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Coinbase is definitely a success story in how to appeal to the masses. There were always alternatives, but coinbase always came out on top despite the high fees

Coinbase is definitely a success story in how to appeal to the masses. There were always alternatives, but coinbase always came out on top despite the high fees and poor customer service. I think Coinbase as a publicly traded company will be very interesting to follow. Not only is it a massively cyclical industry, but the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase. It's very success should be inverse to the goals of crypto, and over time, one would think the relationship can only get more fragile.

dehrmann 6y ago
> the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase That was the pitch of crypto. In practice, people are buying it as a bet that it will go up. I suspect most people are only buying it because the value is going up. If bitcoin actually worked like a currency and traded between $8k and $12 for the past 5 years, no one would care.
- rawtxapp 6y ago
  Except currencies have much bigger market caps, it wouldn't have worked as a currency in that range (outside of a very small economy). We are now in the initial phase where it's being used as a store of value, but sooner or later, it's going to reach roughly it's true value at which point, you would expect it to behave more like a currency rather than an asset with a huge upside.
  - spiralx 6y ago
    Currencies don't have market caps, assets have market caps. The fact that people talk about crypto's "market cap" is as clear an indication that it's not and never will be a currency.
    - delaaxe 6y ago
      Currencies definitely have total supplies which can be measured in USD. Let's not be finicky with definitions. https://fiatmarketcap.com/ https://fiatmarketcap.com/
      - spiralx 6y ago
        Calling a country's M2 money stock "market cap" is exactly the kind of category error I expect in the crypto space.
        delaaxe 6y ago
        You must be fun at parties
- onlyrealcuzzo 6y ago
  Global wealth is $400T. All crypto currency combined is worth about ~$2T at this point. So to store 0.5% of the world's wealth, we are using 0.6% of the world's energy. Banks obviously don't use anywhere near this much energy. Bitcoin is estimated to use more energy than all other server farms put together. So we are using 0.6% of the world's energy to store 0.5% of the world's wealth. And < 0.6% of the world's energy to store the other 99.5% of the world's wealth. Doesn't seem like the ideal wealth storage technology.
  - delaaxe 6y ago
    I like this reasoning in terms of global wealth
  - lotsofpulp 6y ago
    I would include the energy needed to maintain trust in other currencies including efforts to prevent counterfeits, which I might argue includes some portion of a nation's militaristic might. Trust is an even more ambiguous, yet crucial aspect of maintaining a currency's value, tied up in the "order" or predictability of the society using the currency, which involves various legal systems and at the most basic level, relationships between its peoples. It takes a relatively minuscule amount of energy to maintain a database of numbers associated with certain people and entities, but quite a significant amount to make it mean something.
    - abalone 6y ago
      If this were actually true, Coinbase would not need to exist with a market cap of $100B.
    - g_sch 6y ago
      I don't really understand this argument. If militaries are part of the embodied infrastructure of a country's banking system, this would imply that replacing the banking system with something decentralized (like cryptocurrency) would cause countries across the world to reduce their military footprint. I find it much more likely that military resources would be diverted to somewhere upstream of mining in the value chain. For example, if we continue relying on carbon-intensive proof-of-work blockchains, why wouldn't armies simply be diverted to secure energy resources?
- svachalek 6y ago
  Sadly this is true other than "no one would care". Many would care, just mostly not in countries with stable fiat. But the success of BNB which is basically just a corporate database on a blockchain shows there is a big part of the community that doesn't care about decentralization at all.
  - delaaxe 6y ago
    BNB is an ERC-20
  - rodiger 6y ago
    Yeah I believe you mean BSC
jcims 6y ago
One factor of that appeal in the US is that you have to provide your SSN to the exchange you're using. There's a lot of intangibles that Coinbase brings that overcomes the activation energy required to punch in those numbers on a web form. Just an anecdote but, much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily. Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.
- sombremesa 6y ago
  > much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily. > Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance. So...you're happy now, right?
  - jcims 6y ago
    lol Yes! I feel like a member of the economy now. A guid in a database somewhere...i have value.
Sohcahtoa82 6y ago
In the past, Bitcoin exchanges IMO felt shady. They frequently were run from foreign countries and got away with avoiding Know-Your-Customer banking laws. Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging.
- cableshaft 6y ago
  Yep. I always wanted to buy bitcoin way back in the day, it's just every time I almost joined an exchange (like Mt. Gox) they always made me feel really nervous and like I was going to lose my money (didn't help that several of them got hacked and did lose everyone's money). Coinbase was the first company that made the whole process feel pretty safe and reliable.
- MuffinFlavored 6y ago
  > Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging. I could be wrong but to me this makes every shill for crypto that says "it's anonymous!" a joke. I had to provide a driver's license and do checking account verification to be approved on Coinbase. Does that not remove the anonymity or am I missing something?
  - smolder 6y ago
    It does remove any question of who you are for coinbase, but bitcoin was only ever pseudonymous transactions, not fully anonymous. We can all see how each wallet behaves.
    - MuffinFlavored 6y ago
      and in an "audit" or "government" scenario, your Coinbase wallet is linked to your driver's license + checking account, right? Do we know if Coinbase would cooperate with US government in such a situation? I would imagine they would. I'd imagine they are also going to be sending IRS 1099-like forms for all crypto transactions, right?
      - 6y ago
divbzero 6y ago
> coinbase always came out on top despite the high fees Commissions tend to come down as markets mature (with some exceptions like real estate) so I will be curious to see if this occurs in the crypto market as well. I suspect that appeal to the masses will not be a long-term durable advantage.
paulpauper 6y ago
Early on coinbase made it very easy to buy, even if it meant taking losses. They allowed people to trade with funds that were not yet cleared. This was a long time ago. Some ppl could withdrawal the coins and then cancel the deposit by contacting the bank. that did not last long.
o_p 6y ago
>the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase. Not necessarily, the point of crypto is to reduce reliance on fiat money, due to the high fees of crypto it makes sense to build centralized services on top backed by decentralized cryptocurrencies, these exchanges dont hold real power, as you can just switch exchanges (unlike credit card processors). Bitcoin is like the internet gold, but you dont buy stuff with gold.
gge 6y ago
> the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase Yes, that is still the case? Decentralized exchanges like Uniswap are dominating (over $1B volumes daily) and growing very rapidly. Crypto is and always has been about decentralization.

dehrmann 6y ago

> the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase That was the pitch of crypto. In practice, people are buying it as a bet that it will go up. I suspect most people are only buying it because the value is going up. If bitcoin actually worked like a currency and traded between $8k and $12 for the past 5 years, no one would care.

rawtxapp 6y ago
Except currencies have much bigger market caps, it wouldn't have worked as a currency in that range (outside of a very small economy). We are now in the initial phase where it's being used as a store of value, but sooner or later, it's going to reach roughly it's true value at which point, you would expect it to behave more like a currency rather than an asset with a huge upside.
- spiralx 6y ago
  Currencies don't have market caps, assets have market caps. The fact that people talk about crypto's "market cap" is as clear an indication that it's not and never will be a currency.
  - delaaxe 6y ago
    Currencies definitely have total supplies which can be measured in USD. Let's not be finicky with definitions. https://fiatmarketcap.com/ https://fiatmarketcap.com/
    - spiralx 6y ago
      Calling a country's M2 money stock "market cap" is exactly the kind of category error I expect in the crypto space.
      - delaaxe 6y ago
        You must be fun at parties
onlyrealcuzzo 6y ago
Global wealth is $400T. All crypto currency combined is worth about ~$2T at this point. So to store 0.5% of the world's wealth, we are using 0.6% of the world's energy. Banks obviously don't use anywhere near this much energy. Bitcoin is estimated to use more energy than all other server farms put together. So we are using 0.6% of the world's energy to store 0.5% of the world's wealth. And < 0.6% of the world's energy to store the other 99.5% of the world's wealth. Doesn't seem like the ideal wealth storage technology.
- delaaxe 6y ago
  I like this reasoning in terms of global wealth
- lotsofpulp 6y ago
  I would include the energy needed to maintain trust in other currencies including efforts to prevent counterfeits, which I might argue includes some portion of a nation's militaristic might. Trust is an even more ambiguous, yet crucial aspect of maintaining a currency's value, tied up in the "order" or predictability of the society using the currency, which involves various legal systems and at the most basic level, relationships between its peoples. It takes a relatively minuscule amount of energy to maintain a database of numbers associated with certain people and entities, but quite a significant amount to make it mean something.
  - abalone 6y ago
    If this were actually true, Coinbase would not need to exist with a market cap of $100B.
  - g_sch 6y ago
    I don't really understand this argument. If militaries are part of the embodied infrastructure of a country's banking system, this would imply that replacing the banking system with something decentralized (like cryptocurrency) would cause countries across the world to reduce their military footprint. I find it much more likely that military resources would be diverted to somewhere upstream of mining in the value chain. For example, if we continue relying on carbon-intensive proof-of-work blockchains, why wouldn't armies simply be diverted to secure energy resources?
svachalek 6y ago
Sadly this is true other than "no one would care". Many would care, just mostly not in countries with stable fiat. But the success of BNB which is basically just a corporate database on a blockchain shows there is a big part of the community that doesn't care about decentralization at all.
- delaaxe 6y ago
  BNB is an ERC-20
- rodiger 6y ago
  Yeah I believe you mean BSC

jcims 6y ago

One factor of that appeal in the US is that you have to provide your SSN to the exchange you're using. There's a lot of intangibles that Coinbase brings that overcomes the activation energy required to punch in those numbers on a web form. Just an anecdote but, much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily. Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.

sombremesa 6y ago
> much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily. > Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance. So...you're happy now, right?
- jcims 6y ago
  lol Yes! I feel like a member of the economy now. A guid in a database somewhere...i have value.

Sohcahtoa82 6y ago

In the past, Bitcoin exchanges IMO felt shady. They frequently were run from foreign countries and got away with avoiding Know-Your-Customer banking laws. Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging.

cableshaft 6y ago
Yep. I always wanted to buy bitcoin way back in the day, it's just every time I almost joined an exchange (like Mt. Gox) they always made me feel really nervous and like I was going to lose my money (didn't help that several of them got hacked and did lose everyone's money). Coinbase was the first company that made the whole process feel pretty safe and reliable.
MuffinFlavored 6y ago
> Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging. I could be wrong but to me this makes every shill for crypto that says "it's anonymous!" a joke. I had to provide a driver's license and do checking account verification to be approved on Coinbase. Does that not remove the anonymity or am I missing something?
- smolder 6y ago
  It does remove any question of who you are for coinbase, but bitcoin was only ever pseudonymous transactions, not fully anonymous. We can all see how each wallet behaves.
  - MuffinFlavored 6y ago
    and in an "audit" or "government" scenario, your Coinbase wallet is linked to your driver's license + checking account, right? Do we know if Coinbase would cooperate with US government in such a situation? I would imagine they would. I'd imagine they are also going to be sending IRS 1099-like forms for all crypto transactions, right?
    - 6y ago

divbzero 6y ago

> coinbase always came out on top despite the high fees Commissions tend to come down as markets mature (with some exceptions like real estate) so I will be curious to see if this occurs in the crypto market as well. I suspect that appeal to the masses will not be a long-term durable advantage.

paulpauper 6y ago

Early on coinbase made it very easy to buy, even if it meant taking losses. They allowed people to trade with funds that were not yet cleared. This was a long time ago. Some ppl could withdrawal the coins and then cancel the deposit by contacting the bank. that did not last long.

o_p 6y ago

>the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase. Not necessarily, the point of crypto is to reduce reliance on fiat money, due to the high fees of crypto it makes sense to build centralized services on top backed by decentralized cryptocurrencies, these exchanges dont hold real power, as you can just switch exchanges (unlike credit card processors). Bitcoin is like the internet gold, but you dont buy stuff with gold.

gge 6y ago

> the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase Yes, that is still the case? Decentralized exchanges like Uniswap are dominating (over $1B volumes daily) and growing very rapidly. Crypto is and always has been about decentralization.