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Coinbase is essentially transforming itself into a bank to compete with the other Wall St. banks, but rely on their early crypto position as a competitive advan

• quickthrower2 8y ago
  The problem crypto has is simple: You can't pay your rent in crypto, and you can't earn crypto as salary. So you need an intermediate to convert it to/from fiat. And you need to keep using fiat. Therefore you need a way to convert. The most decentralised is something like localbitcoins, but for most people its too much hassle. It's like selling a second hand car type process (which most people hate) just to get cash to spend. Therefore a centralised bank it much more preferable.
  • baby 8y ago
    There are a bunch of companies that pay in cryptocurrencies
    • quickthrower2 8y ago
      True but most people can expect to be paid in fiat. And by most I mean 99.99999%
    • realusername 8y ago
      They are still very rare for now
    • freddie_mercury 8y ago
      There are 22 million companies just in the US. Can you name 1,000 companies in the US that pay in crypto? I'd be willing to call 0.004% "a bunch".
      • unimpressive 8y ago
        Obviously 1000 is a bit more than the grandparent can 'name' directly, but I would in fact like to see some evidence indicating the presence of at least 1000 US companies that pay in crypto.
        • madeofpalk 8y ago
          Hell, I would love to know about one. I’m sure they exist somewhere and I would love to know more about the logistics of it.
          • ok_craig 8y ago
            Coinbase itself gives the option of taking salary in crypto.
        • quickthrower2 8y ago
          Probably possible with data mining. Find "salary like" amounts send on a regular basis on the B.C. If to/from addresses differ then you are looking for the same amount each month (fiat) across all addresses.
      • baby 8y ago
        It's a bunch in my definition, which is already more than "can't earn a salary in cryptocurrencies"
    • hk__2 8y ago
      Is there a single company outside of the cryptocurrencies industry that pays in cryptocurrencies?
      • baby 8y ago
        Yup. I've heard buffer for one does it.
        • hk__2 8y ago
          Thanks, but Buffer used to pay 5% of one single employee’s salary in bitcoins [1], and that employee has switched jobs since the annoucement. [2] [1]: https://open.buffer.com/getting-paid-in-bitcoin/ https://open.buffer.com/getting-paid-in-bitcoin/ [2]: https://twitter.com/nieldlr https://twitter.com/nieldlr
          • baby 8y ago
            Damn. Well there are probably others :) but I'm not going to do the research.
          • quickthrower2 8y ago
            1. Pay employee in Bitcoins 2. Bitcoin bubble 3. Employee retires
            • andirk 8y ago
              What about this. Fill in the blank: 1. Pay employee in Venezuelan bolívar 2. Bolívar inflates to the point where a month's salary gets you a chicken bone 3. Employee __________
      • someonewhocar3s 8y ago
        No, because really 'cryptocurrencies industry' is a misunderstanding. Finance is something everybody uses. Blockchain/cryptocurrency gives you a whole next level of being able to do it. And blockchain/cryptocurrency is about administrative efforts much more than it is about finance. Finance is just a very delicious application in a world that only gets hard for money.
  • ainiagnioadgnio 8y ago
    Can we stop using the term "fiat" to refer to government-issued money? The important feature of fiat currencies is that they're backed by nothing. The fact that fiat currencies are normally government-issued is incidental. The term exists to contrast them with representative currencies. The same goes for most cryptocurrency: it's not backed by anything and only has value because most people agree it has value. Bitcoin is a kind of fiat currency, or at least it's closer to fiat money than it is to anything else.
    • quickthrower2 8y ago
      According to Wikipedia you are correct. But I think you are fighting a losing battle in the crypto space where people take Fiat to mean government backed currencies. I think of it this way especially as Fiat means 'by decree' or something like that.
• asciimo 8y ago
  You will always have the option to transact directly on the blockchain, just like you have the option to send email with hand-crafted SMTP messages. Coinbase offers convenience, take it or leave it.
  • simias 8y ago
    That's like saying "you will always have the option to use cash. Banks offer convenience, take it or leave it". It's true but not massively insightful.
    • omnimus 8y ago
      Yes but the backbone is still decentralised. It is very real possibility for one person to make wallet or a service on blockchain and be part of the network. It is very hard to be part of the traditional banks network. We can debate if it is better that there is much higher cost to entering but overall if the backbone is open then it should help innovation.
• fullshark 8y ago
  The mantra of cryptocurrency changes every few years depending on what brings in new money. Now BTC's a "store of value" that investors should have exposure to in their portfolio, and the ICOs are speculative investments. In two years they'll come up with a new narrative.
  • zodiac 8y ago
    1. I don't think there's anything wrong with changing the "mantra" as it were. People learn things, opinions change; do your own research and form your own conclusions/hypotheses. 2. There's no one fixed "mantra" of cryptocurrency. As you point out yourself, there's some people who see BTC as a store of value first and optimize for that, and I'm sure you're aware that that's at least not an uncontroversial decision. Different people have different opinions about a ton of different things like monetary supply policy, the importance of censorship-resistance, immutability, non-currency use-cases, etc.
  • Meekro 8y ago
    BTC's dominance in the crypto space is at record lows[1], so I would question their ability to speak for the ecosystem as a whole. Ethereum, Ripple, and Bitcoin Cash have a voice as well. Each of those has a very different vision for the future of cryptocurrency, and none of them are talking about "store of value" as their main goal. [1] https://coinmarketcap.com/charts/#dominance-percentage https://coinmarketcap.com/charts/#dominance-percentage
    • baby 8y ago
      Most non-scam cryptocurrencies use the currency thing to back up another technology on top of it. For example smart contracts or storage of data.
• PeterisP 8y ago
  The success of Coinbase seems to indicate that customers are voting with their wallets that "No Banks" and "Decentralization" (including anonymity and censorship resistance) are not actually that highly desirable features for most people, they're willing to give them up and eager to use a trustworthy centralized service that's a bit more convenient and handles the technical risks for them.
  • tmh88j 8y ago
    Do you think decentralization is not actually that desirable, or that there are just very limited avenues for buying/selling? Cryptocurrencies are scary enough for most people, throwing them into a forex like platform on currencies they don't understand the technology behind only amplifies the confusion and reluctance. I think the desire for decentralization is very real, but the "front end" technology hasn't caught up yet.
    • PeterisP 8y ago
      I think that decentralization as such is not an "end goal" for pretty much everyone. Decentralization is one of ways that can enable some particular features (e.g. untraceability or censorship resistance) that can be valuable but the value of these features is different highly situational and can be low or even negative for many people; so it could be more constructive to talk about the benefits those particular features and not centralization in general. E.g. in my opinion most people don't want irrevocable untraceable transactions from their account as that increases fraud risk and (in their particular case) doesn't bring much benefit. Some do benefit from that, but it's a minority in the general population (but a large portion of early cryptocurrency adopters). Most people actually want something like a credit card payment that has a clear benefactor and the ability to recall the payment in case of fraud or other dispute. In other cases, the value is so low people are not willing to "pay" even very low price of convenience to gain them. There are some people (and locations!) where there is large motivation to avoid various capital controls and possibility of government control, but for most people in first world countries it's preferable to have their money in the reach of local legal system rather than outside, as they'd expect (and need!) the legal system to protect them in case of disputes and have a low risk of it working against them. Of course there are all kinds of exceptions where people might desire a way to get undeclared money (say, to avoid making child support payments) but that's usually a sufficiently large motivation only if you want to defraud someone and most people actually are honest and pay what they're due. Also, there are all kinds of trivial reasons why you'd want an institution to handle the trade - e.g. if you're investing, you'd need proper documentation for the crypto purchase so that it'd be tax deductible for the crypto sale, otherwise the whole sale could be treated as taxable income.
• baby 8y ago
  The backbone is still decentralized. Banks and centralized payements systems based on cryptocurrencies with a decentralizer backbone is actually the best outcome imo.
  • PeterisP 8y ago
    Why do you think that a decentralized backbone is the best outcome? I can understand that there are multiple scenarios where a decentralized cryptocurrency has some advantages for a direct end-user, and some market failures where customers can't get appropriate payment services; however for the "institution-to-institution" backbone I see no advantages whatsoever, the settlement channels which financial institutions can use are quite good and fit the needs of these institutions much better than (for example) Bitcoin; the interbank settlement systems are fast, cheap, reliable, secure, already implemented and tested, work on a large scale and they don't really have a trust issue with their operators. There are many flaws in worldwide payment systems available to customers, but the backbone between institutions is not one of them.
    • baby 8y ago
      Good question! The most important aspect of this re-org is that people can choose to take part of the system without a bank, or both. There are many other benefits though, transfers between accounts would be easy peasy, everyone would be capable of auditing logs and transactions (that's a wet dream for an external auditor), etc.
      • PeterisP 8y ago
        Can you elaborate on what you mean by "transfers between accounts would be easy peasy" and "everyone would be capable of auditing logs and transactions" ? To my understanding this is something that can be covered by common standards on message formats that businesses can send to banks (the same format for many banks, integrated in, say, accounting software) to initiate payments, and by common standards for electronic account transaction information and a legal requirement to ensure that all banks would provide that interoperability. And getting that doesn't need decentralization but rather a legal/systematic intervention like SEPA was done in Eurozone. Direct participation in payment systems for non-banks is also an option that already exists, but not widely used because of the costs involved, it's cheaper to just go through a bank - if you don't have huge volumes any bank can give you a quote that's lower than the cost of maintaining the service directly, and the businesses that do have huge volumes (e.g. the major auto manufacturers) generally have established their own bank subsidiaries.
• whataretensors 8y ago
  Adding a trusted component on a trustless system is not the opposite of a holistic trusted system.
• someonewhocar3s 8y ago
  I was one of those people that said "You're destroying crypto!" Because frankly they've been the primary source for identification data in the blockchain space. They violate the basic principle of privacy, by pinning every coin that goes through their platform to the official registered natural person names of the humans that are for some reason responsible for that money. This establishes a chain of responsibility. A policeman may ask "you transferred the coin out of coinbase, didn't you?" and you either answer whom you sent the money, admit to the crime paid for with it at some point, or volunteer for 'obstruction of justice'. Now queue Trumpian illegalogics. Honestly this world is sick. It's sick because reality isn't honorable. It's sick because we pretend it is, lie and deceive to make it so. It's sick because when we do fail, it is so unimaginably horrible, yet passes like a slow breeze. Coinbase guy "I guess Coinbase just isn't for you" No shit sherlock. Guess they're happy 'freedom' gives them the ability to deceive, misguide and subject to money extraction person by person. They must be happy to receive from the governments the required protection against justice - that no good man has the right to do it. That money alone guides the believes of society, and I should simply sit back and watch the spectacle: THE TOWER OF BABEL where we stop to understand one another, where value and meaning take on forms beyond describable abstraction. You are given believes, find meanings, all calculated ahead of time to confuse your outcomes, and give you meaning where there is none. To allow you to operate as a perfect cog for a machine that's nobody's at all, serving nothing.