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Coinbase Custody Is Officially Open for Business
- yohann305 8y agoNot sure if this is related or not, but Coinbase's cryptocurrencies of choice (Bitcoin, Ethereum and Litecoin) just got a huge price bump in the past 2 hours which makes total sense because if this "Coinbase Custody" system is adopted by businesses and institutions, huge amount of money will be poured into these cryptocurrencies which will dwarf the current price. Am I missing something or it makes sense?
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- rekshaw 8y agoWho the hell knows with cryptocurrencies. Investor confidence sways easily and government approvals can make or break viability not to mention most of the populace (including the institutions) have no idea how to practically make use of them. It's probably here to stay, but (hopefully) in a different iteration than we're used to today: more eco-friendly and sustainable.
- 21 8y agoAs someone who watches the price of bitcoin in detail every day, the price bump from today is not related to this news. It's just usual market activity (stop hunting)
- kylebenzle 8y agoAre you saying that if you were a trader or just in the market to buy and sell Bitcoin, and somehow you knew, 100%, 24 hours before anyone else, that Coinbase was announcing this, it would not influence you at all? Because that is what you are saying.
- 21 8y agoYes, this is what I am saying. This is minor news. This is old news. It was known that this was coming since at least November: https://medium.com/@barmstrong/announcing-coinbase-custody-a-digital-currency-custodian-for-institutions-907166d7af85 https://medium.com/@barmstrong/announcing-coinbase-custody-a...
- briatx 8y agoInstitutions want investments that confer actual rights, something which these cryptocurrencies do not do. If you are expecting a large influx of institutional investment money, I expect you will be disappointed.
- jeremyt 8y agoThat’s not true. For example, owning bitcoin gives you property rights.
- DennisP 8y agoThat's a good criticism of ICOs that fund specific teams, which are somewhat analogous to company shares. Base layer cryptocurrencies on decentralized platforms are more like commodities and foreign currencies, which don't confer rights either but still attract massive investment.
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- xiphias 8y agoIt would make sense if only those (+bcash) would have changed, but no, this is just normal volatility in cryptocurrency markets.
- kylebenzle 8y agoI would say Bitcoin Cash is Coinbases's currency of choice. They have pushed for on-chain scaling for years and have been very vocal about how horrible Blockstream (small blocks) has been for Bitcoin.
- ianhawes 8y agoIt's a shame that Coinbase, of all people, demands payment for Coinbase Custody in a fiat currency of US Dollars.
- wmf 8y agoI think of Coinbase as "cryptocurrency for people who don't believe in cryptocurrency" so it's not surprising from that perspective.
- robertAngst 8y agoPlease. Coinbase has kept my bitcoin safe since 2011. They also have free payments to friends with their email + shift card. Yes their customer service sucks, but they have provided tens of thousands of dollars in value to me.
- wmf 8y agoI want to clarify that there's plenty of value around cryptocurrency that doesn't involve believing in it, but it helps to understand the different worldviews.
- hapnin 8y agoI've been holding btc in paper wallets since 2011. They're easy, free and no one has access to my btc but me.
- robertAngst 8y agoI like my 2fa, hope your house doesnt burn down.
- hapnin 8y agoFireproof boxes. I hope Coinbase gives you your btc when the run starts next year or two.
- Animats 8y agoTerms: Setup fee: $100,000 USD Annual fee: 1.2% of the balance. Minimum balance: $10,000,000 USD Insurance: No info available.
- ojr 8y agoInsurance: https://www.coinbase.com/legal/insurance https://www.coinbase.com/legal/insurance
- Animats 8y agoThat's Coinbase generally, not the custodial service.
- ojr 8y agoIt says individual balances are FDIC insured up to $250,000. which is lower than the setup fee and minimum balance for the custodial account, I share the link to show they have some systems in place, speculation and trading will never be risk-free I think
- gremlinsinc 8y agoThis is the most poorly named venture, there's a huge political battle going on about immigrants and custody of their children at the border, custody itself usually goes hand in hand with 'battle'. Having worked with foster children, trying to adopt, when they went back to a relative, and we lost custody it was painful. Custody to MANY MANY people in America has VERY negative connotations.
- wmf 8y agoThe concept of financial custody goes back hundreds of years (although I realize most HN readers have probably never heard of it); it doesn't make sense to abandon that terminology over a short-lived political crisis.
- gremlinsinc 8y agoI'm sure there's many things they could call it though, that would have more positive overtones. From a branding/marketing perspective. Edit: For example, why not call it Coinbase Custodian? Totally different connotation, and better name IMHO.
- JumpCrisscross 8y ago> why not call it Coinbase Custodian? "Coinbase Custody" tells me exactly what they're doing. "Coinbase Custodian" makes me think they're launching a janitorial service.
- workinfunk 8y agoSo you're familiar with "custody" as a term of art, yet not "custodian", very interesting, not saying you're lying, just interesting.
- cbase22 8y agoCoinbase stole $30,000 from me and won't return it. They listed a new coin (bitcoin cash) without prior announcement. I bought $30,000 worth at $5000 each. It went from $500 to $9000 in a matter of minutes. However, while allowing people to buy the coin at very high prices, they also froze everyone's ability to sell the coin. They only allowed people to sell it on their market again, about 24 hours later, after the coin went down to $1,000. They say that coinbase engineers knew about the coin being listed beforehand (obviously) and bought a bunch before listing it publicly (an unannounced), then the insiders sold it all for a huge profit. What lesson did I learn? Coinbase is crooked. Oh well. Lock 'em up
- ceejayoz 8y ago> What lesson did I learn? "Gambling is dangerous"?
- r0fl 8y agoYou invested money in a completely unregulated asset class. Buyer beware Coinbase did not steal anything from you. Sometimes you get lucky with a risky investment sometimes you lose it all. That’s why they are called risky investments
- 21 8y agoStole has a particular legal definition. Assets being stopped for trading occurs in all markets, including in the highly regarded US stock market. You wanted to participate in a pump and dump, and now you are angry that you couldn't do the dump. You thought it was easy money, well, now you know one aspect that you didn't consider (that selling might be suspended)
- infogulch 8y agoEither the market is open or closed, and when that changes is a very well-known schedule (for the most part). Even the US stock market would run into some very unhappy people if they partially closed a market (e.g. only allowed buying, not selling) or they closed a particular stock at their whim. I'm not saying this wasn't risky or dumb, I'm just saying the US stock market is a poor counter-example because both of the things that happened in this case are exceedingly unlikely to happen on the US stock market.
- beefield 8y agoNext step: Coinbase gives discount of custody service fees - or even pays the deposit maker a fee (a.k.a interest) if it is allowed to lend coins forward while coins are within custody (a.k.a fractional reserve banking).
- wereHamster 8y ago"fractional reserve banking" would be the case if Coinbase lends more than it holds in their accounts. That's impossible with bitcoins.
- occamrazor 8y agoThat's possible. They can lend the same bitcoins to many different people, with the expectation that not all of them will withdraw the borrowed coins at the same time.
- erikpukinskis 8y agoHow do you lend the same cash to two people? Don’t people take loans to spend the money?
- occamrazor 8y agoIf Coinbase customer A borrows bitcoins and transfers them to Coinbase customer B, those bitcoins never leave Coinbase, assuming that customer B does not transfers them immediately out of Coinbase. Same happens if Coinbase customer A tranfers 1 BTC to Bitstamp customer B and Bitstamp customer C transfers 1 BTC to Coinbase customer D. Fractional reserve banking can happen (and did happen) even without a central bank, with gold backed currencies.
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- erikpukinskis 8y ago
- ricksanch88 8y agoThey can't even get their two factor authentication to work. Their customer service a joke, and their processing takes too long. Why people are hyped over their new products / features knowing how shit their old ones are is beyond me.
- willio58 8y agoEvery time a new Coinbase feature or product is posted on HN most of the comments are anti-Coinbase.
- hapnin 8y ago"Hold my private keys" has the same intellectual heft as "hold my beer and watch this".
- sicon 8y agoA long time ago I withdrew 5 BTC, after about a week I had my money in my bank and still had 5 BTC in their wallet. I withdrew it again and my bank received another payout. Hope they fixed that problem, but they haven't said anything to me yet.