
Coinbase Launches Instant Exchange - markmassie
https://blog.coinbase.com/2015/06/17/instant-exchange/
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pjc50
So it's now possible for two people to send and recieve local currency through
coinbase without touching the blockchain? See what you can do when you have a
money transmitter license, suddenly all the electricity spent computing and
discarding hashes is no longer required.

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colinbartlett
Why do you say it doesn't touch the blockchain? Aren't they buying and selling
bitcoin for each transaction?

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smtddr
But they don't have to. That's the genius of it all.

 _" You can also receive bitcoin and Coinbase will execute an instant sell in
the background."_

If I can use my money to send you bitcoins that'll be automatically sold and
credited to you as your local currency... then how about secretly skipping the
bitcoin step and just move money like Western Union or any other bank? ;) It'd
be more profitable for them and lower risk, I think. Whatever transaction fee
Coinbase charges, I'm sure it's less than what I pay Western Union to send
money to my family in Nigeria.

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celticninja
but the only way for coinbase to actually move the money from Nigeria to the
US or vice versa is to use legacy banking systems (which will charge for the
privilege of using their system)or by using bitcoin. Using BTC they can send
it for very little cost, the money actually moves from Nigeria to the US, and
in the destination location it is converted to local currency.

Try to do that without bitcoin and you cannot do it instantly unless you want
to assume the risk that the senders money doesnt arrive, or you make the
person being paid wait 7 days for the international wire transfer to be
completed.

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flavor8
In order to move BTC from the US to Nigeria, they'd need BTC buyers in
Nigeria. Given that the two economies are asymmetric (particularly in terms of
how much can be bought in BTC currently) that's a bottleneck.

By contrast, big banks offer large scale international currency transactions
for fractions of a percentage assuming you maintain a minimum balance.
Coinbase could profit by making the exchange rate advantage cover the bank's
very small fee.

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celticninja
OK, just look at USD/GBP conversion. I send BTC to someone in the USA from
here in the UK. They convert via coninbase and have USD in their account
almost immediately.

Alternatively I send a wire transfer to a US bank, now I have to pay a fee
(around about £25 flat fee plus a % on the exchange rate conversion from USD
to GBP, or I send it in GBP and let the receiver worry about converting it to
USD). The wire transfer takes 5 days to acheive what was achieved using
bitcoin in a matter of minutes.

So they are not the same service unless coinbase wants to take on the risk of
paying out immediately in USD to the recevier and the wire transfer not
arriving or of a change in the exchange rate that results in a loss for them
as they receive less USD than the GBP they received. Also they have to eat the
£25 wire transfer fee as the bitcoin transaction has no fees.

So ultimately the bitcoin based exchange is faster, cheaper and more secure
than the legacy banking system wire transfer.

Yes coinbase could profit a small amount on exchange rate fee but that comes
with accepting a significant amount of risk and making the process as long
winded as the current wire transfer system is. The pointof this is that it all
happens pretty immediately and at little cost.

This is how i imagine bitcoin will ultimately succeed, we wont use it in day
to day transactions (with the exception of online purchasing) but it will
underpin the transfer of fiat currencies from country to country or person to
person.

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flavor8
> Alternatively I send a wire transfer to a US bank, now I have to pay a fee
> (around about £25 flat fee plus a % on the exchange rate conversion from USD
> to GBP, or I send it in GBP and let the receiver worry about converting it
> to USD). The wire transfer takes 5 days to acheive what was achieved using
> bitcoin in a matter of minutes.

Right, but that's you as a small timer. Try holding a minimum balance of $250k
in your Citibank account (which would be feasible for coinbase), and see what
rates they give you for international transfers at that point. Hint: cents,
not dollars, per transaction.

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evbots
This is awesome. In my mind the ability to send money or pay for things
without worrying about what currency you're using was the main thing holding
bitcoin back. now people can reap the benefits of the bitcoin network without
having to deal with bitcoin. I know there are those that will hark on how
"centralized" Coinbase is. I mean I agree it's not ideal but this has mass
consumer appeal.

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DiThi
About time! I asked several times to be paid in Bitcoin but the fluctuations
from the time the coins are bought until they arrive to me was too high.

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doiwin
This page makes my browser crash the very moment I try to scroll down.

I tried it 3 times and every time it does that. Latest Firefox on Linux Mint.

I will not put my money there.

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wmeredith
Oh, please. I still have fresh memories of well established banks (think, too
big to fail) that required IE to view their sites. The fact that they do not
support Firefox on Linux isn't much of an indicator of anything funny going
behind the scenes.

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noobie
So thanks to this, volatility risk is down to 0. It is, however, Coibase-
centric, making them similar to, a bank!

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jron
Some more discussion of this feature:
[http://www.reddit.com/r/Bitcoin/comments/3a3z82/coinbase_lau...](http://www.reddit.com/r/Bitcoin/comments/3a3z82/coinbase_launches_instant_exchange/)

