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I believe this is going to be a big milestone in raising awareness of cryptocurrencies and making them more mainstream. I would expect a lot of the "but the gov

I believe this is going to be a big milestone in raising awareness of cryptocurrencies and making them more mainstream. I would expect a lot of the "but the gov will ban it" arguments to be significantly weaker as crypto exposure of traditional investors keeps getting larger and larger. That said, one thing that boggles my mind is the fact that it seems to be currently valued at 100B$ which is roughly the market cap of Goldman Sachs.

the_local_host 6y ago
> I would expect a lot of the "but the gov will ban it" arguments to be significantly weaker... Cryptocurrency supporters should be lobbying for government bans, not against them. The most direct way to demonstrate that cryptocurrencies are truly decentralized and resilient to censorship is to subject them to unrelenting attack, most naturally in the form of legal crackdowns.
- londons_explore 6y ago
  The protocols and tech might be resistant to government crackdowns, but the user's being sent to prison for "illegal use of cryptocurrency" would certainly hamper use...
- spottybanana 6y ago
  Not agreeing, but it is interesting viewpoint. Personally I have been involved a lot in the crypto space, and seen lots of bank account freezes and similar problems happening to crypto traders. Maybe sometimes there is something nefarious going on, maybe it was false positive, who knows. However, personally seeing this has affected me in a way where I don't really trust banks much. That has put me in a position where I have increasingly large position in cryptocurrencies.
- deleted 6y ago
  [deleted]
- beaner 6y ago
  That's dumb. The purpose of decentralization isn't to simply demonstrate the strength of the decentralization. It's an element that helps something achieve a purpose. In this case, the ability of a person to be their own bank. Not being banned also helps that purpose. Why would cryptocurrency supporters lobby for government bans?
- paxys 6y ago
  There are cryptocurrency supporters who want to revolutionize the world's monetary systems, get governments out of currency manipulation, make international transfers easy and free, remove burden of entry for businesses, remove oppressive payment processors etc. Then there are cryptocurrency supporters who are holding large amounts of it and just want the value to keep going up. The latter category definitely does not want a government ban on trading/usage.
- agumonkey 6y ago
  Isn't that typical of new 'things' ? Defining themselves against the norm only to reach for acceptance as proof of stability ?
- TedDoesntTalk 6y ago
  > Cryptocurrency supporters should be lobbying for government bans, not against them. Just like a banned dr. Suess book, this would further inflate prices
  - paholg 6y ago
    No Dr. Seuss books are banned. The publisher decided to stop publishing a few of them.
    - simiones 6y ago
      There's more to it than that - eBay for example has banned trade in those books as well (Amazon too, and probably others), on the second hand market. Not sure if they reversed this absolutely crazy decision in the meantime, would be happy to hear that they did.
      - TedDoesntTalk 6y ago
        They did not reverse it. And I can’t buy those books at Barnes & Noble, either. Even at their physical stores.
        knowaveragejoe 6y ago
        Oh no! Anyways.
- bouncycastle 6y ago
  Obviously sarcasm, but there's a little bit of truth behind this. The real value of cryptocurrency is if the governments ban it. (They are more of a nightmare for totalitarian regimes, rather than free open societies.)
- rtpg 6y ago
  Except there's a gov't ban and now you can't actually get dollars into your brokerage account to buy crypto (and neither can anyone else), and then the price starts dropping. There's only so much effort someone will go through until they'll just put the money in Robinhood or something and buy some random meme stock.
- JumpCrisscross 6y ago
  > cryptocurrencies are truly decentralized and resilient to censorship If a major government wanted to break crypto, it would simply credibly threaten to launch a 51% attack. This is within the budget of most developed economies, and much simpler than enforcing a ban. Nobody does it because it would be stupid. Crypto is part of the economy. Destroying it would be akin to bombing a domestic factory because one doesn’t like its products.
  - throw4738 6y ago
    51% attack would be very expensive on electricity and new infrastructure. There is already working and profitable infrastructure to prevent money laundering.
  - mateuszf 6y ago
    > If a major government wanted to break crypto, it would simply credibly threaten to launch a 51% attack. Do you know how hard it's now to buy/produce graphic cards and asic-s good for mining crypto? The demand is very big yet producers can't scale up. I don't see governments to have possibility obtaining so much hardware in a short/medium time horizon.
    - simiones 6y ago
      Why do you think the government would have to produce new ASICs, when they could just buy or seize the existing ones?
      - WanderPanda 6y ago
        That would take out the "most developed countries" part...
      - mateuszf 6y ago
        > Why do you think the government would have to produce new ASICs, when they could just buy or seize the existing ones? There is not enough of them to buy on the market to make 51% attack. Of course seizing is possible but hard because I imagine it would be quite hard to locate them, apart form large mining operations they are quite distributed. In case of bitcoin network it would have to be a large multicountry operation. Because the miners are really distributed around the world.
- throw4738 6y ago
  But most cryptos are not truly decentralised and robust enough. There is centralised dev team. And no crypto can truly handle brainsplit network issues.
randomsearch 6y ago
I think it increases the chance not of legitimisation but of a govt bailout when either (a) Bitcoin threatens to melt the planet or (b) bitcoin’s value collapses, because there isn’t a (c) I can see.
- rocqua 6y ago
  Why can't bitcoins price "stabilize" by fluctuating inside the 1000 to 200000 range?
  - jcpham2 6y ago
    a) it totally can b) proof work uses as much electricity as proof of work needs, the internet cry-for-help crowd likes to recite made up numbers
    - ac29 6y ago
      > b) proof work uses as much electricity as proof of work needs No, proof as work uses as much electricity as is profitable. The entire Bitcoin network could trivially be run on a single PC.
  - pta2002 6y ago
    I'd say 20000% fluctuations are hardly stable, no?
logicchains 6y ago
>That said, one thing that boggles my mind is the fact that it seems to be currently valued at 100B$ which is roughly the market cap of Goldman Sachs It makes more sense when you consider the insane fees they get away with charging due to lack of competition in the regulated US crypto space. In a mature exchange in the normal financial markets, one might expect to pay under 0.5bps (one bp is 1% of 1%). In overseas crypto exchanges, the fee will be around 5bps. In Coinbase, it's 20-50bps.
- riffraff 6y ago
  but the business volume is _much_ lower, and GS deals with an inordinate amount of more lucrative things (SPACs, IPOs, etc).
- I_am_tiberius 6y ago
  > lack of competition in the regulated US crypto space That's what I thought as well. People complain about monopolies but these over regulated spaces make it so difficult for startups to get going. It shouldn't be necessary for a non tangible asset company to need an angel investor that pays for tons of bureaucracy and license acquisition.
  - Guthur 6y ago
    I feel we collectively misinterpret what the problem with single trader situations are. There being a monopoly is not the problem, the problems are always anti trust behaviour i.e. not co-operating with the market for improvement, closing of competition by some behaviour that is not beneficial to the market. Highly regulated markets tend to do this due the difficulty in disrupting such a market, you need to play by the existing rules and that leaves little room for manoeuvre against the incumbents, the incumbents are free from anti trust because the rules are set by the authorities, often at the behest of the incumbents of course.
- TacticalCoder 6y ago
  > It makes more sense when you consider the insane fees they get away with charging due to lack of competition in the regulated US crypto space. The fees, as you explain it, do indeed seem like highway robbery. But there's something very specific about Coinbase in the US: all customers funds from american fiscal residents in USD are FDIC insured (so up to 250 K are safe). AFAICT they're the only one to actually offer this? It's also a real company, with a real address, whose owners are real people, etc. It's not exactly the "we're convicted criminals operating from the Cayman using some shady bank" type of crypto exchange.
rvz 6y ago
> I believe this is going to be a big milestone in raising awareness of cryptocurrencies and making them more mainstream. 'Mainstream' as in a stronger argument for cryptocurrency regulations. We are only going to see more retail investors throwing in riskier investments with leverage and will end up bag-holding in another bust cycle.
- bryanwb 6y ago
  Big hedge funds never do risky things and leave us holding the bag</sarcasm>
  - rvz 6y ago
    Translation: Sure thing. I'm going to buy Coinbase stock with leverage on the day of its direct listing and hope that I will HODL it all the way to the moon. When it goes back down, it doesn't matter if I'm wiped out or a bag holder, I can still get a way with it via asking for a bailout just because a big hedge fund can do it. /s
vineyardmike 6y ago
What’s even crazier is that GS has 30k plus employees while CB has 1500. The value per employee difference is insane. Then consider that CB might find side revenue sources (HS has many sources of revenue for example) and think about what multiple of current value CB can grow to and how comparatively “easy” it is for CB to double compared to GS.
jillesvangurp 6y ago
At this point the reason governments are not cracking down as much as they could is increasingly not just that that would do quite a bit of damage among e.g. VCs and institutional investors (think pensions). People come out with pitch forks if you start messing with their pensions; so that is a big reason to maybe talk tough but let it happen at the same time. But there's also the FOMO factor. Governments are afraid of missing out and getting run over by e.g. the Chinese doing this regardless of what they allow or won't allow. In the US particularly, this is a direct threat to the relevance of the dollar as a means to conduct international trade. For the same reason China is moving pretty aggressively against certain crypto currencies while openly backing and endorsing others and e.g. the Chines national bank openly flirting with moving their currency on a block chain. That's why a lot of this stuff is happening under the watchful eye of the SEC with companies head quartered in San Francisco.
ur-whale 6y ago
> which is roughly the market cap of Goldman Sachs. Nothing prevented GS to enter the crypto space and offer a product similar to Coinbase's. Instead, this is what they were spending their time on: https://www.theguardian.com/business/2017/nov/30/bitcoin-is-a-vehicle-for-fraudsters-warns-goldman-sachs-boss https://www.theguardian.com/business/2017/nov/30/bitcoin-is-...
- rchaud 6y ago
  Goldman Sachs is large enough and ubiquitous enough that it should be assumed that they are, to some extent, on both sides of every trade they recommend (or discourage). Just because Goldman is telling their pension fund clients to avoid crypto doesn't mean that they don't have teams trading billions of it daily.
drexlspivey 6y ago
They were valued at 100B$ before their earnings last week showing an annualized growth of 500% (1.8B revenue for q1 vs 1.1B for the whole 2020), I expect it to settle at a higher number tomorrow.
endymi0n 6y ago
That‘s not a feature, it‘s a bug. An unregulated, emerging industry that comes with a baggage of enormous energy use, fraud and money laundering is one thing. Letting it get to a level of „Too big to fail“ where regulation or an outright ban might have repercussions on whole economies is a whole another thing that I‘m not exactly looking forward to.

the_local_host 6y ago

> I would expect a lot of the "but the gov will ban it" arguments to be significantly weaker... Cryptocurrency supporters should be lobbying for government bans, not against them. The most direct way to demonstrate that cryptocurrencies are truly decentralized and resilient to censorship is to subject them to unrelenting attack, most naturally in the form of legal crackdowns.

londons_explore 6y ago
The protocols and tech might be resistant to government crackdowns, but the user's being sent to prison for "illegal use of cryptocurrency" would certainly hamper use...
spottybanana 6y ago
Not agreeing, but it is interesting viewpoint. Personally I have been involved a lot in the crypto space, and seen lots of bank account freezes and similar problems happening to crypto traders. Maybe sometimes there is something nefarious going on, maybe it was false positive, who knows. However, personally seeing this has affected me in a way where I don't really trust banks much. That has put me in a position where I have increasingly large position in cryptocurrencies.
deleted 6y ago
[deleted]
beaner 6y ago
That's dumb. The purpose of decentralization isn't to simply demonstrate the strength of the decentralization. It's an element that helps something achieve a purpose. In this case, the ability of a person to be their own bank. Not being banned also helps that purpose. Why would cryptocurrency supporters lobby for government bans?
paxys 6y ago
There are cryptocurrency supporters who want to revolutionize the world's monetary systems, get governments out of currency manipulation, make international transfers easy and free, remove burden of entry for businesses, remove oppressive payment processors etc. Then there are cryptocurrency supporters who are holding large amounts of it and just want the value to keep going up. The latter category definitely does not want a government ban on trading/usage.
agumonkey 6y ago
Isn't that typical of new 'things' ? Defining themselves against the norm only to reach for acceptance as proof of stability ?
TedDoesntTalk 6y ago
> Cryptocurrency supporters should be lobbying for government bans, not against them. Just like a banned dr. Suess book, this would further inflate prices
- paholg 6y ago
  No Dr. Seuss books are banned. The publisher decided to stop publishing a few of them.
  - simiones 6y ago
    There's more to it than that - eBay for example has banned trade in those books as well (Amazon too, and probably others), on the second hand market. Not sure if they reversed this absolutely crazy decision in the meantime, would be happy to hear that they did.
    - TedDoesntTalk 6y ago
      They did not reverse it. And I can’t buy those books at Barnes & Noble, either. Even at their physical stores.
      - knowaveragejoe 6y ago
        Oh no! Anyways.
bouncycastle 6y ago
Obviously sarcasm, but there's a little bit of truth behind this. The real value of cryptocurrency is if the governments ban it. (They are more of a nightmare for totalitarian regimes, rather than free open societies.)
rtpg 6y ago
Except there's a gov't ban and now you can't actually get dollars into your brokerage account to buy crypto (and neither can anyone else), and then the price starts dropping. There's only so much effort someone will go through until they'll just put the money in Robinhood or something and buy some random meme stock.
JumpCrisscross 6y ago
> cryptocurrencies are truly decentralized and resilient to censorship If a major government wanted to break crypto, it would simply credibly threaten to launch a 51% attack. This is within the budget of most developed economies, and much simpler than enforcing a ban. Nobody does it because it would be stupid. Crypto is part of the economy. Destroying it would be akin to bombing a domestic factory because one doesn’t like its products.
- throw4738 6y ago
  51% attack would be very expensive on electricity and new infrastructure. There is already working and profitable infrastructure to prevent money laundering.
- mateuszf 6y ago
  > If a major government wanted to break crypto, it would simply credibly threaten to launch a 51% attack. Do you know how hard it's now to buy/produce graphic cards and asic-s good for mining crypto? The demand is very big yet producers can't scale up. I don't see governments to have possibility obtaining so much hardware in a short/medium time horizon.
  - simiones 6y ago
    Why do you think the government would have to produce new ASICs, when they could just buy or seize the existing ones?
    - WanderPanda 6y ago
      That would take out the "most developed countries" part...
    - mateuszf 6y ago
      > Why do you think the government would have to produce new ASICs, when they could just buy or seize the existing ones? There is not enough of them to buy on the market to make 51% attack. Of course seizing is possible but hard because I imagine it would be quite hard to locate them, apart form large mining operations they are quite distributed. In case of bitcoin network it would have to be a large multicountry operation. Because the miners are really distributed around the world.
throw4738 6y ago
But most cryptos are not truly decentralised and robust enough. There is centralised dev team. And no crypto can truly handle brainsplit network issues.

randomsearch 6y ago

I think it increases the chance not of legitimisation but of a govt bailout when either (a) Bitcoin threatens to melt the planet or (b) bitcoin’s value collapses, because there isn’t a (c) I can see.

rocqua 6y ago
Why can't bitcoins price "stabilize" by fluctuating inside the 1000 to 200000 range?
- jcpham2 6y ago
  a) it totally can b) proof work uses as much electricity as proof of work needs, the internet cry-for-help crowd likes to recite made up numbers
  - ac29 6y ago
    > b) proof work uses as much electricity as proof of work needs No, proof as work uses as much electricity as is profitable. The entire Bitcoin network could trivially be run on a single PC.
- pta2002 6y ago
  I'd say 20000% fluctuations are hardly stable, no?

logicchains 6y ago

>That said, one thing that boggles my mind is the fact that it seems to be currently valued at 100B$ which is roughly the market cap of Goldman Sachs It makes more sense when you consider the insane fees they get away with charging due to lack of competition in the regulated US crypto space. In a mature exchange in the normal financial markets, one might expect to pay under 0.5bps (one bp is 1% of 1%). In overseas crypto exchanges, the fee will be around 5bps. In Coinbase, it's 20-50bps.

riffraff 6y ago
but the business volume is _much_ lower, and GS deals with an inordinate amount of more lucrative things (SPACs, IPOs, etc).
I_am_tiberius 6y ago
> lack of competition in the regulated US crypto space That's what I thought as well. People complain about monopolies but these over regulated spaces make it so difficult for startups to get going. It shouldn't be necessary for a non tangible asset company to need an angel investor that pays for tons of bureaucracy and license acquisition.
- Guthur 6y ago
  I feel we collectively misinterpret what the problem with single trader situations are. There being a monopoly is not the problem, the problems are always anti trust behaviour i.e. not co-operating with the market for improvement, closing of competition by some behaviour that is not beneficial to the market. Highly regulated markets tend to do this due the difficulty in disrupting such a market, you need to play by the existing rules and that leaves little room for manoeuvre against the incumbents, the incumbents are free from anti trust because the rules are set by the authorities, often at the behest of the incumbents of course.
TacticalCoder 6y ago
> It makes more sense when you consider the insane fees they get away with charging due to lack of competition in the regulated US crypto space. The fees, as you explain it, do indeed seem like highway robbery. But there's something very specific about Coinbase in the US: all customers funds from american fiscal residents in USD are FDIC insured (so up to 250 K are safe). AFAICT they're the only one to actually offer this? It's also a real company, with a real address, whose owners are real people, etc. It's not exactly the "we're convicted criminals operating from the Cayman using some shady bank" type of crypto exchange.

rvz 6y ago

> I believe this is going to be a big milestone in raising awareness of cryptocurrencies and making them more mainstream. 'Mainstream' as in a stronger argument for cryptocurrency regulations. We are only going to see more retail investors throwing in riskier investments with leverage and will end up bag-holding in another bust cycle.

bryanwb 6y ago
Big hedge funds never do risky things and leave us holding the bag</sarcasm>
- rvz 6y ago
  Translation: Sure thing. I'm going to buy Coinbase stock with leverage on the day of its direct listing and hope that I will HODL it all the way to the moon. When it goes back down, it doesn't matter if I'm wiped out or a bag holder, I can still get a way with it via asking for a bailout just because a big hedge fund can do it. /s

vineyardmike 6y ago

What’s even crazier is that GS has 30k plus employees while CB has 1500. The value per employee difference is insane. Then consider that CB might find side revenue sources (HS has many sources of revenue for example) and think about what multiple of current value CB can grow to and how comparatively “easy” it is for CB to double compared to GS.

jillesvangurp 6y ago

At this point the reason governments are not cracking down as much as they could is increasingly not just that that would do quite a bit of damage among e.g. VCs and institutional investors (think pensions). People come out with pitch forks if you start messing with their pensions; so that is a big reason to maybe talk tough but let it happen at the same time. But there's also the FOMO factor. Governments are afraid of missing out and getting run over by e.g. the Chinese doing this regardless of what they allow or won't allow. In the US particularly, this is a direct threat to the relevance of the dollar as a means to conduct international trade. For the same reason China is moving pretty aggressively against certain crypto currencies while openly backing and endorsing others and e.g. the Chines national bank openly flirting with moving their currency on a block chain. That's why a lot of this stuff is happening under the watchful eye of the SEC with companies head quartered in San Francisco.

ur-whale 6y ago

> which is roughly the market cap of Goldman Sachs. Nothing prevented GS to enter the crypto space and offer a product similar to Coinbase's. Instead, this is what they were spending their time on: https://www.theguardian.com/business/2017/nov/30/bitcoin-is-a-vehicle-for-fraudsters-warns-goldman-sachs-boss https://www.theguardian.com/business/2017/nov/30/bitcoin-is-...

rchaud 6y ago
Goldman Sachs is large enough and ubiquitous enough that it should be assumed that they are, to some extent, on both sides of every trade they recommend (or discourage). Just because Goldman is telling their pension fund clients to avoid crypto doesn't mean that they don't have teams trading billions of it daily.

drexlspivey 6y ago

They were valued at 100B$ before their earnings last week showing an annualized growth of 500% (1.8B revenue for q1 vs 1.1B for the whole 2020), I expect it to settle at a higher number tomorrow.

endymi0n 6y ago

That‘s not a feature, it‘s a bug. An unregulated, emerging industry that comes with a baggage of enormous energy use, fraud and money laundering is one thing. Letting it get to a level of „Too big to fail“ where regulation or an outright ban might have repercussions on whole economies is a whole another thing that I‘m not exactly looking forward to.