Gary Tan made a YT video about his experience backing them very early and getting a 6000x return: https://www.youtube.com/watch?v=x5YApjnTG10
It's remarkable that Brian Armstrong gave up what would have been very valuable options in Airbnb—the most valuable YC company at the time—to found a new company that surpassed it.
Personally I'm very sceptical that current valuation for Coinbase is justified. It is a great company for sure but there definitely arent similar network effects as with Airbnb. There's plenty of competition in the crypto exchange space.
What do you think US real estate is?
You might say that any type of travel is a luxury. Ok, I guess. This trip was for a funeral. The flight was under $100. While I'm fortunate to be able to afford such a thing, no part of the trip was "luxury travel".
Airbnb serves a wide variety of customers, via a large range of temporary housing options.
Bitcoin as chaos insurance (or schmuck insurance as Chamath calls it) is the use case that makes the most sense to me.
this to me is where the comparison to gold falls off. i can hold physical gold and silver and trade it at will even without power, pricing updates, etc. this does not apply to crypto. considering cutting internet access is now a normal thing during unrest, being able to pay with anything that is not physical, probably wont work out.
If the global internet goes down and stays down, then I think it's safe to say that global civilization is permanently collapsing, in which case billions of people are going to die in the resulting famine and the survivors probably won't be able to maintain enough technology to survive long term as climate change continues to snowball.
In this scenario, yeah bitcoin is worthless. But so is gold. The only thing worth stockpiling for this scenario is brass and lead (and a strong local community of other preppers who can organize into a new micro state after the collapse). And even then, you have to ask if the reward of surviving is even worth the cost of prepping.
you see, gold can still be traded without power and internet, as could cash or really anything physical, as the value is assigned by those trading it at that time for whatever use they have but BTC is totally useless, toilet paper would literally have more value. brass/lead(killing people) isn't the only way to survive.
People keep using that argument about gold, but is it really realistic? If the SHTF and the USA goes dark for whatever reason, how good is gold really going to be?
First, how does someone know you're really giving them pure gold and not some worthless alloy that looks and feels like gold?
Second, how much is gold going to be worth? Will a gold bar buy you a house, or a loaf of bread? (probably not a good example, after a month or so, houses will probably be less valuable than food)
And without any government to enforce a stable market, how will you even trade safely when the guy who has all the stuff you want can just hit you over the head and take your gold and whatever other possessions you may have with you?
Eventually these things would be sorted out by forming some sort of communal groups for protection and resource gathering, and barter prices will eventually be set, but will the guy with the most gold be valuable, or the guy with real survival skills (or at least some more immediately usable possessions like weapons, farming tools, etc)?
For the short term disruptions that are far more likely (like a regional power outage), cash is probably going to be just as good or better than gold because it's got an accepted value and everyone knows what it is (product values may rise, but in a society that's not used to using gold as currency with infrastructure to do so, it's a lot easier to sell a loaf of bread for $60 than for a gram of gold)
Get real. When governments collapse gold is not even remotely as useful as people seem to assume. There is no hedge against a failure of civilization. When things break down like that, you need to think on your feet and start organizing people (or joining up with a group someone else organized) to stand guard against the roving gangs of murderers, rapists, and thieves. "Trade" beyond the level of barter involving food, fuel, medicine, and weapons does not enter the picture until some new form of government can be established and some semblance of order is restored.
The caffeine addicts will be desperate when the beans stop flowing.
You can flee with some gold, but I'd expect that to all be taken from you by the border guards or smugglers you have to pay off to get out. They can't take your bitcoin if they don't know you have it.
It doesn't take anything this drastic. All it takes is the country you are in deciding to cut off access. This has happened in various unstable countries many times over the last decade so it's not unprecedented.
The very time you would need something more stable than a currency is the time when the local telecom infrastructure would mean you can't transfer bitcoin.
> Pretty sure I am going to want either some other country's currency -- because I still need to buy imported food or fuel or whatever
Explain why, just saying you want Euros or something isn't a very convincing argument. Importing cash Euros is non trivial, and good luck finding banks and credit cards that let you transact in them.
It is much harder to transport gold and silver, and those can be easily confiscated. A mnemonic seed can be stored in your head, and you can add a passphrase as a salt on top of that to create an infinite number of permutations, each being their own wallet, and provide just one of those if under duress.
If you backup your private key in a redundant way, multiple storage locations can be completely destroyed without any loss. If you were really paranoid, you could distribute it around the world to mitigate geographic and geopolitical risk.
So, that's what I think is more likely the mentality of western people holding long term. A check against incompetent government.
You can’t drive a house.
(You can adjust the currency for whatever country you might be considering if dollars are not the local currency.)
Don't kid yourself -- without exchanges of some sort (including payment processors) cryptocurrency is basically worthless.
In this case convenience is necessity, for practical, real-world definitions. Sure, in a theoretical sense, there is no reason why I couldn't use Bitcoin to buy food and clothing, make rent/mortgage payments, buy plane/train/bus tickets, buy furniture, tools, electronics, etc. But the reality is that I can't do it (with some narrow exceptions), and I don't see that materially changing within my lifetime, not to the point where using Bitcoin (or any other up-and-coming cryptocurrency) is more convenient that using fiat currency.
It took a significant pivot for AirBnB to recover and maintain revenues.
There is a whole professional services coinbase for institutional investors, custody, etc that has a huge potential.
What you probably have in mind is "direct network effects", more like what you'd see with a chat app or social network (though social networks also have cross-side effects between users and advertisers).
Hotels have much more guest nights than apartments, so the network effects are much smaller there.
There were companies trying to compete with AirBnB, but I'm not sure if they are still used, at the same time with hotel sites I just find the cheapest one for the hotel that I like.
Coinbase seems less threatened by regulations
There is also an "inverse" regulatory risk for Coinbase. In the best case (where cryptocurrencies are actually being used as payment systems at any significant scale) cryptocurrencies fill a need that is not being filled by existing banks as a result of regulations on the financial industry. Instead of more stringent regulations being imposed on cryptocurrencies, less stringent regulations could be imposed on the mainstream financial system that would allow banks to create more convenient electronic payment systems. The need for a cryptocurrency exchange could implode if the relevant technologies (e.g. offline ecash) were deployed; you would "withdraw" or "deposit" money in the bank just like paper notes. There is even a case for such a system if banking regulations became stricter e.g. if banks were forced to deploy a less fraud-prone and more privacy-preserving system than the credit/debit card system in use today.
That actually improves the situation for them. (Similar to how GPDR improved Google and Facebook's position in the ad market against competitors)
And early-stage help and intros are crucial for startups - between YC and Garry's network I'm sure a ton of that contributed to their success as well. At the end of the day still a bet, but just saying.
He could have bought 833-2500 bitcoins, with a current value of $5.2500.000 - $157.500.000.
He choose to do more than "HODL" and go through the hard work of building a product and a company, which in my book, makes him a true hero. Even though he went the casino/shitcoin rout later...
Coinbase is huge because of the user demand, not the other way around.
Any early companies out there right now seem like it could potentially offer even a 10th of that in ~5-10 years?
Paul stumbled on an absolute goldmine by just giving a bunch of promising companies with good founders 10k in exchange for a decent portion of equity and then some of these companies being worth billions.
NOw you know what those homes and are so expensive in Palo Also and elsehwre, You got of these guys making fortunes, and that money tricked down everywhere.
YC is a massive outlier and they have insanely good deal flow because of their brand.
You won't find a better group of truly qualified, highly accomplished people giving advice to startups, holding talks for cohorts, etc. in any other accelerator anywhere, period.
But remember that unlike the stock market, investing in a VC means locking up your money for 10 years. Slightly beating the market is not worth the liquidity loss, you have to do a good bit better.
Selection bias. There are a heap of other companies that tried the YC model, and failed. It isn’t “just” good founders and 10k.
I know in the past though that, at a minimum, the amount of money was different. I'd say it's still safe to assume they own 7% though - so more than a billion USD on paper, not bad.
You phrase it like he made a mistake and lost out on a huge profit but the ROI is exactly the same so really don't understand your comment.
In practice, cashing out billions of dollars worth of stocks is easier than cashing out billions of dollars worth of crypto.
Another option is, now that it's becoming clear to people that Bitcoin is here to stay, you can just borrow against it to spend (avoid taxes, hold on to the upside). Case in point, this person/group borrowed 300M$ with about 1B$ net worth.
This is misleading. The markets definitely move, they just don't show a massive spike in the charts.
Are people just banking on the assumption that it's going to go up higher than how much they have to pay back over time? What if that stops being true 5 years from now somehow, like another coin becomes dominant? Not saying it's likely, I do think Bitcoin will probably still be doing well in 5 years, but I'm not certain of it.
It's also kind of unclear what the interest is from that page. edit: apparently it's 8.5% https://mkr.tools/governance/stabilityfee
And one more thing, it's not technically an interest rate, it's a stability fee (which btw, gets burned, used to go back to stakers, but they removed that).
There are also centralized versions with blockfi if you prefer traditional loans.
If it dips below 150% the contract is automatically liquidated. Should give ample time for the creditor to get their money back.
I haven't looked at Coinbase stock liquidity, but I would be it is worse as BTC liquidity.
it's not like the btc must be sold on an exchange
Props are owed for bringing some true innovation to the space.
I'd love to know how this turned out. Did he eventually find a co-founder? Or did he continue in his YC application as a sole-founder?
For those that don't want to click through:
There are replies in that thread such as..
- "No thanks. I'd rather sell sugared water."
- "Because bitcoin worked out so well. Have fun with that, dude."
Sure props to him to pull it off, you don't get net worth of $20B by accident or pure luck... but in terms of his vision of the world more united where it is easier to send and receive money without paying outrages fees, he definitely failed on that promise.
It was Bitcoin that failed to deliver that promise, not him.
At this point, there is no way to trade for free on Coinbase or Coinbase Pro. However, maker orders do still have a lower fee vs taker orders on Coinbase Pro, depending on the pricing tier / how much you trade per month (https://help.coinbase.com/en/pro/trading-and-funding/trading...).
IIRC, he did - they met on Reddit.
I didn't launch mine, nor participate in his (obviously). I suggested that a business in that space, if successful, would result in a similar outcome as happened to other founders of international money transmission systems that weren't under direct government control: i.e. swatting.
He was not dissuaded, to his credit. Score one for the "founders must have grit" camp.
To be honest, I'm still not sure why the hammer hasn't come down on something like Coinbase by now. It seems that cryptocurrencies in general are the exact opposite of the regime outlined by the BSA, PATRIOT, et c. My unsubstantiated theory is that it has something to do with pmarca, but that's just a guess. The founder of Kraken has expressed his feelings that it's coming soon.
I'm glad that Coinbase has permitted so many to participate in the ecosystem, but I wonder about how much of a benefit heavily regulated, custodial wallets bring to the ecosystem as a whole. It seems to me that Bitcoin existed to replace banks, and here we have a bank serving as the Bitcoin equivalent of gmail, re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace. The fact that they're listed on a stock exchange and not as an ERC-20 or other permissionless token tells the whole story, in my view.
I have a special respect for those who can function in heavily regulated, guilty-until-proven-innocent style markets like financial services in the USA. I personally would not be able to handle it.
There's a lot of hidden soft power in the USA amongst the ultra-wealthy, I've come to learn.
(Note that this is not a criticism specifically against Coinbase, per se; more an indictment of the lack of equal protection under the law in the USA in general. All animals are equal, but some animals are more equal than others.)
Perhaps you have a answered yourself: “re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace”.
To me, it's a shame to see. Now that Gmail and Coinbase have captured so much of their markets, they (or anyone who can coerce them) are now free to start censoring what goes in or out, turning a federated, permissionless system into effectively a dictatorship.
I really hope that's not what ends up happening. It's a bummer that financial services in the global west engage in such legally-mandated gatekeeping, locking billions out of the most lucrative payments markets. The internet and cryptocurrencies present a new opportunity there, and re-using the same decades old regulation to segregate the technology into the haves and have-nots is, to me, a tragedy.
I fear that neither is true.
Bitcoin was designed to replace fiat money, it can't replace swats.
1. Armstrong was so concerned about privacy that he used a throwaway, but ended up giving his identity away anyway.
2. Those responses! The negativity on Bitcoin has been there from the start on HN especially for some reason.
3. That whole payment angle has not worked out the way most people thought. Most enthusiasts in 2012 saw Bitcoin as a PayPal replacement. Instead, Bitcoin has taking its own path, confounding the predictions of skeptics, professional economists, and enthusiasts alike.
2. Bitcoin was always a dumb idea from the perspective of building a business or an economy on it.
3. Anyone who really looked at Bitcoin in 2012 could see it was not a realistic replacement for PayPal unless you were thinking about paying on a place like SilkRoad.
Not following the law is not a "metric" legitimate businesses usually brag about.
Anybody who use FUD as an argument for something is pushing some kind of snake oil. FUD stands for "Fear, uncertainty, doubt." Why does FUD exist? Because historically when we did dumb things there were consequences. Is fearing consequences an irrational thing?
I would argue though that the magic of Crypto isn't buying coffees. After Silkroad we have seen very little interest in using Crypto as money, and even with "high" fees, alternatives have not become desirable for their ability to transact cheaply. I would also point out that even the likes of Coinbase have a 0.5% fee before spreads. Using crypto over cash or card (at least in Europe) isn't a cheaper of faster process end to end.
IMHO Bitcoin IS an offshore account, and the ability to move wealth anywhere in the world, without a middle man, entirely permission-less and trust-less for even at $15 is a massive achievement. Don't get me wrong, it can be cheaper, but what Bitcoin can do, and how individuals from retail investors to publicly listed companies are holding Bitcoin its a massive signal in terms of whats actually desired.
Bitcoin has low transaction fees compared to US domestic wire transfers or compared to using a credit card on a purchase of $1000 or more.
But what I find interesting is that his vision was way off- crypto is nowhere near replacing credit cards, now or in the future.
But he did build a huge company because crypto became a speculative asset bubble instead.
Similar for the so called 'tech bubble' around the start of the millennium: if you bought all the tech stocks back then and held them until today, you would have made an OK return.
(Of course, many companies have gone out of business, but there were a few outsized winners to make up for it.
Any individual tech stock was extremely risky, but the overall sentiment that 'tech is the future' was right on the money.
If anything, it's not the high valuations of the 'dot-com bubble' that seem off, but the low valuations of the bust.
This story doesn’t likely have a happy ending.
And energy is cheap where it is subsidised or in abundance. The first is often 'China'. The second, currently often hydro.
A lot of mining is now moving to Iceland, Canada etc. Where energy is becoming cheaper than CPC funded energy.
And that's exactly what you would expect when extrapolating from the economic argument above!
To come back to the analogy with dot-com companies:
In a field where a winners might give you outsized 100x returns, you expect perhaps 99 out of 100 companies to be total garbage losers that go bust. So that the average return from investing in all companies in that field is something normal.
Otherwise, rational investors will keep pumping money into that field and funding more and more companies until that's true.
Same here: even if you believe that in 20 years cryptocurrencies will dominate the world economies (just like 20 years after the dot-com boom and bust, internet companies like Amazon and Google dominate economies), still most almost all cryptocurrencies will fail.
The political risks, that you are alluding to, fit this argument just like any other risk would.
Thanks to eg bitcoin futures, it's not relatively easy to go shortsell (something like) bitcoins, so I expect the market price to be roughly in line with the best forecasts possible.
(Only 'roughly', because the market for bitcoin is still pretty tiny, and not very developed, compared to eg US inflation forecasting markets like https://fred.stlouisfed.org/series/T5YIE )
Bitcoin - not. On the other hand, modern altcoins who are faster, PoS-based, low fees, etc are on the path to exactly this.
An expert in the space, Andreas Antonopoulos, speaks to this topic here: https://www.youtube.com/watch?v=U0T49duRt74&t=2720s
Proof of Stake is more secure than Proof of Work because it's not possible to use external resources to take control of the system. The cost of hijacking PoS is exponential, not linear.
With PoW, someone who has no stake in the network could buy or rent mining hardware using fiat and take control of the network for a linear cost - This is because, unlike cryptocurrency tokens, hardware is not a scarce resource; it's always possible to produce more of it.
With PoS, the only way to take control of the network is to buy more than 50% of all tokens. The cost of acquiring 50% of all tokens is non-linear since tokens become more expensive as the attacker purchases more. This is because the attacker will generate continuous demand against fixed supply of tokens; in accordance with the law of supply and demand, the price will keep increasing as they buy more tokens. Also, the incentive to follow through on the attack decreases as the attacker accumulates more tokens.
If an attacker wanted to not raise the price of a coin, couldn't they use crypto OTC markets to buy large amounts while not raising the price (i've seen OTC at least marketed that way)?
Aren't cryptocurrencies also only a scarce resource if they have a hard supply cap? Or do you figure in something like inflation vs coin burning to this as well?
I do understand your point that the incentive to follow through on the attack decreases as the attacker accumulates more tokens, since it would be in their interest for the network to function properly at that point due to how many tokens / how much stake they have in the network.
The only reason I could see the attack making financial sense at that point would be if it was a competitor who was trying to kill a competing PoS network and it was worth it to them to do so in order to promote their own network (or maybe it could be a government trying to protect their fiat currency)?
I've been involved with Lisk (LSK) for several years. It's Delegated Proof of Stake though so you can use your LSK to vote for block forgers who offer a good % share of their block rewards and earn interest that way.
>> If an attacker wanted to not raise the price of a coin, couldn't they use crypto OTC markets to buy large amounts while not raising the price
Yes, that can happen in theory but in practice it's not feasible. In DPoS especially, whales would rarely agree to sell more than 50% of their own stake because if they did they could lose their forging delegate spot (which yields higher rewards than just voting). Because the blockchain is public, delegates all watch each other's on-chain activity and they can lose votes if they try to sell too many tokens (doesn't matter if it's OTC or exchange).
>> Aren't cryptocurrencies also only a scarce resource if they have a hard supply cap? Or do you figure in something like inflation vs coin burning to this as well?
If there is inflation, it doesn't affect the security of the blockchain because the attacker must acquire 50% of all tokens in any case. The more tokens there are in total, the more tokens the attacker needs to buy to get to 50%.
>> The only reason I could see the attack making financial sense at that point would be if it was a competitor who was trying to kill a competing PoS network and it was worth it to them to do so in order to promote their own network
Early days of any blockchain are always more risky. That said, the early days of most PoW blockchains are even more precarious than those of PoS. This is because with PoW, the community has no say over who can start forging blocks on its new blockchain (anyone who owns some crypto mining hardware can compete to produce blocks on potentially any PoW blockchain).
If just a tiny % of Bitcoin's miners were temporarily repurposed (e.g. minor software changes) to mine any new PoW blockchain, those miners could easily take over the new blockchain and create any transaction they want. With PoS, in the early days, the community gets to decide who will receive the initial tokens; so outsiders cannot highjack the network unless then find a way to buy more than 50% of the tokens from existing token holders.
I wonder if he's kicking himself now for not taking the job.
Their retail platform has a 1% withdrawal fee unless you are using USDC in which case it is 0%
And their trading platforms have 20 basis points and less commissions
We also charge a Coinbase Fee (in addition to the spread), which is the greater of (a) a flat fee or (b) a variable percentage fee determined by region, product feature, and payment type. The flat fees are set forth below:
If the total transaction amount is less than or equal to $10, the fee is $0.99
If the total transaction amount is more than $10 but less than or equal to $25, the fee is $1.49
If the total transaction amount is more than $25 but less than or equal to $50, the fee is $1.99
If the total transaction amount is more than $50 but less than or equal to $200, the fee is $2.99
Edit: There's another section about how they charge 4% to deposit dollars unless you use ACH (and wait 1 week) or wire transfer (then they charge you $10 to deposit or $25 to withdraw)
Citation please. Lots of companies IPO while losing money.
If this was a thing, it's ancient history and not relevant to IPO vs DPO discussion.
2. Open up to the public market only once you've reached the max theoretical valuation. The company is still hugely overvalued on hype and future growth is unlikely. Ideally, you quickly make it into the S&P 500 so you can hand off the bag to passive index holders who have very predictable buy rate (mostly retirement savings).
4. The rich profit of the plebs like always.
> Using a sample of 19 advanced economies spanning over 30 years, I find no empirical evidence that dynamics move in the way Piketty suggests. Results are robust to several alternative estimates of r-g.
> Recent influential work finds large increases in inequality in the U.S. based on measures of wealth concentration that notably exclude the value of social insurance programs. This paper revisits this conclusion by incorporating Social Security retirement benefits into measures of wealth inequality. We find that top wealth shares have not increased in the last three decades when Social Security is properly accounted for. This finding is robust to assumptions about how taxes and benefits may change in response to system financing concerns.
Auten & Splinter came out with the most widely accepted rebuttal, which showed that Piketty's theoretical model was based on a reality that ignored major taxes and transfers, and once you account for those, the effect goes away completely.
> Top income share estimates based only on individual tax returns, such as Piketty and Saez (2003), are biased by tax-base changes, major social changes, and missing income sources. Addressing these issues requires numerous assumptions, especially for broadening income beyond that reported on tax returns. This paper shows the effects of adjusting for technical tax issues and the sensitivity to alternative assumptions for distributing missing income sources. Our results suggest that top income shares are lower than other tax-based estimates, and since the early 1960s, increasing government transfers and tax progressivity resulted in little change in after-tax top income shares.
Capital > labor, still. But I guess not as badly as I thought.
That's the least charitable way to write it, but it's somewhat close to the truth (the other part of the truth is that pricing is hard which is why we have markets).
DPOs allow companies to list at a reference price without losing out on money - they can sell at the true price later.
Banks naturally make up a bunch of reasons why this is bad, but it's mostly nonsense.
When one side does many of these types of transactions per year (banks) and one side may only do one or two in a lifetime (founders) expect the side with more experience to both tilt the deal in their favor and to have a compelling narrative of why it's actually better for you.
There's a funny story (I searched briefly, but couldn't find) that when Elon took Tesla public via an IPO and the bankers told him the initial price he just said "no, at least $XX or no deal". I think the bank price was $17 and he said at least $19, but I could be off on the numbers. They did his price and that price was still too low.
It's a mistake for any company to IPO from now on imo, SPACs are even worse really (unless you're running a fraud in which case SPACs are great).
You can list and put up shares on the market later.
I think there's something new where you can list directly and then sell to the public too without the bank underwriting rip off thing, but that's the edge of my knowledge. I'm not super confident here, so definitely possible I'm wrong about specifics.
The title is wrong, there is no IPO. Presumably "IPO" is meant as "public offering." If there's a place to be specific about these things, isn't this thread it?
So there is a difference in structure, but to your point immediately after launch it does not really matter to the general investing public
In an IPO the company puts private shares in the open market and gets money from it, priced at the IPO price. Whoever has (private) shares now has public shares and can trade whenever they want.
In a Direct Listing the company often already traded shares "openly" but not in a "public" way, but now wants it listed publicly so retail investors can trade it, and there's no immediate need of capital so the objective isn't to get a funding from offering shares in an IPO.
They just opened up a share selling shop on the stock exchange, instead of selling it to banks (that already have shops) at wholesale price.
Any shareholder can sell through that shop window, including the company.
I think Coinbase as a publicly traded company will be very interesting to follow. Not only is it a massively cyclical industry, but the supposed point of crypto is to reducing the reliance on, and grifting from, companies like Coinbase. It's very success should be inverse to the goals of crypto, and over time, one would think the relationship can only get more fragile.
That was the pitch of crypto. In practice, people are buying it as a bet that it will go up. I suspect most people are only buying it because the value is going up. If bitcoin actually worked like a currency and traded between $8k and $12 for the past 5 years, no one would care.
Banks obviously don't use anywhere near this much energy. Bitcoin is estimated to use more energy than all other server farms put together.
So we are using 0.6% of the world's energy to store 0.5% of the world's wealth. And < 0.6% of the world's energy to store the other 99.5% of the world's wealth.
Doesn't seem like the ideal wealth storage technology.
It takes a relatively minuscule amount of energy to maintain a database of numbers associated with certain people and entities, but quite a significant amount to make it mean something.
I find it much more likely that military resources would be diverted to somewhere upstream of mining in the value chain. For example, if we continue relying on carbon-intensive proof-of-work blockchains, why wouldn't armies simply be diverted to secure energy resources?
Either way, it’s very convoluted and tough to tease out line item costs, but I don’t think comparing electricity usage is a good proxy.
Although higher prices make larger mining operations more enticing and profitable.
The idea behind this proof-of-work scheme is that creating an alternative blockchain history becomes prohibitively expensive, pushing the network to achive a distributed consensus. However, it's tremendously wasteful because the energy isn't actually being spent on "useful" work.
It's even worse in terms of energy per transaction.
The US doesn't even use 20% of the world's energy. So you would need to think that 125% of the energy the US produces and consumes goes directly into fighting wars and "supporting the petro dollar" - which is absurd. Almost 50% of energy is spent on transportation and utilities alone...
In the most generous of worlds, Bitcoin is 10x less efficient than the current systems. It is probably closer to 1000x less efficient (or more).
This is one of the biggest selling points of crypto, it’s not tied to a government that may decide to commit mass murder for its sake.
It also implies that the goal of storing wealth is optimizing for low energy usage, which seems less important than security/safety, ease of transfer, taxation, automation, and other factors.
I’m not making an argument for or against PoW. Just want to point out it’s possible >.6% of humans energy output may in fact go towards banking and payments.
Given that we are nearing the irreversible destruction of our climate and that existing electronic systems offer all the benefits you mention, but with massively lower energy cost, your claim that energy “seems less important” is unsupported.
But the success of BNB which is basically just a corporate database on a blockchain shows there is a big part of the community that doesn't care about decentralization at all.
Coinbase brought a true sense of legitimacy and trustworthiness to Bitcoin exchanging.
Coinbase was the first company that made the whole process feel pretty safe and reliable.
I could be wrong but to me this makes every shill for crypto that says "it's anonymous!" a joke.
I had to provide a driver's license and do checking account verification to be approved on Coinbase. Does that not remove the anonymity or am I missing something?
Do we know if Coinbase would cooperate with US government in such a situation? I would imagine they would.
I'd imagine they are also going to be sending IRS 1099-like forms for all crypto transactions, right?
Every transaction is part of the public ledger. If you ever want to get money in or out from fiat you need some point that is going to require ID.
You could try and avoid this doing in person and cash, but if make any mistake ever your entire history of transactions is known.
Some people have tried to do things to obscure this (coin mixing), some coins exist to do something clever to make it private, but BTC isn't and the other stuff doesn't really work.
Coinbase is great because the original exchanges like "Magic The Gathering Exchange" (Mt. Gox) were amateur hour, they were routinely hacked and lost everyone's money. Coinbase was the first real company that showed up and did what they were supposed to do. They also made things easy with good UI.
I think this is partly because in the Mt. Gox days it wasn't taken too seriously, (most) people were playing with it because they thought it was cool not because they expected it to grow in to a trillion dollar monster.
But yeah, otherwise I agree with you. Once you've bought your Bitcoin from Coinbase, your name is attached to a Bitcoin address. Law enforcement might not know where the coins go once you spend them, but they could subpoena you or otherwise make some sort of legal demand to know who you sent them to if they suspected you of buying illegal things.
How do you get a Bitcoin wallet registered and get funds into it?
If you download the desktop client, you have a wallet, and you don't need to log in or register anywhere. You can then create a Bitcoin address and have Bitcoin sent to it.
Just an anecdote but, much to my chagrin, I've had a largely dormant Coinbase account since 2013 and haven't received any notable spam or evidence that my contact info has been handled sloppily.
Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.
> Recently I started the enrollment process for a couple other popular exchanges and almost immediately start getting some gnarly spam of topical relevance.
So...you're happy now, right?
Not necessarily, the point of crypto is to reduce reliance on fiat money, due to the high fees of crypto it makes sense to build centralized services on top backed by decentralized cryptocurrencies, these exchanges dont hold real power, as you can just switch exchanges (unlike credit card processors). Bitcoin is like the internet gold, but you dont buy stuff with gold.
Commissions tend to come down as markets mature (with some exceptions like real estate) so I will be curious to see if this occurs in the crypto market as well. I suspect that appeal to the masses will not be a long-term durable advantage.
Yes, that is still the case? Decentralized exchanges like Uniswap are dominating (over $1B volumes daily) and growing very rapidly. Crypto is and always has been about decentralization.