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While I'm sure that there's a lot of truth in this (and love the petition, as it focuses on shareholders, not the employees), the margins Coinbase was having fo
by xiphias2 4y ago
While I'm sure that there's a lot of truth in this (and love the petition, as it focuses on shareholders, not the employees), the margins Coinbase was having for trading cryptocurrencies was unsustainable, and the company was overvalued.
Now the controversial part: Coinbase had a valuation of 100k BTC in 2012, and had the same valuation (100k BTC) at the IPO time. Unlike the internet where most of the valuecis captured over IP protocol, with Bitcoin I expect the base layer to capture most of the value, and not the companies on top of it.
https://www.usv.com/writing/2016/08/fat-protocols/ https://www.usv.com/writing/2016/08/fat-protocols/
- Qworg 4y agoWhy do you expect this? Bitcoin is supply limited, but you can take trading fees over and over forever.
- alar44 4y agoCorrect. If anything, Coinbase's value should be tied to the volatility of the crypto market. Doing a quick search of various crypto volatility indexes, this appears to check out, roughly.
- hackernewds 4y agoThe trick though is volatility = both times of lows and highs. So it can survive down times are well as when times are good
- xiphias2 4y agoNot really, the margins naturally go down, Coinbase has no monopoly on trading, but Bitcoin has network effect. Coinbase made more money on trading fees than the whole ICE exchange, it's not sustainable.