With the frenzy out there, Coinbase makes crypto currencies trading/investing/purchasing as robust and seemingly as safe as possible. This could be a signal, now that we have some reputable market players that crypto currencies are really just starting and there is a very high ceiling. Getting in before coinbase you had to mine your own (that party ended quickly - Butterfly Labs, cex.io for cloud mining etc) or be part of a sketchy exchange (mtgox, btc-e etc where funds were stolen or seized). Some of the rules such as 10k limits on buying/selling/transfers put a natural throttling on bitcoin that other markets don't have, since the buying is immense it should continue to go up for sometime due to this throttling and now reputable sources for buying into the market.
Side note: one of the absolute killer features of crypto currency markets is finally we have an always on market. Stock markets and exchanges still operate in the old days of the hours of the day in the country they are based in, crypto currency is an always on market which is nice because it eliminates the after hours/before open games that go on with stocks.
Based on my experience* over the past ~week, "robust" is not a word I'd use in the same sentence as "coinbase".
*In addition intermittent outages which prevented me from accessing their site, I sent some Satoshi from my local wallet to coinbase (10 days ago at time of writing) in order to unload some; transaction was marked "pending"; they've since sold the coins; customer support has stopped responding to my emails.
I ran into a problem using them, realized their customer support appears to have given up, and decided it was time to get my money out. That was this morning. As of now, the BTC transaction I initialized is reported as “complete” on my Coinbase account, which now has a balance of 0, and the transaction has not even registered on the blockchain. This is certainly not my definition of “robust.”
While coinbase & BTC seems to be doing well, I've anecdotally seen a bunch of people who can't get a response from coinbase support over long periods of time. Doesn't make relying on coinbase seem like a good idea.
My experience with coinbase was terrible. I bought roughly 10k of eth this past summer.
Eventuslly I was up 5000 I decided to sell 10k so I could let the rest freeride. When I went to sell coinbase told me they couldn't validate my identity and wouldn't let me sell.
Which is ridiculous. They had no problem taking 10k from me, but not the other way around?
At the very least they should have put some info somewhere telling me that before I bought any.
Nothing I did worked. It just kept telling me it couldn't validate and to try again in 24hr. I contacted support and eventually got a boiler plate email.
Eventually I opened a new account on another exchange, sent my eth there and sold it for btc which I sold for usd on localbtc.
Ended up a 2000 dollar loss because this whole process took like a week or so during which eth kept dropping.
My advice to anyone using cb would be to have a local wallet and working accounts on multiple exchanges. If I had done that I would have been okay.
However I still think that if my identity was no sufficiently validated to sell, they should have told me before I went to sell.
4 years ago they had a problem with customer service and the situation does not appear to have improved:
> When it takes a public outcry on HN for a company to do their job, I no longer deal with such a company. Simple as that. I don't care if you raised $25 million - if you can't treat your users fairly, you deserve neither.
>> When it takes a public outcry on HN for a company to do their job, I no longer deal with such a company. Simple as that. I don't care if you raised $25 million - if you can't treat your users fairly, you deserve neither.
I wonder if that applies to Google too, the most famous company for which you need to get on the HN frontpage to actually reach someone there.
Coinbase is simply suffering from insane growth pains. I mean, come on, they are adding half a million new users per week! Of course support isn't going to be very responsive.
Funny how they are coping with signing up users just fine. Takes about 5 mins for somebody to check your ID and create an account.
Support however seems not to be a priority to them.
Interesting. I'd assume that these methods are probably more effective than a manual review by your average person anyway, but there are certain areas where I would expect automation to be at least frowned upon.
You've got a point, and I tried to be understanding about the slow customer support response, but after a certain point the _growing pains_ excuse just does not pass muster. Coinbase has been around for years and their business model would seem to be dependent upon rapid adoption/growth of BTC/ETH/LTC. So, they knew this day would come and should have had processes in place to handle the influx (of traffic and related customer support requests). I just cannot _understand_ how a business could misplace $NON_TRIVIAL_AMOUNT_OF_BTC and then not respond to their customer's inquiries about it for _days_ at a time.
UPDATE: My "pending" transaction was marked as "complete" and the coins appeared in my coinbase wallet this morning (almost 11 days after I initially moved the coins). I'm not necessarily chalking it up to this comment, but I suppose it's possible.
Fortune favored me this time around, but I don't know if I can trust coinbase again. If the price had dipped, I'd be out a bunch of money. (Just to be clear: they received the coins days ago, just didn't credit them to my wallet.) I wish there was an option to sell BTC directly from your local wallet, which would set a strike price and ensure that users don't get screwed if/when this sort of thing happens. (Note: This option may exist and I'm just not aware of it. I tried to log into coinbase just now to verify that ... but the site is down again.)
Yeah exactly it's just a way to acquire initial crypto to move elsewhere for trading it's just a money exchange at it's core not the crypto equivalent of a day trader platform.
As a heavy bitcoin/crypto trader, Coinbase and Gdax are one of the worst exchanges out there. Speaking strictly from a technical point of view. Not only their Front-End interface (Gdax) suffers from lag probably due to poor engineering but they also made terrible mistakes at the beginning.
One of them being a lost deposit. The address generated by the site was wrong and thus the deposit never credited. It took a couple months for support to get on this and refund the lost amount. This happened a couple years ago. So had it happened now I'm not sure if technical support will ever get back.
I also failed to contact their technical support about other issues (can't really remember) but there was no way to reach them. They don't have proper support, they just have monkeys that tries to save face on social media. Only.
The best exchange so far from a technical perspective is Bitfinex. It is surprising because it is quite shady. But it is a rock solid exchange; and it is magnificently engineered. No wonder it is the top exchange out there. And Finex has handled the recent surge much better than Gdax or any other exchange out there.
Wait you're suggesting one of the legally most robust changes out there (the one doing the most compliance) is actually slower than the shady, non-transparent exchange..??
Because of bitcoin's origins in a largely an-cap community - and the continual anti-Government, pro-capitalist mindset in a significant part of the community as it stands now - there's not actually as much demand as there should be for "legal" exchanges etc. As a result, there's much more competition in the "shady" exchange space, less competition in the "legal" exchange space, and two things result: people occasionally lose a significant chunk of their life savings to shady exchanges, and legal exchanges don't have as much of a drive to be technically brilliant.
I've run into all sorts of bugs which made the site annoying to use.
1. My bank account has a 5000$ limit and my credit card has a 750$ limit. After spending 1000$ from the bank (which takes a week), I wanted a quick 50$ from my CC, but it said I was already past the 750$ limit.
2. When trying to recover an older account, the recovery keeps asking for my phone number but isn't sending me texts properly. If you say you lost your phone, you can submit id+selfie, but to get to that step, you need your phone??
3. If you reset Authy, it removes your Coinbase token, and tells you to contact their support. They're very slow as responding, and after a week, I was just told to use my phone number (which again, goes back to #2)...
I've run into multiple bugs on their website while using firefox... but it'll work fine in chrome.
Two I remember: The id+selfie didn't work in firefox. and they had a page that would calculate the max wrong in firefox. Sent an email about both. I don't think they responded to the first one; and on the second, they redesigned their site a bit to delete the page.. then sent me an email asking if I still had that problem (about 1-2 weeks later).
I don't think they test very thoroughly... and they definitely don't use firefox.
The limits are different for everyone and they go up as time goes on and you have successful transactions with them. To avoid waiting you can transfer USD into Coinbase ahead of time and then the buy will confirm instantly when you choose to do the transaction.
>2. When trying to recover an older account, the recovery keeps asking for my phone number but isn't sending me texts properly. If you say you lost your phone, you can submit id+selfie, but to get to that step, you need your phone??
I did this a week ago. They ask you for your current (= old) phone number and your new phone number, but you don't actually need access to your old phone number. You just need to enter it.
Coinbase does give one the sense of security and ease of use. It does not seem sketchy, is American based, has KYC procedures, etc. If they lose coins or go under, a lot of "normal" people will lose money. Not sure what regulations might be passed in Congress if that happens, but the cryptocurrency Wild West would likely be over in America at that point.
I would guess they also have some kind of insurance. iirc one of the larger exchanges was hacked and lost millions, but the insurance paid out and made whole the users who lost coin. it's a dynamic market.
Agreed. Maybe one day they will be so big that they are deemed "too big to fail" like the over-extended failed big banks and the bailouts/TARP of the Great Recession.
If the government seized funds of Coinbase with how entrenched it is even now, there would be massive legal challenges. Ultimately that might be a good thing in terms of forfeiture reform. Coinbase (US company) is orders of magnitude different than btc-e or mtgox etc.
Nothing like that would happen today though as that was more a reaction to the Great Depression and the wealthy hoarding during times where cash was constrained.
Also, that was gold so who is to say that couldn't happen to gold today if it can happen to cryptocurrencies, any hoarding would be a target in another depression that bad much like things like offshoring might be or are in some case.
Why it won't happen today you can base off the reaction during the Great Recession, we bailed out failing banks with TARP that got us into this mess by over-extending leverage instead of consumers. The FDR order helped the economy and all people at the time over the wealthy.
FDR, if he was in charge during the Great Recession, probably would have made new banks and let them fail if that happened under him, a people's president. The SEC was also created during his admin which is arguably the best thing to ever happen to investing in the US, solid markets since Securities Act of 1933 and SEC inception, cryptocurrency will eventually be more closely regulated as it grows.
that crypto currencies are really just starting and there is a very high ceiling
Starting at what?
What is the value proposition that is actually in play here, for which there is some hard evidence of it's existence, other than a speculative frenzy?
It's a bit galling how many people this go 'round are just outright saying "yeah, it's a ponzi, come on guys hop on! there's a high ceiling! hope you get your chair when the music stops!"
If you think that some future economy will run on cryptocurrency (not totally far fetched IMO) and that currency will have network effects (I don't really see this yet, apart from deflation via speculation, which will stop eventually, it's not stable) then there's a possibility of a winner takes all outcome. But it's very easy to doubt any specific currency will be the final winner.
This is what I've always thought, to find a real footing there has to be some economy to which bitcoin/some cryptocurrency is the lingua franca, the closest we've seen in that regard is silk road, et al. and ransomware, if you want to call those economies.
But here's the problem with this idea as being some buoy for bitcoin/cryptocurrencies, once an economy of this sort develops with some semblance of structure, that market is going to seek out inefficiencies. First on the chopping block? A massively inefficient distributed currency system.
For this reason I think any sustainable use case of a bitcoin like system is necessarily rather niche, and rather 'seedy' or worse, ransomware, etc. But if all the bitcoin dreamers fade away, it becomes much easier to counteract the use of btc-like systems for ransomware extortions and the like.
Even in that case the price/market cap is getting absurd. The nominal market cap of Bitcoin is like 1/10th the US money supply (M1) and 1/20th the total gold supply. And people on these threads are still saying they think it has another 100x or more in it!
The total long-term value of bitcoin ecosystem is the value of bitcoin as a transactional instrument.
There's a plausible justification to invest in bitcoin now if you believe that in future it'll have a large total capitalization because be used as valuable information of e.g. uncensorable pseudonymous transactions, and you'll be able to sell your bitcoins with profit to those people who'll want to use them for transacting.
However, it's not reasonable to state that the valuation is justified by it being used solely as a savings/investment vehicle; because what is the future exit for that investment? When a number savers in aggregate decide to withdraw their savings from the ecosystem at some point (which is inevitable, the global economy has cycles and at some point people will want that), to whom do they sell bitcoin? If there's a different use (as the one described above), then that's an exit that will set the total value of bitcoin at such an event; but if the only use case is "decentralized savings" then it's comparable to the "greater fool" motivation, you can sell/withdraw while there's someone else who wants to enter the product, but when the aggregate motion switches from saving to withdrawing, the value suddenly drops to zero - exactly the behavior that should be impossible in a good savings (as opposed to speculation) vehicle.
I like to think of bitcoin as the censorship resistant settlement layer on which payment networks/systems can and are being built (like lightning network, which just passed all tests). There are some pretty sweet video demos of lightning network/payment channels in action.
Don't forget that it's now possible to broadcast bitcoin transactions via satellite - without internet...
That could very well be the thing, and there's certain value in that, however IMHO that value is limited because:
1) the market value of a settlement system handling is much, much lower than that of a retail payment system with a comparable value (not number) of transactions. If the "payment of the future" is a side-chain that uses bitcoin as the settlement layer, then that side-chain will be the value creator and get almost all benefit of that value, not bitcoin. Offering payment services to consumers and businesses is a huge value proposition; offering settlement services to institutions or technological payment networks is a lot of value as well but there's less market lock-in and network effect so that's going to be much more commoditized and more vulnerable to competition with established channels.
A consumer is only going to use a few payment methods for convenience reasons; a sophisticated institution (no matter if it's a bank or simply a large corporation selling stuff) or a realistic payment network is easily going to use all possible ways to settle their debts with institution B and is going to route every transaction among the cheapest route possible for that deal. Currently bitcoin is order of magnitude too expensive compared to other real time gross settlement systems (e.g. Target2 starts with ~dollar per transaction and becomes cheaper with more volume), so only transactions that require censorship resistance would be settled through bitcoin and all others would not. Even if we're not talking about institutions but a purely technological solution, using bitcoin as the settlement layer is something that can and will be switched to a different layer if that's more attractive.
2) The properties of bitcoin (irrevocability, pseudonymity, censorship resistance) are benefits to many consumer use-cases and markets, but not particularly relevant to large-volume settlement systems. Anyone who has thousands or millions of payments to aggregate and route through a gross settlement system would generally prefer revocability (partners of payment networks explicitly designed revocability in the protocols they designed, because they wanted this feature); they don't care about pseudonymity because they're large enough that they can't hide, and they don't care about technological censorship resistance because they anyway can't advertise/sell their services if they violate that censorship - they're too large to hide, and they'd be visited by angry men with guns if they tried that. Settlement layer has an entirely different target audience than consumer payments, and that audience has entirely different needs - ones that Bitcoin doesn't fulfill particularly well.
I.e. bitcoin can be used to, for example, smuggle capital out of China avoiding capital controls, and there's value in that use-case; but if it's used as a settlement layer for a service or process smuggling capital out of China, then that wouldn't drive up/maintain the price of Bitcoin nearly as much, and having a censorship-resistant settlement layer doesn't enable you to offer censorship-resistant payments unless all your other money flow is also censorship-resistant.
This was addressing the parent poster's proposal of a single, quite particular (and IMHO not in popular opinion) use-case of it purely as the settlement layer for other payment network(s); but there seems to be no consensus about the main use case, at the very least I see camps of 'value store', 'decentralized payments for the masses' and 'payments that can't be restricted' which already each have some conflicting requirements.
Stock futures are 24 hours. I believe the vast majority of equity volume is in stock futures rather than stocks themselves. Institutional investors drive this volume
On notional value bases, he is probably right but we all know how the derivative guys like to lever up and hide it all under layers of synthetic securities.
stock volume is larger than futures (347B global avg daily volume vs 280 in jan 2016, not sure about now), but futures larger than ETFs (280 vs 88)
youll have to convince me that institutional investors dont drive futures volume, cant find data offhand but wont give you benefit of the doubt on that one :)
Going out on a limb but I think OP probably meant that:
1) They take account verification seriously and leverage best practices around 2-factor auth etc even going so far as suggesting you NOT use simplified solutions like authy.
2) Your "hot wallet" balance is insured from internal breach / external hacking / etc. Good to note it's not insured from somebody stealing your account credentials from you directly.
3) They store 98% of their total crypto balance offline with a physical system designed to minimize losses or attack vectors.
Safer than it was but your take also shows that it is just starting, people are still deterred by the risk. As it becomes safer the risk goes down and more enter. It is still the early days of crypto currencies for this reason.
The fear you have is real, but it is slowly getting better and with that more will enter. Just like investing in early companies, it is riskier now, but as it becomes safer, those risk takers are rewarded.
Funds were lost in mtgox, btc-e, many others and there is fraud abound (pre-SEC times or early), but coinbase and the coins they offer are currently safer than it was. As more players enter it will be safer still.
The original quote is about trading/buyin/selling crypto not real securities. Does any service offer fraud protection and/or make it safer than coinbase?
I think it's subjective. I personally don't have much invested in Bitcoin and if I did I'd probably keep at least half of it in a personal wallet and half in Coinbase in case I wanted to cash out at any given moment and not lose everything. At least in my experience, transferring coins from personal wallet to Coinbase can take days. Just enough to lose everything when it hits the fan. Or maybe i'm just a catastrophist. :)
You wait and see what happens when coinbase has 500 billion or a trillion dollars worth of hard currency on their platform, and the us dollar is three years into its slide. The temptation to raid that will be far too great.
For a large number of people, the likelihood of the us government stealing all of coinbase's money is far lower than the likelihood of them losing their key to their hardware wallet or whatever.
Banks are basically just retail fronts for the Federal Reserve anyway. And IRS has such tight hooks into the banking system...all they have to do is snap their fingers to freeze your account.
Bitcoin is no less safe than any other asset re: civil forfeiture. One might even make the argument that it is moreso because there aren't the established communication mechanisms that exist between law enforcement agencies and banks that allow them to hold funds as quickly as they do.
Per your other argument: a whole host of executive orders spanning 2 years, nearly 100 years ago, designed to work around the federal reserve ratio, doesn't hold much water.
Well I meant "safe" in the way that a Normie would think is safe. IE, similar security guarantees that a bank would provide.
Obviously, this makes no sense to a cryto enthusiast, because they care more about the stuff you talked about.
But the "average" zero knowledge person who freaks out about how Bitcoin is "unsafe" is usually talking about private key theft, or getting scammed by someone. These "unsafe" things aren't a problem on coinbase.
You realize "safe" is a feeling, an emotional response. I have yet to see "safe" defined in some probabilistic way and that is what you would have to do to have it not just a feeling.
Of course, when you start defining "safe" in a probabilistic way, you end up very quickly estimating the degree of safety instead of binary safe/not safe.
Correct. I'm sure its has been done, but the general public does not think about it that way.
Nice subtle joke(?) with that link to a Moody's March 2008 report on rating bonds given that rating agencies were probably the closest single thing you could point to as the fraud that caused the mortgage bubble and 2008 collapse. Yes, sometimes a feeling can be closer to the truth than a lot of complicated math done with wrong assumptions.
> general public does not think about it that way.
I agree that general public is utterly incapable of understanding basic concepts of probability. (See: Clinto had probability 52% of winning. Trump won -> Forecast was wrong. How stupid is that?) I just commented when you told you have not seen safe even defined in a probabilistic way.
> Yes, sometimes a feeling can be closer to the truth than a lot of complicated math done with wrong assumptions.
To me that is like a stopped clock is correct twice a day compared to a working clock that is just having wrong time all the time.
At least with the complicated math you are forced to spell out the assumptions and there is a chance you are able to recognize them before it is too late.
I come from a construction background (big stuff) and it hadn't occurred to me that people would not get my connotative understanding of 'safety'. For me, safety is about risk minimization. If you haven't considered actual risk when you investigate doing something that could hurt you, it isn't 'safe'.
In my experience, Coinbase/GDAX becomes unavailable every time the cost of Bitcoin drops significantly in a really short period of time... it happened again this morning a little before 7am... Not sure if they are trying to control the drops or if their servers can't handle the load.
I was wondering the same thing about GDAX/Coinbase. I've been seeing "partial" outages both on their portal and their API side. Partial outages are the worst, as they only leave 'some' of the participants unable to act.
For what it's worth, you can expose yourself to BTC in the futures market later this month. That's regulated to the same degree all commodity futures are regulated(which is "a lot"). Your profits(and losses) are guaranteed by the clearinghouse(not the exchange), which mitigates your exposure to another mtgox-ish/btc-e/yadoxi event.
In terms of "always on", the futures market is always on. You can trade softs, metals, currencies, bonds - you name it. The leverage available is 200:1, 50 times greater than the SEC's limit on security margins(eg the stock market). This means you can make(and lose) catastrophically larger amounts than you began with. Controlling your risk is no longer done by a broker limiting your leverage, it's done by you and involves methodical discipline.
The downside: you are trading against pros with deeper pockets and more experience than you could possibly imagine. You won't be out smarting, out trading, or getting "an edge" on anyone except the other retail players.
Actually there was circle they were very similar to coinbase, I used them for a while. They decided to get out of Bitcoin for some reason and I have no idea why.
Circle still sells BTC, just (generally) not to consumers. It's addressed in _Giant Robots Smashing Into Other Giant Robots_ #250: http://giantrobots.fm/250
Yeah I guess currency exchanges / futures have always been 24/7 as there is always an open market somewhere in the world. Crypto currencies are close to that I guess.
I wonder if equity markets will one day move to always on, I hope they do.
With more investment options such as crypto currencies, I wonder if they will eventually do it to stay competitive to investment cash.
Nothing worse than pre-market and after hours shenanigans in equity markets, can't pull that in an always on market.
Side note: one of the absolute killer features of crypto currency markets is finally we have an always on market. Stock markets and exchanges still operate in the old days of the hours of the day in the country they are based in, crypto currency is an always on market which is nice because it eliminates the after hours/before open games that go on with stocks.