
Coinbase Billionaire Brian Armstrong’s Plan to Make Crypto Safe for All - prostoalex
https://www.forbes.com/sites/michaeldelcastillo/2020/02/19/coinbase-billionaire-brian-armstrongs-plan-to-make-bitcoin-ethereum-xrp-safe-for-all/#6e8cc26345b0
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fossuser
I've been checking in on cryptocurrencies and blockchain things every couple
of years and I tend to come away with a weird mixture of confusion and
admiration each time.

Confusion because I don't understand how all of this has such an immense
amount of time and capital invested in it when its actual use case for
anything is extremely vague (mostly about future potential) and some that have
moved away from proof of work (Stellar) seem a lot less safe?

Admiration because all of the different approaches, goals, and designs are
really technically interesting (Dai using market incentives to stay pegged to
one dollar, Tezos proof of stake and ability to get consensus on its own
updates/formal verification, Zcash using zero knowledge proofs to keep
transaction history optionally private, etc.)

I can't help shake that while the ability to hold decentralized consensus is
neat, most of the current value seems to come entirely from speculation on
future token price from people on reddit that have no idea what they're
buying. Why do these things have any real value?

I've tried to follow the reasoning of people like Balaji S. Srinivasan from
what I can find, but I have a hard time modeling a future where the current
value of these things makes sense.

The value of Coinbase in all this makes sense though, if you build reliable
infrastructure in a market you should make money - it doesn't matter if the
underlying assets are worth anything or not.

~~~
aedron
Bitcoin has a great use case as internet native money, which can be thrown
around programmatically, without being reliant on any private, corporate, or
nation controlled services. Considering how much of a shitshow the payments
industry is, I think this is a huge opportunity for bitcoin. Sure there are
cases where regular payment methods are preferable, perhaps even most, but
that doesn't mean that there is no place for true peer-to-peer permissionless
money transfers.

~~~
shred45
This to me is the real value. I'm not a huge believer in Bitcoin, but try
moving > 10k USD between bank accounts (just operating a small business I run
into this several times a year) and you will quickly see the appeal. High
fees, multi-day settlement times, raised eyebrows. It's just a mess. With
cryptocurrencies you can move millions of dollars for less than a dollar in
fees and it executes in as quickly as 10 minutes. There is definitely a
downside in terms of price volatility, and other cryptocurrencies offer much
better settlement times (beyond the network effect, they seem to offer more
long term value here than Bitcoin), but having what is essentially gold that
can teleport is very appealing. Sadly the ecosystem is not quite to where I
would actually operate my business in this manner, but I can definitely see
the value.

~~~
latchkey
Transactions are about 10 minutes because that is the average block time, but
you want at least 6 confirmations (blocks) too pass to really solidify things.
So, it is more like 60 minutes. It is this reason (and volatility of course)
that people dislike bitcoin as a regular payment mechanism. Nobody is going to
wait 60 minutes at the counter to buy something.

But, if you have 1 trillion USD of value (insert the actual value that is
meaningful to you) that you want to transfer around the world, you certainly
want to do it in the most secure way possible. Especially without having to
get permission from your local bureaucrat first. Bitcoin certainly makes that
possible. The problem being that buying up 1 trillion USD worth of bitcoin is
going to obviously move the market and anyone holding enough to do that OTC,
makes it pretty centralized.

I do feel like there is a middle ground here and that is to look at it as more
of a store of value. Just buy and hold it in the same way that people hold
onto gold. If you look at the 100yr charts for gold, they are all over the
place. 2008 was one of the largest dips that set things back at least 30
years! Now things have bounced back... but it is all on speculation and really
has nothing to do with some sort of 'intrinsic value' of gold.

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optimiz3
Corporate fluff article on Forbes.

Should just be renamed Big-Brotherbase, or Banned-for-Life-and-Won't-Tell-You-
Whybase. Coinbase is famous for suddenly disabling accounts and refusing to
give an explanation. At least a traditional bank will normally explain the
circumstances.

Got one of their arbitrary sucks-for-you letters last year. No way would I
ever recommend them to anyone.

In my case I'm a mining developer, so I have a huge digital currency profile.
Coinbase is horrifically opaque and impossible to deal with if they flag you
unlike most other organizations.

E: I'll just lump some more examples of their corporate ineptitude.

1\. Recently I asked them for a dump of trades and fees executed on their
exchange for audit and record keeping purposes. All they had were records of
deposits and withdrawls but none of the actual trades. So no cost-basis data
and now a huge accounting headache.

2\. When my personal account got locked, we separately had an application out
for an institutional account. 4 months go by and suddenly I get emails saying
"we're ready to proceed with your institutional account". Excuse me? Told them
to fix my personal account first. Never heard back.

~~~
brian-armstrong
Yikes, that sounds terrible. Hopefully the US can set legislation for this
kind of thing. Having people get locked out of their crypto is no good.

~~~
csomar
It's interesting you didn't address his two points:

\- Coinbase not having records of your trades (although it's operating from a
highly regulated jurisdiction)

\- Coinbase not communicating why/how accounts are locked.

> Having people get locked out of their crypto is no good.

Funny thing is that crypto (Bitcoin) was made so that people could _hold_
their own monies instead of relying on a third-party.

~~~
boring_twenties
> \- Coinbase not having records of your trades (although it's operating from
> a highly regulated jurisdiction)

This isn't accurate for active accounts, at least. I use the REST API to pull
down my trading history, and it has all of it going back to 2013.

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kick
I question what these people value about cryptocurrency: with none of the
autonomy, anonymity, or resilience present in initial pitches and offerings in
the space, it seems like it's mostly valueless. Surely there's more to it than
a cash grab that takes a massive amount of energy for these people, isn't
there?

~~~
admiral33
It's a cash grab for many people. On the other hand it feels like a kodak
moment. Digital currency just feels like a natural progression for the world.
It doesn't have a military backing it though. This makes me think that the
most "revolutionary" crypto currency will be tied to a social media where
people pressure elections in it's favor... sort of like reddit karma where
there is no buying power but there is a lot of social power.

~~~
puranjay
Maybe this is an American perspective (the American financial system is
horribly outdated) but in the developing world, "digital currency" is mostly a
solved problem. Your bank account integrates so seamlessly with digital
payment systems that creating a separate currency seems entirely superfluous.

Here in India, we have a system called UPI. Connect it to your bank account
once and you get a username like 'YourName@OkAxis'. Anyone can send money to
this username and it goes straight to your bank account. You can pay
establishments - online as well as offline - by simply verifying a one time
password on your mobile. It's so seamless and cheap (essentially free) that I
can't ever imagine needing a digital currency.

~~~
omosubi
Interesting to hear this perspective as one of the main arguments people used
to make was that people in rural India or wherever could now access banking
products that traditional banks refused to give due to cost. I'm assuming
that's no longer the case?

~~~
puranjay
The current government had a massive banking drive where it almost forced the
rural poor to open bank accounts. This was followed by demonetization of
currency notes, which, as harmful as it was to the economy, "normalized" the
idea of transacting digitally.

A bulk of transactions still happen via cash but digital payments, especially
UPI, are seeing increasingly wider adoption. There has been a lot of
innovation in this space just to make customer-merchant transactions easier.

For example, this product from PayTM basically acts as a confirmation box for
UPI transactions.

[https://business.paytm.com/blog/introducing-paytm-sound-
box-...](https://business.paytm.com/blog/introducing-paytm-sound-box-turn-
your-business-into-a-smart-business/)

Something like this reduces the trust deficit in rural areas about digital
banking products.

It's going to take a long while, but technologically, it's a solved problem. I
can't see any utility that crypto brings to the table except for
decentralization which most consumers don't care about anyway.

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Seenso
The title is misleading. This doesn't sound like it will do anything to help
make crypto safe for those people who need protection from government
backdoors and key escrow.

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RcouF1uZ4gsC
> That success comes from acting like a bank. Coinbase draws in customer funds
> via bank wires. It stores its assets—numerical keys that unlock coins—in
> vaults. It boasts of insurance coverage from Lloyd’s of London. It has a
> security staff of 41, including an Iraq War veteran assessing perimeter
> risks and a Ph.D. cryptographer doing the same for mathematical assaults.

It is a bank, that instead of storing cash, stores keys. It is centralized. It
complies with regulators. It does allow you to withdraw your keys into your
own wallet, but a bank also allows you to withdraw your cash to your physical
wallet. It walks like a bank, and it quacks like a bank. It is a bank.

------
meagher
> “It’s like if Google made Gmail for bitcoin,” says Chris Dixon, an
> Andreessen partner who serves on the Coinbase board. “And that’s literally
> the way they described it.”

One of the most painful startup analogies I've heard.

~~~
pavlov
Every startup should adopt this formula for their decks.

“Juicero: it’s like if Google made Gmail for juice”

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ljm
The sooner that billionaire becomes a greater pejorative, the better.

The whole of society suffers from the accumulation of wealth to these few
people.

On that basis, I don’t give a fuck what this person says because they won’t
overcome the exploitation that got them there. And he does not command respect
by having so much money.

This is the aristocracy by a different measure. Back then they used
agricultural output. Now it is measured in assets.

~~~
allovernow
>they won’t overcome the exploitation that got them there

Do the corporations that evil billionaires own not pay their employees?

You realize that this wealth is just a result of a couple percent of markup
per transaction on a massive scale, right?

Yeah, Armstrong may be a scummy person, and his exchanges are trash, but he
made his billions by offering a service that no one else did. There was no
other way that I'm aware of to easily buy BTC or ETC with cash before coinbase
popped up.

It's possible to make a billion honestly.

------
habosa
Is there any other reputable site for a US citizen to buy crypto quickly with
a credit card or bank account?

I have used Coinbase for lack of alternatives. It's awful. Every time I sign
in (a few times a year) there's some new problem with my account. Either they
need more ID verification (done it 10x) or they decided my purchases are going
to be delayed 3 days or blah blah blah. I just got an email from them today
saying my account is suspended if I don't take some action.

This is not the decentralized future crypto people want. It's a half-assed
bank that doesn't need its customers.

~~~
Seenso
> Is there any other reputable site for a US citizen to buy crypto quickly
> with a credit card or bank account?

You can buy it here: [https://www.axcrypt.net/](https://www.axcrypt.net/) and
[http://www.cryptoexpert.com/](http://www.cryptoexpert.com/).

However there's really no need to buy it anymore, as there are very good open-
source implementations, like [https://gnupg.org/](https://gnupg.org/) and
[https://www.veracrypt.fr/](https://www.veracrypt.fr/).

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Ididntdothis
I really wish people would stop using the title “billionaire”. Is
“billionaire” the new aristocracy or priesthood?

~~~
huangc10
What, you never heard of the tres comas club?

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ASalazarMX
How kind of him to give us us all be same opportunity to be fleeced.

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artsyca
As usual it involves making questionable fashion choices

~~~
artsyca
i.e. the 'hey I'm a billionaire / bond supervillain' look

