13 ms·

Coinbase (YC S12) seeks to bring Bitcoin to the masses

291 points by barmstrong 14y ago

infinitivium 14y ago
What advantages does this service provide over bitcoin itself? My suggestion would be to make this very clear, and definitely make sure it is explained on the About page.
- eragnew 14y ago
  Definitely agree with making the advantages clear. I can see how this could be a pretty useful interface to BTC for non-technical users. I might have to try it out myself :)
- brittohalloran 14y ago
  Agreed. "Without coinbase, this is how you would use bitcoins _____..., with coinbase it looks like this instead ____." Dont assume any knowledge of bitcoins.
- base698 14y ago
  My guess is that you can send bitcoins to people who don't give a shit about it or know how to use the client and they can in turn pay for things with the coins you sent. I'm thinking of sending my dad a couple just to see if he can figure it out. :)
pat2man 14y ago
I like the idea, kind of a PayPal for Bitcoin. My issues would be the usual: I don't trust a new service with my bitcoins, don't know anything about their policy for data loss, etc. The about page and support pages don't really instill any confidence. If I knew I could trust them it would seem like a great service.
mtgx 14y ago
Is this a YCombinator start-up? I see PG's name there.
- Spittie 14y ago
  On their about page (https://coinbase.com/about https://coinbase.com/about) there is written "Investors: YCombinator"
- haasted 14y ago
  According to the About page (https://coinbase.com/about# https://coinbase.com/about#), yes. The AllThingsD article linked from the page mentions that the company is part of the current Y Combinator class.
smalter 14y ago
It's very cool to see that after posting looking for a co-founder to get into YC, it looks like Brian has gotten into YC as a solo founder and by the looks of it, is doing great. I sent his previous post looking for a co-founder to friends because Brian looked seriously formidable. Best of luck to him.
deleted 14y ago
[deleted]
karamazov 14y ago
This looks great - I can't wait until you can start ordering from eBay and Amazon with bitcoin.
- elliottcarlson 14y ago
  You can already redeem bitcoins for Amazon giftcards through various services, for example: http://coincard.ndrix.com/ http://coincard.ndrix.com/
- bbit 14y ago
  FYI: You can get a virtual visa card sent to your email for bitcoins :::: http://www.btcinstant.com http://www.btcinstant.com allows you order anywhere with bitcoins.
thechut 14y ago
I think that this could be the hero that Bitcoin needs. If they make it super simple / super clean they could revolutionize Bitcoin. To the creators, have you considered adding a USD (or other currency) funding option? Since getting the Bitcoins is probably the biggest obstacle for most everyday consumers.
- sage_joch 14y ago
  If that's true it could be a good time to speculate/gamble a bit. I'm tempted to throw $500 or so at it, for the chance of another bubble.
res0nat0r 14y ago
Any technical details on how wallets are protected? I think we've seen how previous bitcoin websites have fared on HN, it would be cool to know some of the details on how the BTC are going to be protected so that the problems of the past don't happen again.
- barmstrong 14y ago
  Yep - sorry we should really add a page on that. We're storing wallets in the cloud so this is an important concern. Private keys are encrypted in the database. bcrypted passwords. We also offer two factor authentication for your logins: http://blog.coinbase.com/post/25677574019/coinbase-now-offers-two-factor-authentication http://blog.coinbase.com/post/25677574019/coinbase-now-offer... We'll start keeping a majority of funds in cold storage as deposits grow (we're still in beta at the moment). I worked on fraud prevention at Airbnb previously and we had lots of money flowing through the site and stored with us, so I'm familiar with best practices around this. I also have a healthy respect for what can go wrong, and I think as we grow we'll go through regular security audits (and much more scrutiny as we pursue licensing as a money transmitter). You certainly shouldn't trust us on face value though, it's something we'll have to earn over many years.
brittohalloran 14y ago
Is it that Bootstrap makes every website look amazing or is it that people who build amazing looking websites tend to use Bootstrap?
- zethraeus 14y ago
  It's that they all look similar and you like the look. You also might be looking at websites built more by hackers than by web designers. Bootstrap is great for visually clean rapid development, but that comes at the cost of individuality. Props to Coinbase for changing the looming black top bar anyway.
  - tcwc 14y ago
    It's a theme from http://bootswatch.com/ http://bootswatch.com/. I wish more sites used one of those, completely agree with you on the black top bar.
drivebyacct2 14y ago
How is this different than MtGox? I don't trust MtGox, but at least they've made mistakes and have spoken publicly about how they've fixed those mistakes. On the other hand, are these guys storing my wallet safely? How about my balance (please god, don't store it as a float)? How about my password? If they're not launching with two-factor auth I won't even give it a chance (and likely ever, honestly). I've gotten progressively more and more pessimistic about these sorts of sites even though I like the idea of BitCoin as a currency. If security isn't heavily discussed and visible (2FA, do it!) at the launch, it will be hard for me to take this seriously.
- politician 14y ago
  "Coinbase now offers Two-Factor Authentication" http://blog.coinbase.com/ http://blog.coinbase.com/
  - mootothemax 14y ago
    And what happens if someone gains access to your server or social engineers their way in with your hosting company? As far as I can tell, this has been the biggest problem with such services so far.
    - politician 14y ago
      I'm not affiliated with coinbase; sorry if that was unclear.
  - drivebyacct2 14y ago
    Fantastic fantastic! Maybe I'm a nerd, but I'd be repping that on the front page.
- magic_haze 14y ago
  Haven't signed up, but http://blog.coinbase.com/ http://blog.coinbase.com/ does mention 2FA is supported through SMS or an app called Authy. In case the founder sees this, was there any reason why Verisign's VIP app (which has native apps on more devices and seems to be the de-facto standard for banking sites) was not used?
steve8918 14y ago
It looks nice, but I don't see anything addressing safety and security. How does this service guarantee that any money you transfer to them will be kept safe? Also, do they guarantee that if a break-in occurs like the Bitcoinica disaster, that users' monies will be returned?
- napillo 14y ago
  Nope. They can't get federal insurance since they aren't a bank. The "bank transfers coming soon" - I've yet to see a bitcoin exchange actually allow bank transfers, so that will be a welcome thing. Still, you should be storing your money in your wallet, not leave it sitting around on a site. I think that games should use litecoin or something instead of <insert name of fake in-game currency here>.
- barmstrong 14y ago
  Yep - sorry we should really add a page on that. We're storing wallets in the cloud so this is an important concern. Private keys are encrypted in the database. bcrypted passwords. We also offer two factor authentication for your logins: http://blog.coinbase.com/post/25677574019/coinbase-now-offers-two-factor-authentication http://blog.coinbase.com/post/25677574019/coinbase-now-offer... We'll start keeping a majority of funds in cold storage as deposits grow (we're still in beta at the moment). And I think you're right a firm policy on this would be needed about loss of funds and what is covered. I'm interested in the idea of getting insurance through Lloyds of London or something along those lines, but haven't pursued it yet (we've just been building the prototype). I worked on fraud prevention at Airbnb previously and we had lots of money flowing through the site and stored with us, so I'm familiar with best practices around this. I also have a healthy respect for what can go wrong, and I think as we grow we'll go through regular security audits (and much more scrutiny as we pursue licensing as a money transmitter). You certainly shouldn't trust us on face value though, it's something we'll have to earn over many years.
  - pkhamre 14y ago
    Even google's two factor authentication got hacked. How do you seceure yourself for something like that?
rmc 14y ago
"Widespread Adoption" About $2 million a day (USD) is already being transacted in bitcoin. It's quickly becoming an international currency of the world. Er... bit of a stretch
- rbn 14y ago
  Exactly what I thought. I wonder how much money is transacted in WoW, Second Life and other large mmorpgs.
  - Retric 14y ago
    WoW gold is a multi bullion dollar economy with daily transactions worth around around 10-100 times what BitCoin is currently doing depending on how and what you count.
- barmstrong 14y ago
  This is a good point, I think we'll change it to "It's quickly becoming an international currency." Thanks for the feedback :)
  - rmc 14y ago
    ahem. There is already a large international currency that is way bigger than bitcoin (and maybe bigger than USD). Euro. (Though then we get into semantic arguments about "international")
jpwagner 14y ago
How is a user protected from a transaction history subpoena?
- arihelgason 14y ago
  BTC transactions are all public in the blockchain so they're not as anonymous as many think. But as for preventing your identity from being linked to your BTC wallet? There's probably no way to prevent that if the service provider is under US jurisdiction.
  - AdmiralBeotch 14y ago
    You can certainly be fully anonymous with bitcoin but care must be taken... Mainly, you need to isolate your change to an identity wallet - a wallet used for specific purpose under a dedicated pseudonym. Identity of the pseudonym is protected by plausible deniability - "I bought those coins on MTGOX, but I sold some of them to some guy for cash on the street corner, that purchase wasn't me" The more hops through a wallet (which can be created dozens of times), adds more plausible deniability and separation to any purchase.
    - arihelgason 14y ago
      Good point. And if you sign up to Coinbase anonymously and acquire BTC reasonably anonymously any data that gets subpoenaed is worthless.
wmf 14y ago
Have they been hacked yet? It's a rite of passage.
notjustanymike 14y ago
Twitter Bootstrap is homogenizing the entire web! This place used to be cool, man. What happened?!
- mcmire 14y ago
  Well, at least they've made some modifications to it so that it looks good.
GigabyteCoin 14y ago
Since you auto-focus on the email address input field... it erases the default text that reads "Your Email" so it is initially quite confusing to know what you should enter. I had to click on the page to de-select the input, see that it said "Your Email", and then enter my email. The way it is now, it looks like you might simply want two passwords.
- Cushman 14y ago
  Looks like Mozilla clears placeholders on focus, while Chrome and Safari clear on the first input. In Internet Explorer they don't show up at all...
  - barmstrong 14y ago
    Good to know - you can guess which browsers we've been testing with. Sounds like a we'll need to do a js placeholder solution or change the page.
    - dfc 14y ago
      Barmstrong, I asked the following downthread but I'm afraid its going to get buried in the muck: "Zero Transaction Fees"??? Are you refunding the bitcoin transaction fees that are builtin to the protocol[1]? If you are going to eat that cost you should say so, it seems like a good marketing point. [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
      - carrja99 14y ago
        Don't think anyone will respond, but I believe the statement is a stretch. I think they just mean THEY won't charge transaction fees.
      - barmstrong 14y ago
        Good question, and sorry I just saw this. So we aren't including any bitcoin transaction fees by default. If you try to send a transaction below 0.01 it will never get confirmed without the fee, so we added this user interface improvement a few days ago which gives the option of including the fee if people want to: http://blog.coinbase.com/post/26452774981/confirming-small-transactions http://blog.coinbase.com/post/26452774981/confirming-small-t... Coinbase will make money more like an exchange down the road, 0.5% to convert money into our out of bitcoin, but once you have your money in bitcoin there are no transaction fees (it mentions this on the homepage, but admittedly it's still a bit confusing). I wish there was a better way to distinguish between an exchange fee and transaction fee (to the average consumer these may be the same thing, I'm not sure). In general, I would like to abstract out the idea of btc fees to the average user (I think it's an unnecessary complication for someone new to bitcoin). It would be much easier to just say "no fees" - this is simple and shows a clear benefit of using bitcoin. If you have to explain to people that "sometimes there are fees, but they are a lot lower, etc" it loses some of it's punch. Right now we can do zero fees and transactions still get confirmed. In the future we may be able to do it by eating the cost and have this be a cost of doing business, but that is a decision for later. Hope it helps.
vessenes 14y ago
Congrats!
trotsky 14y ago
1. Start centralized bitcoin depository. 2. Fail to provide any loss protection. 3. "get hacked" 4. Profit.
- pixie_ 14y ago
  this is the tried and true model.
- DrJokepu 14y ago
  While I'm not a big fan of BitCoin, I don't think this is a very good argument. You could use the same argument for banks and "get robbed". Why doesn't this happen to banks?
  - brian_cloutier 14y ago
    FDIC Insurance, lots of regulation, and criminal liability.
    - deleted 14y ago
      [deleted]
  - fromhet 14y ago
    The difference between the bitcoin banks/cloud wallets has been that the bitcoin counterparts seldom have any law or big organization to back them but only a few hackers with a bitcoind and a web servers. Some, like the old mybitcoin.com, have been hacked mysteriously with little data released, but only millions of $ worth of bitcoins gone forevermore.
  - base698 14y ago
    He's echoing the many, many scandals of centralized bitcoin banks that had the same thing happen over the past year. It's like the wild west out there. https://en.bitcoin.it/wiki/MyBitcoin https://en.bitcoin.it/wiki/MyBitcoin
  - noduerme 14y ago
    If Joe Blow rents a $20/mo. VPN and opens up the "First Federated Bank of Joblovia", chances are he isn't going to be able to take a whole lot of wire transfers to his Bank of America account before the feds move in and shut him down. In fact this is basically what happened to some of the earliest Bitcoin exchanges who were less sophisticated with how they moved currency in and out; guys like Jered from Tradehill used their personal bank accounts to take money from people, and gave them Bitcoins online. The cashflow problems and subsequent collapse stemmed more from the constant shutdown of bank accounts than from the "misunderstanding" with Dwolla as to the nature of Dwolla's chargeback policy. I think. In any case, Bitcoin offers the ability to do exactly this: Open a completely unregulated financial institution with no accountability. Looking at this site, the first question in my head was "Where are your coins stored?" Second was, "What are the limits, and how, exactly, do you guarantee funds will transmit since every country in the world has different limits, regulations and KYC disclosures required to make that possible?" The answer for Bitcoin businesses thus far has mostly been "don't worry about it". In Bitcoin that's slang for "I'm using my bank account, my buddy's bank account, my girlfriend's bank account...and I swear you'll get your money on time until you don't, and I'm gone, and you're fucked." This looks to be yet another one. No news here.
sown 14y ago
Will there be an API? It looks neat! It's one of those ambitious projects, that, even if failure is in the future, it's still a worthwhile project.
gersh 14y ago
If I want to sell something, how can I get my Bitcoins converted to cash, safely and reliably? I don't trust MtGox, and I don't want to long-term forex risk exposure. Is there someone who could settle Bitcoin to USD, daily in San Francisco?
- pnathan 14y ago
  A reliable BTC<->USD exchange is going to be a key requirement for any meaningfully large BTC adoption. A year ago, when I was looking around, there was none. I have no real qualms about dropping a few bucks into BTC, but I have to be confident that I can exchange it for the ability to pay my bills.
  - wmf 14y ago
    And yet such an exchange will inevitably charge fees that are higher than credit cards, which hinders adoption.
- irunbackwards 14y ago
  bit-pay.com offers a service where you can accept payment in Bitcoin, which is then immediately converted to USD at the average market rate (of the last 15 minutes) and sent to your bank account. I believe the funds are available next day, I forget.
fromhet 14y ago
So, this is essentially yet another cloud-based bitcoin wallet? Also, how will you comfort your customers when you get hacked and their funds are gone? That is not a hypothetical thing to ask, but very real and has happened before in the cloud-wallet bussiness. Anyone who wants to get started with bitcoin, I suggest using the client Electrum. Written in python, light, quick and secure.
feydr 14y ago
are you a single founder?
jaybill 14y ago
I'm not sure why, but I find the term "for the masses" horribly insulting and elitist. It instantly turns me off on whatever it is you're talking about and tells me absolutely nothing about the product other than you think your target market is a mass of people that aren't as smart as you.
Dn_Ab 14y ago
So the profit mechanism is through taking a percentage of bank transfers. So not going after banks. Also did you mean shopping card or shopping cart? I can't resolve either from context and shopping card is not commonly used.
richiezc 14y ago
Congrats Brian! I remember when you told me about your idea at startup school. Heard you had left Airbnb and I suspected it was for this.
astrofinch 14y ago
Lots of startups have tried to popularize Bitcoin. What's different about this one?
- kylebrown 14y ago
  This is a Ycombinator startup founded by a former AirBnB employee.
mdonahoe 14y ago
Storing individual wallets in the cloud is better than have a single institution-wide account that holds everyone's money like MtGox did/does. With the latter, you need to roll your own secure transaction system to keep track of balances. The former uses bitcoins existing transaction record keeping, allowing the devs to focus on the already hard problem of secure authentication. Still, centralizing a decentralized system is like trying to tame a wild animal. I can be done, but expect to get bit.
omi 14y ago
One wouldn't expect bunch of web-devs to provide great transaction processing/software and physical security/as well as support.
alexanderh 14y ago
Any bitcoin related website that has you "choose a password" and not a Passphrase, and perhaps mandatory 2 stage authentication, is just asking for it.
Kilimanjaro 14y ago
First rule of financial apps: if you're going to deal with money you should own your servers. The cloud is not an option. Second rule: Hire a security expert and a thief. The former to keep you safe and the latter to break in before the real ones so the expert can fix the holes. Btw, I like the service.
- Estragon 14y ago
  I hear AWS is certified for credit card processing. Is that not the case?
  - wccrawford 14y ago
    http://aws.amazon.com/security/pci-dss-level-1-compliance-faqs/ http://aws.amazon.com/security/pci-dss-level-1-compliance-fa... Apparently they are now, yes. Last I checked they weren't and were saying their cloud services were inherently uncertifiable, due to the architecture.
    - rdl 14y ago
      Yeah, they changed PCI DSS 2.0 to allow virtual servers, specifically to let Amazon Web Services pass. PCI DSS 1.0 wouldn't work. (level 1 compliance PCI DSS 2.0 from the most trusting/forgiving QSA available, i.e. a pretty fucking low bar) The PCI firms I know probably would not have passed them.
- rdl 14y ago
  I like the service, but AWS (or the cloud in general) is the wrong infrastructure choice for it. AWS is fine for some things, but not for being a payment processor or wallet provider. It's fine if you're just accepting credit card payments through another processor. They probably won't be able to pass the money transmitter certification on AWS, so presumably they'll migrate eventually.
UK-AlasGou 14y ago
Is bitcoin still deflationary?
- AdmiralBeotch 14y ago
  It will experience an inflation rate for the next 140 years or so. It is currently expanding at 50 BTC per 10 minutes. In december it will cut to 25 BTC per 10 minutes, half each 4 years after that. Bitcoins have already been destroyed to the tune of about 80,000 BTC from disk failures, lack of backups, and forgotten keys. We will already never reach 21 million bitcoins in circulation.
  - UK-AlasGou 14y ago
    I think a digital currency is a lost opportunity, you could make the system self adjusting to a set target, very accurately.
    - w-ll 14y ago
      That's what Bitcoin does. The protocol can't know if funds are destroyed... because they cant be. They are actually just sitting in unreachable wallets.
      - stevedekorte 14y ago
        Right, though all wallets are reachable/stealable with sufficient compute power. This is partially why it's always a good idea to split up your holdings into many wallets.
    - muyuu 14y ago
      It's a catch-22. While many people would agree that strict deflation is probably a bad idea, the very fact that this policy proves changeable by a popularity vote would set such an immensely worrisome precedent. It would mean that the inflation policy is in practice discretional.
- deleted 14y ago
  [deleted]
tokenadult 14y ago
A while ago I wrote that perhaps the greatest contribution the Bitcoin experiment will make to humankind is to teach you and me and our neighbors more about the realities of economics. And now I will add that the Bitcoin experiment will also contribute to greater understanding of attack surfaces and online crime. Many of the ideas about how to mine Bitcoins, store Bitcoins, and trade with Bitcoins as a medium of exchange illustrate both the strengths and weaknesses of any other medium of exchange in a world full of human beings. Seeing the discussion of Bitcoins here on Hacker News reminds me of early discussions in the 1990s of online payment systems such as PayPal, and the arguments beforehand that PayPal wouldn't have to invest a lot of time and effort (as it eventually did) building defenses against theft and fraud. If a weakness in a system is attached to a lot of money, the way to bet is to bet that someone will go looking for that weakness, even if you haven't thought of it.
- joe_the_user 14y ago
  I'd start from the other direction. The newness of this stuff is overrated. The bitcoin phenomenon isn't ultimately different from phenomena described by Mackey: http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions... As we know, each new version of speculative excess has the slogan "it's different this time". And each one is different, in some way. And you can extract various interesting particular lessons from all these newnesses - I'm sure after 2008, someone's written a deep, interesting article on the failure of the Gaussian copula‎ but really, you didn't need to understand the heat equation and Ito's Formula to know that synthetic bonds were a problem in 2006 (I'd recommend the enlightening discussions of Doug Noland of Prudent.com from that time). But it is important to not allow ourselves to let the details of these situations distract us from the psychological dynamics which ultimately has carried all these phenomena. This psychological dynamic allows a slightly stretching of numerous points to add up to the concrete mistakes one point can point out later as "what went wrong". And these "what went wrong then" arguments are themselves dangerous since they general are coupled with "so this time, the different thing we are doing is..." and so forth. Essentially, understanding magician's tricks are great. But never let yourself be fooled by the belief that you know all the tricks. And I writing with the assumption that bitcoins aren't a "medium of exchange" in any meaningful way - for example, I could directly my car for something else valuablle far more easily than I could directly trade bitcoins and cars aren't a very meaningful medium of exchange today. This is the position that I believe most serious economists take, Nobel Prize winner Paul Krugman being on record here (not that I think this is really a left-right question).
allaun1 14y ago
I decided to see what they had to say to a question I had. This is the responses they gave! :3 How do you see yourself combating the rapid fluctuation of price vs value when dealing with merchants? Brian Armstrong: good question Brian Armstrong: two thoughts on that Brian Armstrong: one would be an automatic withdrawal rule they could setup Brian Armstrong: so it just gets converted automatically when it arrives and deposits once a day or something Brian Armstrong: the other is that i think the exchange rate volatility is largely a short term problem, volatility decreases as volume of transactions increases Brian Armstrong: so if you believe btc volume of transactions will be much higher in 5 years, then exchange rate volatility will be much lower →Makes sense, Saw the site mentioned on hacker news, so that means you'll probally mentioned on slashdot at some point →^.^ Brian Armstrong: at least that is my guess :) Brian Armstrong: hope so Brian Armstrong: maybe I should submit it? Brian Armstrong: haven't slashdotted in a few years →heh, you could try, though slashdot seems to be consolidated to a few power submitters lately, might try reddit? →http://www.reddit.com/r/bitcoin http://www.reddit.com/r/bitcoin would be a start? →http://news.ycombinator.com/item?id=4177605 http://news.ycombinator.com/item?id=4177605 that's the article mentioning you btw Brian Armstrong: already submitted :) Brian Armstrong: http://www.reddit.com/r/Bitcoin/comments/vswkw/silicon_valley_investors_back_coinbasecom_seeking/ http://www.reddit.com/r/Bitcoin/comments/vswkw/silicon_valle... →Where bitcoin could REALLY take off is CPU usage cycles →Since bitcoin is fractional Brian Armstrong: oh yeah, tiny amounts →Instead of charging pennies per cycle, you could specify exact amounts per clock →so instead of 1 penny per second →.00001 per clock or whatever is the better value →It'd be alot more precise →It must be interesting to start a company like this. Are you / your company registered in the united states? And if so, How do you feel about their reaction to bitcoin? Brian Armstrong: yep that'd be interesting for sure Brian Armstrong: we're incorporated in delaware (U.S.) Brian Armstrong: based in california Brian Armstrong: we have the backing of really good investors who want to see innovation happen Brian Armstrong: as long as we pursue licensing as a money transmitter (same as facebook credits, paypal, etc) i think we'll be ok Brian Armstrong: it will def be controversial though →I wonder how mt.gox handles it Brian Armstrong: they are incorporated outside the U.S. (Japan I believe) →nods →Well, If it's ok with you, i'll post this to the hacker news article and see what kind of discussions it generates? Only with your permission of course! =^.^= Brian Armstrong: sure, that'd be fine with us!
dfc 14y ago
"Zero Transaction Fees"??? Are you refunding the bitcoin transaction fees that are builtin to the protocol[1]? If you are going to eat that cost you should say so, it seems like a good marketing point. [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
- AdmiralBeotch 14y ago
  Transaction fees are optional. Currently, if you do not include a transaction fee, your transaction will get confirmed, but the first confirmation could take longer for a miner to pick it up - but it is very likely to still get confirmed. As transactions per second increase and load is placed on the memory pool, those fee-less transactions may get lost and need to be resubmitted.
  - dfc 14y ago
    "As of 10 June 2012, minimum transaction fees on the original Bitcoin client are: Accept a transaction for inclusion in a block: 0.0005 BTC Relay a transaction to other Bitcoin hosts: 0.0001 BTC A transaction can be sent without fees if both of these conditions are met: It is smaller than 10 (SI) kilobytes (10.000 bytes). All outputs are 0.01 BTC or larger."[1] Put another way as bitcoin grows fee-less transactions will become rare... [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
    - muyuu 14y ago
      You don't need to use Gavin's client.
      - dfc 14y ago
        My political philosophy professor used to call this "making a rule out of the exception." How many other viable bitcoin clients are there? And what do you think the likelihood of you fee-less transaction being accepted despite a flood of fee paying transactions?
Difwif 14y ago
I've toyed with the idea of a Bitcoin bank for a while now. Since I don't seem to be making much progress here's the final piece that I think this is missing and would really let this take off. Offer a way for your customers to spend their Bitcoins using plastic through a payment processor. The cheap startup version way of offering this would be to partner with a bank to offer your customers prepaid debit cards. On your website they would have two accounts, one with the funds avaible on the card and the other with your Bitcoin wallet. When they want to transfer funds make a market trade on behalf of them and put the money on their cards. Obviously in the long run the ideal setup would be to become a licensed money transmitter which can be ridiculously expensive in some states, and yes you need the license in each state you do business in. This is what Paypal has. As a licensed financial institution you now have the ability to offer your own debit/credit cards and you could theoretically make market trades from your customers bitcoin wallets as soon as you receive transaction requests. Obviously this doesn't flow with the spirit of Bitcoin and why it was designed but I think it's what will be necessary for it to start gaining wide spread use.
cs702 14y ago
What's the pitch to the masses? "We make Bitcoin easy to use... and all you lose is anonymity and decentralization?"
- icebraining 14y ago
  You can't lose what you never had; the "masses" won't use the Bitcoin client and manage keys themselves anyway.
  - cs702 14y ago
    icebraining: decentralization and optional anonymity are key selling points of Bitcoin; without these two features, it looks a lot like existing payment systems.
    - icebraining 14y ago
      I know, my point is that those selling points are irrelevant to the masses, because to take advantage of them you need to run the Bitcoin client and manage your own keys, which most people won't do. So they can't "lose" anything. Now, as for why would you use a system like this instead of one based on conventional currencies, well, don't ask me!
paulsutter 14y ago
The best way to find out if bitcoin is a viable platform is for someone to forge ahead with mainstream oriented services like this. We'll all learn a ton from what happens. Payments is a great starting point for a mainstream bitcoin serice. The user isn't going out too far on a limb to use the service because it's just a payment. This could increase the chance of adoption, and lessen the impact of something going wrong in the early days. I'm really impressed with folks trying to make a service like this work. I find any opinionated naysaying to be really boring. Can't wait to see how it turns out. Hope there is enough traction to put it all to a real test.
makmanalp 14y ago
1) How do you make a profit? 2) How do I convert to "real money"? If I can't, why should the average joe be interested in this at all? Power users can use mtgox already. 3) How do you plan to keep it legal? As I understand, there is no legal precedent about new currencies and the law is not favorable.
sfbay84 14y ago
Rumour has it this dude is paying people to post good comments on Reddit- desperate much?? I've seen better start up sites than this- that don't need to give out bribes to get good reviews- sus.
alister 14y ago
The 2-minute video on their home page takes the right approach. It does not try to explain the lofty ideals of Bitcoin. It never mentions scary concepts like free banking, lack of government regulation, and crypto. It uses the word "anonymous" only once. That's the way to convince the public: a cheery talk about tangible benefits!
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rubyfan 14y ago
... and their site looks just like Github.
buhokok 14y ago
Currently getting a 500 error when trying to create a password with special characters. With all the password hash leaks going on these days, am I the only one paranoid enough to create a long, random password?
- deleted 14y ago
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jc123 14y ago
Is coinbase using aws or heroku and down right now? Seeing an application error on coinbase.com...
known 14y ago
Does Bitcoin solve https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma
- white_devil 14y ago
  Is Bitcoin a national currency (or an international reserve currency for that matter)?
  - white_devil 14y ago
    (To whoever downvoted this, the questions were meant to be rhetorical)
shughes 14y ago
I think Brian dated my sister back at Rice.. haha. So strange to stumble upon him here. Anyway, impressive startup resume. I'm familiar with a lot of his projects, but never connected the dots. Too bad my comment contributes nothing to the post and it's gonna go to the bottom. Oh well..

291 points by barmstrong 14y ago

What advantages does this service provide over bitcoin itself? My suggestion would be to make this very clear, and definitely make sure it is explained on the About page.

eragnew 14y ago
Definitely agree with making the advantages clear. I can see how this could be a pretty useful interface to BTC for non-technical users. I might have to try it out myself :)
brittohalloran 14y ago
Agreed. "Without coinbase, this is how you would use bitcoins _____..., with coinbase it looks like this instead ____." Dont assume any knowledge of bitcoins.
base698 14y ago
My guess is that you can send bitcoins to people who don't give a shit about it or know how to use the client and they can in turn pay for things with the coins you sent. I'm thinking of sending my dad a couple just to see if he can figure it out. :)

pat2man 14y ago

I like the idea, kind of a PayPal for Bitcoin. My issues would be the usual: I don't trust a new service with my bitcoins, don't know anything about their policy for data loss, etc. The about page and support pages don't really instill any confidence. If I knew I could trust them it would seem like a great service.

mtgx 14y ago

Is this a YCombinator start-up? I see PG's name there.

Spittie 14y ago
On their about page (https://coinbase.com/about https://coinbase.com/about) there is written "Investors: YCombinator"
haasted 14y ago
According to the About page (https://coinbase.com/about# https://coinbase.com/about#), yes. The AllThingsD article linked from the page mentions that the company is part of the current Y Combinator class.

smalter 14y ago

It's very cool to see that after posting looking for a co-founder to get into YC, it looks like Brian has gotten into YC as a solo founder and by the looks of it, is doing great. I sent his previous post looking for a co-founder to friends because Brian looked seriously formidable. Best of luck to him.

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karamazov 14y ago

This looks great - I can't wait until you can start ordering from eBay and Amazon with bitcoin.

elliottcarlson 14y ago
You can already redeem bitcoins for Amazon giftcards through various services, for example: http://coincard.ndrix.com/ http://coincard.ndrix.com/
bbit 14y ago
FYI: You can get a virtual visa card sent to your email for bitcoins :::: http://www.btcinstant.com http://www.btcinstant.com allows you order anywhere with bitcoins.

thechut 14y ago

I think that this could be the hero that Bitcoin needs. If they make it super simple / super clean they could revolutionize Bitcoin. To the creators, have you considered adding a USD (or other currency) funding option? Since getting the Bitcoins is probably the biggest obstacle for most everyday consumers.

sage_joch 14y ago
If that's true it could be a good time to speculate/gamble a bit. I'm tempted to throw $500 or so at it, for the chance of another bubble.

res0nat0r 14y ago

Any technical details on how wallets are protected? I think we've seen how previous bitcoin websites have fared on HN, it would be cool to know some of the details on how the BTC are going to be protected so that the problems of the past don't happen again.

barmstrong 14y ago
Yep - sorry we should really add a page on that. We're storing wallets in the cloud so this is an important concern. Private keys are encrypted in the database. bcrypted passwords. We also offer two factor authentication for your logins: http://blog.coinbase.com/post/25677574019/coinbase-now-offers-two-factor-authentication http://blog.coinbase.com/post/25677574019/coinbase-now-offer... We'll start keeping a majority of funds in cold storage as deposits grow (we're still in beta at the moment). I worked on fraud prevention at Airbnb previously and we had lots of money flowing through the site and stored with us, so I'm familiar with best practices around this. I also have a healthy respect for what can go wrong, and I think as we grow we'll go through regular security audits (and much more scrutiny as we pursue licensing as a money transmitter). You certainly shouldn't trust us on face value though, it's something we'll have to earn over many years.

brittohalloran 14y ago

Is it that Bootstrap makes every website look amazing or is it that people who build amazing looking websites tend to use Bootstrap?

zethraeus 14y ago
It's that they all look similar and you like the look. You also might be looking at websites built more by hackers than by web designers. Bootstrap is great for visually clean rapid development, but that comes at the cost of individuality. Props to Coinbase for changing the looming black top bar anyway.
- tcwc 14y ago
  It's a theme from http://bootswatch.com/ http://bootswatch.com/. I wish more sites used one of those, completely agree with you on the black top bar.

drivebyacct2 14y ago

How is this different than MtGox? I don't trust MtGox, but at least they've made mistakes and have spoken publicly about how they've fixed those mistakes. On the other hand, are these guys storing my wallet safely? How about my balance (please god, don't store it as a float)? How about my password? If they're not launching with two-factor auth I won't even give it a chance (and likely ever, honestly). I've gotten progressively more and more pessimistic about these sorts of sites even though I like the idea of BitCoin as a currency. If security isn't heavily discussed and visible (2FA, do it!) at the launch, it will be hard for me to take this seriously.

politician 14y ago
"Coinbase now offers Two-Factor Authentication" http://blog.coinbase.com/ http://blog.coinbase.com/
- mootothemax 14y ago
  And what happens if someone gains access to your server or social engineers their way in with your hosting company? As far as I can tell, this has been the biggest problem with such services so far.
  - politician 14y ago
    I'm not affiliated with coinbase; sorry if that was unclear.
- drivebyacct2 14y ago
  Fantastic fantastic! Maybe I'm a nerd, but I'd be repping that on the front page.
magic_haze 14y ago
Haven't signed up, but http://blog.coinbase.com/ http://blog.coinbase.com/ does mention 2FA is supported through SMS or an app called Authy. In case the founder sees this, was there any reason why Verisign's VIP app (which has native apps on more devices and seems to be the de-facto standard for banking sites) was not used?

steve8918 14y ago

It looks nice, but I don't see anything addressing safety and security. How does this service guarantee that any money you transfer to them will be kept safe? Also, do they guarantee that if a break-in occurs like the Bitcoinica disaster, that users' monies will be returned?

napillo 14y ago
Nope. They can't get federal insurance since they aren't a bank. The "bank transfers coming soon" - I've yet to see a bitcoin exchange actually allow bank transfers, so that will be a welcome thing. Still, you should be storing your money in your wallet, not leave it sitting around on a site. I think that games should use litecoin or something instead of <insert name of fake in-game currency here>.
barmstrong 14y ago
Yep - sorry we should really add a page on that. We're storing wallets in the cloud so this is an important concern. Private keys are encrypted in the database. bcrypted passwords. We also offer two factor authentication for your logins: http://blog.coinbase.com/post/25677574019/coinbase-now-offers-two-factor-authentication http://blog.coinbase.com/post/25677574019/coinbase-now-offer... We'll start keeping a majority of funds in cold storage as deposits grow (we're still in beta at the moment). And I think you're right a firm policy on this would be needed about loss of funds and what is covered. I'm interested in the idea of getting insurance through Lloyds of London or something along those lines, but haven't pursued it yet (we've just been building the prototype). I worked on fraud prevention at Airbnb previously and we had lots of money flowing through the site and stored with us, so I'm familiar with best practices around this. I also have a healthy respect for what can go wrong, and I think as we grow we'll go through regular security audits (and much more scrutiny as we pursue licensing as a money transmitter). You certainly shouldn't trust us on face value though, it's something we'll have to earn over many years.
- pkhamre 14y ago
  Even google's two factor authentication got hacked. How do you seceure yourself for something like that?

rmc 14y ago

"Widespread Adoption" About $2 million a day (USD) is already being transacted in bitcoin. It's quickly becoming an international currency of the world. Er... bit of a stretch

rbn 14y ago
Exactly what I thought. I wonder how much money is transacted in WoW, Second Life and other large mmorpgs.
- Retric 14y ago
  WoW gold is a multi bullion dollar economy with daily transactions worth around around 10-100 times what BitCoin is currently doing depending on how and what you count.
barmstrong 14y ago
This is a good point, I think we'll change it to "It's quickly becoming an international currency." Thanks for the feedback :)
- rmc 14y ago
  ahem. There is already a large international currency that is way bigger than bitcoin (and maybe bigger than USD). Euro. (Though then we get into semantic arguments about "international")

jpwagner 14y ago

How is a user protected from a transaction history subpoena?

arihelgason 14y ago
BTC transactions are all public in the blockchain so they're not as anonymous as many think. But as for preventing your identity from being linked to your BTC wallet? There's probably no way to prevent that if the service provider is under US jurisdiction.
- AdmiralBeotch 14y ago
  You can certainly be fully anonymous with bitcoin but care must be taken... Mainly, you need to isolate your change to an identity wallet - a wallet used for specific purpose under a dedicated pseudonym. Identity of the pseudonym is protected by plausible deniability - "I bought those coins on MTGOX, but I sold some of them to some guy for cash on the street corner, that purchase wasn't me" The more hops through a wallet (which can be created dozens of times), adds more plausible deniability and separation to any purchase.
  - arihelgason 14y ago
    Good point. And if you sign up to Coinbase anonymously and acquire BTC reasonably anonymously any data that gets subpoenaed is worthless.

wmf 14y ago

Have they been hacked yet? It's a rite of passage.

notjustanymike 14y ago

Twitter Bootstrap is homogenizing the entire web! This place used to be cool, man. What happened?!

mcmire 14y ago
Well, at least they've made some modifications to it so that it looks good.

GigabyteCoin 14y ago

Since you auto-focus on the email address input field... it erases the default text that reads "Your Email" so it is initially quite confusing to know what you should enter. I had to click on the page to de-select the input, see that it said "Your Email", and then enter my email. The way it is now, it looks like you might simply want two passwords.

Cushman 14y ago
Looks like Mozilla clears placeholders on focus, while Chrome and Safari clear on the first input. In Internet Explorer they don't show up at all...
- barmstrong 14y ago
  Good to know - you can guess which browsers we've been testing with. Sounds like a we'll need to do a js placeholder solution or change the page.
  - dfc 14y ago
    Barmstrong, I asked the following downthread but I'm afraid its going to get buried in the muck: "Zero Transaction Fees"??? Are you refunding the bitcoin transaction fees that are builtin to the protocol[1]? If you are going to eat that cost you should say so, it seems like a good marketing point. [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
    - carrja99 14y ago
      Don't think anyone will respond, but I believe the statement is a stretch. I think they just mean THEY won't charge transaction fees.
    - barmstrong 14y ago
      Good question, and sorry I just saw this. So we aren't including any bitcoin transaction fees by default. If you try to send a transaction below 0.01 it will never get confirmed without the fee, so we added this user interface improvement a few days ago which gives the option of including the fee if people want to: http://blog.coinbase.com/post/26452774981/confirming-small-transactions http://blog.coinbase.com/post/26452774981/confirming-small-t... Coinbase will make money more like an exchange down the road, 0.5% to convert money into our out of bitcoin, but once you have your money in bitcoin there are no transaction fees (it mentions this on the homepage, but admittedly it's still a bit confusing). I wish there was a better way to distinguish between an exchange fee and transaction fee (to the average consumer these may be the same thing, I'm not sure). In general, I would like to abstract out the idea of btc fees to the average user (I think it's an unnecessary complication for someone new to bitcoin). It would be much easier to just say "no fees" - this is simple and shows a clear benefit of using bitcoin. If you have to explain to people that "sometimes there are fees, but they are a lot lower, etc" it loses some of it's punch. Right now we can do zero fees and transactions still get confirmed. In the future we may be able to do it by eating the cost and have this be a cost of doing business, but that is a decision for later. Hope it helps.

vessenes 14y ago

Congrats!

trotsky 14y ago

1. Start centralized bitcoin depository. 2. Fail to provide any loss protection. 3. "get hacked" 4. Profit.

pixie_ 14y ago
this is the tried and true model.
DrJokepu 14y ago
While I'm not a big fan of BitCoin, I don't think this is a very good argument. You could use the same argument for banks and "get robbed". Why doesn't this happen to banks?
- brian_cloutier 14y ago
  FDIC Insurance, lots of regulation, and criminal liability.
  - deleted 14y ago
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- fromhet 14y ago
  The difference between the bitcoin banks/cloud wallets has been that the bitcoin counterparts seldom have any law or big organization to back them but only a few hackers with a bitcoind and a web servers. Some, like the old mybitcoin.com, have been hacked mysteriously with little data released, but only millions of $ worth of bitcoins gone forevermore.
- base698 14y ago
  He's echoing the many, many scandals of centralized bitcoin banks that had the same thing happen over the past year. It's like the wild west out there. https://en.bitcoin.it/wiki/MyBitcoin https://en.bitcoin.it/wiki/MyBitcoin
- noduerme 14y ago
  If Joe Blow rents a $20/mo. VPN and opens up the "First Federated Bank of Joblovia", chances are he isn't going to be able to take a whole lot of wire transfers to his Bank of America account before the feds move in and shut him down. In fact this is basically what happened to some of the earliest Bitcoin exchanges who were less sophisticated with how they moved currency in and out; guys like Jered from Tradehill used their personal bank accounts to take money from people, and gave them Bitcoins online. The cashflow problems and subsequent collapse stemmed more from the constant shutdown of bank accounts than from the "misunderstanding" with Dwolla as to the nature of Dwolla's chargeback policy. I think. In any case, Bitcoin offers the ability to do exactly this: Open a completely unregulated financial institution with no accountability. Looking at this site, the first question in my head was "Where are your coins stored?" Second was, "What are the limits, and how, exactly, do you guarantee funds will transmit since every country in the world has different limits, regulations and KYC disclosures required to make that possible?" The answer for Bitcoin businesses thus far has mostly been "don't worry about it". In Bitcoin that's slang for "I'm using my bank account, my buddy's bank account, my girlfriend's bank account...and I swear you'll get your money on time until you don't, and I'm gone, and you're fucked." This looks to be yet another one. No news here.

sown 14y ago

Will there be an API? It looks neat! It's one of those ambitious projects, that, even if failure is in the future, it's still a worthwhile project.

gersh 14y ago

If I want to sell something, how can I get my Bitcoins converted to cash, safely and reliably? I don't trust MtGox, and I don't want to long-term forex risk exposure. Is there someone who could settle Bitcoin to USD, daily in San Francisco?

pnathan 14y ago
A reliable BTC<->USD exchange is going to be a key requirement for any meaningfully large BTC adoption. A year ago, when I was looking around, there was none. I have no real qualms about dropping a few bucks into BTC, but I have to be confident that I can exchange it for the ability to pay my bills.
- wmf 14y ago
  And yet such an exchange will inevitably charge fees that are higher than credit cards, which hinders adoption.
irunbackwards 14y ago
bit-pay.com offers a service where you can accept payment in Bitcoin, which is then immediately converted to USD at the average market rate (of the last 15 minutes) and sent to your bank account. I believe the funds are available next day, I forget.

fromhet 14y ago

So, this is essentially yet another cloud-based bitcoin wallet? Also, how will you comfort your customers when you get hacked and their funds are gone? That is not a hypothetical thing to ask, but very real and has happened before in the cloud-wallet bussiness. Anyone who wants to get started with bitcoin, I suggest using the client Electrum. Written in python, light, quick and secure.

feydr 14y ago

are you a single founder?

jaybill 14y ago

I'm not sure why, but I find the term "for the masses" horribly insulting and elitist. It instantly turns me off on whatever it is you're talking about and tells me absolutely nothing about the product other than you think your target market is a mass of people that aren't as smart as you.

Dn_Ab 14y ago

So the profit mechanism is through taking a percentage of bank transfers. So not going after banks. Also did you mean shopping card or shopping cart? I can't resolve either from context and shopping card is not commonly used.

richiezc 14y ago

Congrats Brian! I remember when you told me about your idea at startup school. Heard you had left Airbnb and I suspected it was for this.

astrofinch 14y ago

Lots of startups have tried to popularize Bitcoin. What's different about this one?

kylebrown 14y ago
This is a Ycombinator startup founded by a former AirBnB employee.

mdonahoe 14y ago

Storing individual wallets in the cloud is better than have a single institution-wide account that holds everyone's money like MtGox did/does. With the latter, you need to roll your own secure transaction system to keep track of balances. The former uses bitcoins existing transaction record keeping, allowing the devs to focus on the already hard problem of secure authentication. Still, centralizing a decentralized system is like trying to tame a wild animal. I can be done, but expect to get bit.

omi 14y ago

One wouldn't expect bunch of web-devs to provide great transaction processing/software and physical security/as well as support.

alexanderh 14y ago

Any bitcoin related website that has you "choose a password" and not a Passphrase, and perhaps mandatory 2 stage authentication, is just asking for it.

Kilimanjaro 14y ago

First rule of financial apps: if you're going to deal with money you should own your servers. The cloud is not an option. Second rule: Hire a security expert and a thief. The former to keep you safe and the latter to break in before the real ones so the expert can fix the holes. Btw, I like the service.

Estragon 14y ago
I hear AWS is certified for credit card processing. Is that not the case?
- wccrawford 14y ago
  http://aws.amazon.com/security/pci-dss-level-1-compliance-faqs/ http://aws.amazon.com/security/pci-dss-level-1-compliance-fa... Apparently they are now, yes. Last I checked they weren't and were saying their cloud services were inherently uncertifiable, due to the architecture.
  - rdl 14y ago
    Yeah, they changed PCI DSS 2.0 to allow virtual servers, specifically to let Amazon Web Services pass. PCI DSS 1.0 wouldn't work. (level 1 compliance PCI DSS 2.0 from the most trusting/forgiving QSA available, i.e. a pretty fucking low bar) The PCI firms I know probably would not have passed them.
rdl 14y ago
I like the service, but AWS (or the cloud in general) is the wrong infrastructure choice for it. AWS is fine for some things, but not for being a payment processor or wallet provider. It's fine if you're just accepting credit card payments through another processor. They probably won't be able to pass the money transmitter certification on AWS, so presumably they'll migrate eventually.

UK-AlasGou 14y ago

Is bitcoin still deflationary?

AdmiralBeotch 14y ago
It will experience an inflation rate for the next 140 years or so. It is currently expanding at 50 BTC per 10 minutes. In december it will cut to 25 BTC per 10 minutes, half each 4 years after that. Bitcoins have already been destroyed to the tune of about 80,000 BTC from disk failures, lack of backups, and forgotten keys. We will already never reach 21 million bitcoins in circulation.
- UK-AlasGou 14y ago
  I think a digital currency is a lost opportunity, you could make the system self adjusting to a set target, very accurately.
  - w-ll 14y ago
    That's what Bitcoin does. The protocol can't know if funds are destroyed... because they cant be. They are actually just sitting in unreachable wallets.
    - stevedekorte 14y ago
      Right, though all wallets are reachable/stealable with sufficient compute power. This is partially why it's always a good idea to split up your holdings into many wallets.
  - muyuu 14y ago
    It's a catch-22. While many people would agree that strict deflation is probably a bad idea, the very fact that this policy proves changeable by a popularity vote would set such an immensely worrisome precedent. It would mean that the inflation policy is in practice discretional.
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tokenadult 14y ago

A while ago I wrote that perhaps the greatest contribution the Bitcoin experiment will make to humankind is to teach you and me and our neighbors more about the realities of economics. And now I will add that the Bitcoin experiment will also contribute to greater understanding of attack surfaces and online crime. Many of the ideas about how to mine Bitcoins, store Bitcoins, and trade with Bitcoins as a medium of exchange illustrate both the strengths and weaknesses of any other medium of exchange in a world full of human beings. Seeing the discussion of Bitcoins here on Hacker News reminds me of early discussions in the 1990s of online payment systems such as PayPal, and the arguments beforehand that PayPal wouldn't have to invest a lot of time and effort (as it eventually did) building defenses against theft and fraud. If a weakness in a system is attached to a lot of money, the way to bet is to bet that someone will go looking for that weakness, even if you haven't thought of it.

joe_the_user 14y ago
I'd start from the other direction. The newness of this stuff is overrated. The bitcoin phenomenon isn't ultimately different from phenomena described by Mackey: http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions_and_the_Madness_of_Crowds http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions... As we know, each new version of speculative excess has the slogan "it's different this time". And each one is different, in some way. And you can extract various interesting particular lessons from all these newnesses - I'm sure after 2008, someone's written a deep, interesting article on the failure of the Gaussian copula‎ but really, you didn't need to understand the heat equation and Ito's Formula to know that synthetic bonds were a problem in 2006 (I'd recommend the enlightening discussions of Doug Noland of Prudent.com from that time). But it is important to not allow ourselves to let the details of these situations distract us from the psychological dynamics which ultimately has carried all these phenomena. This psychological dynamic allows a slightly stretching of numerous points to add up to the concrete mistakes one point can point out later as "what went wrong". And these "what went wrong then" arguments are themselves dangerous since they general are coupled with "so this time, the different thing we are doing is..." and so forth. Essentially, understanding magician's tricks are great. But never let yourself be fooled by the belief that you know all the tricks. And I writing with the assumption that bitcoins aren't a "medium of exchange" in any meaningful way - for example, I could directly my car for something else valuablle far more easily than I could directly trade bitcoins and cars aren't a very meaningful medium of exchange today. This is the position that I believe most serious economists take, Nobel Prize winner Paul Krugman being on record here (not that I think this is really a left-right question).

allaun1 14y ago

I decided to see what they had to say to a question I had. This is the responses they gave! :3 How do you see yourself combating the rapid fluctuation of price vs value when dealing with merchants? Brian Armstrong: good question Brian Armstrong: two thoughts on that Brian Armstrong: one would be an automatic withdrawal rule they could setup Brian Armstrong: so it just gets converted automatically when it arrives and deposits once a day or something Brian Armstrong: the other is that i think the exchange rate volatility is largely a short term problem, volatility decreases as volume of transactions increases Brian Armstrong: so if you believe btc volume of transactions will be much higher in 5 years, then exchange rate volatility will be much lower →Makes sense, Saw the site mentioned on hacker news, so that means you'll probally mentioned on slashdot at some point →^.^ Brian Armstrong: at least that is my guess :) Brian Armstrong: hope so Brian Armstrong: maybe I should submit it? Brian Armstrong: haven't slashdotted in a few years →heh, you could try, though slashdot seems to be consolidated to a few power submitters lately, might try reddit? →http://www.reddit.com/r/bitcoin http://www.reddit.com/r/bitcoin would be a start? →http://news.ycombinator.com/item?id=4177605 http://news.ycombinator.com/item?id=4177605 that's the article mentioning you btw Brian Armstrong: already submitted :) Brian Armstrong: http://www.reddit.com/r/Bitcoin/comments/vswkw/silicon_valley_investors_back_coinbasecom_seeking/ http://www.reddit.com/r/Bitcoin/comments/vswkw/silicon_valle... →Where bitcoin could REALLY take off is CPU usage cycles →Since bitcoin is fractional Brian Armstrong: oh yeah, tiny amounts →Instead of charging pennies per cycle, you could specify exact amounts per clock →so instead of 1 penny per second →.00001 per clock or whatever is the better value →It'd be alot more precise →It must be interesting to start a company like this. Are you / your company registered in the united states? And if so, How do you feel about their reaction to bitcoin? Brian Armstrong: yep that'd be interesting for sure Brian Armstrong: we're incorporated in delaware (U.S.) Brian Armstrong: based in california Brian Armstrong: we have the backing of really good investors who want to see innovation happen Brian Armstrong: as long as we pursue licensing as a money transmitter (same as facebook credits, paypal, etc) i think we'll be ok Brian Armstrong: it will def be controversial though →I wonder how mt.gox handles it Brian Armstrong: they are incorporated outside the U.S. (Japan I believe) →nods →Well, If it's ok with you, i'll post this to the hacker news article and see what kind of discussions it generates? Only with your permission of course! =^.^= Brian Armstrong: sure, that'd be fine with us!

dfc 14y ago

"Zero Transaction Fees"??? Are you refunding the bitcoin transaction fees that are builtin to the protocol[1]? If you are going to eat that cost you should say so, it seems like a good marketing point. [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees

AdmiralBeotch 14y ago
Transaction fees are optional. Currently, if you do not include a transaction fee, your transaction will get confirmed, but the first confirmation could take longer for a miner to pick it up - but it is very likely to still get confirmed. As transactions per second increase and load is placed on the memory pool, those fee-less transactions may get lost and need to be resubmitted.
- dfc 14y ago
  "As of 10 June 2012, minimum transaction fees on the original Bitcoin client are: Accept a transaction for inclusion in a block: 0.0005 BTC Relay a transaction to other Bitcoin hosts: 0.0001 BTC A transaction can be sent without fees if both of these conditions are met: It is smaller than 10 (SI) kilobytes (10.000 bytes). All outputs are 0.01 BTC or larger."[1] Put another way as bitcoin grows fee-less transactions will become rare... [1] https://en.bitcoin.it/wiki/Transaction_fees https://en.bitcoin.it/wiki/Transaction_fees
  - muyuu 14y ago
    You don't need to use Gavin's client.
    - dfc 14y ago
      My political philosophy professor used to call this "making a rule out of the exception." How many other viable bitcoin clients are there? And what do you think the likelihood of you fee-less transaction being accepted despite a flood of fee paying transactions?

Difwif 14y ago

I've toyed with the idea of a Bitcoin bank for a while now. Since I don't seem to be making much progress here's the final piece that I think this is missing and would really let this take off. Offer a way for your customers to spend their Bitcoins using plastic through a payment processor. The cheap startup version way of offering this would be to partner with a bank to offer your customers prepaid debit cards. On your website they would have two accounts, one with the funds avaible on the card and the other with your Bitcoin wallet. When they want to transfer funds make a market trade on behalf of them and put the money on their cards. Obviously in the long run the ideal setup would be to become a licensed money transmitter which can be ridiculously expensive in some states, and yes you need the license in each state you do business in. This is what Paypal has. As a licensed financial institution you now have the ability to offer your own debit/credit cards and you could theoretically make market trades from your customers bitcoin wallets as soon as you receive transaction requests. Obviously this doesn't flow with the spirit of Bitcoin and why it was designed but I think it's what will be necessary for it to start gaining wide spread use.

cs702 14y ago

What's the pitch to the masses? "We make Bitcoin easy to use... and all you lose is anonymity and decentralization?"

icebraining 14y ago
You can't lose what you never had; the "masses" won't use the Bitcoin client and manage keys themselves anyway.
- cs702 14y ago
  icebraining: decentralization and optional anonymity are key selling points of Bitcoin; without these two features, it looks a lot like existing payment systems.
  - icebraining 14y ago
    I know, my point is that those selling points are irrelevant to the masses, because to take advantage of them you need to run the Bitcoin client and manage your own keys, which most people won't do. So they can't "lose" anything. Now, as for why would you use a system like this instead of one based on conventional currencies, well, don't ask me!

paulsutter 14y ago

The best way to find out if bitcoin is a viable platform is for someone to forge ahead with mainstream oriented services like this. We'll all learn a ton from what happens. Payments is a great starting point for a mainstream bitcoin serice. The user isn't going out too far on a limb to use the service because it's just a payment. This could increase the chance of adoption, and lessen the impact of something going wrong in the early days. I'm really impressed with folks trying to make a service like this work. I find any opinionated naysaying to be really boring. Can't wait to see how it turns out. Hope there is enough traction to put it all to a real test.

makmanalp 14y ago

1) How do you make a profit? 2) How do I convert to "real money"? If I can't, why should the average joe be interested in this at all? Power users can use mtgox already. 3) How do you plan to keep it legal? As I understand, there is no legal precedent about new currencies and the law is not favorable.

sfbay84 14y ago

Rumour has it this dude is paying people to post good comments on Reddit- desperate much?? I've seen better start up sites than this- that don't need to give out bribes to get good reviews- sus.

alister 14y ago

The 2-minute video on their home page takes the right approach. It does not try to explain the lofty ideals of Bitcoin. It never mentions scary concepts like free banking, lack of government regulation, and crypto. It uses the word "anonymous" only once. That's the way to convince the public: a cheery talk about tangible benefits!

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rubyfan 14y ago

... and their site looks just like Github.

buhokok 14y ago

Currently getting a 500 error when trying to create a password with special characters. With all the password hash leaks going on these days, am I the only one paranoid enough to create a long, random password?

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jc123 14y ago

Is coinbase using aws or heroku and down right now? Seeing an application error on coinbase.com...

known 14y ago

Does Bitcoin solve https://en.wikipedia.org/wiki/Triffin_dilemma https://en.wikipedia.org/wiki/Triffin_dilemma

white_devil 14y ago
Is Bitcoin a national currency (or an international reserve currency for that matter)?
- white_devil 14y ago
  (To whoever downvoted this, the questions were meant to be rhetorical)

shughes 14y ago

I think Brian dated my sister back at Rice.. haha. So strange to stumble upon him here. Anyway, impressive startup resume. I'm familiar with a lot of his projects, but never connected the dots. Too bad my comment contributes nothing to the post and it's gonna go to the bottom. Oh well..