTC nor buy things with it.
placeybordeaux 9y ago
Not to mention 80% of the hash power seems to be controlled by one entity. They could roll back tx arbitrarily.