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Nothing, so most people should use Coinbase the same way they use a grocery store: buy what they need and take it somewhere else. Unfortunately most people do n

by diego 13y ago

Nothing, so most people should use Coinbase the same way they use a grocery store: buy what they need and take it somewhere else. Unfortunately most people do not know enough to do that. I wrote a blog post about it if you're interested. http://diegobasch.com/do-you-know-enough-to-securely-own-bitcoins http://diegobasch.com/do-you-know-enough-to-securely-own-bit...

gnaritas 13y ago
> Nothing False. Theft is against the law. Bitcoins don't magically avoid being subject to existing law. The owners are known and subject to US jurisdiction, you have legal recourse through the courts should they try and steal your funds.
- baddox 13y ago
  Lots of people in this thread seem to think that there is either no incentive for Coinbase to conduct their business legitimately, or that the law is the only incentive. That ignores the much more obvious and presumably stronger incentive: they should be able to make a lot more money as a legitimate business than if they just ran away with one lump sum.
  - diego 13y ago
    That relies on the assumption that they will not suffer a tremendous loss due to a rogue employee, a software bug or a malicious hack. If they found themselves in a situation in which they are certain to go out of business as soon as people find out that they are in trouble, that motivation would cease to exist. It would come down to ethics, reputation, pressure from investors, etc.
    - torbjorn 13y ago
      Sure, Bad Things™ could happen at Coinbase like they did at Gox. However, I think it is reasonable to trust Coinbase more than Mt. Gox. If you looking to Mt. Gox's history there are many signals that suggest general mismanagement and dysfunction. This is in no way rigorous but consider User Interface design as a rule of thumb. Gox had an ugly unintuitive site. Coinbase on the other hand has a polished UI. This attention to detail suggests that the people who operate Coinbase are very different from those who operated Gox.
    - baddox 13y ago
      Rogue employees, software bugs, and malicious hacks can also happen in a pure USD business covered by explicit laws.
  - torbjorn 13y ago
    The mistrust in Coinbase line of thinking seems similar to fear and paranoia about terrorism. Could a bad actor acquire and use agency to do something horrible like obtain a dirty bomb and set it off? Sure, it is possible. But at the same time it is very unlikely. People GENERALLY want to be good actors and make a positive impact on the world. With Mt. Gox I am more inclined to think their problems stemmed incompetence rather than malevolence.
- CoachRufus87 13y ago
  > The owners are known and subject to US jurisdiction Assuming they don't just leave the country
  - MichaelGG 13y ago
    ... Most places have extradition treaties with the US or US-allies. I'm sure it wouldn't be hard to find one Coinbase user not in the US, then use that country's extradition.
  - gnaritas 13y ago
    We have jurisdiction in all countries, just ask our politicians and witness our world policing.
- pavanky 13y ago
  How do you probe you lost something that is not tied to your identity ?
  - deleted 13y ago
    [deleted]
- diego 13y ago
  The law doesn't prevent you from committing crimes. It certainly did not prevent Mt. Gox from making bitcoins disappear. If that happens and you need to go to court, good luck proving that an exchange stole your coins. We haven't even seen Mt. Gox play out yet. Suppose they actually stole everyone's coins. Can someone prove it wasn't a hacker or a software bug? Time will tell.
  - sheetjs 13y ago
    The one good thing about coinbase is that they do react to outrage on HN. For example: https://news.ycombinator.com/item?id=6929705 https://news.ycombinator.com/item?id=6929705
    - k-mcgrady 13y ago
      The fact that public outrage is required to get their attention when dealing with such large amounts of money doesn't inspire confidence. Your example is a good example of bad customer service, not something good to credit them with.
  - gnaritas 13y ago
    > The law doesn't prevent you from committing crimes. That wasn't the question, the question was what's to stop them and the answer I objected to was "Nothing"; that's false, the law is not nothing. What's to stop most bad behavior... the law.
    - makomk 13y ago
      The law is fairly obviously not an answer though, given the context. The original question specifically asked what stops Coinbase from shutting down and taking everyone's money like MtGox did. It was just as illegal when MtGox did it, yet it happened anyway. (Actually, most of the other answers have the exact same problem.)
      - gnaritas 13y ago
        > The law is fairly obviously not an answer though, given the context. You're free to think that, I'm free to think you're wrong. MtGox is in Japan, Coinbase isn't; the contexts are different.

by diego 13y ago

gnaritas 13y ago

> Nothing False. Theft is against the law. Bitcoins don't magically avoid being subject to existing law. The owners are known and subject to US jurisdiction, you have legal recourse through the courts should they try and steal your funds.

baddox 13y ago
Lots of people in this thread seem to think that there is either no incentive for Coinbase to conduct their business legitimately, or that the law is the only incentive. That ignores the much more obvious and presumably stronger incentive: they should be able to make a lot more money as a legitimate business than if they just ran away with one lump sum.
- diego 13y ago
  That relies on the assumption that they will not suffer a tremendous loss due to a rogue employee, a software bug or a malicious hack. If they found themselves in a situation in which they are certain to go out of business as soon as people find out that they are in trouble, that motivation would cease to exist. It would come down to ethics, reputation, pressure from investors, etc.
  - torbjorn 13y ago
    Sure, Bad Things™ could happen at Coinbase like they did at Gox. However, I think it is reasonable to trust Coinbase more than Mt. Gox. If you looking to Mt. Gox's history there are many signals that suggest general mismanagement and dysfunction. This is in no way rigorous but consider User Interface design as a rule of thumb. Gox had an ugly unintuitive site. Coinbase on the other hand has a polished UI. This attention to detail suggests that the people who operate Coinbase are very different from those who operated Gox.
  - baddox 13y ago
    Rogue employees, software bugs, and malicious hacks can also happen in a pure USD business covered by explicit laws.
- torbjorn 13y ago
  The mistrust in Coinbase line of thinking seems similar to fear and paranoia about terrorism. Could a bad actor acquire and use agency to do something horrible like obtain a dirty bomb and set it off? Sure, it is possible. But at the same time it is very unlikely. People GENERALLY want to be good actors and make a positive impact on the world. With Mt. Gox I am more inclined to think their problems stemmed incompetence rather than malevolence.
CoachRufus87 13y ago
> The owners are known and subject to US jurisdiction Assuming they don't just leave the country
- MichaelGG 13y ago
  ... Most places have extradition treaties with the US or US-allies. I'm sure it wouldn't be hard to find one Coinbase user not in the US, then use that country's extradition.
- gnaritas 13y ago
  We have jurisdiction in all countries, just ask our politicians and witness our world policing.
pavanky 13y ago
How do you probe you lost something that is not tied to your identity ?
- deleted 13y ago
  [deleted]
diego 13y ago
The law doesn't prevent you from committing crimes. It certainly did not prevent Mt. Gox from making bitcoins disappear. If that happens and you need to go to court, good luck proving that an exchange stole your coins. We haven't even seen Mt. Gox play out yet. Suppose they actually stole everyone's coins. Can someone prove it wasn't a hacker or a software bug? Time will tell.
- sheetjs 13y ago
  The one good thing about coinbase is that they do react to outrage on HN. For example: https://news.ycombinator.com/item?id=6929705 https://news.ycombinator.com/item?id=6929705
  - k-mcgrady 13y ago
    The fact that public outrage is required to get their attention when dealing with such large amounts of money doesn't inspire confidence. Your example is a good example of bad customer service, not something good to credit them with.
- gnaritas 13y ago
  > The law doesn't prevent you from committing crimes. That wasn't the question, the question was what's to stop them and the answer I objected to was "Nothing"; that's false, the law is not nothing. What's to stop most bad behavior... the law.
  - makomk 13y ago
    The law is fairly obviously not an answer though, given the context. The original question specifically asked what stops Coinbase from shutting down and taking everyone's money like MtGox did. It was just as illegal when MtGox did it, yet it happened anyway. (Actually, most of the other answers have the exact same problem.)
    - gnaritas 13y ago
      > The law is fairly obviously not an answer though, given the context. You're free to think that, I'm free to think you're wrong. MtGox is in Japan, Coinbase isn't; the contexts are different.