3 ms·

> Exchange risk is tempered somewhat by Coinbase which is more comparable to a standard bank in terms of risk (imo). The fine print does not bear this out at a

> Exchange risk is tempered somewhat by Coinbase which is more comparable to a standard bank in terms of risk (imo). The fine print does not bear this out at all. Coinbase states in their TOS that your funds may not replaced in the case of a breach because they do not insure the entirety of accounts, nor do they stipulate a guaranteed insured amount:[0] > In case of a covered security event, we will endeavor to make you whole. However, total losses may exceed insurance recoveries so your funds may still be lost. Comparing the risk profile of Coinbase to a bank is no different than blindly trusting a big bank not to fail. These are not analogous institutions from a risk management standpoint. 0: https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured https://help.coinbase.com/en/coinbase/other-topics/legal-pol...

gonehome 5y ago
FDIC insurance is capped at 250k. The recovery there is also limited and it’s a bad idea to keep large amounts of money in a bank account. > “Comparing the risk profile of Coinbase to a bank is no different than blindly trusting a big bank not to fail.” That’s kind of my point? They share a similar risk. The most interesting thing with crypto is the new capabilities it enables for self custody of wealth. There’s also the non-government controlled supply and global store of value which are interesting too, but easier self-custody is the prerequisite differentiator imo. It’s also one of its core advantages over gold (the others being easier to transact with, easier to move/store which is related).
- thr0wawayf00 5y ago
  But your individual losses are covered when a bank fails, you're not protected when an exchange fails. They're just gonna try their hardest to make you whole. Look at that worked out at Mt Gox. > The most interesting thing with crypto is the new capabilities it enables for self custody of wealth. Serious question: what are the new capabilities that this opens up? These tokens are really unstable which makes them poor candidates to use as actual currency, research shows that decentralized networks are no less susceptible to market manipulation than traditional financial markets and there's an unbelievable amount of fraud everywhere in this space. The whole reason the Federal Reserve was created was to weed out endemic fraudulent activity around the country during the era of "Wildcat Banking"[0], when banks were essentially creating their own currencies. Crypto is largely the digital reincarnation of this philosophy, and isn't really doing anything about shitcoins and other scams. Now, we're starting to see the legitimization of shitcoins through sports team fan tokens that provide no tangible value beyond the purely speculative "hodl" mentality. 0: https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking

gonehome 5y ago

FDIC insurance is capped at 250k. The recovery there is also limited and it’s a bad idea to keep large amounts of money in a bank account. > “Comparing the risk profile of Coinbase to a bank is no different than blindly trusting a big bank not to fail.” That’s kind of my point? They share a similar risk. The most interesting thing with crypto is the new capabilities it enables for self custody of wealth. There’s also the non-government controlled supply and global store of value which are interesting too, but easier self-custody is the prerequisite differentiator imo. It’s also one of its core advantages over gold (the others being easier to transact with, easier to move/store which is related).

thr0wawayf00 5y ago
But your individual losses are covered when a bank fails, you're not protected when an exchange fails. They're just gonna try their hardest to make you whole. Look at that worked out at Mt Gox. > The most interesting thing with crypto is the new capabilities it enables for self custody of wealth. Serious question: what are the new capabilities that this opens up? These tokens are really unstable which makes them poor candidates to use as actual currency, research shows that decentralized networks are no less susceptible to market manipulation than traditional financial markets and there's an unbelievable amount of fraud everywhere in this space. The whole reason the Federal Reserve was created was to weed out endemic fraudulent activity around the country during the era of "Wildcat Banking"[0], when banks were essentially creating their own currencies. Crypto is largely the digital reincarnation of this philosophy, and isn't really doing anything about shitcoins and other scams. Now, we're starting to see the legitimization of shitcoins through sports team fan tokens that provide no tangible value beyond the purely speculative "hodl" mentality. 0: https://en.wikipedia.org/wiki/Wildcat_banking https://en.wikipedia.org/wiki/Wildcat_banking