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Coinbase is exploring the addition of new currencies
- mathattack 8y agoIs this Coinbase throwing a Hail Mary on the way down? What happens to the wallets if they go under? Is it hard to disentangle the coins?
- elliekelly 8y agoIt doesn't look like it would be easy. From their FAQ[1]: >U.S. Customers - Coinbase stores all customer fiat currency (government-issued currency) in, custodial bank accounts, or in U.S. Treasuries. >Non-U.S. Customers - Coinbase stores all customer fiat currency (government-issued currency) in segregated, custodial bank accounts. You'll notice the non-U.S. customer cash is held in segregated, custodial bank accounts while the U.S. customer cash is held in custodial bank accounts and U.S. Treasuries. This leads me to believe the corporate cash is co-mingled with cash that's earmarked as belonging to investors. That might not sound like a problem but if Coinbase goes under then creditors will stake a claim against the entire account. The best case scenario there would be that Coinbase keeps meticulous records and a bankruptcy court would return client funds in a few years. [1]https://support.coinbase.com/customer/portal/articles/1662379-how-is-coinbase-insured- https://support.coinbase.com/customer/portal/articles/166237...
- mathattack 8y agoThat is if there are funds, no? I’m surprised they can do this. Is it because US laws are more lax or vague on crypto?
- elliekelly 8y agoYou're correct, that's all assuming they don't "accidentally" spend customer funds on corporate expenses which is obviously fairly easy to do when all of the funds are in the same account. I'm honestly a bit surprised this hasn't come up with regulators yet. Even under current U.S. law I'm not sure how Coinbase can take custody of client funds without being either an OCC chartered bank or an SEC (or NFA) registered broker. Coinbase is absolutely functioning as a bank and there's a pretty strong argument they're operating as a forex broker. Banks and broker-dealers have strict rules around segregation of client funds and securities for the exact purpose of protecting customers' ability to promptly access their funds/assets in the event the custodian goes under.
- simonebrunozzi 8y agoIn an ideal world, initiatives like this one would be properly regulated to protect consumers from exploitation. I don't know if Coinbase is to blame or not; certainly, lots of people will lose money in the crypto game. They might deserve it (because of greed!), but still...
- gammateam 8y agoCoinbase exacerbated the exploitation by only allowing users to buy one or two cryptocurrencies to get access to the broader crypto ecosystem. 1) This mitigates that. 2) Simultaneously allows Coinbase to collect commissions. 3) Allows Coinbase to stay competitive while other exchanges enter the US/European market with the ability purchase with US banks and debit and credit cards.
- cft 8y agoIn an ideal world, people are free to buy and sell what they want. You feel patronizing to the people who need to be "regulated", but I feel that people should have their own agency.
- donedealomg 8y agoLike hardcore drugs and guns?
- jeromegv 8y agoSure, because that never ended badly before.
- chasing 8y agoIn an ideal world everyone would be perfectly informed, no one would ever runs scams, all food and medicine would always be safe no matter what, and cars and weapons would only affect the people who purchased them.
- CryptoPunk 8y agoNo one ever argued that in a free society, no one would get scammed. The argument is that freedom is worth its inconveniences.
- perseusprime11 8y agoThey seem to be in a rush to make as much commission as possible before the bust.
- booleandilemma 8y agoBitcoin is losing its luster isn’t it? They’re thinking it’s time to diversify.
- jgh 8y agodiversify into what exactly? The entire cryptocurrency ecosystem seems highly correlated. Take a look at coinmarketcap.com, the charts are essentially the same for nearly all the listed coins.
- atomical 8y agoDiversify in the trading fees that come from listing other coins.
- dehrmann 8y agoThey're trying to take more slices of a shrinking pie, hoping to capture enough of the long-term cryptocurrency market share to justify their current size and valuation. It's also a really good time to muscle-out some of the weaker players.
- empath75 8y agoThey want you to have as many Ponzi schemes as possible to invest in.
- 2bitencryption 8y agoMaybe previously they could survive off BTC alone, and it benefited them to focus on the healthiest currency, but now BTC isn't doing too hot, so they feel the need to cast a wider net so they can get a head-start on the next craze, should it come?
- davnicwil 8y agoGenuine question, what does not too hot mean? Relative to what and/or when?
- 2bitencryption 8y agoI don't necessarily mean "market value" by that; I mean something more like "public perception". Since the public perception of Bitcoin heavily influences whether the average Joe is going to trade on Coinbase or not.
- davnicwil 8y agoSure, that makes sense. But I don't see what better indicator you could have than market value about public perception of an asset, especially one as abstract as a cryptocurrency. Does it make sense to pull the two apart and discuss them as separate things?
- JumpCrisscross 8y ago> now BTC isn't doing too hot Volatility is an exchange’s friend. Out of the entire cryptocurrency space, Coinbase is the one that makes sense—selling shovels.
- muhneesh 8y agoCrypto is a different ballgame than the stock market, given concentration of trading volumes in relatively few coins. To the extent that the investment philosophy leans more towards "HODL" as prices decrease, trading volumes will go down, and trading volumes predicate volatility.
- Hydraulix989 8y agoDesperate times call for desperate measures
- shiado 8y agoIf you ever want a fun simple math problem. Calculate how much hashing power you need to accumulate in order to 51% attack some of the lesser quality cryptocurrencies. It is very feasible for the right actor.
- baddox 8y agoMake sure to also calculate the upside of attacking a small cryptocurrency. I suspect the upside is generally less than the cost of the attack.
- markovbot 8y agoAnd if you don't want to bother doing the math, go to https://www.crypto51.app/ https://www.crypto51.app/
- shiado 8y agoInteresting site. Only thing I would change would be to find the attack cost based on block time. Ethereum has a block time of 15 seconds whereas Bitcoin has a block time of 10 minutes. This changes the amount of damage that can be done in a given amount of time.
- xur17 8y agoI welcome pull requests [0]! :) [0] https://github.com/tdickman/crypto51 https://github.com/tdickman/crypto51
- shshhdhs 8y agoNice! I didn't realize you were on HN, I've sent your site to friends before. I'm curious -- has your traffic increased or decreased lately (due to the bust)? Do you track your traffic or graph it at all?
- xur17 8y agoI track it via Google Analytics -> here's a screenshot of the last few months [0]. Traffic has been pretty steady over time with a few spikes from Hacker News or Twitter mentions. I believe the most recent spike in traffic is related to the 51% attack against Vertcoin [1]. [0] https://i.imgur.com/UwFrpgs.png https://i.imgur.com/UwFrpgs.png [1] https://bitcoinist.com/vertcoin-vtc-51-attack-100k-double-spend/ https://bitcoinist.com/vertcoin-vtc-51-attack-100k-double-sp...
- TazeTSchnitzel 8y ago“Coinbase Abandons Cautious Approach” seems a bit hyperbolic as a title. In fact, it sounds like they're still being cautious. They aren't saying they will list a ton of new “currencies”, they just listed a number they might want to explore, and they are going to take their time deciding which are reasonable: > Coinbase recently revamped its policy on new token listings. [… Coinbase] now goes public with its intention to “explore” the potential to list new assets in order to lower the impact of a listing. It also doesn’t guarantee which, if any, will make it through and be listed. > “Adding new assets requires significant exploratory work from both a technical and compliance standpoint, and we cannot guarantee that all the assets we are evaluating will ultimately be listed for trading,” the company said.
- deleted 8y ago[deleted]
- ec109685 8y ago“It makes sense that any company out there who has a cap table… should have their own token” That doesn’t seem long term cautious…
- pmorici 8y agoIt's the end game for sure. The whole ICO utility token thing we've seen over the past couple years has just been an intermediary step while companies navigate the regulations. The idea is that stock certificates, and the Depository Trust Company will be replaced by block chain tokens and dividends would be paid directly to the holder on the block chain. When he says it makes sense for everyone with a cap table to have their own token that is what he is talking about he isn't suggesting that every company in the world should jump on the ICO bandwagon. There are a bunch of companies pursuing this right now Coinbase is one, that's why they bought a broker dealer. Overstock / tZero is another.
- arcticbull 8y agoOr it could be replaced by Carta, and it is.
- jf- 8y agoI wonder, how low does crypto need to fall before coinbase becomes non-viable?
- rotskoff 8y agoIt's an interesting and complicated question, but it seems like the coinbase business model should be pretty dramatically affected by the massive sell-off. First, as prices go lower, the average value of a transaction is (probably) declining, so the money they make on fees is (probably) going down as well. Second, as the market looks worse and worse, the number of people casually entering or trading is likely declining too. The have a lot of correlated risk with the decline.
- gfodor 8y agoThe impact of the variables you mention can't be assessed without understanding the internals of their business. For example, if they have a lot of fixed or hard-to-change operating costs (like headcount) that have been taken on that now assume a certain amount of transaction volume, you may be right. But if they have just had their average revenue per employee spike over the last 18 months (after all, ETH is trading where it was in May last year) then what we just went through was more of a windfall-laden anomaly for their business to accrue a rainy day fund not necessarily something they were dependent upon. In any case, given the volatility of crypto and the survivorship of Coinbase vs all other exchanges, it'd be surprising to me if they didn't manage their business in a way that assumed a 10X cut in price could happen at any time.
- mcfunley 8y agoGreg would it really surprise you if a tech startup turned out to have done something stupid
- gfodor 8y agoHaha no not in general, but at this point Coinbase has survived some pretty severe market swings, so if you ask me with no additional info (of which I have basically none on Coinbase) I'd assume they at least have some institutional awareness that a 90% drop in all the coins they offer is not perceived to be an "INF sigma" event. (Which it probably was perceived as for a vast number of the know-nothing ICO schemes)
- jdlyga 8y agoThe crypto market is going bust. Quick! Toss in everything you can!
- system2 8y agoIt is already busted.
- crb002 8y agoGoogle, Microsoft, and AWS together have enough spare compute to 51% even BitCoin.
- shoshino 8y agoNo they don't.
- CharlesW 8y ago> No they don't. Can I ask how you came to that answer? https://www.crypto51.app/ https://www.crypto51.app/ says a one-hour 51% attack on Bitcoin would cost only $237K as I type this, which doesn't seem like much for tech behemoths (much less nation-states).
- ars 8y agoHe said compute, you responded with money. You are not comparing the same things. Specifically: Bitcoin is done on specialized ASICs, while the tech companies have general purpose CPUs.
- muhneesh 8y agoLet's call a spade a spade. This market is a bust, and there's no value-driven economic model to justify cryptos collectively being worth $50B-$100B. With any startup, there is an expected future value of the company discounted back to the present. It then just becomes a risk-weighted probability question of whether that startup will achieve that expected future value in the expected timeframe. Conversely, the valuations of the crypto market are driven mostly by momentum and prayers. It's ultimately a case study of what happens when you mix unsophisticated investors, no regulation, frictionless market entry, memes as an investment philosophy ("HODL") and the psychological highs of winning a lot of money. It's gambling, not investing. In terms of Coinbase - sure, they're selling pickaxes during a gold rush, but gold rushes end and the pickaxe salesmen go out of business too.
- jf- 8y agoBTC is still around $3500, not bad for something that was worth a few hundred three years ago. I'm not willing to call it dead just yet. There are plenty of assets that make little sense to value, and yet they are. The bias here is to assume that cryptocurrency is useless or valueless because the technology isn't all it's hyped up to be, and that is true, but value is not a rational game. Let's wait and see how it develops.
- muhneesh 8y agoI'm not arguing that BTC hasn't returned value to earlier investors. I'm arguing that cryptocurrencies don't have the same economic model as most startups - which is essentially the expected future value generated by their operations discounted to the presented. There are startups within that definition that have a low probability of achieving such - but it's the same fundamental economic model that applies to Apple that applies to a seed-stage biotechnology startup. This doesn't extend to cryptocurrencies - given that currencies don't generate operating cash flows.
- jf- 8y agoSure, there's no rational way to predict what bitcoin "should" be worth like with a startup, or any other company. Exactly because it's less a technology and more a social construct, as you say it's based on momentum and prayers, it's worth what people think it's worth. We may not be disagreeing, I took "this market is a bust" and the picaxe seller analogy to mean that you foresaw cryptocurrencies dying out completely, but you may have just been referring to the crash that's already happened.
- deleted 8y ago[deleted]
- Animats 8y agoStrange timing. Most of the cryptocurrencies other than Bitcoin look terrible right now. Why get into the lower-tier ones?
- exitcode00 8y agoSeems odd they didn't include Dash
- apo 8y agoMany coin projects hope for a Coinbase listing as a way to boost exchange rate. Broader markets mean more liquidity, which in turn means more investor interest. I'd like to offer a counterpoint: that Coinbase listing is likely to kill the tokens that get listed. Shitcoin speculators are attracted to volatility, not technical merit. The wilder the swings, the more engaged they become. By adding liqudiity to a token, Coinbase dampens volatility. Projects must then compete on technical merit, which means most will fade away as new tokens not listed on Coinbase emerge. Second, shitcoin speculators trade with the understanding that they can evade taxes by trading on unregulated exchanges. By muscling out competitors, Coinbase will drive middle tier exchanges out of business. Given its strict guidelines around AML/KYC, Coinbase will make it very difficult for speculators to conceal their tax liabilities. This in turn will drive out most speculators who will see little advantage of cryptocurrency over traditional forex or penny stocks. Bottom line, this move will not increase demand for trading more mature tokens, but dry it up. Speculation will instead take place on thinly traded, unregulated exchanges.
- mihaifm 8y agoInteresting point of view, although crypto market has proven irrational most of the time. But indeed liquidity tends to bring the price closer to the real value, which is much lower than the current traded value for most of these tokens.
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- rhegart 8y agoCrypto may have its usage but the coins themselves aren’t worth very much and the market does not value them very much. Why? Only maybe 3% of crypto buyers understand the technology, understand the boom/bust cycles, and essentially understand what exactly it is they are buying. The other 97% are irrational actors. They are common people who hopped onto the craze after the wild media frenzy, heard from their colleagues about a magic coin that exponentially increases in value, poor and lower middle class from other countries who really don’t understand it, and the tech pseudo crypto literate community who repeat the similar phrases: the technology is legit, but some coins are overvalued, alt coins are useless but etherum and btc are useful, crypto is like the dot com bubble and a few coins will survive and turn into the next tech behemoths. I belong to this latter group though my ego might think otherwise. In my eyes the valuation is due to the volatility from the 97% of irrational actors, many who pump and dump, and the big players who can do sketch actions with little oversight. This is not an investment class I feel confident in purchasing if it’s almost completely irrational. I am at the mercy of others and chaos and long term these factors will likely converge to a significant loss for me. The one hope being that there comes to be significant value unknown to us now but comes in the future.
- KasianFranks 8y agoMore emotionally charged anti-crypto commentary that will not age well. If you've ever spent time as a quant, you'd know everything about crypto is about it being a trading vehicle with global public market exposure. Capital is raised from the capital markets and if it swells, ride it.
- ineedasername 8y agoseems like with the collapse of crypto prices they see no room for growth in the near future except to open the flood gates to any coin with even a bit of value. It seems kind of desperate, but is there a downside in this for them? Apart from their own infrastructure costs to implement.
- mihaifm 8y agoThe recent market crash is partly the exchanges’ fault. Listing every possible coin out there exposes people to unfinished and shady products. Just looking at that list things like Storj and Tezos, or even Eos and Cardano are very questionable choices. No one seems to take a stance against this garbage. While Coinbase is currently more selective, with this type of move they’d probably join the rest of the pack. Also I’m not sure why they don’t include Nano in that list, which is one of the few cryptocurrencies that can actually be used as a currency.
- elliekelly 8y agoEven highly regulated exchanges don't vet for quality like you're suggesting. Exchanges merely set disclosure requirements so investors can make their own informed decision but even that only goes so far. Herbalife is on NYSE and Tesla on NASDAQ, for example.
- arcticbull 8y agoTesla is an actual car company making actual fun awesome cars. Dentacoin is... a coin for dentists to...
- elliekelly 8y agoDon't get me wrong: Tesla the technology is awesome. The veracity of Tesla's financial disclosures[1], on the other hand, leave much to be desired. [1] https://www.reuters.com/article/us-tesla-sec/u-s-securities-regulator-subpoenas-tesla-on-model-3-production-estimates-idUSKCN1N71QY https://www.reuters.com/article/us-tesla-sec/u-s-securities-...
- nivexous 8y agoAnd yet they don't support Bitcoin SV, the only coin that's still Bitcoin (the idea) at this point, and gives their company its name. How ironic.
- throwaway487552 8y agoThis is an agony. An attempt to support falling volume.
- jboggan 8y agoThat's quite the url TechCrunch chose for the story.
- ToFab123 8y agoMany comments here about investing in crypto is same as gambling. So what if it is? (and it is in my opinion). I buy a little bit of crypto each month and are just leaving them for a couple of years to see what happens. Why? Because the odds in the crypto lottery is better than any other lottery that I know of.
- timr 8y agoThe difference is, investing is nothing like a lottery. When you invest, you're putting money to productive economic use. There is some chance of loss, but that chance doesn't define the investment. When you gamble, you're putting money on a random number. Bitcoin is "meant" to be a currency, so it's really neither thing. But people are definitely gambling on its price fluctuations (just as people gamble with stocks, bonds, real estate, and other commodities).
- arcticbull 8y agoThere are no published odds in the crypto lottery, You’ve been doing nothing but lose money for a full year and have nothing but some heavy bags to show for it. The counter would be so what if craps is gambling? I go to the craps table every payday and throw $1000 on hard eight. Why? Because the odds of winning at craps are better than the odds of winning at anything else in the casino! At least craps odds are published. Even as everyone is freaking out about a market downturn right now if you’ve been putting that same money in the S&P 500 over the course of the year you’d be either break even on ticker price or probably up 2 to 3% in total returns, instead you’re down 80% and that’s if you’ve been only in BTC, some of the alts are down 99.95% and you’d have shares of real productive companies and their future revenues to show for it.
- StavrosK 8y agoHow come they don't list Monero? They added a bunch of less popular coins, I wonder what's going on with that.
- CryptoPunk 8y agoAll the ones listed are ERC20 tokens on Ethereum. Maybe Ethereum's much greater security against a 51% attack was a factor in the decision.
- whoisninja 8y agothey're doing so so that their same investors who have investments in these garbage tokens, can off load them - and leave retail people holding those bags full of non-sense. Ethereum and 1000 other coins have simply created too much hype first and then bad reputation for the original cryptocurrency i.e. Bitcoin. There are people who think Ethereum is Bitcoin 2.0 but they don't understand that Bitcoin is built with the strongest fundamentals. First of before making guesses, if you really want to know about this industry - try the applications, try to play with it (even if you put $10) - run full nodes, try wallets, try sending transactions. Trust me it is fun and you understand the basics then. Secondly, separate out the financial markets side from the technology and it's potential itself. Even gold use-case initiated at some point in history. Not everyone started thinking of gold as store of value, so initially it price must have fluctuated quite a bit as well. Third, try to understand how Bitcoin actually works - what is proof of work and why it is such an innovative idea to implement a decentralized network. I mean this is a very large network with almost 100% uptime, close to 10 years of history, storing Billions of dollars of worth of value and that people have moved 100s of millions of dollars worth Bitcoin with very little tx cost and time. I mean this alone requires a lot of credit as technology - no one needs an affirmation from someone like Jamie Dimon to know it is valuable or not - he doesn't know, no one does at this point. Statistically speaking, most experiments fail so it is a risk-averse position for someone in that position to say it will fail IMO. But opinions don't matter. Rome was not built in a day. Even the central banks and modern banks were not built in a day. Whatever these cryptocurrencies can replace or improve, let them take their due course or even if they fail. People are too much stuck on the financial market side of it, it is important to bootstrap it and take it mainstream but what happened in 2017 was a unsustainable and hack-ish way of bringing hype to this industry. Please read if you're really interested : book:Bitcoin standard, please read works of Nick Szabo, read upon origins of digital money and cypherpunks behind Bitcoin
- whoisninja 8y agoI should also mention that biggest technical debate to understand right now is scaling in this space for most part. Smart contracts is not that big of deal at the moment IMO. These are all open-source developments, adding proven features from one to other is always going to happen over time. For scaling - you need to read understand a bit about pros and cons of on-chain scaling(ex. bigger block sizes,proof of stake, sharding etc.) and off-chain scaling (ex. layer2/lightning). You might be surprised to learn that Bitcoin might be the only one or at least one of a couple that has/have the right fundamentals in terms of technology, which of course can still fail.
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- babz 8y agoLinkkoin.com is giving 5$ in BTC for registration, check it out!
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