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I don't really follow these cryptocurrencies very closely. I assume that Coinbase is sitting on keys/wallets that own Bitcoin belonging to their customers, whi

I don't really follow these cryptocurrencies very closely. I assume that Coinbase is sitting on keys/wallets that own Bitcoin belonging to their customers, which would mean that they are now also sitting on keys/wallets that own Bitcoin Cash. So could Coinbase short (some of) that Bitcoin Cash by selling it on other exchanges? I read this statement from Coinbase: "If this decision were to change in the future and Coinbase was to access Bitcoin Cash, we would distribute Bitcoin Cash to customers associated with Bitcoin balances at the time of the fork." So as long as Coinbase bought back enough Bitcoin Cash to distribute it to customers at time-of-fork-value, they would be true to their word. Or is there something that prevents Coinbase from even accessing the Bitcoin Cash associated with Bitcoin it is holding? Edit: I'm not trying to make any judgments here, I don't know enough. Just trying to understand.

shpongled 9y ago
Yes, Coinbase would control the private keys for any bitcoin stored there. So the issue is most likely that Coinbase hold's the majority of it's digital currencies in cold storage - essentially stored on air-gapped computers. To redeem your bitcoin cash (BCH), you have to import your private keys into a new bitcoin cash wallet, and then transfer them. If you do not transfer your BTC to a new wallet before importing your private keys to the BCH wallet, a malicious wallet could then have access to both your BCH and BTC. With replay protection, the solution is to move your BTC to a new wallet, then import the old private keys (with a balance of 0 BTC, but still has BCH associated) to the BCH wallet. Hopefully you can see all of the failure points here. I have coins stored in cold storage and haven't yet bothered to claim any BCH due to the hassle, and lack of exchanges where you can sell it.
vocatus_gate 9y ago
You're more or less correct. Coinbase is sitting on the keys to customer wallets/funds. When the fork happened, those keys work both on the original Bitcoin network and the new "Bitcoin Cash" network. Which, apparently turned out to have substantial value (currently trading ~$650). Coinbase made a colossal mistake in outright ignoring BCC and will likely get sued (and lose) because of it. If I had 10 BTC on CB and missed out on the opportunity to trade or sell $6,500 worth of free BCC I just got, I'd be mad too. They need to act quickly before it goes to court. Someone else commented that they don't even need to support trading BCC, all they have to do is provide a way for customers to withdraw their BCC, and they're in the clear.
- jmilloy 9y ago
  If CB can't easily allow customers to withdraw the BCC, they probably can't easily exchange the BCC themselves either? (I recognize that people not being able to withdraw the coins at all is an issue, just curious also about the ability of CB to speculate in the interim).
  - icebraining 9y ago
    Allowing customers to withdraw BCC involves adapting their platform to connect to the BCC network, track how many BCCs each user owns, allow them to issue transaction orders in it, etc. To exchange themselves they only need to load their existing wallets in an existing BCC client.
- fauigerzigerk 9y ago
  >If I had 10 BTC on CB and missed out on the opportunity to trade or sell $6,500 worth of free BCC I just got, I'd be mad too. But is that really what's going on? As I understand it, each BTC also became a BCC at the time of the fork, and owners can now decide on which network they want to use these units (CB users are not technically owners though). No free BCCs were distributed. If I were to decide to move 1 BTC to a BCC wallet now, I would buy something worth $650 for something worth $2700. That is my very tentative understanding at least.
  - thaumasiotes 9y ago
    > As I understand it, each BTC also became a BCC at the time of the fork, and owners can now decide on which network they want to use these units (CB users are not technically owners though). No free BCCs were distributed. No. Each BTC also became a BCC at the time of the fork, and now exists independently on both networks. Owners are free to use them on each network. That is the concept of a fork -- it's an intended double spending attack. There is no such concept as "moving 1 BTC to a BCC wallet". Moving BTC means a transaction on the BTC blockchain. Moving BCC means a transaction on the BCC blockchain.
  - nicpottier 9y ago
deleted 9y ago
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shpongled 9y ago

Yes, Coinbase would control the private keys for any bitcoin stored there. So the issue is most likely that Coinbase hold's the majority of it's digital currencies in cold storage - essentially stored on air-gapped computers. To redeem your bitcoin cash (BCH), you have to import your private keys into a new bitcoin cash wallet, and then transfer them. If you do not transfer your BTC to a new wallet before importing your private keys to the BCH wallet, a malicious wallet could then have access to both your BCH and BTC. With replay protection, the solution is to move your BTC to a new wallet, then import the old private keys (with a balance of 0 BTC, but still has BCH associated) to the BCH wallet. Hopefully you can see all of the failure points here. I have coins stored in cold storage and haven't yet bothered to claim any BCH due to the hassle, and lack of exchanges where you can sell it.

vocatus_gate 9y ago

You're more or less correct. Coinbase is sitting on the keys to customer wallets/funds. When the fork happened, those keys work both on the original Bitcoin network and the new "Bitcoin Cash" network. Which, apparently turned out to have substantial value (currently trading ~$650). Coinbase made a colossal mistake in outright ignoring BCC and will likely get sued (and lose) because of it. If I had 10 BTC on CB and missed out on the opportunity to trade or sell $6,500 worth of free BCC I just got, I'd be mad too. They need to act quickly before it goes to court. Someone else commented that they don't even need to support trading BCC, all they have to do is provide a way for customers to withdraw their BCC, and they're in the clear.

jmilloy 9y ago
If CB can't easily allow customers to withdraw the BCC, they probably can't easily exchange the BCC themselves either? (I recognize that people not being able to withdraw the coins at all is an issue, just curious also about the ability of CB to speculate in the interim).
- icebraining 9y ago
  Allowing customers to withdraw BCC involves adapting their platform to connect to the BCC network, track how many BCCs each user owns, allow them to issue transaction orders in it, etc. To exchange themselves they only need to load their existing wallets in an existing BCC client.
fauigerzigerk 9y ago
>If I had 10 BTC on CB and missed out on the opportunity to trade or sell $6,500 worth of free BCC I just got, I'd be mad too. But is that really what's going on? As I understand it, each BTC also became a BCC at the time of the fork, and owners can now decide on which network they want to use these units (CB users are not technically owners though). No free BCCs were distributed. If I were to decide to move 1 BTC to a BCC wallet now, I would buy something worth $650 for something worth $2700. That is my very tentative understanding at least.
- thaumasiotes 9y ago
  > As I understand it, each BTC also became a BCC at the time of the fork, and owners can now decide on which network they want to use these units (CB users are not technically owners though). No free BCCs were distributed. No. Each BTC also became a BCC at the time of the fork, and now exists independently on both networks. Owners are free to use them on each network. That is the concept of a fork -- it's an intended double spending attack. There is no such concept as "moving 1 BTC to a BCC wallet". Moving BTC means a transaction on the BTC blockchain. Moving BCC means a transaction on the BCC blockchain.
- nicpottier 9y ago

deleted 9y ago

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