
Coinbase: The Heart of the Bitcoin Frenzy - rahulshiv
https://www.nytimes.com/2017/12/06/technology/coinbase-bitcoin.html
======
drawkbox
With the frenzy out there, Coinbase makes crypto currencies
trading/investing/purchasing as robust and seemingly as safe as possible. This
could be a signal, now that we have some reputable market players that crypto
currencies are really just starting and there is a very high ceiling. Getting
in before coinbase you had to mine your own (that party ended quickly -
Butterfly Labs, cex.io for cloud mining etc) or be part of a sketchy exchange
(mtgox, btc-e etc where funds were stolen or seized). Some of the rules such
as 10k limits on buying/selling/transfers put a natural throttling on bitcoin
that other markets don't have, since the buying is immense it should continue
to go up for sometime due to this throttling and now reputable sources for
buying into the market.

Side note: one of the absolute killer features of crypto currency markets is
finally we have an always on market. Stock markets and exchanges still operate
in the old days of the hours of the day in the country they are based in,
crypto currency is an always on market which is nice because it eliminates the
after hours/before open games that go on with stocks.

~~~
ehsankia
I've run into all sorts of bugs which made the site annoying to use.

1\. My bank account has a 5000$ limit and my credit card has a 750$ limit.
After spending 1000$ from the bank (which takes a week), I wanted a quick 50$
from my CC, but it said I was already past the 750$ limit.

2\. When trying to recover an older account, the recovery keeps asking for my
phone number but isn't sending me texts properly. If you say you lost your
phone, you can submit id+selfie, but to get to that step, you need your
phone??

3\. If you reset Authy, it removes your Coinbase token, and tells you to
contact their support. They're very slow as responding, and after a week, I
was just told to use my phone number (which again, goes back to #2)...

~~~
ThomPete
You can transfer money to a usd wallet so that should make it easier to
purchase if you need to.

~~~
matwood
And for those worried, the USD wallet is FDIC insured in the US.

------
hectorr1
I have a ton of respect for Coinbase. It seems like their implied priorities
are:

1) Security 1a) Compliance ... 57) Customer Service

While annoying, this was both sufficient and necessary for the business to
date. Security is necessary for obvious reasons. Compliance is necessary
because to be able to do business with US banks (card processing, ACH,
wires...) they had to be aggressive about complying with US regulation. Which
ultimately gives them an advantage on the customer service front relative to
their competition for retail investors. And frankly, they aren't much worse
than most online brokers.

These priorities were also sufficient. Amazon was competing against major
incumbents and had to win on cost and service. By outcompeting an empty field
on compliance, Coinbase has built a significant moat around US retail. They
have relationships with Fidelity and USAA that signal legitimacy. They had
cold storage while incumbents were/are still saying 'blockchain not Bitcoin'.

The critical question is how they manage customer service and communications
going forward. Amazon, Facebook, and Google created monopolies based on a
great user experience. Uber destroyed a thousand monopolies for the same
reason. Coinbase is riding the coattails of Bitcoin's awesome UX, the warm
fuzzies people get from making 10x on an investment. If and when there is a
correction, their core business will hinge on how well they handle a large
sell-off.

~~~
vocatus_gate
Agree with almost everything you've said, and unfortunately if past experience
is anything to go by, they'll crash/go down during the next big price dip.

~~~
egeozcan
Maybe this is because of the immense increase in the number transactions
during a dip? (really just guessing)

------
40acres
Coinbase seems to be the quintessential "sell shovels during a gold rush"
company. Definitely provides a good case study about how to create a
successful business during new industry booms.

~~~
stephengillie
The giant balance up top is an incredible FOMO machine. In the best
findom/gamification, you can increase your "score" simply by giving them more
money. The volatility makes the game more difficult to predict than most free-
to-play games, but the daily graphs going up so fast make it hard to resist.

~~~
mancerayder
My brokerage account and bank accounts also display the balance. Sometimes at
the top, sometimes in the middle. It's a UI decision, more than a FOMO game.
With that mindset, capitalism itself is a FOMO and the balance at the top of
your head (your net worth) the FOMO machine.

------
shiado
It is pretty funny how the original value proposition of "being your own bank"
given in the bitcoin whitepaper, which is necessitated by actually possessing
the private keys, has gone out the window due to convenience and a lack of
understanding of the fundamental blockchain technology by speculators.
Coinbase is central in these facts.

~~~
skybrian
It's not so much that they don't understand, but rather that they don't care.
People can buy Bitcoin for fun or to try to make money without believing in
the ideology that was originally used to justify it.

~~~
IkmoIkmo
Which is why I got out of bitcoin.

There's literally nothing special about bitcoin, apart from its decentralised
nature.

Other than that, it's just a big ledger. No different from virtually any other
database. It's special because it's decentralised.

The way people use bitcoin however, completely reverses that and is extremely
geared towards use of centralised parties. It's as if we built solar panels to
generate electricity with which we heat up our oceans, causing ice caps to
melt and global warming to occur. It's a bit of a joke.

We're now all valuing a system, above other systems, for its unique
decentralised properties, while subsequently throwing that out the window, yet
still expecting this system to be uniquely valuable. We're all introducing
trust into a trustless system, and paying intermediaries and middlemen a cut
in the process.

That's fine for other investments, e.g. productive assets that are valuable
for other reasons. But it's not fine for an investment into something that's
valuable because it's trustless, decentralised and disintermediating.

There's some nuance I'm leaving out of course, you can argue against this
post, but by and large you can't ignore this massive disconnect between
bitcoin's value proposition and bitcoin's reality. Nor can you argue anymore,
like we used to, that it's just a phase. If anything, there's less and less
regard for personally run wallets, personal nodes, personal mining, personal
transactions, and an increase in use of centralised parties, with centralised
wallet providers, cloud and company mining, transaction processors etc.

~~~
raiyu
I think you captured this notion quite well and I think it's very interesting
that for a decentralized system people have immediately given up on that so
called benefit because it wasn't as easy to use as a trusted intermediary.

Then the whole angle of "trusted" is complex due to the parties that you are
entrusting and the number of issues that they have suffered.

So then you look at banks and say ok, interesting, perhaps I haven't quite
noticed the seamless ease of use layer that they provide, that I have
undervalued simply because it's been a fact of life for so long it becomes
invisible until you deal with the exact opposite.

------
kvee
Most interesting thing I learned from this article:

Brian Armstrong, Coinbase CEO, "said he now holds more of his wealth in a
Bitcoin competitor, Ether"

~~~
Frogolocalypse
Brian Armstrong has quite the history of being on the wrong side of every
argument to do with safe and scalable crypto implementation. He has been a
champion of centralization and attacks on bitcoin governance. He was a vocal
proponent of four out of the five failed fork attempts of bitcoin over the
past couple of years. He, and coinbase investors, are very lucky they had
people like Charlie Lee managing the technical parts of coinbase.

~~~
nextstep
I’m not sure if you’re willfully misinterpreting what happened or just unware,
but the debate over how to scale bitcoin (basically, on-chain vs off-chain) is
know being played out with Bitcoin vs Bitcoin Cash. And it’s looking like big
blocks is actually a solution for scalability (lower fees, faster
transactions), at least in the short term.

(For those not aware, Bitcoin Cash is a fork of Bitcoin that removes segwit,
the initial groundwork for off-chain scaling solutions, and instead simply
increased the blocksize; so far this has proven to greatly reduce network
congestion.)

Maybe it was the right call for Coinbase to not support many of the forks, but
they will be adding support for Bitcoin Cash in 2018 (at least withdrawals).
So it’s inaccurate to characterize Brian Armstrong on the “losing” side of
these debates.

~~~
etr-strike
Bitcoin Cash is the brute force solution to scaling. Increasing block size
results in longer validation times as well as slower block propagation. Both
of these things lead to centralization. The entire purpose of bitcoin is to be
as decentralized as possible.

Anyways, here's a video released today of a lightning transaction happening on
mainnet:
[https://www.youtube.com/watch?v=a73Gz3Tvx3k](https://www.youtube.com/watch?v=a73Gz3Tvx3k)

Here's a video of Greg Maxwell explaining how slight propagation delays can
lead to drastic increases in centralization:
[https://www.youtube.com/watch?v=EHIuuKCm53o](https://www.youtube.com/watch?v=EHIuuKCm53o)

And here's rootstock, an ethereum compatible solution for smart contracts:
[https://www.rsk.co/](https://www.rsk.co/)

Bitcoin Cash is like trying to solve traffic congestion by adding more lanes.

~~~
RexetBlell
Why would anyone ever use rsk? They created a centralized clone of Ethereum
and charge 20% fees, or something like that.

Here's a truly revolutionary scaling solution by the inventor of Bitcoin's
Lightning network and Vitalik Buterin:
[https://plasma.io/](https://plasma.io/)

Also here is an Ethereum's equivalent of the Lightning network, which was
deployed on main net recently:
[https://raiden.network/](https://raiden.network/)

~~~
Frogolocalypse
I don't mind eth. I hope they can solve their problems. But they have
problems, and they are running out of time to work them out. Their blockchain
is out of control size. Nodes are dropping and they aren't coming back up.
I've heard about sharding and pos, but i haven't seen anything approaching a
solution yet. It's an issue.

Edit: > Why would anyone ever use rsk?

ICO. Share offer.

------
zkms
I used to use coinbase but some godawful KYC/AML thing kicked in and asked me
to send them a "selfie" of myself, which creeped me the hell out. I'm a US
citizen, am not on any sort of list of prohibited people, and had already
given them a photo of my driver's licence and my SSN -- and have had no issues
with opening other bank/bitcoin-exchange accounts online previously.

I thus switched to Gemini because I do not want to support this invasive
nonsense. It's literally an automated version of "put shoe on head" (the
request that /b/tards would make of camgirls that they wanted to troll).

Between that, and the thing where you literally have to enter your _BANK_ 'S
username/password to ANOTHER WEBSITE (coinbase, in this case) to prove you
have that account (of course it chokes on 2FA); the USian banking system is
such a scary bad mess -- and i'm pretty sure that that's a significant driver
of bitcoin adoption (and there's also the ACH clusterfuck).

~~~
koolba
Wait what? Did they really ask for your bank login credentials? If so,
approximately what date was that?

~~~
superquest
They use Plaid[1] to verify bank accounts using bank login credentials instead
of micro deposits -- which reduces abandoned applications since you don't have
to wait a couple days to complete verification.

This is a very common thing for fintech companies to do.

[1] [https://plaid.com/](https://plaid.com/)

~~~
acjohnson55
It's so bizarre to me that there isn't proper auth delegation in online
banking. You should _never_ have to put credentials for one domain into a form
on another domain. Let alone banking credentials!

~~~
mbrock
And that's a huge indicator of why blockchain finance is attractive. The
banking system is AWFUL. Exchanges are bridges between banks and blockchains,
and it's quite reasonable to want to keep your money in cryptocurrency just
for technical usability reasons. I can send cryptocurrency from a shell script
-- that's not going to work with bank money in a million years, or if it does
it's going to be because of the competition from blockchains. Blockchains
enable permissionless innovation in finance, and that's HUGE.

~~~
PeterisP
You're talking about the USA banking system, which is pretty much stone age
compared to everyone else. (paper checks? really?) For example, in EU the
requirement for banks to open up APIs to everyone is coming in force next
year, a bit closer than a million years - and it's not happening because of
competition from blockchains, it was put in force (before blockchains boomed)
for reasons of consumer rights and restricting anti-competitive behavior by
banks.

~~~
mbrock
I'm not sure the EU directive will open up APIs to everyone. More likely it
will be to a regulated class of businesses, right? If it really means I will
be able to directly access and manipulate my own personal and business bank
account with curl, then I'm really excited. If I have to go through a
bureaucratic approval process, then it's still pretty cool, but not what I
really want (permissionless innovation).

~~~
PeterisP
Yes, the main intent is not for end-users to access those APIs directly - most
consumers don't want that, and the larger business who want it already have
such access, pretty much every bank here offers a cash management solution
that allows you to automatically access your account data and send
transactions from your system to the bank. The big expectation is that it will
open up the market to fintech service providers / tool makers who can then
provide services using that API to every customer of every bank; but there
certainly could be (or you could make) a service provider that offers exactly
what you describe - a consumer friendly API for direct access, handling the
authentication in some manner that's compatible with isolated curl requests.
You wouldn't have to get permission from the involved banks to do that, but
you would have to get the permission from the customers, of course.

------
ggm
"too big to fail" doesn't yet apply to any entity directly engaged in this
space, as its entire business model. J.P. Morgan got away with a central role
in the GFC because it did not suit the regulatory environment to kick one of
the legs of a wobbly table.

The same does not apply to this, or any other coin- centric company. Yes, in
_our_ terms, these are huge dollar sums. But if you work in fintech, this is a
small pimple on the side of trades in real goods, and existing financial
instruments.

Look: the fintech people _get_ this space, and they are not dissing the model
entirely. But please, don't pretend that the feds could not shut this agency
down tomorrow, and it would have almost no effect on the US bottom line
reports for financials.

~~~
JBlue42
That's a pretty good summary of a casual conversation I had with someone that
works in investing about Bitcoin and Ethereum. He said blockchain is here to
stay and that knowing what companies are going to try and do with it is useful
but these currencies, or at the very least, their value, could go away very
quickly.

~~~
tome
This is what my uneducated hunch is, so I'm glad to hear you say it, but I'm
enjoying reading all the countervailing opinions too, to educate myself
further!

~~~
JBlue42
I'm glad to have finally pushed myself to read and learn more about all this
sense it does seem to be hitting the mainstream.

Here's a shit ton of reading if you're interested:

[https://github.com/xel/blockchain-stuff](https://github.com/xel/blockchain-
stuff)

------
Cookingboy
Coinbase has a key difference from traditional brokers such as Charles Schwab,
Scottrade, etc.

It doesn't charge a flat fee for buy/sell crypto currency, but a 2-3% fee
based on the transaction value.

So even though I'm sure they've been making cash hand over fist this past 12
months, it makes any sort of future prediction extremely difficult. They not
only have to predict customer growth (which leads to transaction volume), but
also the price of those cryptocurrencies. It's akin to calculate position from
nothing but a accelerometer, and that double integral would be quite a bit of
margin of error.

But in the end it may not even matter, as far as revenue growth and even
profit wise I'm sure they are doing absolutely amazingly.

Hell, I wouldn't even be surprised if Coinbase has higher daily revenue
(definitely more profitable) than _Uber_ at this point.

~~~
mifeng
I bet Coinbase makes more money from their exchange (GDAX) which does $1
billion each day in volume. While limit orders are free, market orders cost
0.25% of transaction value.

~~~
MichaelGG
Why would anyone ever want to use a market order versus a limit? In any
exchange, for any kind of trading? If you're really ok with e.g. selling for
0.01, set that as your limit.

~~~
sobani
Because the market could move against you.

If you're ok with buying for 100, but someone else is selling for 99, you've
effectively done a market order and have to pay the fees. However if the
lowest sell is 101 and then the price moves up to 105, you've just screwed
yourself for 4 in order to save 0.25

~~~
MichaelGG
Huh? Just set your limit to 105 or 200 or 10500. There's no reason to ever use
a market order unless there's some other severe limitation on limit orders in
a particular implementation.

~~~
sobani
You can't set your 'limit' to 105, when the current price is 101. That's a
market order.

Even if you could, why would you want to buy at 105, when the current price is
101? Just to don't have to pay 0.25 in fees!? That sounds like "The Firm" from
John Grisham where rich people would rather pay $2 to lawyers than $1 in
taxes.

~~~
MichaelGG
This is incorrect.

You do not know what the current price will be when you click the submit
button. You may enter a limit of 105, and find that when you get around to
submitting, the price is suddenly 205 or 1.05. This is why you use a limit
order, so that your "market" order doesn't give you a sudden surprise.

On top of that, the current price is only valid for a certain depth. So if the
asks are 10x101 and 20x106, I want to set my limit to 105 to make sure I only
take that 10x101 order off, and not start chewing through and execute at a
much different price than "current". All these orders are changing extremely
rapidly for any popular item, so using limits makes sure you get the execution
you want.

The limit does not set the price that your order will execute at, but the
limit. It'll match at or better than the limit you set. So you never end up
paying more than you're OK with, but you prevent getting burned by sudden
movements. This is much more important on these cryptocurrency exchanges than
traditional stocks.

------
eqmvii
If the bubble bursts, this will be a delightful pull quote in the postmortem:

"Correction: December 6, 2017 An earlier version of a photo caption with this
article misidentified the place where Coinbase employees were gathered for
lunch. It was the gaming room, not the cafeteria."

~~~
travisjungroth
I work at Coinbase. If you want the inside scoop: "game room" is a bit of a
misnomer for that room. It's a large room with a big theater screen. All day
it's full of meetings and presentations. There are a bunch of games on shelves
as well, and some people play them after hours.

~~~
kbody
Btw, do you have any engineers capable of working to upgrade the platform to
use SegWit? I find it weird that Brian advertises open positions like there's
nobody there capable of doing it.

~~~
travisjungroth
I wouldn't take any job ad copy as disparaging to the current team.

~~~
kbody
Neither am I, just in this case I know some context that lead me to this
question.

SegWit being pretty much the most important update to Bitcoin so far with a
lot of advantages, I would expect that CB would give top priority on
supporting it. But Brian when asked about it, he replied with a job ad about
new positions, while I would expect they would put their most experienced
engineers on it, instead of depend on new recruits for such crucial and maybe
challenging project.

------
JepZ
> No company had made it simpler to sign up, link a bank account or debit
> card, and begin buying Bitcoin.

Actually, I think it is still too difficult. I mean it is not that difficult,
but if you had to send every e-commerce shop a photo of your driver license
just to buy something there would be a lot fewer people buying stuff online.

~~~
nordsieck
There is a certain amount of financial regulation that they (and most other
exchanges) have to comply with.

------
aussie1233
Support is horrible, here is my story - not sure how common that problem is.
Would be interested if others have the same valdation issue.

I have a case open for multiple weeks to get my address validated. I was able
to buy initially, but now it pops up a "quiz" (that's how support calls it),
where i have to enter my address and then it says that it's not a valid
permanent address. Which is funny because that is the same address the
accepted when I signed up and validated my ID. There support literally tells
me, "sorry your problem, but you can try the quiz again- and maybe one day it
will work". To me thats an unbelievable statement.

I think they have to stop onnoarding customers and solve some of their basic
flows first. What if I wanted to sell? It is just not possible within
Coinbase.

------
j_s
I would love to hear more about what must be Coinbase's love/hate relationship
with MongoDB.

From my very uninformed perspective, the tool mostly does what it says on the
tin these days, but that hasn't always been the case. I would be interested in
following along with Coinbase during this transition, and hearing more about
what MongoDB is used for there today.

------
thisisit
Does anyone know the hot/cold wallet address for Coinbase, like the below one
for Bitfinex?

[https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmc...](https://bitinfocharts.com/bitcoin/address/3D2oetdNuZUqQHPJmcMDDHYoqkyNVsFk9r)

~~~
blhack
It seems likely that coinbase has _many_ cold and hot wallets which are
geographically and technically distributed across many vaults and key
generators.

~~~
likelynew
Good for them that they can spend bitcoin cash without people noticing.

------
carbocation
(Coinbase: YC S12)

------
IamNotAtWork
So can you actually withdraw money from coinbase, if you say had 100 coins (I
don't). Everyone said back then that Mt. Gox was safe because it was the
biggest. It being based in Japan was a huge red flag, but nobody cared until
all of its money disappeared.

Coinbase being based in the US probably won't happen because there could be
consequences for them if they disappear with the coins, but having been burned
by Mt. Gox fiasco is making me sit out of crypto, but with some sour grapes
because each day bitcoin just go up and up. Was $13000 yesterday and it's
almost $16000 today. It took a week to go from $10000 to $15000. Insane.

~~~
econner
It's an exchange so if there's no one to take the other side of the trade then
you wouldn't be able to sell. They probably float a little bit of coin, but
likely not enough to wipe them out. The question is what they'd do in a
crisis. Would they freeze everyone's coin? Would other exchanges do the same?

Now, they could be hacked and lose a lot of customers' coin without realizing
it as happened with Mt Gox. This is why it's advisable to hold your coin in an
offline wallet, but doing so makes it harder to panic sell. But that shouldn't
matter since we're all definitely here just to HODL crypto and see it actually
be useful and we're definitely not just to try to speculate off of it. Right??
Right???

------
plaidfuji
What I find most interesting about Coinbase is that they quote your selling
exchange rate the moment you place a sell order. If I click "sell" right now,
they lock in the $13,000 exchange rate or whatever it is. The amount that
shows up in my bank days later is exactly what they quoted at the time I
placed the sell order. When people start selling off, this policy is either
going to drive them to bankruptcy or create a lot of unhappy customers.

~~~
bowmessage
You must have never had a transaction cancelled for being ‘too risky’.
Happened a lot for me in the past.

~~~
doug3465
Can you explain more about what happened?

------
aloukissas
Coinbase is getting away with murder charging outrageous fees, cashing in the
bitcoin frenzy. Kinda like the shady brokerages in the 80s.

~~~
mancerayder
Maybe, but how are they supposed to hire employees to build and run the
infrastructure and rent datacenter space / cloud VPSes / etc. if they do it
for free?

I'm not being facetious, I'm genuinely curious - hey, the fees seemed high to
me, too. Luckily the appreciation of the coins made those icky feelings
disappear quickly.

~~~
aloukissas
AFAIK, running a full-on brokerage (e.g. Schwab, Robinhood) is probably more
expensive as it's highly regulated, with non-trivial compliance costs, for
example. Cryptocurrencies are supposed to be new, digital "securities",
without the fat of the incumbents. I'm probably oversimplifying this here, but
at the age of easy cloud scaling, where their main job is a secure digital
wallet storage, their fees are mostly taking advantage of the BTC craze.

To clarify: their % fee isn't _that_ high - the fact that it's uncapped though
is pretty outrageous. A $10K trade on Schwab costs a few dollars; on Coinbase,
a couple hundred.

I guess once BTC futures are out and one can speculate on BTC in the open
market, they'll have to feel the pressure and adjust their pricing.

------
imartin2k
Coinbase is down again. This seems to happen with every BTC price spike now,
and since these spikes get more extreme, I guess Coinbase's infrastructure
always lags behind.

------
ssharp
With the wild price swings, Bitcoin has practically no value as anything other
than a speculative investment.

Are any of these people downloading Coinbase and buying coins really
interested in transacting in Bitcoin or are they just buying Beanie Babies?

Although, as someone who thought the bubble would burst at $1,000, I'm quite
impressed at how much interest it has garnered. I just don't seeing it end
well for many people.

~~~
IamNotAtWork
Why? Most people just put money they don't need into it, like spare cash.
Depending on when you bought, chances of ever going down to that level now is
incredibly small.

~~~
ssharp
I'm not so sure in the middle of a buying rush that people are just putting
spare cash into it.

But the larger point is that even if people are investing small amounts,
they're doing so to ride the rush, not because they see value in Bitcoin as
anything other than an investment.

------
_pdp_
Unless you buy with credit cards, good luck making bank transfers work on
Coinbase.

EDIT: Downvoting with no explanation will not change my experience. I believe
that cryptocurrencies are the future but having to wait weeks for a simple
bank transfer only to find out that your funds will be returned with no
explanation why apart from a cryptic message that has something to do with
your bank account name not matching your coinbase name is rather annoying.
Match how? What do you compare? An extra dot at the end of your middle name
will throw off the system without any reasonable explanation.

Honestly, if Coinbase improves their messages in this situation, it may
actually reduce the overhead on their customer support but I gather that this
might be intentional.

~~~
Kiro
Never heard anyone have that problem. You're in minority so please don't speak
like this is some major problem.

~~~
_pdp_
Do you work for Coinbase?

~~~
Kiro
Yeah, because it's entirely impossible that you may have just been unlucky or
messed it up on your side?

~~~
_pdp_
I can send customer support transcript if you want as attacking me does
nothing constructive for this conversation. Also, if you do a quick web search
you will find that this is not just unlucky, it is common although in the
grand scheme of things it might be nothing for Coinbase or perhaps you are
just not personally dealing with these types of problems. You know a minority
can be a pretty large group of people.

Look, my comment is not meant to bash Coinbase but there are issues with the
service and it can be ironed out to make it so much better.

~~~
Jommi
It's worked for me just fine every week the last few months.

------
paulpauper
I have heard so many bad things about coinbase...as the mtgox scandal shows,
sometimes the most popular exchange is not the best I would rather spread my $
in several smaller ones

------
marcosscriven
I bought £100 of Bitcoin in September via Coinbase, pretty much just to have a
play with Bitcoin itself, and try a couple of transactions.

To my horror, I discovered that transaction wasn't actually in the blockchain,
and that Coinbase essentially has an internal system you just have to trust,
which seemed to be contrary to the whole idea of a global ledger.

I setup my own wallet and transferred it to that (thus achieving my initial
goal of seeing my own transaction in the block chain). There's no way I'd put
any significant amounts into Bitcoin, let alone Coinbase.

~~~
lend000
Would it also horrify you to learn that when you transfer money from your
savings to your checking account (at the same bank), those transactions are
not cleared by the Federal Reserve?

~~~
tome
I doubt it would, firstly because that hasn't been touted as the "point" of
dollars, and secondly because FDIC insures deposits.

------
artur_makly
im traveling and when inattempted to join.. due to my IP u couldnt get a US
based account which would allow me to buy coins. i asked support and got some
automated answer which didnt work. i responded and waited again. lost huge
opportunities for weeks.

Their ID system keeps throwing me errors when using my US passport. i have no
Us drivers license or Active Us Cel phone for auth.

------
cellis
So, any guesses as to top line for coinbase?

------
seattle_spring
> 57) Customer Service

58) Recruiting process

------
kgwgk
Slightly offtopic, but this is so funny: (From today’s “money stuff”
[https://www.bloomberg.com/view/articles/2017-12-07/shale-
sha...](https://www.bloomberg.com/view/articles/2017-12-07/shale-shareholders-
and-direct-listing))

Happy Bitcoin 13,000 Day.

I mean, that was yesterday. A few hours after I sent out Money Stuff saying
Happy Bitcoin 12,000 Day, which was also yesterday. At this rate we'll have
Bitcoin 25,000 before my "Bitcoin 25,000 Before Dow 25,000" hats get here.

Happy Bitcoin 14,000 Day.

That was also yesterday.

Happy Bitcoin 15,000 Day.

That was this morning. See what I mean?

Happy Bitcoin 16,000 Day.

That will be this afternoon, probably.

Happy Bitcoin 17,000 Day.

Just in case, why not.

Still more bitcoin.

Bitcoin futures are set to start trading next week at CBOE Global Markets
Inc.'s futures exchange, with CME Group Inc. following the week after that,
but some people object:

The Futures Industry Association, whose members include Goldman Sachs Group
Inc., JPMorgan Chase & Co. and Citigroup Inc., detailed its concerns in a
letter to the Commodity Futures Trading Commission on Wednesday. The
association said there should have been more discussion about margin levels,
trading limits, stress tests and clearing before the contracts were given a
green light.

For clearing members of futures exchanges, the worry is that some bitcoin
futures trader will blow up, and that bitcoin is so volatile that the trader's
margin won't be sufficient to cover its losses. That will leave the members of
the exchanges on the hook for losses. This seems like a ... totally reasonable
worry? If you collected 25 percent margin from someone who was short bitcoin
on Monday, they would have blown through it by this morning. Also the standard
fate of bitcoin exchanges seems to be to get hacked and lose their customers'
money, so if you are a customer of a futures exchange I can see why you'd be
skeptical of your futures exchange turning into a bitcoin exchange.

Meanwhile, here is a nice profile of Coinbase, a bitcoin exchange that hasn't
been hacked, much. (Though: "In May, the company was criticized by a customer
who could not reach anyone at the company after his account was hacked.") It
"runs an exchange, called GDAX, tailored to larger investors," overseen by
Adam White. "A year ago, his Wall Street outreach was difficult, but 'it’s all
inbound now,' Mr. White said." Indeed.

Oh and another bitcoin thing was hacked:

NiceHash, the marketplace for cloud-based mining of cryptocurrencies, said
hackers breached its systems and stole an unknown amount of bitcoin from its
virtual wallet.

Some $60 million worth of bitcoins may have been affected. Elsewhere here's a
guy who lost the password to his 40 bitcoins.

~~~
PeterisP
This aspect isn't anything new, stock markets (which are even more volatile in
certain types of stock) and forex have been doing that for ages - stop loss
orders are a thing; in your example someone who was short bitcoin on Monday
would have been forced to sell e.g. yesterday and eat the loss even if bitcoin
started to drop today.

------
gt_
I have recommended Coinbase to many people. But, a few days ago, I had a
double charge on my bank account from them and have learned since that their
customer support is essentially non-existent. It’s been 8 days with no
response by e-mail, their posted phone number results in a busy signal, and
the alternate numbers I found posted on forums go straight to hold music
before hanging up after a couple of minutes. I filed a fraud report with my
bank.

~~~
AlphaWeaver
Their customer service was great in the early days, but has most definitely
gotten worse since its gotten so popular. I think they simply can't find
enough people.

~~~
Phlarp
They should consider paying more to find a suitable equilibrium.

~~~
zodiac
Well, people already complain about the fees they charge

~~~
Phlarp
Everyone is commenting how great their cash flow must be upthread--
regardless, it hardly matters.

If supporting your customer base makes the business unprofitable then you
don't (yet) have a viable business model.

------
sillysaurus3
I posted this earlier today, and earlier than that as an Ask HN. I promise
after this I won't post it again, at least for awhile. This seems sufficiently
important that it's worth a slight annoyance.

What should we do about the destabilizing potential of Bitcoin?

There are two facts about Bitcoin worth worrying about:

1\. There is no upper bound on the price

2\. Everyone who thought the price won't continue to exponentially increase
was wrong

Greed is a powerful motivator.

It's easy to smile at this[1] but it will only take a couple more 10x
increases before people stop laughing.

What happens when governments start putting money into Bitcoin because they
don't want their economy to be left out? It'll only make the price go up even
further.

It might be a good idea to take a step back for a moment and stop thinking
"Can I get rich?" and start thinking "Before this reaches a point where we
should worry, what should we do?"

I'm aware that this has roughly a 0.1% chance of happening. But if you'll
suspend your disbelief for a few minutes and accept "What if it might be
true?" then you'll find it's an interesting question worth thinking about.

It's starting to feel like no one really has a plan for this contingency. It
will be a relief if the price crashes back to $1k, but Bitcoin defies belief.
How many of you have parents that are seriously talking about getting in?
Everyone wants to become rich. And if that infectious mindset spreads to the
whole population, we might get an uncontrolled upward spiral.

Is there a way to prevent that?

Now, to add to the discussion: Several people have voiced that there is no
reason to worry, both because it's impossible for BTC to hit $1M/coin and
because this is all conjecture. But there is every indication that the BTC
craze could in fact spread to the entire world -- literally nobody will be
able to escape thinking about it, because that is what the world values. This
has low probability, but just like climate change, it's worth planning for it
now rather than later. Can we please try to think of something? Look at
this[2] and let that graph sink in.

Fiction is also worth taking seriously. Satellites were predicted by fiction
long before they were deployed. Many of the most influential ideas start as
works of art. The dystopian future as envisioned in [1] is a far cry from how
things would turn out, but the underlying idea is that we will become
subservient to a tiny few. It's only a matter of time before that money starts
turning into real power.

So, if we could set aside our selfishness and try to snap out of the getting-
rich craze, and ask "Can we possibly stop this?" it would probably be one of
the most impactful ways you could spend a few minutes.

Making BTC illegal won't work. It'll just go to countries where it's not, and
take the people with them.

I don't think it would be possible to sneak a backdoor into BTC. People would
notice by now. And even if it works, they'd just fork and preserve the wealth.

Even if one were to theoretically become batshit insane and try to hunt down
everyone who holds BTC, that won't work either, because it's easy to conceal.
The price of mixing services will just rise to the point of taking transaction
fees into account, and that's how much people will start to pay.

I can't think of anything else. Ideas?

[1]
[https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_time...](https://www.reddit.com/r/Bitcoin/comments/1lfobc/i_am_a_timetraveler_from_the_future_here_to_beg/)

[2]
[https://www.reddit.com/r/Bitcoin/comments/7f3z8j/btc_price_a...](https://www.reddit.com/r/Bitcoin/comments/7f3z8j/btc_price_as_predicted_by_luka_magnotta_aka_time/)

~~~
kleer001
Yes, Bitcoin might very well eat all money on Earth. No joke, no freaking
joke. I'm thinking along the lines of a financial black hole.

~~~
sillysaurus3
And it's very hard to get anyone to take this seriously. But as far as I can
tell, it's a real possibility.

I had to talk some sense into a friend who was saying she was fed up with
being poor and was going to put her $7k life savings into bitcoin. I told her
to treat it like gold, hold it, and be very careful to keep it secure. And off
Coinbase. And my advice made her hesitate, and now she missed the 100% growth
over the last 30 days.

But almost everybody is starting to think that way. And if the entire world
starts down that mindset, there isn't a top.

People have already noticed that wealthy Saudis' money is safer in BTC than in
banks. Ditto for Zimbabwe. How long until the rest of the world follows?

We have to be thinking of ways to stop this, not merely to benefit from being
prescient.

~~~
tonyztan
Could you explain why "this" needs to "stop"? Why would the success of Bitcoin
be apocalyptic?

~~~
sillysaurus3
Although BTC has a finite maximum, it has been inflationary, since coins are
being created. This will not hold.

BTC was the first crypto, and network effects means it stands a good chance of
staying on top. Like eBay, it may be the go-to crypto.

If it's true that crypto is the future -- that the entire world will switch
from fiat to crypto, kicking and screaming -- then that means the entire world
will likely switch to whichever crypto is on top. There are many benefits to
using the same crypto that everyone else is using, especially when it comes to
long-term wealth storage.

Eventually, the coins will stop being generated, and those coins will be the
only thing that the world values. We won't transact in BTC, but BTC wasn't
designed to transact. It was designed to store wealth. And it does that very
well.

The rise of Bitcoin will prompt people to pour even more money into it.
Savings accounts will look like an anachronism. You won't want to keep your
money in a bank: If the entire world is hopping onto the bitcoin boat, then
you currently stand to benefit from (7 billion - total BTC holders) of people
that have yet to switch.

That means you will find it quite inescapable.

Now, the final nail will be when your dollars start to lose value relative to
BTC. One way of looking at the BTC price is to say that the dollar's value is
going down, not that BTC is getting more valuable.

Do you really want to bet the future of all mankind on this grand experiment?
For all their flaws, our traditional systems have gotten us this far. The
amount of upheaval that it could cause to switch the entire world from
inflationary to deflationary basis of wealth isn't something to underestimate.

[https://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-
deflationa...](https://bitcoin.org/en/faq#wont-bitcoin-fall-in-a-deflationary-
spiral)

There are all kinds of theories about what might happen. But let it sink in
that no one knows, and we have no plan to stop this if it turns out badly.

This isn't really meant to persuade you, as that would be impossible. No one
knows what will happen, so this is guesswork. But we know that if BTC does
ultimately win, we will lose all economic controls: there will be no way to
inject more money when needed, such as the 2008 crisis, and no strategies to
prevent deflation. We will be at the whims of an algorithm that no one has any
incentive to change.

Contingency plans are good. Let's come up with one.

~~~
Slartie
> We will be at the whims of an algorithm that no one has any incentive to
> change.

Not only that. We will also be at the whims of a practically unchangeable
algorithm that only works as long as (mostly) chinese mining operators keep
their gigawatt-guzzling hashing machines running, and that has no suitable
failure handling for the case of big parts of that hashing power suddenly
going missing. Look up "chain death spiral" for a description of this specific
doomsday scenario.

It really is intriguing to follow through on some of these scenarios in which
Bitcoin sucks up enormous portions of worldwide economic power, only to
catastrophically fail in one of the numerously envisioned ways in which it
could fail. The higher the market cap rises, the more it seems possible that
we are right now looking at the next worldwide financial crisis in its
infancy.

Another thought: even assuming Bitcoin continues working normally and somehow
being able to handle the transactions that come with a multi-trillion market
cap, what about the fact that all this "value" is completely removed from the
market where it would usually be mostly "at work" as operating capital of
companies which in turn (not all of them, but in the grand scheme) generate
actual value, as in improvements of the conditions for real humans? If this is
not offset somehow, won't it cause a huge economic crisis of its own, possibly
- in the worst case - leading to us (as humanity) not being able to keep up
the stupid hashing game and thus making bitcoin entirely unusable and thus
worthless?

------
goofed
That "What is money" slide is pretty much brainwash

