6 ms·

You think it's fishy and you have no way to know if something is going on behind the curtain at coinbase but you don't want regulation? Regulation is what lets

You think it's fishy and you have no way to know if something is going on behind the curtain at coinbase but you don't want regulation? Regulation is what lets you peek behind the curtain and know that Coinbase is or isn't doing something fishy.

conanbatt 9y ago
Thats not what bank regulations have achieved.
- davidw 9y ago
  Compare and contrast to hypothetical banks with no regulations at all? Maybe they're not perfect right now, but it could be a lot worse, too.
  - ethbro 9y ago
    I'd certainly agree that at least in the US, regulation has greatly increased banking transparency. There are still edge cases, but capital ratio requirements and accounting standards, compared to none? Huge difference.
- quickben 9y ago
  They have achieved trust is system. If my bank stops existing right now, I still have any money. If <exchange> gets hacked, tough luck.
  - cmurf 9y ago
    It depends on the holdings, not everything you can have in a bank account is FDIC insured. Update: By "everything" I mean not all kinds of financial instruments are insured by the FDIC. They do not cover mutual funds, annuities, bonds, etc. They cover pretty much just cash and cash equivalents.
    - ceejayoz 9y ago
      It's fairly trivial to make sure everything's FDIC insured, and being wealthy enough to care about the per-account caps should mean you've got someone to advise you on doing so.
      - osteele 9y ago
        It doesn't even require a human advisor. Many banks participate in CDAR, which spreads large deposits across multiple accounts at other banks in the network. Fidelity isn't a bank, but their cash management feature includes checks, an ATM card, bill pay, and can send and receive ACH and wire transfers; they also implement this hack. None of this applies to securities. Presumably you could insure them. It's not obvious to me from first principles that the cost of insurance would wipe out any incremental appreciation value, but I've never heard of anyone doing this so probably it does.
        koolba 9y ago
        Securities held at a broker are usually backed by SPIC protection.
    - quickben 9y ago
      True. But for average people at popular banks, it's very sufficient.
  - conanbatt 9y ago
    Thats federally insured. You are paying taxes for your 'still have your money'. Not as clear cut as you think it is. If the government insured bitcoin 'for free' you would also see a major surge in confidence.
    - not_kurt_godel 9y ago
      The government insures bank deposits because it, and the vast majority of its citizens, has/have a vested interest in the stability of its currency. That's kind of the point of fiat currency. At the end of the day, there are dudes with guns that will back its value. Not so with Bitcoin. And good luck to any expecting that to change.
- tootie 9y ago
  There have been many notable failures of enforcement, but as someone who has been in and out of a few banks I can assure they take compliance extremely seriously most of the time. It's enough for people to have faith in the system.
- abakker 9y ago
  Are you sure of that? In many ways bank regulation has achieved exactly that. We have an SEC, we have mandatory filings, we have disclosure requirements, conflict of interest requirements, bank capital requirements, stress tests, and many rules about types of financial products which cannot be sold. Those create much more uniformity and trust in the system. (of course this comes with some cost, but, arguably the thing lost in the system is volatility more than anything else).
  - SilasX 9y ago
    ... and then we had 2008, where you can violate all of that with reckless abandon and still get bailed out.
    - beavisthegenius 9y ago
      2008 was about over leverage and speculation.
      - demachina 9y ago
        It was also about mortgage fraud ... bond rating fraud ... multinational banks selling fraudulent mortgage backed securities based on the previous two frauds. Almost no one went to jail for any of it, the few who did were little fish. The SEC, Fed, Treasury and DOJ were asleep at the wheel before and during the crash and did almost nothing after other than reward the perpetrators: A. threw $700 billion in tax payer funds at them B. forced mergers that made some of them even bigger C. the Fed printed $4 trillion dollars and handed it to them to plow in to the stock market and juiced an 8 year bull market which enriched all of them. Cryptocurrencies certainly have their problems but the last 10 years have been a case study in how horrible fiat currencies and the current global financial system really is. Japan's central bank has printed so much money they own something like 65% of all the ETF's on the Nikkei. China, EU, U.S. and Japan have printed something like $16 trillion dollars since the crash. If banks leverage that at a conservative 12X that's $192 trillion. The world is awash in fantasy money.
        9y ago
blhack 9y ago
>don't want regulation No, there are many reasons why I do want regulation. I just try not to get too religious about any of my opinions, and that lets me still see some reasons why regulation can be a bad thing.
- ineedasername 9y ago
  I figure regulation should protect against deliberate malice and foreseeable stupidity. Unfortunately that can be very broad, the line isn't always clear, and it can change. I figure good regulation needs to be very agile, and above all skeptical of its own use of power. But again, reasonable people can easily disagree on all of the specifics.
slg 9y ago
I can't help find it funny as the libertarian cryptocurrency fans slowly realize why we have all these dang laws. There are plenty of financial regulations that could use updates or tweaks, but an overwhelming majority are put in place to protect people and try to ensure transactions are as fair as possible. Cryptocurrencies too often throw the baby out with the bathwater.
- ceejayoz 9y ago
  Yup. The last few years has basically been a real-time history lesson on how the modern financial and regulatory systems came to be. Must be fairly fascinating for economists and historians.
  - wsinks 9y ago
    I can feel it! It's fascinating.
- mr_spothawk 9y ago
  Meanwhile, the libertarians in the crowd are nodding, having expected this... and protected themselves from the fallout ahead of time.
  - whytaka 9y ago
    No true Scotsmen.
    - ineedasername 9y ago
      The only true Scotsmen are the ones who agree with me :)
  - ineedasername 9y ago
    Could be most did in terms of not having their coins in an exchange, but their coins, wherever they are, just lost value for everyone looking to spend a bit of their money today. Off-exchange storage prevents against exchange-based theft, but not overall loss of value. If that loss of value stems from fraud on a single exchange it still impacts the libertarian crowd.
ryanSrich 9y ago
Adding regulation would just increase the complexity. Instead of one curtain, you now have two. For as much as people complain about the US government, they certainly aren't backing down when it comes to having them meddle in private affairs. Let the market work this out. Coinbase exists to legitimize the industry. If they turn, someone will step in to take their place. Blockchain and crypto aren't going anywhere.
- frgtpsswrdlame 9y ago
  I think the issue is about transparency. Most of the economic models us laymen think about and use to rationalize our political beliefs rely on perfect information. There are valid libertarian arguments against regulations which restrict what actions a company can take but I don't think there are very good arguments against regulations which only require companies to publicize their internal workings. >If they turn, someone will step in to take their place. There's a lot of stuff going on in that 'someone will step in' though. How many people lose their money when CoinBase turns? Do quick movers get out with all their BTC intact and slow movers go bitcoin-bankrupt? 'Someone will step in' may be an assurance to the long-term future of crypto but it says nothing to the fates of many of the individual investors who currently hold that crypto.
- ineedasername 9y ago
  Yeah, maybe the long term is all good either way, but look at it from the view of an individual, or institution, trying to decide an investment strategy. It's like any product or service. Let's finance is like restaurants, and look at the example of a local McDonald's: Food has been fine, and if the manager screws up, there'll be another to step in and fix things, eventually. But lets say the manager really screws up and a bunch of people get sick. That a new manager will fix things isn't much consolation. And after a few days in the toilet, and fines paid for poor sanitation standards, and news plastered around about the issue, it's going to be a while. Now imagine there wasn't even a local health & safety team certifying and inspecting these things to begin with, and a new place opens up: It's exciting, edgy cuisine, equal parts delicious and daring. But there's no health & safety inspection. Heck, that's part of the excitement, they don't have to play by any set rules! So you might get an awesome meal, but its a dice role on which day of the week all customers will spend their time crapping their pants. Now, in the world of large-scale personal finance and institutional investment, not many are going to risk redecorating the insides of their pants every few days. They're sticking with McDonalds, which may still cause some level of bowel décollage now and again, but in much safer, more predictable ways. I'm not saying that makes crypto a "fail", only that the next few months will really determine if it's going to be a future behemoth or a niche asset class that risk-tolerant portfolios occasionally take a piece of.

conanbatt 9y ago

Thats not what bank regulations have achieved.

davidw 9y ago
Compare and contrast to hypothetical banks with no regulations at all? Maybe they're not perfect right now, but it could be a lot worse, too.
- ethbro 9y ago
  I'd certainly agree that at least in the US, regulation has greatly increased banking transparency. There are still edge cases, but capital ratio requirements and accounting standards, compared to none? Huge difference.
quickben 9y ago
They have achieved trust is system. If my bank stops existing right now, I still have any money. If <exchange> gets hacked, tough luck.
- cmurf 9y ago
  It depends on the holdings, not everything you can have in a bank account is FDIC insured. Update: By "everything" I mean not all kinds of financial instruments are insured by the FDIC. They do not cover mutual funds, annuities, bonds, etc. They cover pretty much just cash and cash equivalents.
  - ceejayoz 9y ago
    It's fairly trivial to make sure everything's FDIC insured, and being wealthy enough to care about the per-account caps should mean you've got someone to advise you on doing so.
    - osteele 9y ago
      It doesn't even require a human advisor. Many banks participate in CDAR, which spreads large deposits across multiple accounts at other banks in the network. Fidelity isn't a bank, but their cash management feature includes checks, an ATM card, bill pay, and can send and receive ACH and wire transfers; they also implement this hack. None of this applies to securities. Presumably you could insure them. It's not obvious to me from first principles that the cost of insurance would wipe out any incremental appreciation value, but I've never heard of anyone doing this so probably it does.
      - koolba 9y ago
        Securities held at a broker are usually backed by SPIC protection.
  - quickben 9y ago
    True. But for average people at popular banks, it's very sufficient.
- conanbatt 9y ago
  Thats federally insured. You are paying taxes for your 'still have your money'. Not as clear cut as you think it is. If the government insured bitcoin 'for free' you would also see a major surge in confidence.
  - not_kurt_godel 9y ago
    The government insures bank deposits because it, and the vast majority of its citizens, has/have a vested interest in the stability of its currency. That's kind of the point of fiat currency. At the end of the day, there are dudes with guns that will back its value. Not so with Bitcoin. And good luck to any expecting that to change.
tootie 9y ago
There have been many notable failures of enforcement, but as someone who has been in and out of a few banks I can assure they take compliance extremely seriously most of the time. It's enough for people to have faith in the system.
abakker 9y ago
Are you sure of that? In many ways bank regulation has achieved exactly that. We have an SEC, we have mandatory filings, we have disclosure requirements, conflict of interest requirements, bank capital requirements, stress tests, and many rules about types of financial products which cannot be sold. Those create much more uniformity and trust in the system. (of course this comes with some cost, but, arguably the thing lost in the system is volatility more than anything else).
- SilasX 9y ago
  ... and then we had 2008, where you can violate all of that with reckless abandon and still get bailed out.
  - beavisthegenius 9y ago
    2008 was about over leverage and speculation.
    - demachina 9y ago
      It was also about mortgage fraud ... bond rating fraud ... multinational banks selling fraudulent mortgage backed securities based on the previous two frauds. Almost no one went to jail for any of it, the few who did were little fish. The SEC, Fed, Treasury and DOJ were asleep at the wheel before and during the crash and did almost nothing after other than reward the perpetrators: A. threw $700 billion in tax payer funds at them B. forced mergers that made some of them even bigger C. the Fed printed $4 trillion dollars and handed it to them to plow in to the stock market and juiced an 8 year bull market which enriched all of them. Cryptocurrencies certainly have their problems but the last 10 years have been a case study in how horrible fiat currencies and the current global financial system really is. Japan's central bank has printed so much money they own something like 65% of all the ETF's on the Nikkei. China, EU, U.S. and Japan have printed something like $16 trillion dollars since the crash. If banks leverage that at a conservative 12X that's $192 trillion. The world is awash in fantasy money.
      - 9y ago

blhack 9y ago

>don't want regulation No, there are many reasons why I do want regulation. I just try not to get too religious about any of my opinions, and that lets me still see some reasons why regulation can be a bad thing.

ineedasername 9y ago
I figure regulation should protect against deliberate malice and foreseeable stupidity. Unfortunately that can be very broad, the line isn't always clear, and it can change. I figure good regulation needs to be very agile, and above all skeptical of its own use of power. But again, reasonable people can easily disagree on all of the specifics.

slg 9y ago

I can't help find it funny as the libertarian cryptocurrency fans slowly realize why we have all these dang laws. There are plenty of financial regulations that could use updates or tweaks, but an overwhelming majority are put in place to protect people and try to ensure transactions are as fair as possible. Cryptocurrencies too often throw the baby out with the bathwater.

ceejayoz 9y ago
Yup. The last few years has basically been a real-time history lesson on how the modern financial and regulatory systems came to be. Must be fairly fascinating for economists and historians.
- wsinks 9y ago
  I can feel it! It's fascinating.
mr_spothawk 9y ago
Meanwhile, the libertarians in the crowd are nodding, having expected this... and protected themselves from the fallout ahead of time.
- whytaka 9y ago
  No true Scotsmen.
  - ineedasername 9y ago
    The only true Scotsmen are the ones who agree with me :)
- ineedasername 9y ago
  Could be most did in terms of not having their coins in an exchange, but their coins, wherever they are, just lost value for everyone looking to spend a bit of their money today. Off-exchange storage prevents against exchange-based theft, but not overall loss of value. If that loss of value stems from fraud on a single exchange it still impacts the libertarian crowd.

ryanSrich 9y ago

Adding regulation would just increase the complexity. Instead of one curtain, you now have two. For as much as people complain about the US government, they certainly aren't backing down when it comes to having them meddle in private affairs. Let the market work this out. Coinbase exists to legitimize the industry. If they turn, someone will step in to take their place. Blockchain and crypto aren't going anywhere.

frgtpsswrdlame 9y ago
I think the issue is about transparency. Most of the economic models us laymen think about and use to rationalize our political beliefs rely on perfect information. There are valid libertarian arguments against regulations which restrict what actions a company can take but I don't think there are very good arguments against regulations which only require companies to publicize their internal workings. >If they turn, someone will step in to take their place. There's a lot of stuff going on in that 'someone will step in' though. How many people lose their money when CoinBase turns? Do quick movers get out with all their BTC intact and slow movers go bitcoin-bankrupt? 'Someone will step in' may be an assurance to the long-term future of crypto but it says nothing to the fates of many of the individual investors who currently hold that crypto.
ineedasername 9y ago
Yeah, maybe the long term is all good either way, but look at it from the view of an individual, or institution, trying to decide an investment strategy. It's like any product or service. Let's finance is like restaurants, and look at the example of a local McDonald's: Food has been fine, and if the manager screws up, there'll be another to step in and fix things, eventually. But lets say the manager really screws up and a bunch of people get sick. That a new manager will fix things isn't much consolation. And after a few days in the toilet, and fines paid for poor sanitation standards, and news plastered around about the issue, it's going to be a while. Now imagine there wasn't even a local health & safety team certifying and inspecting these things to begin with, and a new place opens up: It's exciting, edgy cuisine, equal parts delicious and daring. But there's no health & safety inspection. Heck, that's part of the excitement, they don't have to play by any set rules! So you might get an awesome meal, but its a dice role on which day of the week all customers will spend their time crapping their pants. Now, in the world of large-scale personal finance and institutional investment, not many are going to risk redecorating the insides of their pants every few days. They're sticking with McDonalds, which may still cause some level of bowel décollage now and again, but in much safer, more predictable ways. I'm not saying that makes crypto a "fail", only that the next few months will really determine if it's going to be a future behemoth or a niche asset class that risk-tolerant portfolios occasionally take a piece of.