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Coinbase mafia shows how tight a circle holds sway over Bitcoin

160 points by T-A 6y ago

loceng 6y ago
So will there be an investigation by the SEC for price manipulation relating to how inconveniently Coinbase was unaccessible multiple times for fairly long periods at different times the price of Bitcoin started to skyrocket?
- Triv888 6y ago
  You can only wish... The same thing happens to stock brokers and they don't get investigated, most of the time.
- gruez 6y ago
  robinhood (among other brokers) goes down all the time during periods of high trading activity. That doesn't mean there's anything malicious going on.
mrfinn 6y ago
Blockchain technology is doomed, and somebody will be, eventually, the last link of the ponzi scheme.
- superbcarrot 6y ago
  I don't get why people's thinking swings to these wild extremes. Why does it have to be either a societal disruptor that changes everything or a doomed ponzi scheme? Can't it be something like "oh we tried to have cool internet money, turned out that it's not that great, some people are still into it I guess".
  - africanboy 6y ago
    because there is no such thing as "cool invented money" it is either useful for society or it is a scam.
  - TheButlerian 6y ago
    Because they are dumb nocoiners.
  - jariel 6y ago
    'into it' for what reason? That's where the Ponzi part comes from.
  - thetanil 6y ago
    there are a lot of people in the "not that great" and "still into it I guess" camps. Those just don't make headlines. Also, some morons can only read headlines. Don't worry, the world is not as idiotic as the headline writers and readers.
  - mrfinn 6y ago
    It becomes a Ponzi scheme the moment you realize that the idea is intrinsically broken, but still you keep shilling it and making grow the value exponentially, (value that somebody has to pay). BTW, flagged, really mods??
    - tiku 6y ago
      When does a Ponzi scheme stop being a Ponzi scheme?
      - totalZero 6y ago
        This is a really, truly weird way to defend Bitcoin, whose claim to fame is that its only value comes from its uptake. The argument goes, "governments can fiat money, so why can't we?" There is no unique creation of value anywhere in the Bitcoin life cycle. Any liquidity or anonymity externality that doesn't equally apply to USD is probably accruable only by criminals and traffickers. The transactions are slow and costly, and there's no guarantee that some governmental research agency hasn't already broken the cryptographic underpinnings.
  - xirbeosbwo1234 6y ago
    Because it is so fantastically monumentally brain-meltingly bad. When a casino uses as much electricity as entire countries, it deserves my hatred rather than just not deserving my love.
- ur-whale 6y ago
  And all the tin-foil wearing weirdos who had been hollering about it from their mum's basement will be vindicated. That will be quite a day!
  - mrfinn 6y ago
    Actually some of us are really interested in cryptocurrencies as tool to liberate people from a corrupt system, and we leaved our mum's basement a long time ago.
ALittleLight 6y ago
"Mafia" seems a strange and prejudicial word to use here. "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset" - at first I thought this was really astonishing. Now, I'm not so sure. My first interpretation was that 2% of bitcoiners have 95% of the bitcoin - but now I wonder how many addresses a typical person has. e.g. If I create an address every time someone buys illegal drugs from me over the 5 years I sell them on the darknet, and later coalesce all my earnings into some address, does that mean that my X empty addresses are counted in the 98% of have-nots and my one coalesced address in the 2% of haves? Depending on how many addresses people typically use, and given the multi-year history of bitcoin, it actually seems somewhere between not surprising and incomprehensible to me. Like, I guess that's a percentage it could be, but I don't know how to interpret it. I think a better news article would provide context on stats like this so the reader could understand rather than just leaving the reader to figure out the meaning for themselves.
- _Microft 6y ago
  They might be alluding to the "Paypal Mafia". https://en.wikipedia.org/wiki/PayPal_Mafia https://en.wikipedia.org/wiki/PayPal_Mafia
- Izkata 6y ago
  > My first interpretation was that 2% of bitcoiners have 95% of the bitcoin Consider how much was probably lost in the early days, from dead hard drives and such. For one specific example, bitcoin creator Satoshi Nakamoto appears to have ~1 million bitcoin sitting untouched [0] - that alone seems to be ~5% of all existing bitcoin [1] owned by one person, with an estimated 11-16% more just "lost" [also 1]. [0] https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-satoshi-nakamoto-still-own https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-... [1] https://www.buybitcoinworldwide.com/how-many-bitcoins-are-there/ https://www.buybitcoinworldwide.com/how-many-bitcoins-are-th...
  - agumonkey 6y ago
    A recent example of lost recovery https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_old_usb_key/ https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_ol...
geswit2x 6y ago
please, can you post something that we don't have to pay in order to read? thanks
- randomNumber7 6y ago
  Don't know why you are downvoted. I think it's super annoying...
- kemonocode 6y ago
  I agree, there needs to be a ruling about paywalled articles already. At the very least, tagging them properly (so people may ignore them at their leisure) or also putting an archive link in the comments.
- greenyoda 6y ago
  Please read the HN FAQ: https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html > Are paywalls ok? > It's ok to post stories from sites with paywalls that have workarounds. > In comments, it's ok to ask how to read an article and to help other users do so. But please don't post complaints about paywalls. Those are off topic. More details: https://news.ycombinator.com/item?id=10178989 https://news.ycombinator.com/item?id=10178989 You can get around Bloomberg's free article limit by clearing their cookies (or using a browser extension like uMatrix that automatically blocks them). Their articles are also readable if you submit them to an archive site. For example, someone posted this link in another comment: https://archive.is/AqtRg https://archive.is/AqtRg
- tim333 6y ago
  https://archive.vn/uR4n6 https://archive.vn/uR4n6
gnrlst 6y ago
Remember when BTC used to be fun and exciting? Stupid projects being created, tipping widespread all over the internet. It was created to be a "peer-to-peer electronic cash system" (quoting from the whitepaper title)... oh how far it has strayed.
- ZeroMinx 6y ago
  Most of this also applies after a s/BTC/WWW/
- barbegal 6y ago
  Yes I remember when you could send Bitcoins and your transaction was practically guaranteed to get into the next block. I had fun solving puzzles created using Bitcoin scripts. If you could solve the puzzle you could win some Bitcoins. Transaction fees were so low as to be irrelevant and you could send small tips to anyone you wanted, buy beers, gift it to strangers to try out... But even then you could see that Bitcoin wouldn't scale. Most people couldn't run full nodes, block sizes were getting bigger and bigger. Bitcoin worked great when you had a few hundred thousand people using it but with 10s of millions it doesn't work well.
  - vbezhenar 6y ago
    > Most people couldn't run full nodes Can you elaborate on that? I checked few years ago and it was possible to run full node. What would prevent me from running full node right now?
    - barbegal 6y ago
      Maybe I should say didn't rather than couldn't. Everyone can rent a server for a few dollars a month to run a node. Most people home laptops are not suited to running a full node as they either have to be always on or are spending a lot of time validating blocks every time you power them on to catch up.
      - imtringued 6y ago
ur-whale 6y ago
https://archive.is/AqtRg https://archive.is/AqtRg
ExcavateGrandMa 6y ago
money > bitcoin ... wake up before the bitcoin excavates you :)
ur-whale 6y ago
Any article that uses the sentence "mostly men" in the first paragraph is highly likely not worth reading.
- CryptoPunk 6y ago
  I agree. It goes without saying that most of the capital is owned by men. In which industry is that not the case? The social commentary angle can't justify that line either: Bitcoin is a pseudonynous digital currency, that started trading at $0.10, and required nothing more than having a basic windows machine, and downloading the node software, to hold from the start. Very early on, downloading the standard wallet software was also all it took to mine bitcoin. If mostly men own it, it's because mostly men were interested in the concept early on. In any case, despite containing that line, this was a good article and worth reading.
  - darawk 6y ago
    I think the point is that the article feels a need to highly this, as though it is relevant. Primarily because they are trying to narrativize it in a certain way.
- 55555 6y ago
  These says, if you write "men" instead of "mostly men", you get attacked my SJWs. My favorite form is when they write "men (and they are almost entirely men)." But as is becoming clear to many, you cant please everyone all of the time, and, especially these days, there are some people you cant please any of the time. What phrasing would you prefer? "Humans" or just "men"?
  - dmingod666 6y ago
    If someone cannot think about a topic without classifying the genitals of the discussed people irrespective of what they are talking about, you'd probably not be wrong to take notice of that. Not that it matters, but, expecting the whole world to share the same perversion is a bit too much..
Traster 6y ago
It is kind of funny that exchanges have become so successful for Bitcoin- since they lose 100% of the stuff that made BTC attractive in the first place. They’re centralised, regulated and transactions don’t even go on the blockchain. The result is that the number 1 way people get into Bitcoin is through a mechanism that has none of the attributes of Bitcoin.
- read_if_gay_ 6y ago
  > They’re centralised, regulated and transactions don’t even go on the blockchain. Of course. All of that is kind of unavoidable if you want to interface with fiat.
  - vbezhenar 6y ago
    Not really. I can buy bitcoins on localbitcoins and it's pretty decentralized.
    - viraptor 6y ago
      The fact you got to the localbitcoins service and tell it who you do the exchange with makes it at least a centralised place of information.
      - 177tcca 6y ago
        So basically the consumer tech hasn't yet caught up with the technology, is what you're saying? Once there are enough people buying and selling for cash, you'll just need to find an old payphone, or some other known meeting place, if popular technical means are legislated away.
      - deleted 6y ago
        [deleted]
    - robcohen 6y ago
      Under US law it is illegal to use localbitcoins. It’s a violation of money transmitter laws. https://kelman.law/blog/money-transmitter-licensing-for-u-s-crypto-companies/ https://kelman.law/blog/money-transmitter-licensing-for-u-s-...
rsp1984 6y ago
“It’s a money network,” Winklevoss said. “What happens when you put an economic incentive around that network? That’s possibly the most effective network in the world.” How in the world can you call Bitcoin a "money network"? Unless I'm missing something obvious there's no more network effect to it than to any other popular currency or security.
- deleted 6y ago
  [deleted]
- chrisco255 6y ago
  You're correct on Bitcoin's network effect being currently less than that of existing popular fiat currencies. The currency market, is of course, the most actively traded market in the world. The FOREX trades over $7 trillion per day, and the market is worth over $2.4 quadrillion. But yes, Bitcoin has already eclipsed all but a handful of stocks with a market cap clocking in at $800B-$1T, a daily volume of $50B+ and its more liquid than any stock since it trades 24/7 and can be remitted without intermediaries.
asdev 6y ago
unrelated comment: it's crazy how anti crypto and anti blockchain HN is for being a tech community
- paulryanrogers 6y ago
  Is it? Would it be crazy how anti-homeopathy a medical forum could be? Perhaps a tech savvy community is more aware of the flaws of BTC, and therefore more bearish on it's prospects.
  - deleted 6y ago
    [deleted]
- sidlls 6y ago
  What about being a tech community suggests it should not be anti-crypto/blockchain?
- rchaud 6y ago
  It may be because cryptocurrencies in their present state represent little other than a electricity-hungry 'store of value' rather than its considerably loftier original goals.
  - 177tcca 6y ago
    "Represent" in the public and media mind share. What the technology actually is capable of, and is doing today, these are different things.
    - rchaud 6y ago
      Sure, but we are not commenting on a story about crypto-related applications. The story is about a centralized exchange going public. Coinbase doesn't care what dApps will be created on Ethereum or whatever, in the same that my broker doesn't care about how my GME purchase will strike a blow for the little guy. They're both just there to pick up their cut.
ffggvv 6y ago
am i the only one that gets a warm euphoric feeling going on the crypto subreddits on days like these and drinking their salty tears as it crashes to hell?
- sah55 6y ago
  Yes I think you might be the only one (btw +380% since 2020)
- wtf_is_up 6y ago
  >crashes to hell Zoom out.
  - mamon 6y ago
    "Past performance is not indicative of future results" EDIT: it might be a lawyerspeak, but it is still a good advice: there's a reason why Bitcoin has been down $14k this week and that reason is the settlement with NYAG in the Tether lawsuit. Situation has changed, there's one fewer scam company there to artificially inflate Bitcoin price, so expect downward trend for at least the next few months.
    - ravenstine 6y ago
      That phrase is lawyer-speak that only exists for the sake of mitigating liability. Of course every conceivable thing has a non-zero risk.
    - wtf_is_up 6y ago
      I fail to see the relevance of the cliche you've posted here. BTC has 'crashed to hell' all the way down to where it was 07 Feb 2021 after doubling a few times and the parent post is spitefully spiking the football by 'drinking salty tears'. Has nothing to do with predicting the future.
kemonocode 6y ago
I won't say much about the article as it's a topic that has been discussed plenty of times before (The merits and faults of Bitcoin) with often inflammatory results, but I will definitively say it's pretty easy and rather intellectually dishonest to attack it only whenever there's a dramatic price swing. Where were all these articles during all those price lull periods? Also, if we're pointing fingers, the influence Coinbase has on Bitcoin is insignificant compared to the Chinese mining conglomerates. The US is not the rest of the world.
- kodah 6y ago
  > Where were all these articles during all those price lull periods? People are motivated to talk and report based on a myriad of things, but lately this perception of "power" has been center stage. If you ask these people I imagine they would tell you that when Bitcoin hits a high it makes those people, and Bitcoin, very powerful while when it's $8 they're just nobodies wasting time in a dark room and coming up with memes like HODL.
- arcticbull 6y ago
  Some of us have maintained a strong anti-Bitcoin position at all times. [edit] David Gerard comes to mind - author of Attack of the 50 Foot Blockchain and Libra Shrugged - and HN user (dgerard I think) (https://davidgerard.co.uk/ https://davidgerard.co.uk/) More recently Amy Castor, also an HN user (amycastor) (https://amycastor.com/ https://amycastor.com/) And of course Bitfinex’d is back and public again on Twitter. (https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed)
  - bombcar 6y ago
    /r/buttcoin has memes but it also has some pretty serious discussions
    - arcticbull 6y ago
      One thing I really appreciate about them is unlike literally every other crypto sub, they’re not an echo chamber. Nobody as far as I can tell is ever banned for being pro-crypto, or posting pro-crypto content. If they’re hard-core shills or brigading they get downvoted or get slapped with a playful flair (“warning, I have the brain worms” is my favorite haha). As such it gets a lot of pro-crypto folks participating to get a different perspective. It’s not high brow HN level discourse but to your point a lot of serious stuff ends up there. Considering the topic it’s pretty balanced.
glitchc 6y ago
Fiat money works because government has a strong say in its creation and valuation, and govt. is elected by the people. Lobbying and other private interests aside, by and large, the system is still beholden to the opinions of the citizenry. Decentralized finance, while originally designed to give more power directly to the people (Nakamoto’s “one CPU one vote”), is now clearly shown to be beholden to an oligopoly of private interests. It’s important to point out the reality behind the fallacious narrative of “the people are in control,” so that people wake up and realize that DeFi without govt. intervention is a bad thing. An individual has zero say in Bitcoin prices. At least with fiat currency, if they don’t like what’s happening, they can change the govt. to one that is more aligned with their collective fiscal view.
- Empact 6y ago
  That’s strange because I see it essentially in reverse of that: To change the Bitcoin price, vote with your dollars, going long or shorting. You will materially impact the order book and resulting price. Other ways exist: starting a company like the ones mentioned in the article. In contrast, in federal elections you have a vanishingly small chance of casting a deciding vote between two participants in an actual oligopoly (more specifically, a duopoly), who are themselves primarily allied with powerful interests which include the banking sector. Does anyone really believe their reps are responsive to them on issues like monetary policy?
  - glitchc 6y ago
    And if you don't have dollars? No dollars, no votes? And the corollary: More dollars, more votes? Sounds like a plutocracy, don't you think? Be careful what you wish for. Unless you're secretly Bezos or another of the billionaires' club, in a plutocracy you and I and countless others are just peons. At least in democracy you have a voice, regardless of your bank balance. Democracy may suck as a system, but it's definitely better than the alternatives :) I'll venture further and say those who say otherwise have either never actually lived in the alternative, or secretly harbour delusions of grandeur.
    - 6y ago
mensetmanusman 6y ago
“ Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset, according to researcher Flipside Crypto.” It’s kind of ironic that BTC pollutes more than any prior monetary invention while simultaneously having higher levels of internal income inequality.
- arcticbull 6y ago
  It’s all around the worst one yet. If your transaction counterparty is within 1250 miles of your house it takes less energy to simply drive there in a Tesla with a brick of gold. It’s also funny because I suspect the overwhelming majority of those accounts simply lost their keys.
aphextron 6y ago
Say what you will about the technology, but the Bitcoin community attracts the most unsavory, scandalous people imaginable. It truly is a wretched hive of scum and villainy. Everything even tangentially related to it instantly becomes a source of scams, illegal activity, and just general shadiness. It's what has always turned me off of blockchain technology in general. I'm sure these same people exist in the fiat financial world as well, but it just has a lawless, wild west, dog eat dog atmosphere that is so off putting.
- 1996 6y ago
  > I'm sure these same people exist in the fiat financial world as well, but it just has a lawless, wild west, dog eat dog atmosphere that is so off putting. Actually, it's far worse in the fiat financial world.
Rapzid 6y ago
Perhaps the idea of "pure decentralization" doesn't exist; only partial realizations of it. If you look at Bitcoin and Ethereum you find concentrations of power, information, and etc at many levels; centralization. Even at the technical level the solution to controlling change is often to have minority steering groups whose membership necessarily suggests a concentration of power enabling them to exert influence.
- ketamine__ 6y ago
  Taking that a bit further many startups have raised a traditional round before an ICO. Since ICO's are so popular I think one could argue that they don't need to do this. Are they loyal to the VC's or the token holders?
ffggvv 6y ago
is bitcoin truly decentralized? in the sense that there’s a centralized ledger that anyone can access and see transactions? i know the ledger is copied and decentralized to all nodes but for instance if i go on the street corner and buy something with cash, no one in the world knows other than the participants. with bitcoin everyone in the world knows and it’s recorded for all time
bombadilo 6y ago
I've been reading hacker news for years and I can't recall any piece of technology that seems to attract such vitriol and disdain from the community here. Certain bitcoin criticisms are understandable, but painting the block chain and the whole crypto industry with a broad brush of 'scam', 'shady', 'useless' is just down right moronic and embarrassing. Many of you claim to be technologists that leverage the power of technology to benefit humanity. Yet you can't plainly see how various projects in the space like ethereum, nano, chain link, cardano etc. have useful applications that will change the landscape of finance and economics forever. Painfully cynical bunch you lot are.
samstave 6y ago
Whats the networth of the W brothers (the ones that Zuck stole FB from?)
- samstave 6y ago
  edit: Dont worry I found out: Assuming the Winklvoss Twins ONLY kept the initial 11,000 BTC they purchased - Those coins are worth 497MM today. reply
b1daly 6y ago
This article is an example of the pure propaganda that 'mainstream financial media' participates in on-the-regular. Why that is I don't know. Symbiotic business interests I guess. It's not that the information is incorrect. It probably is and it does tell us something about some of the big players around Coinbase. But the whole bitcoin 'ecosystem' is essentially a collective criminal organization, with some players being closer to the dirty parts than others. (I'm leaving out everyday holders of bitcoin, just talking about insider types.) These big Coinbase players might not 'touch the poo' directly, but their hands still get stinky. The price action in bitcoin is determined across a network of exchanges, most of which do not use real dollars (or other govt currency). They use crypto only for trading, including the fake 'stable-coin' tether. Tether (the company who issues the currency tether) has been shown definitively to be running a scam and are completely dishonest.) They have issued $35Billion worth of their fake dollars. Until recently they were issuing on the order of $1B per week! Tether is a sister company to the exchange Bitfinex with the same owners and management. So essentially the same company. They just signed an agreement with the New York Attorney General where they paid a fine of $18.5M (notice difference in scale). The agreement spells out exactly how they have been scamming people. This is based on information coming from the company itself. This is not FUD, just FACT. (interestingly since they signed this agreement ~10 days ago, they stopped issuing tether.) One of the central players in this ongoing criminal operation who has been taken out is Crypto Capital Corp. They ran a shadow banking system for many of the big exchanges, including Bitfinex and Binance. The Feds seized $850M from CCC for money laundering, which precipitated a crisis for these entities and intensified the criminal activity of the many industry insiders connected through this shadow bank. My guess is that Tether issued $35B in fake USDT (tether) almost exclusively without dollar collateral backing. (the original premise of tether was each would only be issued on receipt of a true USD by tether, and therefor each USDT was pegged to a USD, the peg holds for now but the dollar backing is not there, that's another story.) Most of this $35B was issued over the last year when we have seen a huge rise in bitcoin price. The tether currency only has one purpose, to buy cryptocurrency. So this is a huge amount of liquidity introduced into the market. (Compare to the hype around Tesla's $1.5B bitcoin purchase.) It is the price appreciation that drives this whole market, including the business of Coinbase, even though they do not deal with tether. The OP article mentions none of this! Sure, it reveals some insiders, perhaps on the more legit side, but ignores the real engine of this speculative bubble/fraud. It has the effect of 'white-washing' this dirty game. It's really gross.
deleted 6y ago
[deleted]
samstave 6y ago
Assuming the Winklvoss Twins ONLY kept the initial 11,000 BTC they purchased - Those coins are worth 497MM today.
moralsupply 6y ago
> Coinbase Global Inc.’s filing to become a publicly-traded company provides a glimpse into the remarkably small circle of mostly men who command the incredibly lucrative digital landscape Why is the fact they are "mostly men" relevant in any way? What if they are "mostly jewish"? Or "mostly white"? Or "mostly American"? Is Bitcoin now a matter of "privilege"? Are there people out there who fall for this sort of insane narrative? In any case, feel free to keep all your wealth away from Bitcoin. It's not mandatory to use it -- unlike the US Dollar, which is actually managed by a mafia, which we call "the government", and which will use force against you if you don't use its currency.
- runawaybottle 6y ago
  That’s interesting. Yeah, what if they were mostly Jewish? I never really thought about the demonization of men now days in those terms. Took a long time until Jews fought back against the absolute constant throb of ‘Jewish cabal’ that runs the world. Very long time. Interesting, that was profound.
  - charia 6y ago
    This is hacker news and so I'm trying to not just post a low effort reply, but reddit.com/r/menkampf is all about taking that premise and running with it. Before finding that subreddit, I didn't notice how just how commonplace casually insulting men was accepted. I do understand the power difference that isn't one to one and why this sort of insulting is accepted, in that men are not a real minority like Jewish people are so culturally insulting men is a considered a punching up situation. Still, I think the proliferation and casual acceptance of the rhetoric people use in this context is not exactly healthy for society.
    - riekus 6y ago
      I have start noticing it as well after stumbling on some interviews with Jordan Peterson.
- anonisko 6y ago
  Proof of work (PoW) vs proof of violence (PoV). Both energy intensive mechanisms for enforcing the security of a currency.
jgalt212 6y ago
If tether is such a scam, how is it still trading close to par? Is anyone willing to buy a non-trivial amount of tether at par (other than tether co. and Bitfinex)? https://finance.yahoo.com/quote/USDT-USD/ https://finance.yahoo.com/quote/USDT-USD/
- meowster 6y ago
  How did Bernie Madoff's investment fund operate for years after people were claiming it was a ponzi? People want to believe just a little longer.
laughingbovine 6y ago
What is this article? Literally only one line in this article lines up with the headline: "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset, according to researcher Flipside Crypto." Then its a story about bitcoin beginnings and the lead up to coinbase. Does the article imply that the Coinbase owners own 95% of the digital asset? Who knows, article never says. Who is the "Coinbase Mafia"? Who knows, i guess its just every person who was named in the article. Who holds sway over bitcoin? Find another article cuz this one wont tell you.

160 points by T-A 6y ago

So will there be an investigation by the SEC for price manipulation relating to how inconveniently Coinbase was unaccessible multiple times for fairly long periods at different times the price of Bitcoin started to skyrocket?

Triv888 6y ago
You can only wish... The same thing happens to stock brokers and they don't get investigated, most of the time.
gruez 6y ago
robinhood (among other brokers) goes down all the time during periods of high trading activity. That doesn't mean there's anything malicious going on.

mrfinn 6y ago

Blockchain technology is doomed, and somebody will be, eventually, the last link of the ponzi scheme.

superbcarrot 6y ago
I don't get why people's thinking swings to these wild extremes. Why does it have to be either a societal disruptor that changes everything or a doomed ponzi scheme? Can't it be something like "oh we tried to have cool internet money, turned out that it's not that great, some people are still into it I guess".
- africanboy 6y ago
  because there is no such thing as "cool invented money" it is either useful for society or it is a scam.
- TheButlerian 6y ago
  Because they are dumb nocoiners.
- jariel 6y ago
  'into it' for what reason? That's where the Ponzi part comes from.
- thetanil 6y ago
  there are a lot of people in the "not that great" and "still into it I guess" camps. Those just don't make headlines. Also, some morons can only read headlines. Don't worry, the world is not as idiotic as the headline writers and readers.
- mrfinn 6y ago
  It becomes a Ponzi scheme the moment you realize that the idea is intrinsically broken, but still you keep shilling it and making grow the value exponentially, (value that somebody has to pay). BTW, flagged, really mods??
  - tiku 6y ago
    When does a Ponzi scheme stop being a Ponzi scheme?
    - totalZero 6y ago
      This is a really, truly weird way to defend Bitcoin, whose claim to fame is that its only value comes from its uptake. The argument goes, "governments can fiat money, so why can't we?" There is no unique creation of value anywhere in the Bitcoin life cycle. Any liquidity or anonymity externality that doesn't equally apply to USD is probably accruable only by criminals and traffickers. The transactions are slow and costly, and there's no guarantee that some governmental research agency hasn't already broken the cryptographic underpinnings.
- xirbeosbwo1234 6y ago
  Because it is so fantastically monumentally brain-meltingly bad. When a casino uses as much electricity as entire countries, it deserves my hatred rather than just not deserving my love.
ur-whale 6y ago
And all the tin-foil wearing weirdos who had been hollering about it from their mum's basement will be vindicated. That will be quite a day!
- mrfinn 6y ago
  Actually some of us are really interested in cryptocurrencies as tool to liberate people from a corrupt system, and we leaved our mum's basement a long time ago.

ALittleLight 6y ago

"Mafia" seems a strange and prejudicial word to use here. "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset" - at first I thought this was really astonishing. Now, I'm not so sure. My first interpretation was that 2% of bitcoiners have 95% of the bitcoin - but now I wonder how many addresses a typical person has. e.g. If I create an address every time someone buys illegal drugs from me over the 5 years I sell them on the darknet, and later coalesce all my earnings into some address, does that mean that my X empty addresses are counted in the 98% of have-nots and my one coalesced address in the 2% of haves? Depending on how many addresses people typically use, and given the multi-year history of bitcoin, it actually seems somewhere between not surprising and incomprehensible to me. Like, I guess that's a percentage it could be, but I don't know how to interpret it. I think a better news article would provide context on stats like this so the reader could understand rather than just leaving the reader to figure out the meaning for themselves.

_Microft 6y ago
They might be alluding to the "Paypal Mafia". https://en.wikipedia.org/wiki/PayPal_Mafia https://en.wikipedia.org/wiki/PayPal_Mafia
Izkata 6y ago
> My first interpretation was that 2% of bitcoiners have 95% of the bitcoin Consider how much was probably lost in the early days, from dead hard drives and such. For one specific example, bitcoin creator Satoshi Nakamoto appears to have ~1 million bitcoin sitting untouched [0] - that alone seems to be ~5% of all existing bitcoin [1] owned by one person, with an estimated 11-16% more just "lost" [also 1]. [0] https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-satoshi-nakamoto-still-own https://decrypt.co/34810/how-many-bitcoin-does-its-inventor-... [1] https://www.buybitcoinworldwide.com/how-many-bitcoins-are-there/ https://www.buybitcoinworldwide.com/how-many-bitcoins-are-th...
- agumonkey 6y ago
  A recent example of lost recovery https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_old_usb_key/ https://old.reddit.com/r/Bitcoin/comments/lto0rt/found_an_ol...

geswit2x 6y ago

please, can you post something that we don't have to pay in order to read? thanks

randomNumber7 6y ago
Don't know why you are downvoted. I think it's super annoying...
kemonocode 6y ago
I agree, there needs to be a ruling about paywalled articles already. At the very least, tagging them properly (so people may ignore them at their leisure) or also putting an archive link in the comments.
greenyoda 6y ago
Please read the HN FAQ: https://news.ycombinator.com/newsfaq.html https://news.ycombinator.com/newsfaq.html > Are paywalls ok? > It's ok to post stories from sites with paywalls that have workarounds. > In comments, it's ok to ask how to read an article and to help other users do so. But please don't post complaints about paywalls. Those are off topic. More details: https://news.ycombinator.com/item?id=10178989 https://news.ycombinator.com/item?id=10178989 You can get around Bloomberg's free article limit by clearing their cookies (or using a browser extension like uMatrix that automatically blocks them). Their articles are also readable if you submit them to an archive site. For example, someone posted this link in another comment: https://archive.is/AqtRg https://archive.is/AqtRg
tim333 6y ago
https://archive.vn/uR4n6 https://archive.vn/uR4n6

gnrlst 6y ago

Remember when BTC used to be fun and exciting? Stupid projects being created, tipping widespread all over the internet. It was created to be a "peer-to-peer electronic cash system" (quoting from the whitepaper title)... oh how far it has strayed.

ZeroMinx 6y ago
Most of this also applies after a s/BTC/WWW/
barbegal 6y ago
Yes I remember when you could send Bitcoins and your transaction was practically guaranteed to get into the next block. I had fun solving puzzles created using Bitcoin scripts. If you could solve the puzzle you could win some Bitcoins. Transaction fees were so low as to be irrelevant and you could send small tips to anyone you wanted, buy beers, gift it to strangers to try out... But even then you could see that Bitcoin wouldn't scale. Most people couldn't run full nodes, block sizes were getting bigger and bigger. Bitcoin worked great when you had a few hundred thousand people using it but with 10s of millions it doesn't work well.
- vbezhenar 6y ago
  > Most people couldn't run full nodes Can you elaborate on that? I checked few years ago and it was possible to run full node. What would prevent me from running full node right now?
  - barbegal 6y ago
    Maybe I should say didn't rather than couldn't. Everyone can rent a server for a few dollars a month to run a node. Most people home laptops are not suited to running a full node as they either have to be always on or are spending a lot of time validating blocks every time you power them on to catch up.
    - imtringued 6y ago

ur-whale 6y ago

https://archive.is/AqtRg https://archive.is/AqtRg

ExcavateGrandMa 6y ago

money > bitcoin ... wake up before the bitcoin excavates you :)

ur-whale 6y ago

Any article that uses the sentence "mostly men" in the first paragraph is highly likely not worth reading.

CryptoPunk 6y ago
I agree. It goes without saying that most of the capital is owned by men. In which industry is that not the case? The social commentary angle can't justify that line either: Bitcoin is a pseudonynous digital currency, that started trading at $0.10, and required nothing more than having a basic windows machine, and downloading the node software, to hold from the start. Very early on, downloading the standard wallet software was also all it took to mine bitcoin. If mostly men own it, it's because mostly men were interested in the concept early on. In any case, despite containing that line, this was a good article and worth reading.
- darawk 6y ago
  I think the point is that the article feels a need to highly this, as though it is relevant. Primarily because they are trying to narrativize it in a certain way.
55555 6y ago
These says, if you write "men" instead of "mostly men", you get attacked my SJWs. My favorite form is when they write "men (and they are almost entirely men)." But as is becoming clear to many, you cant please everyone all of the time, and, especially these days, there are some people you cant please any of the time. What phrasing would you prefer? "Humans" or just "men"?
- dmingod666 6y ago
  If someone cannot think about a topic without classifying the genitals of the discussed people irrespective of what they are talking about, you'd probably not be wrong to take notice of that. Not that it matters, but, expecting the whole world to share the same perversion is a bit too much..

Traster 6y ago

It is kind of funny that exchanges have become so successful for Bitcoin- since they lose 100% of the stuff that made BTC attractive in the first place. They’re centralised, regulated and transactions don’t even go on the blockchain. The result is that the number 1 way people get into Bitcoin is through a mechanism that has none of the attributes of Bitcoin.

read_if_gay_ 6y ago
> They’re centralised, regulated and transactions don’t even go on the blockchain. Of course. All of that is kind of unavoidable if you want to interface with fiat.
- vbezhenar 6y ago
  Not really. I can buy bitcoins on localbitcoins and it's pretty decentralized.
  - viraptor 6y ago
    The fact you got to the localbitcoins service and tell it who you do the exchange with makes it at least a centralised place of information.
    - 177tcca 6y ago
      So basically the consumer tech hasn't yet caught up with the technology, is what you're saying? Once there are enough people buying and selling for cash, you'll just need to find an old payphone, or some other known meeting place, if popular technical means are legislated away.
    - deleted 6y ago
      [deleted]
  - robcohen 6y ago
    Under US law it is illegal to use localbitcoins. It’s a violation of money transmitter laws. https://kelman.law/blog/money-transmitter-licensing-for-u-s-crypto-companies/ https://kelman.law/blog/money-transmitter-licensing-for-u-s-...

rsp1984 6y ago

“It’s a money network,” Winklevoss said. “What happens when you put an economic incentive around that network? That’s possibly the most effective network in the world.” How in the world can you call Bitcoin a "money network"? Unless I'm missing something obvious there's no more network effect to it than to any other popular currency or security.

deleted 6y ago
[deleted]
chrisco255 6y ago
You're correct on Bitcoin's network effect being currently less than that of existing popular fiat currencies. The currency market, is of course, the most actively traded market in the world. The FOREX trades over $7 trillion per day, and the market is worth over $2.4 quadrillion. But yes, Bitcoin has already eclipsed all but a handful of stocks with a market cap clocking in at $800B-$1T, a daily volume of $50B+ and its more liquid than any stock since it trades 24/7 and can be remitted without intermediaries.

asdev 6y ago

unrelated comment: it's crazy how anti crypto and anti blockchain HN is for being a tech community

paulryanrogers 6y ago
Is it? Would it be crazy how anti-homeopathy a medical forum could be? Perhaps a tech savvy community is more aware of the flaws of BTC, and therefore more bearish on it's prospects.
- deleted 6y ago
  [deleted]
sidlls 6y ago
What about being a tech community suggests it should not be anti-crypto/blockchain?
rchaud 6y ago
It may be because cryptocurrencies in their present state represent little other than a electricity-hungry 'store of value' rather than its considerably loftier original goals.
- 177tcca 6y ago
  "Represent" in the public and media mind share. What the technology actually is capable of, and is doing today, these are different things.
  - rchaud 6y ago
    Sure, but we are not commenting on a story about crypto-related applications. The story is about a centralized exchange going public. Coinbase doesn't care what dApps will be created on Ethereum or whatever, in the same that my broker doesn't care about how my GME purchase will strike a blow for the little guy. They're both just there to pick up their cut.

ffggvv 6y ago

am i the only one that gets a warm euphoric feeling going on the crypto subreddits on days like these and drinking their salty tears as it crashes to hell?

sah55 6y ago
Yes I think you might be the only one (btw +380% since 2020)
wtf_is_up 6y ago
>crashes to hell Zoom out.
- mamon 6y ago
  "Past performance is not indicative of future results" EDIT: it might be a lawyerspeak, but it is still a good advice: there's a reason why Bitcoin has been down $14k this week and that reason is the settlement with NYAG in the Tether lawsuit. Situation has changed, there's one fewer scam company there to artificially inflate Bitcoin price, so expect downward trend for at least the next few months.
  - ravenstine 6y ago
    That phrase is lawyer-speak that only exists for the sake of mitigating liability. Of course every conceivable thing has a non-zero risk.
  - wtf_is_up 6y ago
    I fail to see the relevance of the cliche you've posted here. BTC has 'crashed to hell' all the way down to where it was 07 Feb 2021 after doubling a few times and the parent post is spitefully spiking the football by 'drinking salty tears'. Has nothing to do with predicting the future.

kemonocode 6y ago

I won't say much about the article as it's a topic that has been discussed plenty of times before (The merits and faults of Bitcoin) with often inflammatory results, but I will definitively say it's pretty easy and rather intellectually dishonest to attack it only whenever there's a dramatic price swing. Where were all these articles during all those price lull periods? Also, if we're pointing fingers, the influence Coinbase has on Bitcoin is insignificant compared to the Chinese mining conglomerates. The US is not the rest of the world.

kodah 6y ago
> Where were all these articles during all those price lull periods? People are motivated to talk and report based on a myriad of things, but lately this perception of "power" has been center stage. If you ask these people I imagine they would tell you that when Bitcoin hits a high it makes those people, and Bitcoin, very powerful while when it's $8 they're just nobodies wasting time in a dark room and coming up with memes like HODL.
arcticbull 6y ago
Some of us have maintained a strong anti-Bitcoin position at all times. [edit] David Gerard comes to mind - author of Attack of the 50 Foot Blockchain and Libra Shrugged - and HN user (dgerard I think) (https://davidgerard.co.uk/ https://davidgerard.co.uk/) More recently Amy Castor, also an HN user (amycastor) (https://amycastor.com/ https://amycastor.com/) And of course Bitfinex’d is back and public again on Twitter. (https://twitter.com/Bitfinexed https://twitter.com/Bitfinexed)
- bombcar 6y ago
  /r/buttcoin has memes but it also has some pretty serious discussions
  - arcticbull 6y ago
    One thing I really appreciate about them is unlike literally every other crypto sub, they’re not an echo chamber. Nobody as far as I can tell is ever banned for being pro-crypto, or posting pro-crypto content. If they’re hard-core shills or brigading they get downvoted or get slapped with a playful flair (“warning, I have the brain worms” is my favorite haha). As such it gets a lot of pro-crypto folks participating to get a different perspective. It’s not high brow HN level discourse but to your point a lot of serious stuff ends up there. Considering the topic it’s pretty balanced.

glitchc 6y ago

Fiat money works because government has a strong say in its creation and valuation, and govt. is elected by the people. Lobbying and other private interests aside, by and large, the system is still beholden to the opinions of the citizenry. Decentralized finance, while originally designed to give more power directly to the people (Nakamoto’s “one CPU one vote”), is now clearly shown to be beholden to an oligopoly of private interests. It’s important to point out the reality behind the fallacious narrative of “the people are in control,” so that people wake up and realize that DeFi without govt. intervention is a bad thing. An individual has zero say in Bitcoin prices. At least with fiat currency, if they don’t like what’s happening, they can change the govt. to one that is more aligned with their collective fiscal view.

Empact 6y ago
That’s strange because I see it essentially in reverse of that: To change the Bitcoin price, vote with your dollars, going long or shorting. You will materially impact the order book and resulting price. Other ways exist: starting a company like the ones mentioned in the article. In contrast, in federal elections you have a vanishingly small chance of casting a deciding vote between two participants in an actual oligopoly (more specifically, a duopoly), who are themselves primarily allied with powerful interests which include the banking sector. Does anyone really believe their reps are responsive to them on issues like monetary policy?
- glitchc 6y ago
  And if you don't have dollars? No dollars, no votes? And the corollary: More dollars, more votes? Sounds like a plutocracy, don't you think? Be careful what you wish for. Unless you're secretly Bezos or another of the billionaires' club, in a plutocracy you and I and countless others are just peons. At least in democracy you have a voice, regardless of your bank balance. Democracy may suck as a system, but it's definitely better than the alternatives :) I'll venture further and say those who say otherwise have either never actually lived in the alternative, or secretly harbour delusions of grandeur.
  - 6y ago

mensetmanusman 6y ago

“ Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset, according to researcher Flipside Crypto.” It’s kind of ironic that BTC pollutes more than any prior monetary invention while simultaneously having higher levels of internal income inequality.

arcticbull 6y ago
It’s all around the worst one yet. If your transaction counterparty is within 1250 miles of your house it takes less energy to simply drive there in a Tesla with a brick of gold. It’s also funny because I suspect the overwhelming majority of those accounts simply lost their keys.

aphextron 6y ago

Say what you will about the technology, but the Bitcoin community attracts the most unsavory, scandalous people imaginable. It truly is a wretched hive of scum and villainy. Everything even tangentially related to it instantly becomes a source of scams, illegal activity, and just general shadiness. It's what has always turned me off of blockchain technology in general. I'm sure these same people exist in the fiat financial world as well, but it just has a lawless, wild west, dog eat dog atmosphere that is so off putting.

1996 6y ago
> I'm sure these same people exist in the fiat financial world as well, but it just has a lawless, wild west, dog eat dog atmosphere that is so off putting. Actually, it's far worse in the fiat financial world.

Rapzid 6y ago

Perhaps the idea of "pure decentralization" doesn't exist; only partial realizations of it. If you look at Bitcoin and Ethereum you find concentrations of power, information, and etc at many levels; centralization. Even at the technical level the solution to controlling change is often to have minority steering groups whose membership necessarily suggests a concentration of power enabling them to exert influence.

ketamine__ 6y ago
Taking that a bit further many startups have raised a traditional round before an ICO. Since ICO's are so popular I think one could argue that they don't need to do this. Are they loyal to the VC's or the token holders?

ffggvv 6y ago

is bitcoin truly decentralized? in the sense that there’s a centralized ledger that anyone can access and see transactions? i know the ledger is copied and decentralized to all nodes but for instance if i go on the street corner and buy something with cash, no one in the world knows other than the participants. with bitcoin everyone in the world knows and it’s recorded for all time

bombadilo 6y ago

I've been reading hacker news for years and I can't recall any piece of technology that seems to attract such vitriol and disdain from the community here. Certain bitcoin criticisms are understandable, but painting the block chain and the whole crypto industry with a broad brush of 'scam', 'shady', 'useless' is just down right moronic and embarrassing. Many of you claim to be technologists that leverage the power of technology to benefit humanity. Yet you can't plainly see how various projects in the space like ethereum, nano, chain link, cardano etc. have useful applications that will change the landscape of finance and economics forever. Painfully cynical bunch you lot are.

samstave 6y ago

Whats the networth of the W brothers (the ones that Zuck stole FB from?)

samstave 6y ago
edit: Dont worry I found out: Assuming the Winklvoss Twins ONLY kept the initial 11,000 BTC they purchased - Those coins are worth 497MM today. reply

b1daly 6y ago

This article is an example of the pure propaganda that 'mainstream financial media' participates in on-the-regular. Why that is I don't know. Symbiotic business interests I guess. It's not that the information is incorrect. It probably is and it does tell us something about some of the big players around Coinbase. But the whole bitcoin 'ecosystem' is essentially a collective criminal organization, with some players being closer to the dirty parts than others. (I'm leaving out everyday holders of bitcoin, just talking about insider types.) These big Coinbase players might not 'touch the poo' directly, but their hands still get stinky. The price action in bitcoin is determined across a network of exchanges, most of which do not use real dollars (or other govt currency). They use crypto only for trading, including the fake 'stable-coin' tether. Tether (the company who issues the currency tether) has been shown definitively to be running a scam and are completely dishonest.) They have issued $35Billion worth of their fake dollars. Until recently they were issuing on the order of $1B per week! Tether is a sister company to the exchange Bitfinex with the same owners and management. So essentially the same company. They just signed an agreement with the New York Attorney General where they paid a fine of $18.5M (notice difference in scale). The agreement spells out exactly how they have been scamming people. This is based on information coming from the company itself. This is not FUD, just FACT. (interestingly since they signed this agreement ~10 days ago, they stopped issuing tether.) One of the central players in this ongoing criminal operation who has been taken out is Crypto Capital Corp. They ran a shadow banking system for many of the big exchanges, including Bitfinex and Binance. The Feds seized $850M from CCC for money laundering, which precipitated a crisis for these entities and intensified the criminal activity of the many industry insiders connected through this shadow bank. My guess is that Tether issued $35B in fake USDT (tether) almost exclusively without dollar collateral backing. (the original premise of tether was each would only be issued on receipt of a true USD by tether, and therefor each USDT was pegged to a USD, the peg holds for now but the dollar backing is not there, that's another story.) Most of this $35B was issued over the last year when we have seen a huge rise in bitcoin price. The tether currency only has one purpose, to buy cryptocurrency. So this is a huge amount of liquidity introduced into the market. (Compare to the hype around Tesla's $1.5B bitcoin purchase.) It is the price appreciation that drives this whole market, including the business of Coinbase, even though they do not deal with tether. The OP article mentions none of this! Sure, it reveals some insiders, perhaps on the more legit side, but ignores the real engine of this speculative bubble/fraud. It has the effect of 'white-washing' this dirty game. It's really gross.

deleted 6y ago

[deleted]

samstave 6y ago

Assuming the Winklvoss Twins ONLY kept the initial 11,000 BTC they purchased - Those coins are worth 497MM today.

moralsupply 6y ago

> Coinbase Global Inc.’s filing to become a publicly-traded company provides a glimpse into the remarkably small circle of mostly men who command the incredibly lucrative digital landscape Why is the fact they are "mostly men" relevant in any way? What if they are "mostly jewish"? Or "mostly white"? Or "mostly American"? Is Bitcoin now a matter of "privilege"? Are there people out there who fall for this sort of insane narrative? In any case, feel free to keep all your wealth away from Bitcoin. It's not mandatory to use it -- unlike the US Dollar, which is actually managed by a mafia, which we call "the government", and which will use force against you if you don't use its currency.

runawaybottle 6y ago
That’s interesting. Yeah, what if they were mostly Jewish? I never really thought about the demonization of men now days in those terms. Took a long time until Jews fought back against the absolute constant throb of ‘Jewish cabal’ that runs the world. Very long time. Interesting, that was profound.
- charia 6y ago
  This is hacker news and so I'm trying to not just post a low effort reply, but reddit.com/r/menkampf is all about taking that premise and running with it. Before finding that subreddit, I didn't notice how just how commonplace casually insulting men was accepted. I do understand the power difference that isn't one to one and why this sort of insulting is accepted, in that men are not a real minority like Jewish people are so culturally insulting men is a considered a punching up situation. Still, I think the proliferation and casual acceptance of the rhetoric people use in this context is not exactly healthy for society.
  - riekus 6y ago
    I have start noticing it as well after stumbling on some interviews with Jordan Peterson.
anonisko 6y ago
Proof of work (PoW) vs proof of violence (PoV). Both energy intensive mechanisms for enforcing the security of a currency.

jgalt212 6y ago

If tether is such a scam, how is it still trading close to par? Is anyone willing to buy a non-trivial amount of tether at par (other than tether co. and Bitfinex)? https://finance.yahoo.com/quote/USDT-USD/ https://finance.yahoo.com/quote/USDT-USD/

meowster 6y ago
How did Bernie Madoff's investment fund operate for years after people were claiming it was a ponzi? People want to believe just a little longer.

laughingbovine 6y ago

What is this article? Literally only one line in this article lines up with the headline: "Less than 2% of the anonymous ownership accounts that can be tracked on Bitcoin’s blockchain control 95% of the digital asset, according to researcher Flipside Crypto." Then its a story about bitcoin beginnings and the lead up to coinbase. Does the article imply that the Coinbase owners own 95% of the digital asset? Who knows, article never says. Who is the "Coinbase Mafia"? Who knows, i guess its just every person who was named in the article. Who holds sway over bitcoin? Find another article cuz this one wont tell you.