12 ms·

Fidelity launches trade execution and custody for cryptocurrencies

204 points by prostoalex 8y ago

SideburnsOfDoom 8y ago
In a gold rush, you get rich by selling shovels. You don't even have to have a strong opinion on whether there really is any gold to be found, in order to see the market opportunity for shovel sales.
tim333 8y ago
They don't say if the custody is insured against loss/theft which has been a sticking point for institutional investors. They basically can't stick your money in unless it is, and none of the existing custodians have been. I can see why insurers are reluctant when it only takes one or two insiders to transfer the coins to some account they control and say oops we've been hacked.
pastor_elm 8y ago
great time to get in on the dip
Theodores 8y ago
As I understand it Fidelity have bought a chunk of Bitcoin and are currently trying to buy more. They actually do not care about price, they just need the coins so they can setup these new financial things they will let their bigger customers buy into, as part of the portfolio. The cold storage thing is no biggie, they will be holding their new and shiny bitcoins in many, many wallets. So a customer of theirs will be able to effectively buy one of these wallets rather than a stake in a nebulous fund. I have heard no mention of them wanting to buy the 'fake crptocurrencies', i.e. anything except 'bitcoin', which I think has appeal to their customers in a way that 'ethereum' or 'crypto-kitties' does not. But is this really progress? If a cafe has customers wanting some new fad food, e.g. 'kale and pulled pork burgers' and if they have staff that have bought into the 'kale and pulled pork' hype then they might as well add it to the menu. This is becoming a trope: "No one said when some of these early-stage Internet companies in 2000 were going out of business, 'Gee, the Internet is toast,'" Jessop said. "We don't focus too much on the price. It's a foundational technology — people are trying to get exposure to the trend and expect volatility in the assets themselves." Could be said about fidget spinners - they have only got started! In debating this point with a bitcoin 'bore' I was told that there was no innovation in the internet after the dot-com crash until 'ajax came along' and no 'new innovation' came along after that until the iphone came along. I didn't see it that way, but was it?
- roymurdock 8y ago
  Bitcoin is useful for evading currency controls, semi-anonymous digital payments, and speculation Blockchain is a new type of database that has larger applications that involve the tradeoff between efficiency and trust To answer your bigger question you have to ask yourself what you define as "progress" - is Bitcoin/blockchain new? Yes. Is either useful? Sure, for people who are looking to move money around semi anonymously, enforce more expensive supply chain tracking solutions, or make money selling new financial products. Is that progress? If you, like me, don't see new database/financial engineering that benefits a small group of technologists and financiers as potentially equal in value to the raise in standard of living across huge sections of the world brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods, then you may be interested in this thesis: https://www.nber.org/papers/w19895 https://www.nber.org/papers/w19895 "While no forecast of a future slowdown of innovation is needed, skepticism is offered here, particularly about the techno-optimists who currently believe that we are at a point of inflection leading to faster technological change. The paper offers several historical examples showing that the future of technology can be forecast 50 or even 100 years in advance and assesses widely discussed innovations anticipated to occur over the next few decades, including medical research, small robots, 3-D printing, big data, driverless vehicles, and oil-gas fracking."
  - 21 8y ago
    > brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods Most of that stuff required financial engineering. The most developed countries on Earth, with the best of those things, also have the most developed financial markets. Coincidence?
    - Theodores 8y ago
      Sorry to mod you down... Antibiotics means Fleming, one guy worked it out, I wouldn't be here if it wasn't for him, my grandpa was one of the first to use penicillin and I don't see the bean-counters as having had anything to do with it, however, the war machine did. Henry Ford was the man that got America and the world motoring. He is an incredibly complex character however, he did not go to the city to raise money and he had no time for bean counters, hence the Jew-bashing nonsense that he got involved in. As for early motor innovation/discovery in Europe and America, it was the bicycle workshop that made it happen, not the bean counters with their 'financial engineering'. We are talking organic growth from paying customers buying bicycles from people that had workshops. The Wright Brothers also started with bicycles, hence the left/right hand thread they also lay claim to. Public roads also have a debt to the bicycle. Trains came before bicycles and roads ceased to connect towns when the trains were how people travelled. It was actually the bicycle and cyclists that got the roads paved, motorists were to come along a lot later. Your Interstate Highway System was again military-industrial complex, not some wonder brought to the world by bean-counters. Of course capitalism and the need to raise capital made a lot of things possible, the railways were obviously a massively speculative bubble at first. However, the industrial revolution is not a story of financial engineering. The bean counters had nothing to do with progress. And Henry Ford was not alone in wanting to avoid 'investors' like the plague. In the UK - cradle of the industrial revolution - the prominent industrialists tended to be Quakers with god rather than mammon on their side. (We skip over the slave trade part conveniently here - but you don't want that because that really is 'financial engineering', a.k.a. rape and pillage.)
pmorici 8y ago
I wonder if they are working with Coinbase behind the scenes on this or if this is a totally independent product. They have a partnership with Coinbase that lets you view your Coinbase balances from your account page on Fidelity.
omegaworks 8y ago
More capital wasted to entrench a fairly useless commodity[1] that requires electrical energy expenditure that rivals entire nations' usages[2]. We are bounding toward climate catastrophe and our largest institutions are taking stakes in actively destructive tulips. 1. https://www.tik.ee.ethz.ch/file/74bc987e6ab4a8478c04950616612f69/main.pdf https://www.tik.ee.ethz.ch/file/74bc987e6ab4a8478c0495061661... [pdf] 2. https://www.wired.co.uk/article/how-much-energy-does-bitcoin-mining-really-use https://www.wired.co.uk/article/how-much-energy-does-bitcoin...
- seibelj 8y ago
  The energy is available on the free market. Or acquired for the express purpose of blockchain mining (I.e. new geothermal energy created specifically for this industry and impractical to transmit other places). If you want to ban bitcoin mining because it “wastes” energy, there is an argument to be made for banning any industry not absolutely necessary for society because it destroys the planet. Why do we have sports stadiums? Rock concerts? Car racing? The other argument is that what bitcoin achieves through mining is only possible with financial institutions, the court system, and so on. What power does that system use? And finally, new innovations will likely end PoW mining for some major block chains like Ethereum, but it is extremely doubtful bitcoin will ever switch. Also, your first link is a white paper on scaling unrelated to the statement that bitcoin is a “useless commodity”, so I’m not sure why you are using it to back up your assertion.
  - omegaworks 8y ago
    The paper describes the problems inherent to bitcoin. I think blockchain might be a good fit for some things, but bitcoin makes a terrible currency. The relevant section: >Today’s representative blockchain such as Bitcoin takes 10 min or longer to confirm transactions, achieves 7 transactions/sec maximum throughput. In comparison, a mainstream payment processor such as Visa credit card confirms a transaction within seconds, and processes 2000 transactions/sec on average, with a peak rate of 56,000 transactions/secnsactions/sec on average, with a peak rate of 56,000 transactions/sec
deleted 8y ago
[deleted]
corv 8y ago
I'm disappointed of HN comments whenever cryptocurrency topics come up. People are forgetting that Nakamoto Consensus is a legitimate CS breakthrough concerning the Byzantine Generals Problem. Is it acceptable to bash every stock in the Nasdaq just because a second tech bubble popped and some SV companies are behaving unscrupulously? Frenzied speculation brought about inadvertent side effects but these should not detract from the fact that significant advancements are continuously being researched and implemented.
- mindfulplay 8y ago
  Well....There is a stark difference in appreciation for TCP/IP the computer science protocol versus the Cesspool that is the internet or the early AOL crap...
- arcticbull 8y ago
  Besides the battles over efficiency (it's bad) and novelty (it's not really), there are some truly fundamental blockers to adopting cryptocurrencies. For instance, this poor Redditor lost the keys to a wallet with $40,000 of crypto in it [1]. This happens all the time. Being your own bank is literally the worst. Plenty of jokes ensued: "It's just like the time I lost my car keys and need to buy a new car next day." "It’s just like the time that I lost my house keys and had to move into a homeless shelter." "It's just like the time I forgot my personal question to my 401k account and I got locked out forever, nobody could help me, and I lost the entire balance." Unlike all the efficiency and speed questions, this part here is a stated, inalienable objective of Bitcoin and other cryptocurrencies. This is the expected behavior. Some clown designed it to work like this. Imagine grandma trying to use this. Remember that time PayPal locked your account and you were so mad you couldn't get at your $600 for a few weeks? Now imagine you lost your life savings because you can't remember your password and literally nobody can help you now, or ever again - and thats the point. I'd imagine it'll destroy itself anyways, it seems like any random walk ends in 100% of coins lost to human inability to preserve access. Who cares how amazing the system is technically? It's designed to be actively hostile to human users. [1] https://i.imgur.com/RP7ighy.jpg https://i.imgur.com/RP7ighy.jpg
  - 8y ago
Immortalin 8y ago
Time to add crypto support to KloudTrader :) https://kloudtrader.com/narwhal https://kloudtrader.com/narwhal

204 points by prostoalex 8y ago

In a gold rush, you get rich by selling shovels. You don't even have to have a strong opinion on whether there really is any gold to be found, in order to see the market opportunity for shovel sales.

tim333 8y ago

They don't say if the custody is insured against loss/theft which has been a sticking point for institutional investors. They basically can't stick your money in unless it is, and none of the existing custodians have been. I can see why insurers are reluctant when it only takes one or two insiders to transfer the coins to some account they control and say oops we've been hacked.

pastor_elm 8y ago

great time to get in on the dip

Theodores 8y ago

As I understand it Fidelity have bought a chunk of Bitcoin and are currently trying to buy more. They actually do not care about price, they just need the coins so they can setup these new financial things they will let their bigger customers buy into, as part of the portfolio. The cold storage thing is no biggie, they will be holding their new and shiny bitcoins in many, many wallets. So a customer of theirs will be able to effectively buy one of these wallets rather than a stake in a nebulous fund. I have heard no mention of them wanting to buy the 'fake crptocurrencies', i.e. anything except 'bitcoin', which I think has appeal to their customers in a way that 'ethereum' or 'crypto-kitties' does not. But is this really progress? If a cafe has customers wanting some new fad food, e.g. 'kale and pulled pork burgers' and if they have staff that have bought into the 'kale and pulled pork' hype then they might as well add it to the menu. This is becoming a trope: "No one said when some of these early-stage Internet companies in 2000 were going out of business, 'Gee, the Internet is toast,'" Jessop said. "We don't focus too much on the price. It's a foundational technology — people are trying to get exposure to the trend and expect volatility in the assets themselves." Could be said about fidget spinners - they have only got started! In debating this point with a bitcoin 'bore' I was told that there was no innovation in the internet after the dot-com crash until 'ajax came along' and no 'new innovation' came along after that until the iphone came along. I didn't see it that way, but was it?

roymurdock 8y ago
Bitcoin is useful for evading currency controls, semi-anonymous digital payments, and speculation Blockchain is a new type of database that has larger applications that involve the tradeoff between efficiency and trust To answer your bigger question you have to ask yourself what you define as "progress" - is Bitcoin/blockchain new? Yes. Is either useful? Sure, for people who are looking to move money around semi anonymously, enforce more expensive supply chain tracking solutions, or make money selling new financial products. Is that progress? If you, like me, don't see new database/financial engineering that benefits a small group of technologists and financiers as potentially equal in value to the raise in standard of living across huge sections of the world brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods, then you may be interested in this thesis: https://www.nber.org/papers/w19895 https://www.nber.org/papers/w19895 "While no forecast of a future slowdown of innovation is needed, skepticism is offered here, particularly about the techno-optimists who currently believe that we are at a point of inflection leading to faster technological change. The paper offers several historical examples showing that the future of technology can be forecast 50 or even 100 years in advance and assesses widely discussed innovations anticipated to occur over the next few decades, including medical research, small robots, 3-D printing, big data, driverless vehicles, and oil-gas fracking."
- 21 8y ago
  > brought by electrification, refrigeration, antibiotics, internal combustion engines, public roads, and white goods Most of that stuff required financial engineering. The most developed countries on Earth, with the best of those things, also have the most developed financial markets. Coincidence?
  - Theodores 8y ago
    Sorry to mod you down... Antibiotics means Fleming, one guy worked it out, I wouldn't be here if it wasn't for him, my grandpa was one of the first to use penicillin and I don't see the bean-counters as having had anything to do with it, however, the war machine did. Henry Ford was the man that got America and the world motoring. He is an incredibly complex character however, he did not go to the city to raise money and he had no time for bean counters, hence the Jew-bashing nonsense that he got involved in. As for early motor innovation/discovery in Europe and America, it was the bicycle workshop that made it happen, not the bean counters with their 'financial engineering'. We are talking organic growth from paying customers buying bicycles from people that had workshops. The Wright Brothers also started with bicycles, hence the left/right hand thread they also lay claim to. Public roads also have a debt to the bicycle. Trains came before bicycles and roads ceased to connect towns when the trains were how people travelled. It was actually the bicycle and cyclists that got the roads paved, motorists were to come along a lot later. Your Interstate Highway System was again military-industrial complex, not some wonder brought to the world by bean-counters. Of course capitalism and the need to raise capital made a lot of things possible, the railways were obviously a massively speculative bubble at first. However, the industrial revolution is not a story of financial engineering. The bean counters had nothing to do with progress. And Henry Ford was not alone in wanting to avoid 'investors' like the plague. In the UK - cradle of the industrial revolution - the prominent industrialists tended to be Quakers with god rather than mammon on their side. (We skip over the slave trade part conveniently here - but you don't want that because that really is 'financial engineering', a.k.a. rape and pillage.)

pmorici 8y ago

I wonder if they are working with Coinbase behind the scenes on this or if this is a totally independent product. They have a partnership with Coinbase that lets you view your Coinbase balances from your account page on Fidelity.

omegaworks 8y ago

More capital wasted to entrench a fairly useless commodity[1] that requires electrical energy expenditure that rivals entire nations' usages[2]. We are bounding toward climate catastrophe and our largest institutions are taking stakes in actively destructive tulips. 1. https://www.tik.ee.ethz.ch/file/74bc987e6ab4a8478c04950616612f69/main.pdf https://www.tik.ee.ethz.ch/file/74bc987e6ab4a8478c0495061661... [pdf] 2. https://www.wired.co.uk/article/how-much-energy-does-bitcoin-mining-really-use https://www.wired.co.uk/article/how-much-energy-does-bitcoin...

seibelj 8y ago
The energy is available on the free market. Or acquired for the express purpose of blockchain mining (I.e. new geothermal energy created specifically for this industry and impractical to transmit other places). If you want to ban bitcoin mining because it “wastes” energy, there is an argument to be made for banning any industry not absolutely necessary for society because it destroys the planet. Why do we have sports stadiums? Rock concerts? Car racing? The other argument is that what bitcoin achieves through mining is only possible with financial institutions, the court system, and so on. What power does that system use? And finally, new innovations will likely end PoW mining for some major block chains like Ethereum, but it is extremely doubtful bitcoin will ever switch. Also, your first link is a white paper on scaling unrelated to the statement that bitcoin is a “useless commodity”, so I’m not sure why you are using it to back up your assertion.
- omegaworks 8y ago
  The paper describes the problems inherent to bitcoin. I think blockchain might be a good fit for some things, but bitcoin makes a terrible currency. The relevant section: >Today’s representative blockchain such as Bitcoin takes 10 min or longer to confirm transactions, achieves 7 transactions/sec maximum throughput. In comparison, a mainstream payment processor such as Visa credit card confirms a transaction within seconds, and processes 2000 transactions/sec on average, with a peak rate of 56,000 transactions/secnsactions/sec on average, with a peak rate of 56,000 transactions/sec

deleted 8y ago

[deleted]

corv 8y ago

I'm disappointed of HN comments whenever cryptocurrency topics come up. People are forgetting that Nakamoto Consensus is a legitimate CS breakthrough concerning the Byzantine Generals Problem. Is it acceptable to bash every stock in the Nasdaq just because a second tech bubble popped and some SV companies are behaving unscrupulously? Frenzied speculation brought about inadvertent side effects but these should not detract from the fact that significant advancements are continuously being researched and implemented.

mindfulplay 8y ago
Well....There is a stark difference in appreciation for TCP/IP the computer science protocol versus the Cesspool that is the internet or the early AOL crap...
arcticbull 8y ago
Besides the battles over efficiency (it's bad) and novelty (it's not really), there are some truly fundamental blockers to adopting cryptocurrencies. For instance, this poor Redditor lost the keys to a wallet with $40,000 of crypto in it [1]. This happens all the time. Being your own bank is literally the worst. Plenty of jokes ensued: "It's just like the time I lost my car keys and need to buy a new car next day." "It’s just like the time that I lost my house keys and had to move into a homeless shelter." "It's just like the time I forgot my personal question to my 401k account and I got locked out forever, nobody could help me, and I lost the entire balance." Unlike all the efficiency and speed questions, this part here is a stated, inalienable objective of Bitcoin and other cryptocurrencies. This is the expected behavior. Some clown designed it to work like this. Imagine grandma trying to use this. Remember that time PayPal locked your account and you were so mad you couldn't get at your $600 for a few weeks? Now imagine you lost your life savings because you can't remember your password and literally nobody can help you now, or ever again - and thats the point. I'd imagine it'll destroy itself anyways, it seems like any random walk ends in 100% of coins lost to human inability to preserve access. Who cares how amazing the system is technically? It's designed to be actively hostile to human users. [1] https://i.imgur.com/RP7ighy.jpg https://i.imgur.com/RP7ighy.jpg
- 8y ago

Immortalin 8y ago

Time to add crypto support to KloudTrader :) https://kloudtrader.com/narwhal https://kloudtrader.com/narwhal