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Coinbase raises $100M Series D led by IVP
- ringaroundthetx 9y agoSo that's why they refunded everyone after they got taken advantage of in the flash crash. Maintaining confidence had greater consequences than not. All about those user numbers, or attracting other people attempting to exploit the same glitch. Pretty efficient market in that regard.
- Torai 9y agoWhy does Coinbase need another $100M when it's making tons of money with its fees?
- wastedhours 9y agoRaise when you don't need it. VCs are desperate to part with cash ("use it or lose it"), and Coinbase probably has the best chance (after perhaps Stripe and Braintree) of becoming the de facto home for the crypto payment/trading industry.
- BlackjackCF 9y agoMakes sense, but I don't love how they handled the whole Bitcoin split.
- jshevek 9y agoMy agreement with this sentiment was stronger before they announced their commitment to accommodate BCC, at least for withdrawal.
- tehlike 9y agoThis. When their hands are so strong, they probably got a pretty favorable terms.
- dpflan 9y agoHaving cash sounds great, but does this kind of cash create a crutch? $100M seems like a large number for CB, but I don't know enough about its business to understand how far that money goes. Is CB growing very quickly and in what ways? Is CB making money on their own? In order to become the de facto home for crypto payment/trading, what does that mean? Does it mean they need to help make the adoption / use of cryptocurrencies easier and more widespread? I am curious as to how this money gets spent.
- wastedhours 9y agoAlso, not sure what their position is on ringfencing deposits, but could also be an in-house credit line for immediate liquidity? Yep - I'd say they need to push into tech to allow mainstream adoption. Being the backend layer to convert crypto to real funds for businesses or payment processors. Talent, partnerships, probably regulatory issues etc...
- arikr 9y agoNot sure why so many people downvoted you, this is likely their thought process.
- zjaffee 9y agoEven so, a 1.6 billion dollar valuation of coinbase is certainly very high. Assuming that over the course of the long term they are comparable to something like intercontinental exchange (the owner of NYSE/EURONEXT, and controller of the clearing house for 50% of the worlds oil futures/derivative products). The total market cap of coins traded on their platform would need to be magnitudes larger to justify this valuation unless they can somehow either continue to justify their high fees amidst competition, or they would need to totally monopolize all future cryptocurrency banking, something that could certainly involve large amounts of competition in the future as well.
- base698 9y agoBy deduction they make about a million USD in fees a day. A startup making real cash along with huge growth potential. Seems valid.
- joering2 9y agoWhy on earth would it become a "home for crypto". The only reason I use them is because Kraken & Co requires full SSN to buy or sell; Coinbase doesn't. There is no network effect here. I don't buy/sell/keep with Coinbase because my friends or family does. The moment I found some other system that doesn't require my full SSN to be revealed, Im moving on as well.
- SippinLean 9y agoHopefully to hire support staff
- SilasX 9y agoI'm of the opposite mindset: why do so many people trust them, with so much money, when they've been so flaky about outages? One 30 minute outage per year would be bad, but they had 3-4 in a two week span, all coinciding with high volume. Plus, numerous complaints about missing bitcoins. And the potential headache about not honoring BCH balances (which they may be legally sound on).
- uncletammy 9y agoSome think that Coinbase's failure to give their customers the Bitcoin Cash they were entitled to after the fork demonstrated their insolvency.
- lesiva 9y agoSo I'm late to the digital currency game. What are the regular use cases for digital currency? Who accepts it? Is it mostly for person-to-person trading?
- heifer2822 9y agoThe utility is that it's a trust-less transfer of value between two parties. Essentially, it's like being able to send cash, anonymously if you chose, to someone else, without an intermediary, in a way that everyone can see and nobody can challenge the legitimacy of. It seems to me a lot of it is tied up in speculative investment. But there are some vendors who accept it and some countries (eg: Japan) where it's more popular and widely accepted.
- iDemonix 9y agoDepends on the currency. Bitcoin is largely just currency, but things like Ethereum introduce concepts such as smart contracts. Here's an article explaining Ethereum, but obviously there are tons of cryptocurrencies now that all work in their own way. https://thenextweb.com/contributors/2017/08/10/ultimate-2000-word-plain-english-guide-ethereum/#.tnw_3DXj3qZI https://thenextweb.com/contributors/2017/08/10/ultimate-2000...
- lesiva 9y agoOh, this is super interesting! Thanks!
- paulcole 9y agolots of people have used it to buy drugs
- ktta 9y agoWhile downvoting this is warranted, this is certainly true. To catch up on the biggest news that has come out of Bitcoin, I'd suggest reading on 'Silk Road' and Ross Ulbricht. Wired has a very good 2-set long form on this[1]. If you don't want such a verbose story, Ars Techica follwed it well too[2] [1]: https://www.wired.com/2015/04/silk-road-1/ https://www.wired.com/2015/04/silk-road-1/ https://www.wired.com/2015/05/silk-road-2 https://www.wired.com/2015/05/silk-road-2 [2]: https://arstechnica.com/series/the-silk-road-trial/ https://arstechnica.com/series/the-silk-road-trial/
- phaed 9y agoThat money would have had better upside if invested in bitcoin directly.
- Torai 9y agoI guess they prefer selling shovels in a gold rush.
- ojr 9y agoinvest in the high profit margin exchange or invest in one of the high volatility assets the exchange is selling? I would invest in both as a hedge.
- jshevek 9y agoAre you saying that the investors would get a better return on their investment if they had instead simply purchased bitcoins? That claim seems to require the ability to know the future. Bitcoin may eventually be superseded by a superior alt coin, and disappear into history.
- mdns33 9y agoa big if.
- sudoscript 9y ago> That claim seems to require the ability to know the future. One could say startup investing does too.
- kolbe 9y agoHow in the bloody hell does Coinbase not fund its own operations with profit??? I figured they made over a $100m every quarter.
- richardknop 9y agoDo we have any source on what is their revenue? I sincerely doubt they are making 100 million in profit every quarter. I would be surprised if they were actually profitable.
- deleted 9y ago[deleted]
- vocatus_gate 9y agoWith the fees they charge, and the volume on the exchange, I don't see how they couldn't be making a profit? Of course I'm not a business guy, might be something I'm not thinking of.
- richardknop 9y agoIf they were making profit, I'd assume they would make a press release. They would want the business world know.
- dajohnson89 9y agoNo. If they're making a killing and released it to the public, there would be a clamor for lower fees.
- pmorici 9y agoPrivately owned profitable businesses don't usually go trumpeting to the world how wildly profitable they are. That is just inviting competition. Kind of dumb.
- fullshark 9y agoI would guess (hope) they have a ton of fiat in reserve that they don't want to touch.
- revmoo 9y agoSomebody stole my identity and created a Coinbase account with it. I made a ticket on their system over two weeks ago and they haven't even bothered to respond. I'm baffled that such a shady company is able to raise funds like this. I mean, imagine if your bank just one day stopped answering the phone.
- FozzworthSE 9y agolots of people have used it to buy drugs
- mbloom1915 9y agolots of people have used cash to buy drugs...
- trumpownsyou420 9y agowhat an absolutely worthless comment. you should be almost as ashamed as me for posting this comment.
- stanmancan 9y agoI'm pretty naive on the subject of Bitcoin so I might be missing something here, but can someone explain to me how it's used right now? Aside from treating BTC like a stock that is. The value of it fluctuates so much that actually buying/accepting it seems incredibly risky. The price can go down just as fast as it goes up. As a someone looking make purchases with BTC; if the value of a BTC is going up, why would I use it to buy anything? It's gone up $700 in the last week; up $200 in the last 24 hours alone. I'd feel incredible silly spending bitcoin in a growth phase. As someone looking to accept BTC for purchases, how do I do so with confidence that when I accepted $3400 today that by the time I cash out it's not worth $2700? My confusion really comes from the buying/selling of legal goods; I can see the risk being worth it if you're operating outside the law. But really; if I'm selling something then there's a pretty good chance I'm buying my supplies with a fiat currency. I have hard and set costs I need to cover. If I accept BTC, there's a chance that when it's all said and done the BTC isn't worth what I paid and now I'm losing money. Are businesses just expected to accept that risk? If so, how many businesses are actually willing to accept that risk? Or do we have to wait for the price to settle down before seeing more widespread adoption?
- avenoir 9y ago> When a business accepts bitcoins for payment, there generally is the need to convert them to the currencies used for paying suppliers, employees and shareholders. Some merchants set prices based on the current market rate at the time the price quote is presented to the customer Bitcoin Prices lists the exchange rate for many currencies on multiple exchanges. When prices are determined using an automated process, the current market rate can be based on either a current price or on a weighted average basis. When bitcoin funds for purchases are received, some merchants instantly exchange those proceeds into the preferred currency used. Hedging for each transaction can nearly entirely eliminate exchange rate risk that the business is exposed to when accepting bitcoins for payment. [1] So it sounds like merchants accept Bitcoin and immediately convert to preferred currency based on the going BTC rate at the time of transaction. [1] https://en.bitcoin.it/wiki/How_to_accept_Bitcoin,_for_small_businesses https://en.bitcoin.it/wiki/How_to_accept_Bitcoin,_for_small_...
- iDemonix 9y ago
- TigerShark5 9y agoSomebody stole my identity and created a Coinbase account with it. I made a ticket on their system over two weeks ago and they haven't even bothered to respond. I'm baffled that such a shady company is able to raise funds like this. I mean, imagine if your bank just one day stopped answering the phone.
- 45h34jh53k4j 9y agoIm sorry this happened, but you might want to get on to their security team, rather than the regular customer support queue. Imagine if your bank suddenly had millions of new clients join in a 2 month period. I think they would stop answering the phone too.
- sspring1 9y agono, they'd answer the phone.
- 45h34jh53k4j 9y agoeven if every line was already jammed with the millions of new customers? Humans only scale so far. I think coinbase can do a better job with support, but expecting the same quality of support as a heavily regulated and $T industry from a startup is foolish.
- revmoo 9y ago> Imagine if your bank suddenly had millions of new clients join in a 2 month period. I think they would stop answering the phone too. This is utterly delusional. You can't handle new clients, you STOP ACCEPTING NEW CLIENTS.
- Danihan 9y agoGreed. It's just pure greed. And many people do work for banks despite them doing incredibly shady shit (worse than just not answering the phone).
- user5994461 9y ago
- josh2600 9y agoSeems like a no-brainer for IVP. It seems like coinbase is exceptionally well positioned to harvest a big chuck of the institutional money that's about to hit crypto.
- 45h34jh53k4j 9y agoCoinbase is positioning themselves to be the first legit cryptobank. Fidelity now feeds their customer portfolio data (on BTC, LTC and ETH holdings) from their user cold storage holdings at coinbase. Its extremely risky to hold client keys that hold money. Making a CryptoBank is like making a regular bank on hard mode.
- JumpCrisscross 9y agoI don't think they're going for bank, but the more-lucrative exchange model. "Bank" means ongoing fees but lots of risk. "Exchange" means low-risk transaction fees.
- fpgaminer 9y ago> Making a CryptoBank is like making a regular bank on hard mode. Back in "the old days" bank security was based around metal vaults and guns. That I would also consider doing banking on hard mode. Coinbase just needs good specialist engineers and a good insurance policy. Not much different from a traditional bank. At least Coinbase has an advantage over traditional banks. Good engineers would probably rather work at Coinbase where they get to play with cool Bitcoin tech, rather than a stuffy old banking system which still limits passwords to 8 characters...
- 45h34jh53k4j 9y agoInsurance on cryptocurrency holdings? might be hard to find a provider that would accept that level of risk and volatility. Would the premiums increase with the value of the BTC? What if there just isn't enough bitcoin in circulation to cover the loss (there is a 21 million cap on BTC). Bank robberies don't usually leave the bank with nothing :-) Exchange gets rolled, it might not even afford the claim. Agree about advantage as being a great place to work vs traditional banks. They will attract better talent for sure.
- fpgaminer 9y ago> What if there just isn't enough bitcoin in circulation to cover the loss (there is a 21 million cap on BTC). It's being defacto established that when a cryptobank gets robbed, the funds are repaid to customers using local currency, not BTC, priced at the time of the loss. So, from the underwriter's perspective, it's just insuring whatever total USD value Coinbase currently holds, with consideration given to Coinbase's ability to prevent theft. Not any different from a bank insuring itself against loss due to cybertheft.
- ruok0101 9y agoMaybe now they can spare a human to respond to my 4 attempts to get my account unlocked?
- anilshanbhag 9y agoCoinbase makes a killing with their fees. The spread between the buy and sell prices on coinbase are 1-1.2%. On top, their bank transfer charges are proportional to amount transferred instead of standard flat fee. I wonder why they need another $100M ! For people who want to buy, I would recommend Kraken - they have much higher volume and sane pricing. There are others too like Bitfinex, Poloneix, etc.
- fpgaminer 9y agoIt's important to note that Coinbase also operates an exchange, GDAX, that anyone can get access to. The fees for limit orders on GDAX are currently 0%, and there are no transaction fees for withdrawal (at least on USD->Bank account or BTC withdrawals). I'm not sure if GDAX has any deposit fees. Buying/selling directly on Coinbase is merely for convenience, and obviously you're going to pay for that convenience. I'm glad that Coinbase offers that option, because there are a lot of people for whom the fees are worth the ease of use. But if you're one of those people for whom the fees aren't worth it, and you want to get your hands dirty, by all means use GDAX and pay no fees at all.
- dahdum 9y agoNo deposit or withdrawal fees for GDAX, and it's instant to move funds to/from Coinbase wallets.
- solotronics 9y agothe fees for market making orders is 0% other orders is about 0.25% (better if you are trading more). market making is when you place an order that is not instantaneously filled.
- deleted 9y ago[deleted]
- andruby 9y agoI was wondering the same thing. At the volume GDAX is processing ($100M/day [0]) they should be making $100M in gross profit every year [1]. [0] https://coinmarketcap.com/exchanges/volume/24-hour/#gdax https://coinmarketcap.com/exchanges/volume/24-hour/#gdax [1] $100M * 0.0025 = $250K /day, or almost $91M per year.
- aresant 9y agoEdit - Moved to comment I was trying to address -
- jorvi 9y ago> Crypto could become the "people's" wealth vault, and undercut nations ability to tax & control markets by truly privatizing wealth. All it takes is MOST of us to decide. You say that like its an admirable goal we should strive for. Taxes built the roads and bridges you drive on, the crystal-clean water that flows from your tap, the lines that your internet runs over, and the (admittedly glacial) bureaucracy that prevents your city, municipality, province and country from descending into unorganised chaos.
- aresant 9y agoI am illustrating use cases, not advocating. The minute you realize the use case around privatization of global wealth you can begin to underwrite its probability. Because the crypto platform provides the OPTION for that to happen at scale. And crypto gives people globally the opportunity to make the decision and vote with their personal wealth (and mining power).
- eliribble 9y agoJust because tax enable those things in the United States right now does not imply that is the only way they could be provided
- ringaroundthetx 9y agoRoads, bridges and schools were built before national governments began passively levying taxes on income. this is a 100 year old concept. Taxes on capital gains are a 70 year old concept. Just recognize the amorality of it. It can only be billed as a "duty" for "roads and schools" when pandering to the lower classes who have no choice in the matter, while recognizing those classes have the numbers to get you in office. But "taxes" are not an absolute on the concept of how a government can fund itself. Governments have to balance the consequences of how they attempt to raise revenues, by being competitive amongst other countries, as their ecosystems primarily rely on attracting or incentivizing investment.
- ryanSrich 9y agoHopefully they spend all $100mm on support. I've never experienced such bad support.
- joering2 9y agoAt this point me and many of friends with Coinbase account came to conclusion that there is NONE. I don't believe a single person works in customer support. I also heard that it is such a big issue that some California attorney is advertising heavily in top 5 states to gather traction for a class-action lawsuit regarding this problem. Unfortunately I haven't stumbled upon his advertisement yet, but wouldn't be surprised if judge will give it a green light.
- trjordan 9y agoAccording to LinkedIn, they have 7 people who work in support. At a company of ~200 people, that's not an unreasonable number to have. It feels mean to say they have none.
- joering2 9y agoMean to say something? I guess its not mean not to answer to customer support request. I guess when someone steals your wallet you don't chase them, because that would be mean and not a behavior of a gentleman. Please point me to Linkedin verification page - you know, where it says that whatever people put on LinkedIn is always true, because so far my experience is contradictory. I worked with many people and they LinkedIn profile is nothing like they responsibilities were.
- ryanSrich 9y agoYou know what I find mean? Getting locked out of my GDAX account for no apparent reason for months on end while ETH rises and I have no way of doing anything because I can't access my USD or ETH. Not one single word from support until one day I get a random message that directs me to an article that I've already read 10 times and is of no help.
- UndeadAuraS 9y agoBitcoin purists will say that, eventually, there is no "cash out" phase. 1 BTC = 1 BTC and who cares about what the dollar equivalent happens to be. Once everything is in BTC you will never exchange it for dollars.
- puranjay 9y agoThis is just about the most absurd belief any smart person can actually hold.
- lloyd-christmas 9y agoWhy? Currencies existed prior to governments. What prevents that from happening in the future? Beyond that, the USD is just one of many mediums of exchange. What prevents the USD from becoming the next Deutsche Mark, French franc, or Spanish peseta? While I don't believe BTC is The One, calling it "the most absurd" shows a blatant ignorance of history, and hardly supports a notion of superior intelligence.
- puranjay 9y agoIf the USD collapses, other currencies will take its place - GBP, EUR, etc. The only reason the USD would collapse in the first place would be if the US government collapses. In that event, you're looking at apocalypse. Or at the very least, a world war. To assume that the world is as isolated as it was when the Spanish peseta collapsed as it is right now is absurd. Good luck exchanging a digital currency in the event of an apocalypse.
- lloyd-christmas 9y ago> Collapse... Collapse... Collapse... Nowhere in my comment did I say that word. Why such a bleak outlook? > To assume that the world is as isolated as it was when the Spanish peseta collapsed as it is right now is absurd. I'm not sure which history book you're reading, but your statement has no historical basis. Isolation didn't cause the peseta to "collapse", economic cooperation caused it to MERGE into the Euro. That would seemingly display the exact opposite of "isolation", wouldn't it? I'm pretty sure Europe didn't collapse into an apocalyptic wasteland in 1999 when the Euro started as a currency. The Euro would have sounded preposterous in 1990, the year in which the reunification of Germany took place. 9 Years later the Euro started, 2 years after that Germany was the first to eliminate their own national currency as legal tender. What stops the USD from merging with the CAD and/or MXN other than a lack of imagination, or a recency bias?
- asciimo 9y agoIt's nice to see that, until this comment, CTRL-F yields nothing for "ponzi" or "scam." "pyramid scheme" and "drugs" are still making appearances, though.
- deleted 9y ago[deleted]
- Roger_Jones 9y agoBut how much did they raise by pocketing their customers' Bitcoin Cash after the BTC fork
- tryingagainbro 9y agoThey have been doing this since 2012 when Bitcoin was essentially free...I guess they took the money just in case.
- jefe_ 9y agoDefinitely late to the game, but finally bought bitcoin this week. I've followed bitcoin since ~2010, but it's volatility and financial constraints had prevented any real action. Here are some notes if there are any other holdouts out there: I used Coinbase and Gemini. It was surprisingly difficult to get money into these places, which was a bit frustrating, but in the same sense reassuring that they are playing by the rules. I actually setup on Gemini because Coinbase kept cancelling orders on my debit card (Schwab), and I was able to setup wire transfer with Gemini, and then transfer that to Coinbase to fund the GDAX account. I set out Saturday morning to buy bitcoin and didn't ultimately have any until Monday afternoon when the wire transfer reached Gemini (standard account for ACH transfer is now approved on both platforms, Gemini took 2 days, Coinbase 4). Coinbase has a nice app to monitor accounts and price charts, but it doesn't seem to link to GDAX (their exchange), so you can't get a unified view of holdings in one spot. Gemini doesn't have an app, but has a web application which is annoyingly secure. It remembers a device for 24 hours, after which it requires 2 Factor SMS verification. Security is great, but it's a bit annoying when all you want to do is check account value once a day. Gemini trading volume seemed a bit low, and their API didn't offer any compelling features over GDAX, which is why I've transferred from Gemini to Coinbase (took about 1.5 hours to go through) and then GDAX (Coinbase to GDAX is instantaneous). Both offer websocket feeds and the APIs are well documented. The C# GDAX sample application was last updated in 2015 interestingly, but it still has many useful pieces. Another bonus for GDAX is their fee structure, which is simpler (and cheaper) than Gemini's, maker orders are 0% fees. I've always been intrigued by automated trading systems, but the barriers to entry are so high in the stock markets (data, platforms, high fees, account minimums, day trading rules), to the point where you can't really just 'try it out.' 6 days into this adventure and I'm maintaining my own order book and programmatically making trades with tiny amounts of money. Next step is to work on strategy.
- shpongled 9y agoI have actually already created a C# Gemini API wrapper[0], if you are interested. Along with a GUI for it [1]. Both are open-source. I used my library to write an automated trading system that's running on Gemini (not open source, obviously). I like Gemini much more than it's competitors. [0] https://github.com/lazear/Gemini https://github.com/lazear/Gemini [1] https://github.com/lazear/Libra https://github.com/lazear/Libra
- justinzollars 9y agoGreat news! I'm very bullish on digital currencies.
- discombobulate 9y ago*Crypto currencies. Without cryptography, we may fall into 1984 -- or something like that. Cryptography grants us privacy.
- cft 9y agoWith this trading frenzy on gdax and on coinbase itself, why do they need round D? They are charging hefty fees on coinbase, and some fees on gdax too. It's "pure play" , there's no fixed real world expenses
- qhwudbebd 9y agoDoes this means they'll be arsed to reply to customer support queries more rapidly in future? Say a 1-2 month turnaround instead of 2-4?
- Meekro 9y agoEven in the bitcoin community, I think many people don't realize just how big Coinbase is. I have a paid Alexa account, so I can grab traffic data to for any website. Let me show you how Coinbase compares to several other sites you guys might be familiar with: coinbase.com - 4.8 million monthly unique visitors from the US 4chan.org - 5.3 million chase.com - 47 million So Coinbase is almost as big as 4chan, and is 1/10 the site of Chase. Let me repeat that again: The largest bitcoin exchange has 1/10 of the traffic of the biggest general banking site in the world. That is huge.
- vadym909 9y agoUnrelated, but it still blows my mind- that the creator of this cryptosystem thats now worth $50B is still unknown. He has to have been lived somewhere, gone to school somewhere, studied, worked somewhere, left some track somewhere about who he was.
- keypusher 9y agoDave Kleiman - Look him up. It's actually all a kind of sad and sordid story. The myth is far better than the reality.
- sillysaurus3 9y agoI think that story was largely debunked. It even turned into a dicey situation for gwern, though I respect his commitment to chasing down a lead.
- discombobulate 9y agoI don't think coinbase are going to add Monero. It's too much like cypherpunk money.
- corford 9y agoCan anyone recommend a decent exchange that supports deposits and withdrawals from a UK GBP bank account without needing to do a SEPA or SWIFT transfer? Neither Kraken nor Bitstamp do :(
- jamies888888 9y agoI can't find one either. I've decided the best option is depositing/withdrawing using localbitcoins.com, then transferring in/out of there to your preferred platforms.
- corford 9y agoYeah, it's infuriating. I'm hoping Revolut enables bitcoin on their platform soon. Until then, will check out localbitcoins.com, thanks.
- zebnyc 9y agoCan anyone who has been investing in digital currency provide some alternatives to Coinbase vis-a-vis fees? If I am plunking down $65k, then that is almost $1k in fees. In comparison, if I buy stocks, I pay around $7 in commission. I know that it is not a direct comparison cause there is currency conversion fees involved. Are there any better alternatives? How do you guys invest to avoid fees? Thanks
- pmorici 9y agoIf you are investing that kind of cash you should be using Coinbase's GDAX exchange not their brokerage service. If you place limit orders on GDAX with the "post only" option checked you will be able to buy coins with zero fees. Other exchanges have similar fee structures so if you don't want to pay the 1% brokerage fee you really need to learn how to use limit orders regardless of what exchange you ultimately use.
- koolba 9y agoWhy not do a Coinbase tier2 not-stock-but-we'll-pretend-it's-stock ICO? Could raise even more money with zero actual equity dilution.