
Update for customers with Bitcoin stored on Coinbase - jaequery
https://blog.coinbase.com/update-for-customers-with-bitcoin-stored-on-coinbase-99e2d4790a53
======
sowbug
Most of the comments so far are misunderstanding the cause-effect
relationship. Coinbase is signalling that the Bitcoin Cash fork will die and
thus isn't worth the engineering effort to support. Because Coinbase is one of
the more prominent voices in the industry, this signal diminishes the
perceived value of Bitcoin Cash, which increases the chance that the actual
value will indeed drop to zero (or never rise above it) if/when it comes into
existence. Coinbase's announcement helps ensure the fork will die.

Their decision is rational even if you don't view them as an influencer. If
the fork dies, they were smart to ignore it. If it thrives, they can add
support later and nobody but short-term traders (who wouldn't have kept their
funds in Coinbase to begin with) will have missed out on anything.

~~~
JoshTriplett
I agree with this entirely. Coinbase isn't just "one of the more prominent
voices", they're also one of the more _respectable_ voices. They come across
as the bridge to more traditional systems (like banks and simplified consumer
transactions), filtering out some of the more "radical" elements of the
Bitcoin community, and a statement like this from them may well have a
material effect on the efficacy of a fork.

They might well decide, afterward, to provide a means of cashing out the
"alternate" currency after all. But even if they do, and even if they _plan_
to at this point, there's PR value in them not saying that.

~~~
sowbug
There is also a Machiavellian path where an exchange executes a devastatingly
well-timed series of sales of its customers' holdings of the alternate version
of the currency, thereby tanking the value and ensuring that its preferred
outcome comes to pass. What it does with the minuscule revenue from that is
probably irrelevant, but it'd make sense to credit to its customers' accounts
as BTC.

As you say, Coinbase is a respectable firm, and it seems unlikely it would
choose this tactic. But it would be consistent with a strategy to ensure the
fork fails to thrive.

~~~
runeks
Simple solution: Coinbase adds "convert BCC to BTC" button, which does exactly
what you say, but charges a fee for this service.

I can't see how the BCC price can go anywhere but down if all Coinbase
customers suddenly gain this ability ("Do you want extra BTC. Yes/no?").

~~~
Double_a_92
You can't just "convert" them. You still have to sell them to someone, can't
force that. Even if you could that would pull the price down extremely.

Easiest thing is to just give the user access to the new chain and it's
"parallel"-coins. Then he can decide when and how to sell them.

~~~
cma
> Even if you could that would pull the price down extremely.

That was the point.

------
polemic
Correct me if I'm wrong, but if you hold BTC with Coinbase (or any wallet you
don't control) you'd be extremely foolish not to pull it out now.

The value of BTC after the fork will presumably be the value of BTC + BCC
after the fork. If BCC has any value at over the coming months, then that is
effectively yours but inaccessible. And if it retains value, Coinbase is going
to be in a very awkward situation where they're sitting on an asset that may
_or may not_ be yours any more.

\-- EDIT:

Actually, the savviest move is probably to sell. Coinbase's position mean that
it's more than likely that a lot of BCC is inaccessible even if it has value.
That means BTC drops with no way to recover the lost value. Either the value
of BCC drops to zero (and BTC recovers over time) or Coinbase eventually
releases BCC (people who held it get BCC equivalent to the loss in BTC value).
_Either way_ if you sell immediately before the fork and purchase when it
drops, you should retain the lost BCC value.

(This assumes that BTC itself doesn't lose out).

~~~
untilHellbanned
Caution: your advice didn't hold for Ethereum. When Ethereum forked, it didn't
lose any value and Ethereum Classic value got created out of nothing.

Compare around July 20, 2016:

[https://coinmarketcap.com/currencies/ethereum/#charts](https://coinmarketcap.com/currencies/ethereum/#charts)

[https://coinmarketcap.com/currencies/ethereum-
classic/](https://coinmarketcap.com/currencies/ethereum-classic/)

~~~
runeks
For Ethereum, was/is it possible to sell your coins on the fork you're not
interested in? With BCC, you can create a transaction that transfers only BCC,
thus allowing you to sell your newly-acquired BCC, while keeping your BTC.

I'd be interested in knowing if this were the same with Ethereum (Classic),
since I would assume it would put a large selling pressure on the minority
fork (the greater the minority the greater the relative selling pressure).

~~~
aerique
I had ETH on Kraken and after the fork I had ETH and ETC.

However there's no saying what exchanges will do in this case.

If you have your own BTC you will have BTC and BCC after the fork which you
can sell.

------
nullc
Coinbase's handling of this is completely reasonable.

Anyone can create an altcoin fork of Bitcoin at any time, and they can do it
as many times as they want. Coinbase may not even know about it.

ABC isn't the first fork to award coins to existing Bitcoin users, there have
been several others like Clams and bitcore
([https://bitcointalk.org/index.php?topic=1883902.0](https://bitcointalk.org/index.php?topic=1883902.0))
(how deceptive these jerks are...).

In spite of the seriously short notice coinbase had done an admirable job
taking a clear and consistent position and communicating it to the public.
It's a position that can be applied to any further such events. In ABC's case
they took serious bludgeoning just to get the most basic replay protection
into place-- and they still have many unnecessary conflicts with Bitcoin:
duplicate address types, duplicate p2p port, duplicate p2p magic, duplicate
data dir... all making it unnecessarily complicated and risky for people who
want to use their altcoin.

Consider if they went another way-- what about the next one? and the one after
it? People could effectively flood them with them, a fork a week-- forks that
contain malware backdoors that steal Bitcoin keys, forks that will never have
more than a few dozen users. forks that are only publicly announced months
after they split off (but pretend to have been public all along).. etc.

No one can reasonably keep up with that. If you want to chase some of these
silly things, that is your decision-- one which you have the freedom to make
by keeping your Bitcoin's in your custody. Expecting other people to deal with
those potentially unbounded costs on your behalf wouldn't be reasonable.

~~~
MichaelBurge
BCC is not actually a fork but is the original chain/software, isn't it? That
could be an important distinction compared to these altcoins.

~~~
gfody
it's a fork, the code is here: [https://github.com/Bitcoin-ABC/bitcoin-
abc](https://github.com/Bitcoin-ABC/bitcoin-abc)

the original client is here
[https://github.com/bitcoin/bitcoin](https://github.com/bitcoin/bitcoin)

~~~
MichaelBurge
I suppose there's actually 3 forks in scope: The Segwit chain that Coinbase is
supporting, the big-blocks ABC chain that they are denouncing, and the
original chain that nobody seems to want. And I think I heard rumors of a
Segwit + 2MB blocks fork?

Or are the Segwit chains completely irrelevant here?

~~~
gfody
the third fork is
[https://github.com/btc1/bitcoin](https://github.com/btc1/bitcoin) which
combines segwit and large blocks, afaik they all support segwit - they just
differ in how they reach consensus. I don't think anyone is pushing for no
change since transaction fees and latency what they are it's pretty clear
something has to change.

------
MichaelBurge
I'm a little surprised they won't at least let you withdraw the Bitcoin Cash.
Otherwise it seems like they're asking for a "run on the bank" with a bunch of
people pulling out Bitcoin.

If BCC is even 10% as valuable as the main chain(Ethereum Classic is still at
~$15 vs. $200 for Ethereum main, it looks like), then why wouldn't people take
the free money?

A "run on the bank" would be annoying for them because it would mean they have
to pull a bunch of money out of cold storage. But I suppose allowing BCC
withdrawals would have the same problem, and might add even more risk since
there'd be temporary code involved.

I wonder if they plan to sell customers' unclaimed BCC for themselves if it
later retains any significant value.

They are at least consistent: They did the same thing with Stellar earlier.
Which makes sense, since there seem to be a lot of fork-like ways to get
alternative cryptocurrencies if you hold Bitcoin, and it's probably less
hassle to not deal with each unique situation.

~~~
saurik
What percentage of their customers do you believe will hear about this and go
to the trouble of actually doing it in the next five days (two of which being
a weekend)? When a fork happens, a lot of people who have BTC stored at
Coinbase who don't notice or don't bother are then going to be financially
isolated from the fork, which removes a ton of people who might otherwise be
financially incentived to participate. This thereby could also be acting as a
way to hobble a fork (which maybe they have determined the existence of to be
bad for them in some way).

~~~
gwern
What percentage will hear? ~100%, inasmuch as they emailed out OP to customers
and you need a working email account to do things like device confirmations.
The real question is how many understand the discussion of "you will not have
access to BCC" to imply that the customers might wind up taking a haircut to
the extent of however much BCC becomes worth, and that they probably want to
withdraw? (I withdrew mine last week.)

------
Animats
_Customers who wish to access both bitcoin (BTC) and bitcoin cash (BCC) need
to withdraw bitcoin stored on Coinbase before 11.59 pm PT July 31, 2017._

This applies to all online wallets and exchanges. You should have all Bitcoins
in your own off-line wallet before the fork. Then your coins are available on
both blockchains.

Look what happened when Etherium forked. Etherium Classic is still around and
tradable. It dropped, but not to zero. Why give up that value? Bitcoin Cash
might get some traction. If not, you haven't lost anything.

~~~
09094920394314
except around 4 $ in transaction fees

~~~
apk-d
I've just withdrawn my coins from Coinbase. The fee was 0.00037366 BTC
(roughly $1.05 USD).

------
noddy1
one of the issues is that having your currency added to coinbase gives it huge
legitimacy. every altcoin would love to be on there.

The most simple way for coinbase to distribute the coins would be if coinbase
"listed" the forked coin. They would also be compelled to do this when other
coins airdrop based on holdings of BTC (eg. Stellar and Byteball). This would
set a precedent resulting in large numbers of ropey forks and altcoins trying
to do drops to push coinbase to list them.

------
asciimo
PSA: If you're considering moving your bitcoin from Coinbase to a wallet you
control, and if you store any in the Coinbase vault, it will take 48 hours to
transfer from the Coinbase vault to a standard Coinbase wallet. Then you can
transfer to an external wallet.

------
ladon86
I don't follow cryptocurrency news much, and don't really understand the
consequences of this. I do have some BTC in Coinbase, though I don't really
spend it. Would you recommend I withdraw it ahead of the fork?

~~~
zanny
I'd recommend it. If Coinbase is set on sticking to the original blockchain,
in the event the fork prevails, that means your money effectively becomes
unusable - you don't control that wallet, but Coinbase won't submit your
transfers to that forked blockchain. The money dies on that chain the moment
Coinbase decides not to interact with it.

If you have it on your own, you can technically use it on both chains
independently. The history breaks August 1st. From there are on it is
basically two currencies.

Though in general you should keep your bitcoin close to home. If Coinbase gets
hacked or just ceases operations your money could just be gone if the fallout
is lost in litigation hell.

~~~
nether
Do these instructions for transferring one's btc to a non-Coinbase wallet
sound legitimate?
[https://www.reddit.com/r/btc/comments/6o9iv0/comment/dkg90yj](https://www.reddit.com/r/btc/comments/6o9iv0/comment/dkg90yj)

~~~
spolu
I wrote that a few weeks ago:
[https://spolu.now.sh/notes/bitcoin_gmail_keybase.html](https://spolu.now.sh/notes/bitcoin_gmail_keybase.html)

------
jpatokal
If you're planning to withdraw from Coinbase now, you may already be too late:
they're implementing 72 hour withdrawal delays for transactions over some
undisclosed maximum (4 figures USD?) unless you submit to some fairly
intrusive ID checks to speed things up.

[https://www.reddit.com/r/Bitcoin/comments/6q0hx8/psa_coinbas...](https://www.reddit.com/r/Bitcoin/comments/6q0hx8/psa_coinbase_large_transfer_72_hour_mandatory/)

~~~
mynewtb
My bank transfers funds faster and with less worry.

------
snissn
I've been having no response on support channels to initiate a password reset
for the last week, and now this! Class action lawsuit anyone?

~~~
QML
You're going to sue because you forgot your password and as a result can't
withdraw in time?

~~~
dmm
Somebody also forgot to read Coinbase's user agreement.

> 7.2. Arbitration; Waiver of Class Action.

~~~
mtrycz
Isn't there a new law forbidding the waiving of class action _no matter what
the eula says_?

------
k2xl
I wrote a step by step guide on how to move your coins out of Coinbase to a
private wallet: [https://hackernoon.com/how-to-move-money-from-coinbase-to-
yo...](https://hackernoon.com/how-to-move-money-from-coinbase-to-your-own-
wallet-2507aef1f717)

------
consumerad
Class action lawyers are at least investigating:
[https://www.consumeradlaw.com/coinbase](https://www.consumeradlaw.com/coinbase)

------
Hatred007
They are not allowing transfers out.. processing 24 hrs now.. Placed a small
transfer (10 usd worth) no peoblem. Holding my large transfer... coinbase =
garbage

------
jnordwick
This is almost like a stock having a split, an acquisition, or a spin off and
your broker deciding to keep the extra shares you are given.

~~~
Operyl
I guess the problem here is that Coinbase themselves might not have all the
liquid BTC that their customers have, meaning they don’t necessarily have all
the BCC to just give either?

------
ex3ndr
So, they are just stealing money from customers? Does anyone knows how we can
take a look at coinbase wallets?

------
null0pointer
Unjustifiable decision IMO. They are basically stealing money from their
customers. Regardless of your thoughts on the matter BCC will have _some_
value (no matter how little). Coinbase has always been very pro-core.

~~~
QML
Nope, nobody's forcing people to use Coinbase. If they want their BCC, they
should just withdraw into their own wallets. And why should Coinbase dedicate
effort to support a new untested altcoin?

