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I really wish more startups (if you can call them that at this stage) would go public earlier. There are so many companies I'd love to invest in at much earlier

I really wish more startups (if you can call them that at this stage) would go public earlier. There are so many companies I'd love to invest in at much earlier in their life. Coinbase is one of them for sure.

xiphias2 6y ago
Is there any reason to invest in it instead of jusr buying Bitcoin? I remember the ,,thin protocol vs thick protocol'' comparisions that said that for Internet it was worth investing in the companies over the internet, as with Bitcoin, just buying it can give a better return.
- sna1l 6y ago
  If another cryptocurrency rises to overtake Bitcoin, or even just grow larger, Coinbase will profit from that (assuming they support it) vs Bitcoin.
  - xiphias2 6y ago
    Bitcoin was made more and more secure over 10 years by disabling every feature that was not necessary to make it a digital store of value (like addition/substraction as they could overflow). If there are new ways to take away even more features from it, I'm not sure why they couldn't be taken away from Bitcoin as well to improve its security. Ethereum is a complementary to Bitcoin that's a more complex and less secure, less scarce store of value, and it's much more about running complex financial contracts. As these protocols have strong network effects that give their value, it's really hard to just ,,overtake'' them.
- ve55 6y ago
  Coinbase is more about the ecosystem than BTC itself. It's likely that BTC doing well is good for Coinbase, yes, but they stand to benefit from many other things, including other cryptocurrencies, more users adopting it (while the price may not increase), and other areas like custody services, decentralized finance services, and whatever other products they're still working on. Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on.
  - Melting_Harps 6y ago
    > Coinbase is more about the ecosystem And making it worse for people who simply don't know any better and catering to high-net worth people? Amazing business model. > Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on. So, they're a bank? The very incarnation of Bitcoin's persona non grata ever there ever was one. The apologists around here trying to suck off YC and VC money teet may be more complaint, but I hope this new wave of customers goes to Square/CASH (an easier transition since so many already have it on their phones) in order to steer them to companies that do actual meaningful work in this ecosystem, instead of act as a parasite as Armstrong and Coinbase do.
    - xiphias2 6y ago
      We need companies like Coinbase, I think they provide great value, although what they did with the BCH push and trying to centralize Bitcoin was a huge overreach. Bitcoin is stronger than the current financial system, so I'm not afraid of companies that bridge the two systems. Personally I stay with Bitcoin, as it has a monopoly position, unlike Coinbase that has great competitors for all their important products at this point.
      - Melting_Harps 6y ago
        > We need companies like Coinbase, I think they provide great value, although what they did with the BCH push and trying to centralize Bitcoin was a huge overreach. They once served as training wheels, but we have moved on from needing Coinbase a long time ago, and now they're a drag on over all UX of onboarding new users as they quickly realize how intrusive, invasive and altogether bad the experience is with delays, transactions being reversed, and accounts being frozen or canceled arbitrarily. It's clear their focus is operating as an investment/bank platform for wealthy investors, see Microstratgey's position, but it remains to be seen what they have done in the last 5 years that isn't antithetical to the values of the Bitcoin community as they simply cancel accounts they deem invalid (wikileaks), they sell information to 3rd parties and banks and the IRS, they serve as gatekeepers into a walled garden system that plays judge/jury/executioner if you transact with what they deem to be 'inappropriate' wallets. The list goes on, but over all we're worst off having them associated to Bitcoin at all at this point and we would be better off if Armstrong just focused on alt trading entirely as it seemed we had finally achieved getting rid of a lot of deadwood with the bcash fork. Sadly, most of us in the Community are actual staunch advocates of free market enterprise and commerce so we cannot do to them what they do to others out of sheer principal. To this day the best exchange in my opinion was BTC-e, it served as the axiom of what we wanted most from an exchange which is to simply work, and despite all the hallmarks of being a massive exit scam they were the most honest of all until it got shutdown in 2017: its very telling the FBI/DOJ went after an anonymous Russian (Online only really) based exchange for 'money laundering' at a time when neither the SEC or the IRS considered Bitcoin 'money' at all. This was after having jailed Ross Ulbrich for Life plus 40 for simply hosting a website and acting as middle man and HSBC was caught red handed laundering money for the mexican drug cartels and they walked away with a fine.
- gruez 6y ago
  > Is there any reason to invest in it instead of just buying Bitcoin? "In a gold rush, sell shovels"
- kylebenzle 6y ago
  Yes! Bitcoin (the BTC chain) got it's GitHub repo hijacked years ago by corporate interests and the company Blockstream. The whole concept is a dead end and they are actively trying to push people into using their "second layer" solutions to the congestion and problems they have introduced. People like Greg Maxwell and Adam Back were able to kick out the original maintainers and are hell bent on making Bitcoin not work. Bitcoin Cash is the closest thing to "Bitcoin" now but Blockstream employees an army of Twitter and Reddit trolls to block any real discussion. Greg is basically a one-man-army himself at this point.
  - cheaprentalyeti 6y ago
    I just checked... it's about three to four years post-fork, and the size of the "Bitcoin" blockchain (as you call it) is (minus indexes) about 315 Gb. The size of the Bitcoin Cash blockchain is roughly 170Gb. I don't know what it was when they forked, but it should have been the same size. The people you accuse of hijacking Bitcoin seem to have a much higher transaction rate since the fork than the Bitcoin Cash team has achieved.
ve55 6y ago
Going public comes with a lot of work, expectations, obligations, and has a high requirement for corporate maturity. It's not easy, not always desirable, and it's definitely not feasible to do early on most of the time. I think what we actually want is the ability for us normal people to invest in private companies more easily, rather than for private companies to become public more easily. This is difficult partially due to the SEC and partially due to historic reasons for how private equity is generally allocated and traded, but I'm hoping it gets better some time. But I share the sentiment, I'm continually disappointed when there's a company I really want to invest in, but I know that I won't get a chance to buy it until 5 years later when it has already 100x'd and then just gets IPO dumped to retail, becoming more of a short-term casino (e.g. see all recent tech IPOs) instead of long-term bet placed intelligently early-on in the race. If I could purchase shares in anything from Stripe to Discord to even Chik-fil-A (not to mention a certain 10 or so certain YC companies...), I would in a heartbeat (and I'd be willing to pay a premium for this too!), but the privilege likely won't be given to me until I no longer desire it.
- ericd 6y ago
  Are you familiar with EquityZen and Forge? If you're accredited, they can make it feasible to invest in a number of private companies. Companies can make that difficult by exercising their ROFR consistently, but many don't.
  - doanerock 6y ago
    Wait can I really invest in stripe and buy shares before they go public using EquityZen? Is this correct?
    - ericd 6y ago
      AFAICT Stripe is one of those that aggressively ROFRs. I’ve been trying to invest in them for a while, but no luck.
  - ve55 6y ago
    It's an option to note, I haven't used them as I'm not sure I'd have a good chance of being able to get what I want (since obviously there has to be a seller for me to buy), and the fees also seem pretty notable (5%, and/or up to 2% annual), maybe with some other potential issues of distribution/ownership (it seems it's not equivalent to owning the shares, but owning part of another entity that does own the shares). But, it may be a lot nicer than nothing for some, so thanks for reminding me of it.
jtsiskin 6y ago
They don't want to. If you think they will still grown, I'm sure the owners do as well. They don't benefit from selling at a lower price than they think they will eventually, unless they need the cash. But if they need the cash, getting it from a single source like a VC comes with many other benefits. The only way it would work out for them is if 'going public' would give them significantly more money per share than a VC would. Which I guess may be possible
jedberg 6y ago
They used to go public sooner, before Sarbanes-Oxley (SOX). That law made it so onerous to be a public company that most companies avoid it for as long as possible now. And SOX was born because of Enron. So blame Enron for this trend.
centimeter 6y ago
The extreme amount of regulation around becoming a publicly traded company makes this infeasible except for large, mature companies that don't really have much asymmetric upside available anymore. These regulations were created mostly in the name of protecting "mom-and-pop" investors, but the net effect has mostly been to shut "mom and pop" out of the most lucrative investments. This might or might now be a good thing, depending on how valuable you think it is to decrease variance for "unsophisticated" investors.
ineedasername 6y ago
You can invest: 1) Indirectly: Find a publicly traded VC firm that owns a piece of the startup(s) you like, and invest in them. You'll benefit from the upside if those startups do well, and be buffered from the downside through the VC firm's diversification. 2) Directly: There's a few ways to invest through secondary markets. Sharepost & EquityZen provide some access in this area, possible others as well. If you're interested in Coinbase in particular, EquityZen has you covered: https://equityzen.com/listings/?q=coinbase https://equityzen.com/listings/?q=coinbase
- electriclove 6y ago
  Have you done either? What was the experience like?
  - ineedasername 6y ago
    Have you done either Not at all, I just like to follow the industry. It's a fascinating time to be a spectator from the sidelines. I'm perfectly happy with the "aggressive" setting on my retirement fund, paying 0.08% annual fee (that's $0.80 per $1,000) with an average return of 7%-10% over the last 20 years. I'll wind it down to less aggressive as I get older. Apart from that, I have little trust in myself to, on average, make decisions that will outperform the above. My tolerance for risk of that sort is pretty low, and I'm not particularly motivated by money beyond the comfortable lifestyle I have now: It's zero debt, will see college tuition paid for my 3 kids, a reasonable retirement ready in a few more decades, and some assets to leave to my children to make their lives slightly easier when I ultimately pass away. I guess I'd like to have more money, but it's not a burning desire and I don't see a path to it that doesn't risk either quality of life, lots of stress, or both.
- wp381640 6y ago
  3) get a job at the startup
tofuahdude 6y ago
Sounds like you should be a VC!

xiphias2 6y ago

Is there any reason to invest in it instead of jusr buying Bitcoin? I remember the ,,thin protocol vs thick protocol'' comparisions that said that for Internet it was worth investing in the companies over the internet, as with Bitcoin, just buying it can give a better return.

sna1l 6y ago
If another cryptocurrency rises to overtake Bitcoin, or even just grow larger, Coinbase will profit from that (assuming they support it) vs Bitcoin.
- xiphias2 6y ago
  Bitcoin was made more and more secure over 10 years by disabling every feature that was not necessary to make it a digital store of value (like addition/substraction as they could overflow). If there are new ways to take away even more features from it, I'm not sure why they couldn't be taken away from Bitcoin as well to improve its security. Ethereum is a complementary to Bitcoin that's a more complex and less secure, less scarce store of value, and it's much more about running complex financial contracts. As these protocols have strong network effects that give their value, it's really hard to just ,,overtake'' them.
ve55 6y ago
Coinbase is more about the ecosystem than BTC itself. It's likely that BTC doing well is good for Coinbase, yes, but they stand to benefit from many other things, including other cryptocurrencies, more users adopting it (while the price may not increase), and other areas like custody services, decentralized finance services, and whatever other products they're still working on. Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on.
- Melting_Harps 6y ago
  > Coinbase is more about the ecosystem And making it worse for people who simply don't know any better and catering to high-net worth people? Amazing business model. > Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on. So, they're a bank? The very incarnation of Bitcoin's persona non grata ever there ever was one. The apologists around here trying to suck off YC and VC money teet may be more complaint, but I hope this new wave of customers goes to Square/CASH (an easier transition since so many already have it on their phones) in order to steer them to companies that do actual meaningful work in this ecosystem, instead of act as a parasite as Armstrong and Coinbase do.
  - xiphias2 6y ago
    We need companies like Coinbase, I think they provide great value, although what they did with the BCH push and trying to centralize Bitcoin was a huge overreach. Bitcoin is stronger than the current financial system, so I'm not afraid of companies that bridge the two systems. Personally I stay with Bitcoin, as it has a monopoly position, unlike Coinbase that has great competitors for all their important products at this point.
    - Melting_Harps 6y ago
      > We need companies like Coinbase, I think they provide great value, although what they did with the BCH push and trying to centralize Bitcoin was a huge overreach. They once served as training wheels, but we have moved on from needing Coinbase a long time ago, and now they're a drag on over all UX of onboarding new users as they quickly realize how intrusive, invasive and altogether bad the experience is with delays, transactions being reversed, and accounts being frozen or canceled arbitrarily. It's clear their focus is operating as an investment/bank platform for wealthy investors, see Microstratgey's position, but it remains to be seen what they have done in the last 5 years that isn't antithetical to the values of the Bitcoin community as they simply cancel accounts they deem invalid (wikileaks), they sell information to 3rd parties and banks and the IRS, they serve as gatekeepers into a walled garden system that plays judge/jury/executioner if you transact with what they deem to be 'inappropriate' wallets. The list goes on, but over all we're worst off having them associated to Bitcoin at all at this point and we would be better off if Armstrong just focused on alt trading entirely as it seemed we had finally achieved getting rid of a lot of deadwood with the bcash fork. Sadly, most of us in the Community are actual staunch advocates of free market enterprise and commerce so we cannot do to them what they do to others out of sheer principal. To this day the best exchange in my opinion was BTC-e, it served as the axiom of what we wanted most from an exchange which is to simply work, and despite all the hallmarks of being a massive exit scam they were the most honest of all until it got shutdown in 2017: its very telling the FBI/DOJ went after an anonymous Russian (Online only really) based exchange for 'money laundering' at a time when neither the SEC or the IRS considered Bitcoin 'money' at all. This was after having jailed Ross Ulbrich for Life plus 40 for simply hosting a website and acting as middle man and HSBC was caught red handed laundering money for the mexican drug cartels and they walked away with a fine.
gruez 6y ago
> Is there any reason to invest in it instead of just buying Bitcoin? "In a gold rush, sell shovels"
kylebenzle 6y ago
Yes! Bitcoin (the BTC chain) got it's GitHub repo hijacked years ago by corporate interests and the company Blockstream. The whole concept is a dead end and they are actively trying to push people into using their "second layer" solutions to the congestion and problems they have introduced. People like Greg Maxwell and Adam Back were able to kick out the original maintainers and are hell bent on making Bitcoin not work. Bitcoin Cash is the closest thing to "Bitcoin" now but Blockstream employees an army of Twitter and Reddit trolls to block any real discussion. Greg is basically a one-man-army himself at this point.
- cheaprentalyeti 6y ago
  I just checked... it's about three to four years post-fork, and the size of the "Bitcoin" blockchain (as you call it) is (minus indexes) about 315 Gb. The size of the Bitcoin Cash blockchain is roughly 170Gb. I don't know what it was when they forked, but it should have been the same size. The people you accuse of hijacking Bitcoin seem to have a much higher transaction rate since the fork than the Bitcoin Cash team has achieved.

ve55 6y ago

Going public comes with a lot of work, expectations, obligations, and has a high requirement for corporate maturity. It's not easy, not always desirable, and it's definitely not feasible to do early on most of the time. I think what we actually want is the ability for us normal people to invest in private companies more easily, rather than for private companies to become public more easily. This is difficult partially due to the SEC and partially due to historic reasons for how private equity is generally allocated and traded, but I'm hoping it gets better some time. But I share the sentiment, I'm continually disappointed when there's a company I really want to invest in, but I know that I won't get a chance to buy it until 5 years later when it has already 100x'd and then just gets IPO dumped to retail, becoming more of a short-term casino (e.g. see all recent tech IPOs) instead of long-term bet placed intelligently early-on in the race. If I could purchase shares in anything from Stripe to Discord to even Chik-fil-A (not to mention a certain 10 or so certain YC companies...), I would in a heartbeat (and I'd be willing to pay a premium for this too!), but the privilege likely won't be given to me until I no longer desire it.

ericd 6y ago
Are you familiar with EquityZen and Forge? If you're accredited, they can make it feasible to invest in a number of private companies. Companies can make that difficult by exercising their ROFR consistently, but many don't.
- doanerock 6y ago
  Wait can I really invest in stripe and buy shares before they go public using EquityZen? Is this correct?
  - ericd 6y ago
    AFAICT Stripe is one of those that aggressively ROFRs. I’ve been trying to invest in them for a while, but no luck.
- ve55 6y ago
  It's an option to note, I haven't used them as I'm not sure I'd have a good chance of being able to get what I want (since obviously there has to be a seller for me to buy), and the fees also seem pretty notable (5%, and/or up to 2% annual), maybe with some other potential issues of distribution/ownership (it seems it's not equivalent to owning the shares, but owning part of another entity that does own the shares). But, it may be a lot nicer than nothing for some, so thanks for reminding me of it.

jtsiskin 6y ago

They don't want to. If you think they will still grown, I'm sure the owners do as well. They don't benefit from selling at a lower price than they think they will eventually, unless they need the cash. But if they need the cash, getting it from a single source like a VC comes with many other benefits. The only way it would work out for them is if 'going public' would give them significantly more money per share than a VC would. Which I guess may be possible

jedberg 6y ago

They used to go public sooner, before Sarbanes-Oxley (SOX). That law made it so onerous to be a public company that most companies avoid it for as long as possible now. And SOX was born because of Enron. So blame Enron for this trend.

centimeter 6y ago

The extreme amount of regulation around becoming a publicly traded company makes this infeasible except for large, mature companies that don't really have much asymmetric upside available anymore. These regulations were created mostly in the name of protecting "mom-and-pop" investors, but the net effect has mostly been to shut "mom and pop" out of the most lucrative investments. This might or might now be a good thing, depending on how valuable you think it is to decrease variance for "unsophisticated" investors.

ineedasername 6y ago

You can invest: 1) Indirectly: Find a publicly traded VC firm that owns a piece of the startup(s) you like, and invest in them. You'll benefit from the upside if those startups do well, and be buffered from the downside through the VC firm's diversification. 2) Directly: There's a few ways to invest through secondary markets. Sharepost & EquityZen provide some access in this area, possible others as well. If you're interested in Coinbase in particular, EquityZen has you covered: https://equityzen.com/listings/?q=coinbase https://equityzen.com/listings/?q=coinbase

electriclove 6y ago
Have you done either? What was the experience like?
- ineedasername 6y ago
  Have you done either Not at all, I just like to follow the industry. It's a fascinating time to be a spectator from the sidelines. I'm perfectly happy with the "aggressive" setting on my retirement fund, paying 0.08% annual fee (that's $0.80 per $1,000) with an average return of 7%-10% over the last 20 years. I'll wind it down to less aggressive as I get older. Apart from that, I have little trust in myself to, on average, make decisions that will outperform the above. My tolerance for risk of that sort is pretty low, and I'm not particularly motivated by money beyond the comfortable lifestyle I have now: It's zero debt, will see college tuition paid for my 3 kids, a reasonable retirement ready in a few more decades, and some assets to leave to my children to make their lives slightly easier when I ultimately pass away. I guess I'd like to have more money, but it's not a burning desire and I don't see a path to it that doesn't risk either quality of life, lots of stress, or both.
wp381640 6y ago
3) get a job at the startup

tofuahdude 6y ago

Sounds like you should be a VC!