8 ms·

are you sure you want to trust a single person with your entire fortune? What "entire fortune"? Who keeps their "entire fortune" with an exchange anyway? Or a

by blfr 12y ago

are you sure you want to trust a single person with your entire fortune? What "entire fortune"? Who keeps their "entire fortune" with an exchange anyway? Or a significant chunk of it in cash for that matter? They provide completely reasonable assurances for what they're doing.

sillysaurus3 12y ago
These people: https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_... Specifically this person: https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo4aax https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_... I am the biggest loser at 4700+ BTC. Screenshot from a few days ago for the purposes of record keeping. http://imgur.com/IDbM0BP http://imgur.com/IDbM0BP This behavior isn't uncommon. Check out the rest of the thread. Everyone is expressing their faith in Coinbase's competence, so if that's your position, trusting your fortune to them wouldn't seem unreasonable. It's how I lost money on Mt. Gox. Wanna see a scary survey? https://www.reddit.com/r/Bitcoin/comments/2bjefu/results_of_a_3000_person_bitcoin_survey/ https://www.reddit.com/r/Bitcoin/comments/2bjefu/results_of_... https://docs.google.com/forms/d/1FTW8ec0KAzmK8DVYEhFIRVbmYTHNxQzgiXHAh35p5IY/viewanalytics?usp=form_confirm https://docs.google.com/forms/d/1FTW8ec0KAzmK8DVYEhFIRVbmYTH... Check out this chart: http://i.imgur.com/qHYLeXz.png http://i.imgur.com/qHYLeXz.png A whopping third of people surveyed had more than 20-30% of their net worth in bitcoin. I wonder how many of those people are storing it themselves vs storing them with Coinbase or some other exchange?
- blfr 12y ago
  You can hurt yourself with a powertool, even a kitchen knife or a kettle. Do more damage than you ever could with bitcoin. That doesn't mean the manufacturer should buy you healthcare insurance. Storing 4700BTC with an exchange is far, far beyond intended use. My position is that you shouldn't be doing it. I understand the pro-consumer position. Yes, maybe the exchange should push you into cashing out. But this is starting to turn into padding every room. We allow people to speculate on forex. We allow them to play carpenter. I don't see why this shouldn't extend to bitcoin.
  - sillysaurus3 12y ago
    My intent wasn't to argue that Coinbase should be illegal. That would be silly. My goal was to show that regardless of how we feel consumers should act, those links show how they do act. Consumers take risks far beyond what's reasonable. It's up to Coinbase to protect them, and for them to inform consumers if they can't. But Coinbase is doing just the opposite: they're advertising that they're insured while handwaving the fact that they only insure 2% of their coins. And so on.
  - mikeash 12y ago
    I guess the question is, why are they making such a big deal about their insurance, if it's both unnecessary and not useful? It sounds like they're trying to run the exchange as you say (with the vast majority of assets not insured) but trying to convince people that it's a safe place to store any amount ("we are insured").
    - blfr 12y ago
      The insurance covers the riskiest part of their operation: hot wallets. And it's meant to convince people that it's a safe place to exchange money. Seems rather straight-forward to me.
      - sillysaurus3 12y ago
        The whole point of a hot wallet is that it doesn't matter if it disappears. The only point of insuring it is to give a false sense of safety.
        blfr 12y ago
        How can it not matter if 3% of assets under your management disappear?
        sillysaurus3 12y ago
        If it matters, then you're keeping too much in your hot wallet. The definition of "hot wallet" is "we keep a small enough assets here to cover day-to-day operations, but not so much that we're in trouble if they disappear." There's no other reason to have a hot wallet. Insuring their hot wallet might let Coinbase increase its size, but it offers no extra protection for consumers. None whatsoever.
- celticninja 12y ago
  A whopping third of people surveyed had more than 20-30% of their net worth in bitcoin. I wonder how many of those people are storing it themselves vs storing them with Coinbase or some other exchange? I imagine most of these people saw a medium sized investment increase in value significantly, which made it a larger part of their net worth as opposed to putting 25% of their net worth into bitcoin.

by blfr 12y ago

sillysaurus3 12y ago

These people: https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_... Specifically this person: https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_story_thread_how_much_did_you_lose/cfo4aax https://www.reddit.com/r/Bitcoin/comments/1yv26o/gox_horror_... I am the biggest loser at 4700+ BTC. Screenshot from a few days ago for the purposes of record keeping. http://imgur.com/IDbM0BP http://imgur.com/IDbM0BP This behavior isn't uncommon. Check out the rest of the thread. Everyone is expressing their faith in Coinbase's competence, so if that's your position, trusting your fortune to them wouldn't seem unreasonable. It's how I lost money on Mt. Gox. Wanna see a scary survey? https://www.reddit.com/r/Bitcoin/comments/2bjefu/results_of_a_3000_person_bitcoin_survey/ https://www.reddit.com/r/Bitcoin/comments/2bjefu/results_of_... https://docs.google.com/forms/d/1FTW8ec0KAzmK8DVYEhFIRVbmYTHNxQzgiXHAh35p5IY/viewanalytics?usp=form_confirm https://docs.google.com/forms/d/1FTW8ec0KAzmK8DVYEhFIRVbmYTH... Check out this chart: http://i.imgur.com/qHYLeXz.png http://i.imgur.com/qHYLeXz.png A whopping third of people surveyed had more than 20-30% of their net worth in bitcoin. I wonder how many of those people are storing it themselves vs storing them with Coinbase or some other exchange?

blfr 12y ago
You can hurt yourself with a powertool, even a kitchen knife or a kettle. Do more damage than you ever could with bitcoin. That doesn't mean the manufacturer should buy you healthcare insurance. Storing 4700BTC with an exchange is far, far beyond intended use. My position is that you shouldn't be doing it. I understand the pro-consumer position. Yes, maybe the exchange should push you into cashing out. But this is starting to turn into padding every room. We allow people to speculate on forex. We allow them to play carpenter. I don't see why this shouldn't extend to bitcoin.
- sillysaurus3 12y ago
  My intent wasn't to argue that Coinbase should be illegal. That would be silly. My goal was to show that regardless of how we feel consumers should act, those links show how they do act. Consumers take risks far beyond what's reasonable. It's up to Coinbase to protect them, and for them to inform consumers if they can't. But Coinbase is doing just the opposite: they're advertising that they're insured while handwaving the fact that they only insure 2% of their coins. And so on.
- mikeash 12y ago
  I guess the question is, why are they making such a big deal about their insurance, if it's both unnecessary and not useful? It sounds like they're trying to run the exchange as you say (with the vast majority of assets not insured) but trying to convince people that it's a safe place to store any amount ("we are insured").
  - blfr 12y ago
    The insurance covers the riskiest part of their operation: hot wallets. And it's meant to convince people that it's a safe place to exchange money. Seems rather straight-forward to me.
    - sillysaurus3 12y ago
      The whole point of a hot wallet is that it doesn't matter if it disappears. The only point of insuring it is to give a false sense of safety.
      - blfr 12y ago
        How can it not matter if 3% of assets under your management disappear?
        sillysaurus3 12y ago
        If it matters, then you're keeping too much in your hot wallet. The definition of "hot wallet" is "we keep a small enough assets here to cover day-to-day operations, but not so much that we're in trouble if they disappear." There's no other reason to have a hot wallet. Insuring their hot wallet might let Coinbase increase its size, but it offers no extra protection for consumers. None whatsoever.
celticninja 12y ago
A whopping third of people surveyed had more than 20-30% of their net worth in bitcoin. I wonder how many of those people are storing it themselves vs storing them with Coinbase or some other exchange? I imagine most of these people saw a medium sized investment increase in value significantly, which made it a larger part of their net worth as opposed to putting 25% of their net worth into bitcoin.