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Many have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. In the end Co
by arnaudsm 6y ago
Many have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks.
In the end CoinBase (like every exchange) is a great product, but just a bank. It's centralized, hackable, has economies of scale, etc.
- rawtxapp 6y agoIt's an exchange, as soon as you're done trading, you can and should withdraw your coins to your personal wallet.
- waheoo 6y agoThis is such a trope. Do you pull your funds from interactive brokers after you're done trading? What about vanguard? 401k?
- spurdoman77 6y agoIn many cases it is probably goood choice to keep the coins in custodial, but the fact that you have a possibility for self-custody is great.
- RealityVoid 6y agoIt's great that you _can_ do this, but... a lot of times it does not make sense. Still, the option to do so is very important and valuable.
- rawtxapp 6y agoI'm not sure how you can pull stocks from an exchange once you're done trading. Personally, I deposit coins into an exchange, do my trade and withdraw it as soon as possible. Not just because I think there's a risk they might get hacked, etc, I also don't want them to hold my funds later on for reason x,y,z.
- ceejayoz 6y agohttps://en.wikipedia.org/wiki/Stock_certificate https://en.wikipedia.org/wiki/Stock_certificate
- psychlops 6y agoIn practice, you cannot take ownership of your certificates any more. There may still be brokers that do it, but fewer all the time. Stocks are held in street name and the brokers like it that way.
- tonfa 6y agoYou can move them to the DRS (https://ibkr.info/article/2192 https://ibkr.info/article/2192) but then it while take a while to move it back to your broker if you want to trade.
- StavrosK 6y agoIf I could withdraw thousands of dollars in cash from IB instantly and put them in a secure hardware wallet where they take no space, you bet I would do it every time I was done trading.
- josefresco 6y agoObligatory: https://notyourkeys.org https://notyourkeys.org
- jki275 6y agoI trust Vanguard. I don't trust the exchanges in the cryptocurrency world, coinbase maybe excepted.
- maxia 6y agoWould you ever want a paper stock certificate? https://www.giveashare.com/stock.asp?buy=google-stock https://www.giveashare.com/stock.asp?buy=google-stock
- mindcandy 6y agoIt’s not a trope. It’s being realistic about the problems and advantages of crypto. Problem: Counterparty risk from crypto exchanges is much, much higher than that of traditional banking. Advantage: Self-custody of crypto is much more secure than stuffing stock certificates under your mattress. Solution: Exchange crypto on crypto exchanges. But, don’t rely on them for custody any longer than necessary.
- jabroni_salad 6y agoI don't know about your brokerage, but my fidelity cash management account sweeps money into a set of FDIC insured bank accounts, which is a hell of a lot more than can be said for your coins. And anything that is parked in a security is protected by SIPC from the brokerage going insolvent. What will happen to your assets if coinbase's systems become inoperable or if customers try to withdraw more coins than coinbase has on hand? Ask Mtgox customers how they feel about where to park coins.
- vmception 6y agoThe amount of bitcoin on exchanges - including Coinbase - is at an all time low. People are learning the paradigm of self-custody, which the blockchain supports. You can stick with DTCC freezing markets, we arent.
- cma 6y agoTransferring it to your wallet takes the energy equivalent of burning like 20 gallons of gasoline or something, instead of just updating a micro penny database transaction.
- entropea 6y agoBitcoin and Ethereum are so slow and have such high fees that they actually actively encourage centralization by way of leaving your coins inside exchange wallets you do not actually own.
- deleted 6y ago[deleted]
- TedDoesntTalk 6y ago> We have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. Lots of things evolve and change and their original intent is twisted. It’s ok. Life goes on.
- adwn 6y ago> Lots of things evolve and change and their original intent is twisted. It’s ok. Life goes on. Maybe, but that doesn't mean that a technology is still useful after it's lost its unique selling proposition.
- aserafini 6y agoBut this is like saying email lost its unique selling proposition after Yahoo web Mail came along. Email was always useful and is still useful. Coinbase is like the first Webmail. Maybe it turns out most people like managing their Bitcoin through an app and not running a node 24/7 in the same way that most people are ok using an app for email even though it is still technically possible for anyone to run their own mail server.
- ketamine__ 6y agoHow does that decentralized fiat on ramp look?
- charcircuit 6y agoFiat on ramps are already decentralized. Anyone can sell cryptocurrency for fiat. There is no centralized list of people who are allowed to sell cryptocurrency for fiat.
- from 6y agoI believe it can be found at https://www.fincen.gov/financial_institutions/msb/msbstateselector.html https://www.fincen.gov/financial_institutions/msb/msbstatese....
- snicksnak 6y agocoinbase offers staking rewards now if you park your crypto. They are essentially a centralized bank/exchange. Decentralized exchanges exist but access is limited, while sophisticated users can interact with e.g. uniswap, sushiswap, directly, most will rather buy their tokens on exchanges like coinbase and never leave.
- fny 6y agoYou are still independent from central banks, which in this environment, is far more important.
- xadhominemx 6y ago> We have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. Who is “we”? Outside of criminal enterprises, no one has ever used Bitcoin for anything other than speculation and the occasional novelty purchase.
- nightski 6y agoHave to be honest, I have a small portion of my portfolio (1-3%) in Bitcoin simply as a hedge against inflation. It's neither speculative nor novelty and has replaced a portion of what would typically be bond holdings. It seems companies and major asset holders are now considering the same.
- pvarangot 6y agoI started like that, then it jumped, I recovered my cost basis plus expected inflation for years and taxes, and now it's more like 8/10% of my portfolio but I'm not touching it and I'll just see what happens. It was "free money" after all. It's the second time I'm doing this, the first time I had to spend the money on moving but those were mostly mined coins.
- a2tech 6y agoWe hate the central banks! We're going to take away the power from them and the government! slight inconveniences, fraud happens We need a place to store our coin and help securely move it! recreates central banks with even less regulation and security Profit!
- ceejayoz 6y agoI once saw crytpocurrency described as "speedrunning the evolution of the modern financial system".
- lvs 6y agoWith more carbon dioxide.
- fnord77 6y agoin reverse. the evolution of the modern financial system is less and less friction for each transaction, lower costs. crypto: more friction, slower transactions, higher transaction costs. And wicked exchange volatility. Plus no way to expand or contract the supply to prevent economic shocks. I like my fiat and central banks, thank you very much.
- bhupy 6y ago> I like my fiat and central banks, thank you very much. I do too! But some people don't. And it appears that there are now options for everyone, which seems...good?
- purple_ferret 6y agoWell Bitcoin was a huge failure in that regard. What it needed was inflation that scaled (to prevent hoarding), and ultimately, a way to obfuscate tracking. Imagine thinking knowing your dollar spend will be logged for all eternity is a more 'decentralized' alternative. But as with many idealists, Satoshi and his crypto friends probably didn't think too hard about the problems outside their expertise.
- simias 6y agoInflation is the catch 22 though. With a limited supply it seems like bitcoin may never successfully become a currency due to deflation, but at the same time without the carrot of massive gains you probably wouldn't have had any adoption at all. Most people owning bitcoin these days do it as a speculative investment, hoping that it'll be worth (a lot) more one day. It's not for nothing that the rallying cry of cryptocurrency zealots everywhere is "HOLD". I think the root of the issue is that bitcoin was created in a vacuum. Some guy didn't start minting euro bills in his basement until France and Germany though "hey, we could use that". The financial systems already existed, and they created the currency to unify pre-existing European currencies. Cryptocurrencies like Bitcoin don't have this institutional momentum so they need to reward its users to drive adoption, which is self-defeating in the long run because when I spend a 20 euro bill I don't think "uh, maybe I should just keep it for now, it'll be worth more tomorrow". Actually if anything I think the opposite due to inflation.
- swiley 6y agoThere are some services that are just easier to use crypto currency to pay for because the maintainers don't want to deal with payment providers. The paid version of cheogram is a good example. This really was the original idea behind bitcoin: dynamically selecting payment providers every ten minutes so they become a commodity.
- simias 6y agoBitcoin is pretty nice for vendors: no need to integrate with third party services with complicated terms and regulations, no chargeback etc... But from the client's perspective it's pretty crappy for basically the same reasons. In general if you want to impose a new payment system it's really the buying side that needs convincing. If tomorrow a significant portion of the population wants to buy good and services preferably with Bitcoins, that would drive adoption massively. Thing is, from a user experience standpoint cash and Visa and still vastly more convenient, so the vast amount of buyers won't want to bother with cryptocurrency at the moment.
- mciancia 6y agoWhile coinbase (and other exchanges) is centralised, in what way does it mean that idea of bitcoin being decentralised is lost? It's still independent from banks (and pretty much anyone, as designed). I'm not sure if anyone expected bitcoin to succeed without places like coinbase. They still don't control (and never will) emission of bitcoin and you still have an option to trade it however you like.
- gogopuppygogo 6y agoDecentralization of a currency is great in theory but adoption has been abysmal. At least as an investment asset BTC has found a niche. Especially with billions of tether issued without any fiat behind it to keep the market extra liquid.
- charcircuit 6y ago>Especially with billions of tether issued without any fiat Do you have any proof of this? Tether is over collateralized by $164M. https://wallet.tether.to/transparency https://wallet.tether.to/transparency
- gogopuppygogo 6y agohttps://ag.ny.gov/press-release/2021/attorney-general-james-ends-virtual-currency-trading-platform-bitfinexs-illegal https://ag.ny.gov/press-release/2021/attorney-general-james-... https://crypto-anonymous-2021.medium.com/the-bit-short-inside-cryptos-doomsday-machine-f8dcf78a64d3 https://crypto-anonymous-2021.medium.com/the-bit-short-insid...
- charcircuit 6y agoNeither of these links support your claim. The first link says there was a period years ago where it wasn't true, but nothing about the current state. Your second link just shows that people and businesses prefer Tether over USD. It's also surprising that the author did not know that bitcoin is a very common half of a trading pair.
- bondarchuk 6y agoBy the very nature of cryptocurrencies, they can't prevent anyone building a centralized company around them, and I don't think that was ever the intent. The permissionless, decentralized properties are important in the following respects: - anyone can transact with anyone on the blockchain - the fed can't print more of it Anything else is a disctraction. Besides that it's pretty obvious that Coinbase is centralized, regulated etc.. mainly because it deals in USD, not Bitcoin or Ethereum.
- pjc50 6y agoIt turns out that people value independence from banks far less than "massive asset price inflation" for assets that they happen to hold.
- cactus2093 6y agoDon’t speak for everyone there, “we” don’t all have the same reason. I like Bitcoin as a diversification for being a “better version of gold” - it has the scarcity and you can physically own it but it is much easier to store and send anywhere in the world if needed. These properties also mean that in a pinch, if you live in an unstable society or one facing high inflation it can work as an alternative financial system. But I’ll never understand the westerners that seem to be almost rooting for their own society to collapse just to have another reason to use Bitcoin. I don’t have any real need to be independent from banks, and I am lucky that I live in a pretty stable society where that’s true.
- arnaudsm 6y agoI agree, edited "We" as "Many".
- levosmetalo 6y ago> I like Bitcoin as a diversification for being a “better version of gold” - it has the scarcity ... Why do we repeat the claim of Bitcoin scarcity when we all know it's just a promise and nothing more, there is no technical limitation? All it takes to "print" more Bitcoins is for the majority of miners to agree to make a fork that will allow for more. And that will happen at one point. As for Gold, good luck trying to mine an infinite amount of it.
- Fjolsvith 6y ago> All it takes to "print" more Bitcoins is for the majority of miners to agree to make a fork that will allow for more. And that will happen at one point. Why is this a bad thing? America's founders believed that the people could mint their own coins.
- josephwegner 6y agoIt's not intrinsically a bad thing (some may hold that opinion, though). However, if you are investing in Bitcoin because it is similar to gold in that scarcity is a primary attribute, then the ability to mint new bitcoins is dangerous. I'd also posit that "because America does it" is a fairly weak argument for many of the claimed benefits of Bitcoin. Much of Bitcoin's charter is that it helps move away from government-controlled currency. If you think America's monetary system is the best option available, then Bitcoin likely is not your thing.
- boh 6y agoA bank/exchange with far fewer regulations than a bank/exchange.
- px43 6y agoHow do you figure? They've got regulatory compliance requirements from almost every financial regulator on the planet. They are probabally, by far the heaviest regulated company on the planet.
- MrMan 6y agoCan you explain how a currency or hard asset replaces a bank?
- helsinkiandrew 6y agoThe trouble with Cryptocurrencies is that very few people seem to be using it for exchange of goods, where it could be used independently from banks. It seems that the vast majority of retail sales is into and out of USD and other fiat currency for speculation/investment. Here central markets will always have the advantage that you'll get a 'fair' price due to the mass of buyers and sellers (ignoring market manipulation) over finding someone to trade with you.
- fasdf1122 6y agoNo reason it can't be both. You can manage your own wallet, or you can use coinbase (or any number of "banks") for their services layered on top. Or you can have both.
- CPLX 6y ago> The original promise of cryptocurrency was to become independent from banks. The original promise was being able to buy drugs and gamble. How much this has changed since then is left as an exercise for the reader.
- holtalanm 6y agothis is my gripe with cryptocurrencies in general now. they've strayed so far from their original ideal that they don't even hold up anymore for that. they're just a different form of stocks now, with no intrinsic value, imo, besides being an energy sink.
- ravenstine 6y agoCoinbase does allow people to store their funds with them, but it's common for people to buy bitcoins on Coinbase and then immediately transfer them to their own wallet, or to a service with far better security like Kraken(which will happen less once Kraken supports ACH and immediate funds).
- PragmaticPulp 6y agoSome people transfer coins out, but that’s definitely not what the average person is doing with ever-increasing Bitcoin transaction fees.
- beaner 6y agoDoesn't have to be what the average person is doing, it just has to be an option for those who want it.
- beaner 6y agoKraken doesn't have better security.
- ravenstine 6y agoExplain? Kraken doesn't keep sessions alive very long, whereas I can keep coming back to my Coinbase tab the following day and it will still have a session. 2-factor authentication is optional with Coinbase, but Kraken requires 2-factor and only allows an authenticator app or Yubikey(i.e. not mobile which can be intercepted). The Kraken app uses API keys that you set up rather than username/password; this allows the user to set login permissions in case they want their mobile app to only read their balances but not buy/sell. I'm sure I'm missing something. The added value of that security can certainly be questioned, but I don't think it's unreasonable to say that Kraken is more secure by default and provides more options for keeping one's account secure.
- iexplainbtc 6y agoYou can't go to a bank, ask them to give you all your money in cash and hide it under a mattress (not in most countries at least). You can go to Coinbase and simply transfer all your funds to your own wallet in a matter of seconds.
- lottin 6y agoI didn't know that in most countries it is forbidden to hide money under a mattress. This is news to me.
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- iexplainbtc 6y agoWhat I meant is that it's not a hassle free process. You'll be reported to the IRS (or equivalent) and even be asked to bring an "approved intermediary" in some EU countries. I wish I was making this up.
- PragmaticPulp 6y ago> Many have forgotten why we used cryptocurrencies in the first place I think the speculators know exactly what they’re doing. They want a speculative instrument and they don’t want a currency that people spend (creating sell pressure), so thats what these services have evolved to provide. Bitcoin’s lack of fundamentals is the key to the narrative that it has unlimited upside. If you can remove all of the fundamentals, no one can argued that it’s overpriced.
- Robotbeat 6y agoGresham’s Law.
- psychlops 6y agoCryptocurrencies are protocols, Coinbase is a platform. https://news.ycombinator.com/item?id=20841059 https://news.ycombinator.com/item?id=20841059
- backtoyoujim 6y agoThe pro version of coinbase is a tool to exchange crypto directly with other people with smaller fees. I thought that coinbase is more of a store that buys a stock of crypto then resells it with huge fee mark up.
- personjerry 6y agoWhat's wrong with banks?
- flyingfences 6y agoFrom the perspective of January 2009, quite a lot.
- Cthulhu_ 6y agoA few want crypto for that. Most people just want to surf on the waves of profit from a highly unstable and unregulated investment market.
- electriclove 6y agoThis is the main fiat to crypto onramp in the US. The success of CoinBase will increase crypto adoption. I don't see this as preventing DEX growth but actually increasing it by growing the pond.
- Zetaphor 6y agoI had to scroll past far too many hot takes about how centralized exchanges signal the end of decentralization before finally finding someone saying this. There is a decentralized version of every service that Coinbase currently provides and many more they don't, with the exception of fiat on/off-ramps. Until regulations change that's going to mean centralized entities that cooperate with the existing financial institutions. That fact alone does not invalidate the significant progress being made in every other part of this space with regard to decentralization. Once my USD are converted to crypto I can leave Coinbase and fully engage with the decentralized ecosystem, only going back to a custodian like Coinbase if/when I want to return to USD or other fiats.
- xur17 6y agoTo me Coinbase has basically become a USD -> USDC onramp - everything else they provide can be done on decentralized exchanges in a way that is both cheaper, and (at least once you get used to the system) easier.
- scsilver 6y agoYou still have your solutions, now the vast majority of other users have solutions they can trust and hold within a legal system they have to trust. Banks provide professional money movement, I dont see a problem having an insurance backed entitity managing my lively hood, I call an insured plumber instead of plumbing myself.
- rglullis 6y agoTrust and "Independence" are not binary qualities when we are talking about these systems. It's a matter of risk exposure, a sliding scale that you can control. With crypto I can choose how much of my assets are going to be in crypto that I control (long-term savings, DeFi investments), how much is going to be in a custodial wallet (could be for my scheduled on-ramp DCA buys, could be to keep more liquid trading) and how much I am going to keep in a regular traditional bank for more "traditional" investments, my checking account, private pension payments, credit cards, etc, etc. This wouldn't be easy to achieve if we don't have reputable centralized exchanges. I am not dependent on them to control the funds I already moved out, but I am relying on them to have a functional system to fill in the gaps that the current permissionless/trustless systems can not provide.
- Robotbeat 6y agoEdited: I decided to delete my comment. I do think the hype deserves a dunk, but dunking doesn’t advance the conversation and is lazy.
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- arcticbull 6y agoSo just to recap the current Crypto situation. - Scaling solution: Visa. - Custody: BNY Mellon. - Trading: Centralized, trustful exchanges. - Unlimited money printer: Tether. - The same insane unregulated over-leveraged garbage derivatives products that triggered this whole horror show in 2008: DeFi. - Volatility: Unbelievable. What exactly has been achieved? This is the first IPO I plan to short on day one.
- RestlessMind 6y ago> What exactly has been achieved? A new asset class (like Gold) which everyone wants to invest in because they think everyone else values it (just like Gold). And with a few benefits over Gold like it can be transferred easily. That this has sustained for 12 years is amazing and the longer it stays, the longer it will further stay.
- arcticbull 6y ago> A new asset class (like Gold) which everyone wants to invest in because they think everyone else values it (just like Gold). And with a few benefits over Gold like it can be transferred easily. haha, I've never had trouble buying and selling GLD instantly. Gold futures too! My broker charges a few pennies. On the other hand a BTC transaction uses 600kWh of power, yields 100g of e-waste, takes hours to confirm and $20 in fees. Yay! What a time to be alive. I'm sure glad we went through all this consternation. > That this has sustained for 12 years is amazing and the longer it stays, the longer it will further stay. Madoff lasted 17! :)
- ojr 6y agomoney transfer on the internet that enables online sports gambling and prediction markets to levels that would make me nervous to place a short
- danschumann 6y agoThe reason is robot property rights, isn't it? If I sell you a robot, which is capable of cleaning and trading stocks, and that robot owns $100 of crypto, it can trade and randomly give you things, if it profits. This is possible with crypto. It'd be doable with fiat.. i suppose the robots would be considered a trust or something, and they'd just be "leased" to the customer or something, but that sounds like bs. I just wanna sell people a robot that also owns crypto.
- vmception 6y agoThe amount of bitcoin on exchanges - including Coinbase - is at an all time low. so really: who cares man.
- t0mmyb0y 6y agoIt is what happens when the feds step in, create, and capture the crypto market. Coinbase is a fed company.
- mediaguilt 6y agoMany have forgotten why we used the internet in the first place. The original promise of the internet was to become independent from media/science/gov monopolies. In the end FAANG (like most popular websites) is a great product, but just the same as before. It's centralized, hackable, has economies of scale, etc.
- dehrmann 6y ago> The original promise of the internet was to become independent from media/science/gov monopolies Depending on your definition or "internet," it was to connect military computers to each other.
- solosoyokaze 6y agoAgree. First it was for military, then academia, then commerce (dot com), then more commerce/social/mobile. Bitcoin and other P2P apps starting with Napster were the subversive and populist tech that was built on a military industrial network. I would say the culture and ethos of programming was subversive, the home computer market somewhat so as well. But the internet solidly originated within the establishment and was part of the cold war.
- wtvanhest 6y agoFirst, congrats to everyone at Coinbase. What a great step in their journey. I’m going to hijack the negativity here and ask if anyone has any advice on writing a first smart contract. I feel like I cannot fully understand ETH or BTC lightning until I write one for fun. Does anyone have any advice on how to get started?
- px43 6y agoSomething like this should get you started: https://www.youtube.com/watch?v=W0Lomo8CdTM https://www.youtube.com/watch?v=W0Lomo8CdTM
- yunesj 6y agoWe were never against private banks giving loans or private exchanges facilitating exchange. We wanted bitcoin because govt control of money results in: (1) new $ is unfairly distributed, (2) manipulation of $ to force consumer spending, (3) use of $ to fund wars and other govt programs, (4) threats of war are used to sustain $'s status as reserve currency, (5) absence of any innovation in $ and bitcoin addresses these problems, while being censorship-resistant. BTC has been a great success for sending remittance payments, providing a store of value in countries with hyperinflation, and spurring innovation in the financial sector.
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- paulie_a 6y agoThere is no "we". I started using it because I can recklessly trade it. I see no utility in the current expensive implemention I don't care if it is centralized or not
- jdoliner 6y agoThis is why you shouldn't leave your crypto in Coinbase. If my money is in a bank there's no real way I can transfer all of my money out of it and have it remain usable. I can transfer it to a different bank, or I can get it all in cash and hide it in my mattress. On the other hand, the banking part of Coinbase is a complete commodity, I can transfer my assets to my own wallet and they're just as usable. The existence of an escape hatch is a big difference. Even if CB itself is basically a central bank.
- overtonwhy 6y agoIt's PayPal but your balance changes constantly by random amounts.
- quickthrower2 6y agoWeird take. Exchanges are more like a shop. Ideally you don’t keep the coins on the exchange but in your own wallet after purchase
- puranjay 6y agoThe dex world is thriving and centralized exchanges are the last place innovation happens in the crypto world
- treelovinhippie 6y agoPeople are idiots. I've met a lot of Ethereum developers who are super excited about central bank cryptocurrencies.