
Bitcoin Cash Soars to $700, Coinbase Customers Threaten to Sue - abhi3
http://fortune.com/2017/08/02/bitcoin-cash-lawsuit/
======
bdcravens
Big point to remember: the current high price is artificial. There are only a
few exchanges selling BCH, and they aren't accepting deposits. The only
sellers are those who had BTC there prior to August 1. So it's a sellers
market. There's a ton of demand to sell. Once those deposits are enabled,
you'll see a flood of dumping, and the price will crash.

So let's say Coinbase allows BCH withdrawals. Unless they enabled trading it
(which they didn't with ETC when ETH forked), all those Coinbasers wouldn't be
able to sell anyways. They'd be waiting like everyone else, so that $700 price
wouldn't matter.

~~~
dsacco
Regardless of the price, an exchange cannot seize customer assets by giving
them 10 days notice for withdrawal. It doesn't matter if it's a separate
currency - we have things resembling this in public markets, like stock
splits. It doesn't matter if everyone can fork the cryptocurrency, that
doesn't change the principle of a customer's asset.

What Coinbase should have done is this:

1\. Stood their ground on not supporting trading for the cryptocurrency,
because they are under no obligation to develop new features.

2\. Implemented a system to disburse the forked currency to customers if
needed.

3\. Implemented an explicit trigger price for acknowledging the new currency,
which would function for potential forks of currencies already supported on
the platform. If the currency does not pass a specific (very low, far lower
than $700) mark, they don't disburse it, but if it does, they immediately
support disbursal to anyone who requests it.

The organic state of a cryptocurrency fork is that all extant holders receive
_a new asset_ , which may or may not be worth anything. A company cannot seize
that asset without consideration. If the price of the currency subsequently
crashes, then it crashes; that does not change the rights of a customer to
their assets, which cannot be signed away with an email sent out 10 days
before the event.

~~~
modeless
Where do you draw the line though? Anyone can invent new tokens and grant them
to bitcoin holders; should Coinbase be required to support every one?

This is not a hypothetical question. I particpated in two airdrops this year,
Stellar and Byteball. I immediately sold the airdropped tokens and increased
my bitcoin holdings by 3%. But I don't think Coinbase should be required to
support Stellar or Byteball just because they did airdrops to Bitcoin holders.

Byteball in particular seems like just some guy's random project and only has
value because of the current investment bubble in anything that looks like a
cryptocurrency. I wouldn't trust it to be secure or work properly. What if
Byteball is just a huge scam, and the creator can secretly mint tokens at
will? Now Coinbase is participating in a scam!

~~~
dsacco
Yes, Coinbase should be required to support disbursal for every one, with the
proviso that it either passes a certain price or passes a number of customers
who want to withdraw it.

~~~
erikpukinskis
Why? By using Coinbase you are saying, "I don't want to hold any bitcoins
myself, I want a bank to hold some value, denominated in BTC, on my behalf".
For all depositers care, Coinbase might have zero Bitcoins issued before the
fork.

It's like depositing a dollar to a bank, and then finding out that it had been
signed by Andy Warhol in invisible ink and asking for the specific dollar
back. Sorry, you shouldn't have deposited in a bank. You can get _a_ dollar
back, but not the same one you deposited.

What you're looking for is more like a safety deposit box for Bitcoins. That's
a whole separate product, with a different fee structure.

~~~
meric
Let's say there is a court case where the judge awards all shareholders of
AAPL $100 of compensation for every share held (It's to the shareholders, but
not the company, because the court case involved shareholders vs management).
The government sends $100 per share to each registered holder. Your investment
fund is the registered holder of AAPL securities instead of you. Do you get
$100 per share that was held on your behalf, or do the operators of the
investment fund get it?

~~~
WorldMaker
Isn't that just a dividend at that point? In the real world investment funds
have fairly complex dividend rules (how much is reinvested in the fund, how
much is skimmed for fund manager fees, etc), and regulations have managed to
force such funds to disclose all of those policies up front (prospectus) and
keep them up-to-date.

In the other fork in this discussion thread, the banking analogy: we're
talking about an exotic interest payment of sorts. Again here, banking
regulations require banks to disclose interest rates and payment details and
management fees up front for accounts. But banks in the real world are largely
allowed to reap the majority of profits from an investment that goes well, and
doesn't have to apply much if any of that back to the savings accounts from
which it utilized stored funds to fund that investment.

Which is to say that Coinbase may be doing nothing wrong according to either
real world analogy, with the big difference being the "wild frontier" of
existing in an under-regulated space with fewer up-front disclosure
guarantees.

~~~
meric
Both this and dividends are payments to shareholders but this is different
because it's not funded by the company itself. It's a third party electing to
pay every shareholder. Also, dividends are regular events, but getting a new
asset that can be traded is not.

~~~
WorldMaker
I guess that depends too on what you think "the company" is in this case,
going back to struggling with whether or not this analogizes to a stock split
or not.

~~~
meric
In the AAPL example, it's not a stock split.

------
blhack
Coinbase is in a bad situation here. If they set a precedent that all BTC
forks will be available to their users, then they open themselves to some
pretty obvious DOS attacks.

10 new "bitcoins" could fork every day. Are we really going to expect coinbase
to support them all? That's absurd.

I think it's pretty obvious that they're going to just issue the BCH to people
eventually.

Here's another thought experiment: I am a now-extremely-wealthy bitcoin early
adopter, and I am so happy at bitcoin's success that I am going to distribute
$100 of USD cash per bitcoin to every person who can show me that they own a
bitcoin.

To claim your $100, send me a Self-addressed-stamped-envelope proving your
bitcoin ownership, and I will mail you back the cash.

Does coinbase have an obligation to send a bunch of SASEs to me? Are the
coinbase customer's "owed" that $100?

I personally don't think so. I think that's the tradeoff you're making by
having coinbase securely store your coins for you.

~~~
matt_wulfeck
As one of the btc nouveaux rich, help me understand something I see
reoccurring among my other btc-rich friends. Generally, when you're up big
(and in some cases extremely wealthy), you diversify your investments in order
to preserver your wealth. However, almost without exception my btc friends are
such believers that they are holding on for the ride forever.

Is it just that the risk-averse were initially drawn to btc as a speculative
vehicle? Or is it a matter of principle to hold forever?

~~~
SilasX
I've seen the same -- I know someone who got in early to BTC, _then_ moved it
all into Ethereum early, such that he has enough to comfortably retire today.
But he won't cash any of it in except for a small amount each month to live
on, while he lives rent free with others.

When I explain the logic of hedging and mitigating risk and locking in gains,
he was insistent that the right strategy is to hold because it's going to go
up some more, and he doesn't need the money now for any of his current
objectives.

Come to think of it, I should at least consider that he's making it up, but
I've met him several time and he's well versed in crypto and way ahead of the
curve in learning about this stuff. Who knows?

~~~
spectrum1234
This isn't that terrible. However its much much less risk and at worst only
tiny bit less upside to put 34% in Ethereum, 33% in Bitcoin, and 33% in a
basket of all else possible.

~~~
seanp2k2
I'd suggest S&P index funds for the remaining third. If it's FU money already,
taking out a third and putting into a known-decent investment because you
don't need it right now should be a good way to ensure that you can actually
retire whenever you'd like to.

------
lawn
Note that Bitstamp, another large exchange, took a similar stance as Coinbase
and has issued an update stating customers will receive their BHC balance:

[https://www.bitstamp.net/article/bitcoin-cash-our-
position/](https://www.bitstamp.net/article/bitcoin-cash-our-position/)

For those of our customers who chose to leave their BTC on our platform at the
time of the fork, we recorded their BCH balances for the timestamp of the last
common block (block 478558), which is 1 August 2017, 13:16:14 UTC.

These BCH balances will be made available to our customers as soon as it is
safe to do so. If and when the Bitcoin Cash system has been thoroughly tested
and is sufficiently stable, we will then consider listing BCH. However, a
series of technical, safety and regulatory requirements need to be met in
order for this to occur, and it is still too early in the day to make
realistic predictions about the timeframes involved.

------
bdonlan
It's an interesting situation, but assigning liability to coinbase for this
seems like it'd be a problem long term. Unlike traditional securities, there's
nothing stopping me from going out and making my own fork tomorrow - and then
would all exchanges be required to add support for that fork, too? Where do
you draw the line?

~~~
btzll
This is not a random fork. This is a fork with almost $400 million 24 hour
volume. Coinbase should allow users to withdraw their BCC, since they are
sitting on a huge pile of BCC units, which belong to customers.

~~~
fauigerzigerk
There's something I don't quite get (being a cryptocurrency newbie). Why can
coinbase users not simply import their private key into some other wallet that
supports both Bitcoin and Bitcoin Cash?

My understanding is that Bitcoin Cash recognises the old Bitcoin blockchain as
their own up to the point of the fork. So as of Aug 1st all Bitcoin balances
are Bitcoin Cash balances as well. Or is that not how it works?

~~~
mikeash
Coinbase users don't have a private key for their Coinbase balance. They have
an account with Coinbase, and Coinbase has their own private keys for their
internal wallets. When you withdraw money from Coinbase, you're asking them to
use their private keys to sign a transaction sending bitcoins to an address
you specify.

What users could have done was withdraw their Coinbase balance into their own
wallet, then they'd have coins on both forks. This had to be done before the
fork happened, though. Now that it has, anyone whose coins were in Coinbase at
the time of the fork is at the mercy of Coinbase.

~~~
chii
Users of coinbase have no real right to complain because they have given up
their control of their bit coin when they sign up for coin base. Unless this
wasn't made clear by coin base at the beginning, i don't see how the law suit
has any legs.

~~~
mikeash
They're giving up control of their bitcoin for specific purposes. Coinbase
can't just do whatever they feel like with it, any more than your bank can one
day just declare "Hey, we decided to keep all of your deposits, FOAD, thanks."

~~~
chii
may be i'm misunderstanding the nature of the bitcoin fork, but i see it the
same as owning foreign currency. IF you banked some US dollars, you can't turn
around and say you'd like to get it back out as Euros without paying some kind
of exchange rate.

------
blhack
Just to clarify: bitcoin cash (BCH) is only _sortof_ worth $700. There aren't
any mainstream exchanges accepting BCH deposits right now, so the market for
BCH is limited mostly to people on kraken trading BCH with one another _there_
only.

The exchanges that are accepting BCH require 20 confirmations on your BCH
deposit before they let you withdraw the BTC/XBT you traded them for. 20
confirmations right now would take multiple days. The exchanges offering this
also seem to have pretty lax identity requirements, which is not a great sign.

~~~
jaycroft
Further, as of this writing, more than 24 hours after the first forked block
was mined, we still don't even have those 20 confirmations!

------
gtrubetskoy
What I think all the press isn't making very clear is that to the best of my
understanding for every Bitcoin you own, you get a Bitcoin Cash coin. There is
no "conversion", it is free money for all BTC holders. Everyone who owned BTC,
now owns BTC+BCC.

Of course if your BTC is not real, but is held by an exchange such as
Coinbase, how you get your BCC isn't at all clear.

~~~
jncraton
> Of course if your BTC is not real, but is held by an exchange such as
> Coinbase, how you get your BCC isn't at all clear.

Your BTC should still be "real", but the exchange holds the keys instead of
you. Your point stands about it being unclear how you would access your BCC.
If you aren't allowed access to your BCC, there's nothing preventing exchanges
from dumping the BCC for cash as far as I can tell from a purely technical
standpoint (IANAL).

~~~
simias
What if the exchange didn't actually hold the BTC but only had a line in the
database with an "IOU xBTC"? Maybe at this point the exchange had used its
stored BTC to speculate on an other market and attempt to increase its
profets. Maybe they bought Ether or gold or Microsoft stock.

Normally it doesn't matter as long as the exchange is capable of sending you
back the coins when you claim them but in case of a fork they'd have to buy
two coins instead.

~~~
jncraton
That's certainly a possibility. I was working from the assumption that
Coinbase actually held BTC totaling the sum of all users account balances.
Given the highly volatile nature of BTC and the nature of the BTC community
(e.g. the conventional wisdom was to pull all funds from exchanges prior to
the fork occurring), it seems quite irresponsible to not be holding funds as
BTC.

I'm aware that exchanges in the past have behaved very irresponsibly, but I'm
hoping that Coinbase is the exception here as a well known US-based company.

------
jstanley
Meanwhile, it's 12 hours since Bitcoin Cash actually mined a block.

The only reason the price is so high is because people can't make transactions
to send their BCH to exchanges.

EDIT: My mistake. Originally said 20 hours. It's only 12.

~~~
Jenya_
The delay in mining was required to trigger drastic difficulty reduction
(20%). More details at
[https://www.reddit.com/r/btc/comments/6r33fz/difficulty_adju...](https://www.reddit.com/r/btc/comments/6r33fz/difficulty_adjustment_triggered_at_0940_utc/dl24nbj/)

~~~
matthewbauer
I'm confused. You're saying that the delay was intentional?

~~~
TD-Linux
It's super unprofitable to mine BCH right now, at current exchange rates
(assuming you could even sell BCH, which you can't). Miners stopped to wait
for it to become profitable again, due to BCH's special difficulty adjustment.
Details: [https://medium.com/@jimmysong/bitcoin-cash-difficulty-
adjust...](https://medium.com/@jimmysong/bitcoin-cash-difficulty-
adjustments-2ec589099a8e)

~~~
matthewbauer
Okay that sounds more reasonable. My original thought was that it's not very
decentralized if all the miners can agree to stop mining at any point.
Economic reasons seem much more reasonable.

~~~
cesarb
It's not very decentralized. According to
[https://cash.coin.dance/blocks](https://cash.coin.dance/blocks) ten of the 16
blocks so far on this fork have been mined by "Genesis Block 269-273 Hennessy
Road Wan Chai Hong Kong", 3 have been mined by ViaBTC, and only 3 by someone
else. These two pools together have around 80% of the hash rate on this fork.

------
kerkeslager
The problem both sides are trying to solve is that the system as a whole
cannot handle the volume of transactions. Before the split, bitcoin handled 7
transactions per second, while Visa handles 50,000 transactions per second
(I'm worrying these numbers from memory, so they might be wildly inaccurate).

Bitcoin Cash solves this with a larger block size. This is admittedly a short-
term solution.

Bitcoin main, on the other hand, is moving toward SegWit, which introduces
third-party middlemen. Service providers like Coinbase want this, because they
get to be the middlemen.

But critically, SegWit breaks the only long-term advantage Bitcoin currently
has over Visa. SegWit isn't decentralized. Bitcoin with SegWit still isn't as
fast as Visa, so if you don't need decentralization then you should just use
Visa. The only people who benefit from bitcoin with SegWit are the middlemen.

Decentralization is bitcoin's core value proposition. If you give that up to
solve the scaling problem, you're throwing the baby out with the bathwater.

I don't know the long term solution to bitcoin's scaling problem, but I do
know that I'm not interested in a centralized cryptocurrency.

~~~
lend000
You are confusing Segwit with Lightning network. Segwit is just a version that
optimizes transactions. It's an extension of an unused opcode from the
previous version, allowing previous nodes to view Segwit blocks as compatible,
therefore only requiring a "soft-fork." Pro-Segwit people tend to be pro-
Lightning, since it is not feasible to validate Visa-scale transactions in
such an inefficient, centralized manner. This camp views Bitcoin more as a
user-controlled store of value/bank account, still requiring a hierarchy of
processors to handle day-to-day transactions.

------
ChuckMcM
I wonder sometimes if the origin of coinage was similarly fraught with these
sorts of challenges. The history of money exhibit at the British Museum is
pretty awesome and they go over some of the 'coin scams' of the day like
nicking bits off the coins and remelting them into new coins, melting coins
and alloying them with other metals so that they 'felt right' but were
diluted. People who no longer had to be 'landed' could steal enough coins and
be 'rich'. Etc.

So back in that time when a new coin came out, I'm sure the money changers
would spend good long time watching it to see how it was abused before they
started accepting it as a 'real' coin.

Seems like much the same is true for blockchain currencies, they all need a
bit of 'bake time' before you really understand both the demand and the risks
associated with them.

~~~
duderific
Heck, you can see this in US coinage today. A quarter feels like about half
the weight it was when I was a kid. The cost of the metal gets to a point
where it doesn't make sense to use it in the currency anymore. For example, if
the metal in a quarter was worth more than $.25, you could simply melt it down
and sell it for more than the face value (assuming the cost of melting etc.
could be brought down at volume).

~~~
0xffff2
> A quarter feels like about half the weight it was when I was a kid.

I felt the same, but as far as I can tell the current quarter composition
weighs 84% as much as the heaviest quarter ever produced and 90% as much as
any quarter made since 1873. The quarter's composition has only changed three
times in the history of the United States.

~~~
Frondo
I can think of another reason why a handheld object would seem bigger and
heavier when you're young and small, as opposed to when you're old and big...

------
gtirloni
Coinbase did the right thing by warning their users beforehand that they
wouldn't work with BCH.

They could have simply ignored it altogether and continue business as usual
like nothing had ever happened.

Now after the fork, if people want to convert BTC to BCH, they have to go
through a intermediary currency, just like many banks won't convert USD to
$unknown_currency sometimes.

It doesn't surprise me there are talks about lawsuits, cryptocurrencies will
have a hard time shaking off all the speculators and scammers.

~~~
conanbatt
Sure, 4 days before the fork and also locking up withdrawals and setting time
limits.

I could accept Coinbase saying they dont plan on supporting it in the long
term, but its kind of ridiculous to think that Coinbase can make a blogpost,
and potentially appropiate millions of dollars of the coinbase users and thats
fine because it was said before.

Not to mention that I've been particularly locked out of the platform for
months due to the slow and fuzzy account recovery process, and that the delays
on it didnt allow me to retreive the coins in time between the notice, the
lockup and the account recovery process time.

So no, I dont find Coinbase's position at all tenable.

~~~
bitJericho
Perhaps you would like to switch to my exchange?
[http://bitcoinsexchange.itmustbetrue.com](http://bitcoinsexchange.itmustbetrue.com)

~~~
smlsugarlumps
I don't trust a site named bitcoin sex change

~~~
bitJericho
You can trust it. Its homepage has 3 columns full of text.

------
mikeash
For all the people saying this is totally fine and they warned people and they
shouldn't have to support every single fork that comes along, I'd like to pose
a hypothetical.

All forks are basically equivalent. If I fork Bitcoin today, my fork is just
as legitimate as Segwit or Bitcoin Cash. The only differentiation is community
buy-in and hashing power and similar fuzzy metrics.

Rather than sticking with Segwit and ignoring BCC, what if Coinbase had
ignored Segwit and stuck with BCC? People would have lost 75% of their
holdings, as measured in USD. Would you consider that to be OK?

Or worse, imagine if Coinbase created their own fork and starting from some
certain date they only supported that fork, and it ended up being worthless
because nobody cared about it. Coinbase would have basically wiped out all of
their users. Would that be OK?

~~~
icebraining
I don't follow Bitcoin other than on HN, but it seems to me that while they
may both be legitimate, but they're still distinguishable, right? They may
share the chain history, but only one of them produces blocks supported by
pre-fork clients, right?

The situation doesn't seem analogous to me.

~~~
mikeash
I _think_ it depends on how you do the fork. You can make a fork that
generates blocks that the original clients can't validate, or you can make a
fork whose blocks on the original chain, and are ignored just because they're
not the tallest. If you somehow got a majority of the mining power on your
side in that scenario, you'd supplant the "original."

------
Animats
Coinbase will either cave in on this or be sued and lose. Especially since
they're sluggish about large withdrawals.

The real risk for Coinbase comes if they don't have 100% of the Bitcoins on
deposit. If they don't have all those Bitcoins, like Mt. Gox, we're going to
find out.

~~~
thefalcon
I can't imagine they'll continue to ignore the third largest cryptocurrency by
market cap. Also it would be crazy for them to have encouraged their users to
withdraw BTC prior to the fork if they were insolvent. I imagine it will all
work out, though Coinbase loses lots of reputation points from me for by
insisting on being so slow and reactionary instead of proactive like several
other exchanges.

~~~
bdcravens
It won't be that large for long. Only reason why it's so high is the few
places you can sell it aren't accepting BCH deposits; the only way you can
sell is if you had BTC there prior to August 1. There's a ton of pent up
demand to sell; once those exchanges allow deposits, there will be a ton of
dumping and the price will fall substantially.

~~~
Animats
That makes it worse for Coinbase. They could be held liable for losses
incurred because people couldn't access their BCH to sell at the top.

This is the sort of thing which may involve Coinbase in litigation over
whether SEC and CFTC rules on "fails to deliver" apply to them. When a real
broker does something like this, they're on the hook for customer losses.

~~~
bdcravens
No, they won't. You can't deposit into those exchanges yet, so if those
Coinbasers had those BCH in hand, ready to sell, they wouldn't be able to
anyways. In other words, if you didn't have BTC on those exchanges prior to
August 1, BCH is an unsaleable asset, so that price is not relevant.

------
IgorPartola
Sorry but what exactly is Bitcoin Cash? It seems like it's a fork in the BTC
blockchain, but what prompted it and what gives it any sort of value, let
alone a $12*10^9? Is it somehow technically superior? Is the move going to be
to have BTC and BTC Cash exist side by side? Or are they going to fight for
the market?

~~~
MichaelGG
You can read up on it all over. But the short answer is Bitcoin Cash forked
Bitcoin and has 8MB blocks, which would have eliminated congestion and lowered
fees on Bitcoin during the past year.

Both sides (small Vs big) have economic incentives behind them, making the
argument extra vitriolic. But larger blocks allow on chain growth, keeping it
peer to peer without requiring any 3rd parties. (And the answer that 8x more
bandwidth and storage makes it infeasible for enough people to run nodes rings
false.)

~~~
gruez
8 MB blocks = 1.15GB per day, or 420GB per year. Sure it might be feasible to
run a node if you're in a first world country with fast internet and cheap
storage (cost of living wise), but even in rural america, 34.5GB is a
significant chunk of bandwidth. Not to mention they eventually plan to raise
it to 32MB, which works out to 4.6GB a day or 1.63TB/year.

~~~
vocatus_gate
This whole pipe dream of little Jimmy running his full Bitcoin node on a
raspberry pi in order to protect against the big bad
bankers/government/whatever was never based in reality. Bitcoin was always
destined to end up centralized. Either in the form of powerful companies
controlling it (development, Lightning Network, etc) or large concentrated
groups of miners.

Whichever path it ends up going down, centralization is guaranteed.

~~~
rphlx
Well, there's a large middle ground between "little Jimmy's raspi's 4GB
sdcard' and 'VISA's multi-PB datacenter'.

While there is certainly centralization pressure on mining, I do not agree
that 8MB blocks make it impossible for everyone except for 'powerful
companies' to run a full node, especially a pruned one. An enthusiastic early
adoptor or investor holding, say, $100k of the token is more than capable of
spending $500/yr to run a colo'd node. Would they prefer to spend $0 and host
it at home? Probably. But the expense of a high-end VPS or low-end colo box is
not totally prohibitive. We're not talking about more than a few rack units
worth of HW.

------
brianberns
As an outsider, the remarkable thing about this to me is that one can (for
now) sell the same bitcoins twice, right? If I own 1 bitcoin pre-fork, I can
sell it for $2700 and then sell the exact same bitcoin again as Bitcoin Cash
for $700. Crazy.

~~~
jbb67
Well, you could if there was any practical way to sell the bitcoin cash
version at the moment. I personally think it likely that once you can, you'll
be lucky to get $7 for one.

~~~
brianberns
If there's no practical way to sell bitcoin cash, where does the $700
valuation come from?

~~~
makomk
The handful of smaller exchanges that support Bitcoin Cash gave everyone who
had Bitcoins on their exchanges at the time of the fork an equal balance in
Bitcoin Cash, and it's that relatively small amount of on-exchange BCH that
people have been trading. (I think one exchange allowed trading before the
fork even happened, and just required people to have both BCH and BTC in order
to make withdrawals before the fork.) Actual on-chain Bitcoin Cash cannot be
sold right now as it can't be deposited in any of the exchanges, and buying it
is iffy too due to some of them not allowing withdrawals either. The price of
Bittrex BCH has also generally been about 40-50% higher than BCH on the other
exchanges for some reason.

------
barkingcat
Haha why is there "fiduciary" duty when Coinbase is not a bank, not a security
agency, and not any type of share that people bought into (ie customers are
not shareholder).

Coinbase can do anything they want!

Also, I suggest it's people's own fault for storing their bitcoins at a place
that does not give access to their own private keys. This fork has been a long
time coming. Everyone and their mother was warned to keep your own bitcoins in
your own privately controlled wallet (entirely offline if possible) to weather
this fork.

Anyone who cries that Coinbase didn't do whatever is being childish and
deserves it.

~~~
fosap
>Coinbase can do anything they want!

That's no how laws work. Not even remotely. Thankfully.

Consider you order somebody (X) to transport your pregnant cow. At the
destination the cow arrives. It's not pregnant anymore and X refuses to give
you the calf because... well, because he can do anything he wants.

That's theft.

~~~
barkingcat
The difference is Coinbase clearly announced their position that they will NOT
honour Bitcoin Cash ahead of time

[https://blog.coinbase.com/update-for-customers-with-
bitcoin-...](https://blog.coinbase.com/update-for-customers-with-bitcoin-
stored-on-coinbase-99e2d4790a53)

Basically, they said "if your pregnant cow gives birth, we will not give you
the calf. If you want your calf, take your cow away from Coinbase and keep it
on your own pasture!" And their customers heard it, said ok I'll keep the cow
with you, and when the cow gave birth they cried foul.

Sheesh, this situation is 100% predicable because Coinbase announced it ahead
of time.

~~~
uncoder0
The problem is they have a 48 hour timer on cold wallets. Which leaves you 2
days to move those coins and if you have a withdrawal limit of $10k but you
had 20 BTC in cold storage you were only able to get ~4 btc out of coinbase in
time.

~~~
barkingcat
This fork was foretold weeks or months ago. Sure, the precise timing of the
fork wasn't known until July, but everyone has been talking about "bitcoin's
gonna fork" for ages - even hit hacker news multiple times.

Bitcoin holders need to take responsibility for their own holdings, especially
when there is no FDIC or any type of assurance that your coins are going to be
your coins.

------
jmilloy
I don't really follow these cryptocurrencies very closely.

I assume that Coinbase is sitting on keys/wallets that own Bitcoin belonging
to their customers, which would mean that they are now also sitting on
keys/wallets that own Bitcoin Cash. So could Coinbase short (some of) that
Bitcoin Cash by selling it on other exchanges?

I read this statement from Coinbase: "If this decision were to change in the
future and Coinbase was to access Bitcoin Cash, we would distribute Bitcoin
Cash to customers associated with Bitcoin balances at the time of the fork."
So as long as Coinbase bought back enough Bitcoin Cash to distribute it to
customers at time-of-fork-value, they would be true to their word.

Or is there something that prevents Coinbase from even accessing the Bitcoin
Cash associated with Bitcoin it is holding?

 _Edit: I 'm not trying to make any judgments here, I don't know enough. Just
trying to understand._

~~~
vocatus_gate
You're more or less correct. Coinbase is sitting on the keys to customer
wallets/funds. When the fork happened, those keys work both on the original
Bitcoin network and the new "Bitcoin Cash" network. Which, apparently turned
out to have substantial value (currently trading ~$650).

Coinbase made a colossal mistake in outright ignoring BCC and will likely get
sued (and lose) because of it. If I had 10 BTC on CB and missed out on the
opportunity to trade or sell $6,500 worth of free BCC I just got, I'd be mad
too.

They need to act quickly before it goes to court. Someone else commented that
they don't even need to support trading BCC, all they have to do is provide a
way for customers to withdraw their BCC, and they're in the clear.

~~~
fauigerzigerk
_> If I had 10 BTC on CB and missed out on the opportunity to trade or sell
$6,500 worth of free BCC I just got, I'd be mad too._

But is that really what's going on? As I understand it, each BTC also became a
BCC at the time of the fork, and owners can now decide on which network they
want to use these units (CB users are not technically owners though). No free
BCCs were distributed.

If I were to decide to move 1 BTC to a BCC wallet now, I would buy something
worth $650 for something worth $2700.

That is my very tentative understanding at least.

~~~
nicpottier
This is confusing stuff, but there's no "deciding" if your coin is a BTC or
BCC, the chain split and both exist now if you had a BTC pre-split.

The chains do not talk to each other in any way, so you can spend your BTCs
and BCCs independently. So yes, free BCCs were given to everybody with BTCs.

Imagine it as if someone copied the entire history of bitcoin and just renamed
it and started running on different nodes. That's basically what happened. If
the bitcoin history showed you owned 10 BTC, then the renamed history shows
you own 10 BCC.

------
runeks
This seems fishy to me. There’s a huge divergence in the price between the
various exchanges that claim to trade BCH[1], signaling that arbitrageurs are
unable to deposit to/withdraw from the exchanges.

Many exchanges aren’t even allowing BCH deposits, meaning that the price isn’t
connected to the Bitcoin Cash blockchain, since you can’t sell these coins
into the market. Right now there seems to exist multiple different BCH — one
for each exchange — all of them with a different price because they’re not
joined by the coins on the Bitcoin Cash blockchain.

[1] [https://coinmarketcap.com/currencies/bitcoin-
cash/#markets](https://coinmarketcap.com/currencies/bitcoin-cash/#markets)

------
vetrom
So you needed to get 'your' BTC into a real wallet (and not an exchange) to be
able to have pre-fork BTC that would act as BCH.

While similar to both currency and commodity, this is one of the situations
where cryptocurrency acts as more of a fungible contract than either the
currency or commodity. IANAL, but it seems to me that there isn't a whole lot
of law written on that. I'd argue that Coinbase expended its fiduciary duty by
warning their users of the fork.

Coinbase/kraken/et al., however, don't create/issue the cryptocoins, so it's
probably a misnomer to call them exchanges. At best, they are brokerages.

Now say that a bunch of users decided to instruct their broker that's holding
their security in trust to so assign the security to the user, and the
brokerage sat on that transaction rather than perform the request in a timely
fashion? I'd say that potentially counts as a whole host of other actionable
events, depending on the intent of the brokerage operators. Not sure if I'd
call that front running, but that sounds like a good start to investigate.

~~~
davesque
> I'd argue that Coinbase expended its fiduciary duty by warning their users
> of the fork.

But people are arguing, and I think convincingly, that Coinbase didn't provide
enough lead time after sending out the email announcing their decision.

Coinbase also essentially gets to pocket all the extra value which should
reasonably have belonged to their customers.

IANAL either, but I have to imagine there are the beginnings of something like
an unjust enrichment claim here.

------
Taek
Soars to $700 because nobody who owns any is able to sell them. Trading is not
open to the public except on one exchange right now, and while that exchange
is holding a comfortable $350, it's also an unpopular and low-volume exchange
- I'm guessing 90% of their users today made accounts today just to sell their
Bitcoin Cash. I know I did.

Once Kraken, Bitfinex, Bittrex, and the other major BCH supporting exchanges
are actually accepting deposits, I imagine we'll see the price take a
nosedive.

------
m-p-3
To be fair, as long as you do not have the private key to your wallet, you do
not have complete control.

Whoever kept their bitcoin in a Coinbase wallet and wanted to use Bitcoin
Cash, it was their responsibility to move them to a wallet they fully control
in advance to the fork.

~~~
SnowProblem
Coinbase put limits on how much BTC could be transferred out each day, and
didn't respond to support requests to increase the limits.

------
ty_a
75% of the hashrate was just advertrolling. Which had the side effect of
keeping the difficulty high. They should have forked Bitcoin and used a
different PoW... Oh wait that's Litecoin.

[https://news.bitcoin.com/the-trading-center-in-hk-where-
they...](https://news.bitcoin.com/the-trading-center-in-hk-where-they-mined-
most-of-the-bitcoin-cash-blocks/)

~~~
uncoder0
LTC isn't a fork of the BTC chain but a fork of the BTC software BCH is a fork
of both.

------
bdcravens
Coinbase will likely allow users to withdraw their BCH, but not exchange it,
so they'll have to go elsewhere. They did the exact same thing with Ethereum
Classic (after the price dropped like 80% from the initial spike, no less),
and they ended support for those withdrawals at the end of 2016. To handle
this fork differently could invite another lawsuit.

------
mxscho
Some already mentioned this list showing some exchanges that currently offer
the ability to trade BCH assets for BTC or fiat currency. [1]

Note however that due to low count of blocks currently being mined for BCH
there is no chance for the exchanges to get enough confirmations for deposited
BCH from any (private, non-exchange) wallet to safely confirm the deposit.

So the only BCH assets that are currently being sold are probably the ones
that were granted by the exchanges to the people that did not bother to
transfer their BTC credit into their self-controlled wallet previous to the
fork.

I think this is also a reason why BTC assets seem to be a bit overvalued right
now.

[1] [https://coinmarketcap.com/currencies/bitcoin-
cash/#markets](https://coinmarketcap.com/currencies/bitcoin-cash/#markets)

------
IanDrake
This experiment in crypto currency has made me see the value in fiat money,
which is probably the opposite of the desired effect.

At the end of they day, these digital monetary schemes have become less of a
currency and more of a commodity.

Can someone explain to me why I should be less jaded about crypto currencies?

------
vgprice
But seriously, people threaten to sue the exchanges everytime they go down
from insane amounts of traffic during a dip or spike.

------
pavel_lishin
> Coinbase has clearly stated the company is not taking customers' Bitcoin
> Cash for themselves

So effectively, it's as if they just burned all of the Bitcoin Cash they were
holding?

~~~
ukd1
no - they're just not doing anything with it.

~~~
jpmattia
> _no - they 're just not doing anything with it._

"We're not taking it, we're just not giving it to you."

------
granaldo
Its at $750 now [https://www.coingecko.com/en/price_charts/bitcoin-
cash/usd](https://www.coingecko.com/en/price_charts/bitcoin-cash/usd) Crazy
that it was trading at $1200 BTC all-time high 3 years ago

~~~
dwaltrip
Careful, there are huge discrepancies between exchanges, due to the
illiquidity and difficulty in creating transactions at this time.

Here is a list of exchanges that seem to be listing Bitcoin Cash (along with
their prices):

[https://coinmarketcap.com/currencies/bitcoin-
cash/#markets](https://coinmarketcap.com/currencies/bitcoin-cash/#markets)

------
Teknoman117
I thought that with Coinbase you really didn't "own" the coins. As in, if you
bought a bitcoin via Coinbase you really didn't hold a bitcoin, you really
just held a promise that Coinbase would give you a bitcoin at a later date. If
that were the case, would they actually be liable for giving you anything
related to bitcoin forks?

It's also not like they didn't give warning ahead of time either. If you
really wanted to use BCC/BCH (whatever gets decided on) you could've just
moved the funds out of Coinbase into an offline wallet and sent them back post
fork.

------
pera
From the class-action lawsuit website "FAQ":

> _Coinbase allowed users to withdraw BTC prior to the hard fork_

> _The process of transferring Bitcoin can be complex and potentially very
> risky even for experienced users. Additionally, creation of a new account or
> wallet on a different exchange is often a lengthy and difficult process.
> While Coinbase did suggest to users that they could move their BTC to a
> different wallet in order to obtain BCH, the procedure can be seen as
> prohibitive by a significant portion of users. Finally, many users reported
> slow or non-responsive site when trying to move their BTC from Coinbase
> prior to the lock-down that preceded the hard fork._

First, transferring founds from one wallet to another is trivial in Bitcoin,
and in fact it is easier than any other money transfer method that I know of.
Second, if it really was that difficult then why they are, at the same time,
accepting donations using Bitcoin and Ethereum on the same website?. Third,
"Bitcoin Cash" is an altcoin, and anyone can create a similar fork from the
Bitcoin blockchain, should Coinbase support them all?? because that would be
ridiculous.

I can not believe these people are serious...

~~~
bradly
I had to move my coins out of Coinbase last week and it was very scary. I had
never moved coins before and I even though the process seems simple, I had
very little confidence in what I was doing. Honestly, I almost just left the
coins in Coinbase figuring losing 10% of value from BCH is still probably
positive equity compared to my perceived risk of losing it all which felt
between 25% and 50%.

~~~
pera
What was the very scary part? you just need to copy and paste a Bitcoin
address, it literally can not be simpler :) is it maybe the the alphanumeric
hash that looks scary?

~~~
lawn
Handling a potentially large of money and keeping it secure? How to store the
key? What happens if I loose my phone/computer? How can I protect myself from
fire and theft? Which wallet to choose? How can I be certain I don't have a
virus waiting to steal my coins? Did i copy my address correctly?

That's a lot of uncertainty for "it literally can not be simpler".

~~~
pera
Being able to easily handle a potentially large amount of money is exactly the
reason why Bitcoin was created in the first place, so you don't need to depend
on entities like banks.

But even then, if you don't want to do that, there are other exchanges and
online wallets that can do all that for you.

~~~
lawn
Uh, you literary did not respond to any of my remarks on why someone might
find it scary.

~~~
pera
But I did: if you read my comment you will see I literally wrote that you
don't have to store the wallet yourself, just use some online wallet. Another
option is a hardware wallet like Trezor.

What I don't understand is why would anyone who is so scared of using Bitcoin
transfer money to Coinbase to buy Bitcoins. To me this is the same as
withdrawing all your money from your bank while being super scared of having
your own savings in cash at home.

~~~
lawn
No, that doesn't address the potential fear a customer might have.

And I didn't even mention the problems with an online wallet. Yes, you should
fear online wallets.

~~~
pera
To buying bitcoins on Coinbase (and almost any other exchange) one have to use
their online wallet. Fear was not a decisive issue when you (fig.) decided to
buy bitcoins, but for whatever reason it is now that you want to move them
somewhere else?

------
lorenzfx
If the only difference between bitcoin and bitcoin cash is that bitcoin cash
has larger block sizes (true?), why does bitcoin cash not go "back" to the
bitcoin blockchain since it is now much longer and should also be a valid
bitcoin cash blockchain?

~~~
cesarb
Bitcoin Cash also has a rule that a specific block (the first one after a
specific date and time) MUST be larger than 1 megabyte. If that specific block
is smaller, it's not a valid Bitcoin Cash blockchain.

Since that specific block is smaller than 1 megabyte in the main Bitcoin
blockchain (because the maximum block size for Bitcoin is 1 megabyte), the
current Bitcoin blockchain is not a valid Bitcoin Cash blockchain.

------
hardwaresofton
Does anyone know any exchanges that are selling BCC/BCH?

~~~
neals
I found myself having my BTC assets copied to BCH on kraken.com, which I think
is the best thing ever.

~~~
makomk
Having your BTC on the exchange split into BCH the time of the fork is the
only way I'm aware of to get your BCH onto Kraken (or the other exchanges)
because they're not currently accepting BCH deposits. Unless it's already on
an exchange that supports it or you've got a time machine you're basically out
of luck for now if you want to sell your BCH, and even then people have been
having problems with the exchanges falling over.

------
tobltobs
Isn't this screaming for lawsuits in this thread driving the idea of an
currency independent of any central authority ad absurdum?

------
eadmund
Without JavaScript, the article is a blank page, containing merely 'SEARCH'
and '10:18 AM ET'. What's it say?

------
orbitingpluto
Betting that this headline would be here today would have been a smarter
investment than, well, anything really.

------
galfarragem
People who bought BTC on Coinbase/Gdax _after_ the fork own the correspondent
BCC also?

~~~
npongratz
After the fork, BTC and BCH are distinct and independent. So buying BTC
_after_ the fork would gives the buyer zero BCH.

~~~
galfarragem
So who owns the correspondent BCH (assuming that the seller was a coinbase
user before the fork)? Coinbase? The previous owner?

~~~
pat2man
Coinbase has the keys for them, they have stated that if they ever accessed
those coins they would make them available to the wallet holders.

------
JohnTHaller
They had the opportunity to move their funds and plenty of notice.

~~~
Klathmon
And Coinbase was pretty good about getting pretty much all of the massive
exodus of coins out of their system and out of cold storage in time.

And they were pretty explicit that they wouldn't be supporting the BCC chain.
I get it people are upset about possibly missing out on money, but Coinbase
handled this about as good as they could.

~~~
MichaelGG
No they didn't. They could have offered withdrawals of BCC, eliminating all
uncertainty. That would be handling it "best". Or even a clear policy as to
under which circumstances they will offer BCC would be better. (If they said
they'd do withdrawals if the price stays over 0.1BTC, that'd have placated a
lot of people.)

Giving notice so as to not totally screw customers is sort of the least they
could do. How they get any sort of praise for this is bizarre.

~~~
Klathmon
Even the exhanges that support just about every currency out there still don't
allow deposits/withdraws of BCC right now. There really is a lot of
uncertainty around this whole situation, and due to the nature of a split a
mistake in one of the coins can cause the user to lose both of them. It's not
an area that I want my services rushing into and making mistakes.

If I were in Coinbase's position, I'd make sure that I'm doing everything to
fully support and secure the currencies that I officially support, and maybe
support some forks later if there is massive demand or there are more
stable/secure methods of handling it. I mean right now the biggest "wallets"
for BCC are rushed, filled with bugs, and have significant issues in some
areas.

If they had said "we will allow you to withdraw BCC" and they didn't allow it
right away, people would be significantly more upset (rightfully so in my
opinion). At least the way they handled it they clearly and publicly announced
that if you wanted to deal with BCC, you should move your funds out of
Coinbase, and they gave multiple notifications over multiple days about this.

And mind you, they did offer a clear explanation of when they will offer BCC,
They won't. That's about as clear as you can get. They _might_ change that in
the future, but you can't say they didn't warn you if they never do.

~~~
MichaelGG
Allowing BCC withdrawal doesn't mean it has to happen day one. But they could
have said "within x days we will offer BCC withdrawl". That is better than
they did.

Explain how you'd lose both coins? (If you mean 'well they could rush a code
change and lose all their money', yes that's a risk. They shouldn't rush it.)
The BCC chain has 2 way replay protection (granted, late addition) - but if it
didn't, then Coinbase should have actively moved coins on BCC to prevent
replays.

And if they "might", then it's unclear. That's just saying they're going to
wait and see if BCC is popular enough. Instead they should have defined
criteria of what popular enough is, and that'd have put to rest people's
concerns.

All I'm objecting to is that "they handled it the best", which is clearly not
the case.

------
GoodInvestor
Not sure why there's so much hype. Of course the price is going to be up,
there's not enough BCH to be traded so naturally the demand will cause the
price to go up temporarily.

------
gauravhp
Can someone please advice me whether its good to invest now or wait for
sometime for it to settle?

~~~
shpongled
None of us can see the future. I first got into bitcoin in early 2011. I have
no rational evidence to support this, but my intuition tells me that bitcoin
cash will not be the winner. Too much hassle to adopt, few exchanges currently
supporting it.

~~~
zeep
but BCH/BCC is more like BTC was designed to be (everything is in the
blockchain)... What is the hassle? more HDD space used up?

~~~
oscilloscope
Most exchanges, wallets, miners, etc currently support BTC and designate it as
the new Bitcoin. The switching costs are the big hassle.

------
2paisay
I thought it was supposed to be a decenteralized peer to peer utopia. Now it
all depends on Coinbase's whims.

~~~
danielharrison
Bitcoin does not equal coinbase. Two completely different things.

