It is impressive that Coinbase took VC money as recently as 8 months ago according to Crunchbase and they are now funding other companies. Although I am not sure I would love that if I was an investor in Coinbase.
I agree -- BTC is an extremely volatile speculative vehicle. God only knows if it will be worth nothing or everything in 12 months, but everyone with two brain cells to rub together knows not to treat it as a currency.
this - the real headline here is that this is the top idea in their mind, over all the other things they could be doing with their time - what are they terrified of?
they don't have to be terrified of something, i assume. It's more like they have probably grown enough that they see this as the best use of extra capital.
A lot of startups do this with their extra cash when a more thriving ecosystem in whatever area they operate in will directly help them. E.g. Slack has a fund investing in chat bots.
First, it's unconfirmed. What exactly does "industry sources" mean? That someone who knows someone who works there said "oh ya we make a billion dollars dude".
Second, it could also mean "gross revenue" in some form.
I don't believe any of this stuff until someone reputable confirms some level of it. Doesn't it seem strange that they made "exactly $1b"? Not $750M, or $1.2B, or $500M, but $1B?
Might still not be that much, if earnings through exchange rate gains were also part of their revenue. btc made what? Over 1000% in that year? If they pooled earlier in the year that are huge gains. If it's only from their 1.5% cut, it is really impressive.
Exchanges are literally printing money. I think nearly a million Ether a day was traded on Gdax at the top.
At $1,400 you're talking $1.4bn a day in trading volume, on (at least) half of which they take a 0.3% fee. That's $2.1m a day, just from ETH. Then there's Bitcoin and Litecoin. Bitcoin probably makes a similar amount. And their "simplified" website on which they charge higher fees.
Most of that $$ was loaded towards the end of the year, so they were in the middle of the raise as it ramped up insanely. They closed the raise before the revenue was hitting that mark, announced it in August, then it turned out to be likely irrelevant when they made another $600m to finish 2017 and no signs of stopping (although slowing) in 2018.
Yes, I can send money to my buddy in the US for a few cents and I don't care about Western Union opening hours or ELIXIR bank session times or whatever really. It's just me, my buddy, and the money. Takes only a few minutes, I can do it whenever I like. Even sundays. And nobody even knows. It's beautiful.
Out of curiosity, what app/coin do you use to go fiat-->crypto-->fiat? I know there are various options, but intereste to know one which can be used easily for this kind of transfer.
I have a local fiat gateway here in my country which I use to convert between fiat / cash, like 4coins.pl or inpay.pl. I suppose most countries have some fiat gateways like this. In my case the exchange usually takes only a few minutes.
Ideally you would not need to convert to fiat as more businesses accepted cryptocurrency as payment, but we are not there yet unfortunately.
And your buddy has to pay income tax on that transaction. And IRS will know later, when his chosen exchange will decide to share their records with them (and they do this).
The buddy would owe taxes on receiving the money like receiving any kind of money (is it a gift etc?). Beyond that they owe capital gains or can take a cap gains loss due to changes in btc price if they hold onto the btc. If they receive it and immediately cash it out the additional potential capital gains taxes would be extremely minimal. I don't really see what the issue is here?
People send and receive money and owe taxes on it, whether it is using bitcoin or dollars or whatever... The difference here are the reasons the parent post said they enjoyed sending the money via btc.
They only owe tax on what they earn through price speculation (e.g. if I send my buddy $1k in Eth, and he sells Eth for $1.2k, he pays tax on $200 only. If he sells for $0.8k, it's a loss, and he can do the tax writeoff on the $200)
LOL just like everybody pays all their taxes on gifts right? Do you know how Monero works? Monero is completely private and there's too many exchanges for the government to audit them all, and besides that the laws are bound to change in the near future as crypto-currency becomes more viable. Stop being so cynical, it's a poor long-term life strategy.
what I'm saying is that anybody who gives somebody five dollars is technically supposed to pay taxes on that, but when's the last time you did that? "Tax fraud" is rampant if you're going strictly by the book, it's not just limited to crypto-currencies. (But the fact that you attempted to make that point isn't surprising considering Hacker News in general seems to be very cynical towards crypto-currency)
- Power consumption
- Media headlines
- Gambling
and guess the security aspect is kinda neat, but feels like this needs to evolve quite a bit more first. Future still looks interesting.
Most likely due to relatively low percent of "business" people and relatively high percent of "tech" people here. Blockchain is really not the bestest amazing thing as some people describe it.
The blockchain is the least interesting aspect of what makes up the public cyptocurrency networks. They are a nice combination of distributed consensus + PK signed transactions that produces a very good UX.
“Very good UX” doesn’t really describe interacting with public cryptocurency networks for me between the security concerns, transaction times, and obscure address names. Is there a particular use case that you have in mind where that’s an improvement on the status quo from a UX perspective?
Are you including signing up for a credit card or bank, making sure you don't have inactivity fees in your checking account, paying your bills on a monthly basis and incurring late fees and credit score dings if you don't?
Yup, all-in the sign-up is roughly the same, the bills are pretty easy to keep paid, and fees are far less inconvenient than the possibility of losing control over a financially-significant private key.
I don't think that aspect of centralized banking infrastructure has "very good UX" either. I could imagine something like PGP where the key management around hardware wallets and an interface like https://etherscan.io/ was serious UX improvement, but wasn't broadly disseminated knowledge yet.
> You may also see us invest in companies that ostensibly look competitive with Coinbase. There may be nuance to the way these startups are building out their products. Or, in some cases, we may be comfortable investing in companies that are potentially competitive, because it’s in everyone’s interest to see the ecosystem innovate. We’re taking a long term view of the space, and we believe that multiple approaches are healthy and good.
In other words, everyone else in SV has conflicts of interest when it comes to funding startups from corporate entities (GV, SalesForce Ventures, angels who work at big corps, etc) and we're just gonna come out and be somewhat explicit about it...and well hey it's crypto, so there's no rules anyway!
Seems wrong to invest in companies and not serve your own customers first. That should be the absolute priority. You're basically investing their money.
Bragging about first response metrics is a little disingenuous when most of those are automated replies. To answer the question, support is still a disaster and why I left Coinbase last month.
Yes, the 95th %-ile of time-to-resolution would be a far better metric, although you would need to correct for the fact that open unresolved cases are right-censored.
Yeah, I got a first response within a few hours...... To a message about a critical accounting error Coinbase reported to the IRS. I sent the message in early March and -- perhaps unsurprisingly -- I haven't heard back since. It's cool, though. It's not like all of this paperwork is due like, in less than two weeks or anything.
While Coinbase might have scaled their support, it’s also important to highlight than the number of tickets received in the first 3 months of 2018 is nothing compared to that of the end of 2017 (the Bitcoin network fee crisis).
Given the size of the support team now, would Coinbase still get backlogged if we were to have a repeat of that time?
You can only grow an organization so fast, and it's unlikely that money is the bottleneck for Coinbase's scaling challenges. Throwing money at problems only helps so much.
So if they're growing as fast as they can to handle demand and take care of their customers, but they still have a huge (growing) pile of cash, why not put a few people on a team to look for places to invest that cash where it'll get a return and help the ecosystem that your company is built on?
Like this company as a customer and admire them as an entrepreneur. They are smartly run.
But, it does bug me a bit that "traditional money" is once again co-opting and effectively centralizing what was supposed to be a democratizing, de-centralized paradigm shift.
Primates gonna prime. In many ways, Bitcoin was a technological solution to a social problem. But the primate dominance dynamic is, like most things that predate humanity, pretty baked in. It's hard enough to fight that when you're explicitly working against it, as with the origin of the various western democracies. Doing it as a technological bank shot is even trickier.
Alas, I don't think they are end-runnable. Their whole business is end-running whatever system exists so as to maximize their own profits. And they're very good at it; their rake has quadrupled since WW II: https://blogs.wsj.com/economics/2011/12/10/number-of-the-wee...
Oh, agreed. I definitely think we should keep financiers and rentiers on a much tighter leash. I just think we have to do it explicitly and politically.
Why do admire them so much. They are one of the worst exchanges when it comes to customer support and there are massive complaints about them holding vast amounts of money of customers hostage?
Then comes insider trading during the BCH launch in addition. Coinbase isn't well liked in the crypto community and numerous questionable practices definitely can quickly backfire.
I've had a good experience as a customer. On the business side, they've navigated a difficult landscape and gone from zero to printing money in virtually no time. It's hard not to admire that if you're an entrepreneur.
I'll caveat that by saying that if they've managed it via shady practices, then it is not admirable. However, I have only heard rumblings here or there (admittedly, I am not hyper-plugged into the crypto community). But, given the volume they are said to be doing, issues seem far from widespread, relatively speaking.
I may be biased though: I've built and run a business where I've bent over backwards to go well beyond what could be reasonably expected at significant expense to the business, only to have a relative handful of unreasonable people impugn our company and even my personal integrity. It's a constant and these people tend to be very vocal, whereas the hordes of satisfied customers tend to quietly say thank you. So, I tend to filter for that.
As for customer support, their growth was meteoric and I'd expect there to be scaling pains. Customer support in particular is difficult to calibrate from the outset because needs are uneven and also tend to spike around policy changes, etc. You eventually pick up on patterns, learn to identify and develop support for oft-asked questions, etc. Then, you have to hire, develop and communicate processes, etc. Unlike with scaling other processes, the timeline for this is very visible to customers since they are typically waiting on the other end for a response.
Hopefully they invest heavily into making blockchain technology green and energy efficient because without doing so, you can't "help billions of people".
Right now PoW blockchain doesn't require energy consumption to scale with # of tx or even total value tx, but rather with value tx * time spent waiting for confirmations * probability of double spend attempt.
Unless we start seeing cartels that would aggregate tx that they'd like to see double spend having a long tail of users and tx means that the likelyhood that you'll be targeted for a double spend attack decreases.
All that to say that you don't necessarily need to increase the electricity spend to extend the same security to more people.
How many blockchains aren't using proof of work? There are large mining operations everywhere for various cryptocurrencies (the largest most popular ones!) taking large amounts of power and greatly contributing to climate change.
> The graphics card shortages proves my point here.
Oh man, do you think if the popular coins start moving to proof of stake, used graphics cards will flood onto eBay and the like and we'll get to snap them up cheap for some machine learning?
You probably don't want to use graphics cards that have been abused mining cryptocurrencies in generally poor thermal conditions.
Floating point math errors similar to the recent Titan V issues could potentially mess with your machine learning.
Regardless, if it has been mining for some time, the lifetime of the card is greatly shortened, if the operator did not take precautions such as running undervoltage and designing a good thermal solution. Most people will not have done these things!
Do you have proof that mining reduces card life outside of mechanical fan failure?
Anecdotally, I've been running 12 RX480's to mine ethereum since AMD launched the cards some year(s) ago. They're still just as fast as the day I got them. What in your opinion would make the cards fail at this point?
If anything im inclined to argue that reduced thermal cycling will result in these GPU's lasting longer than cards that get torched to 100% to game for an hour every day and then sit at idle the other 23 hours.
Almost all the new ones inclusing 3rd gen block chains don't, e.g. IOTA, Nano. They use PoS or a PoS/PoW hybrid, thus leading to 1/1000th of the energy consumption or 1/1,000,000.
Vitalik's tweet was a call to direct effort to more important projects (quoting Vitalik directly):
- So total cryptocoin market cap just hit $0.5T today. But have we earned it?
- How many unbanked people have we banked?
- How much censorship-resistant commerce for the common people have we enabled?
- How many dapps have we created that have substantial usage? Low added value per user for using a blockchain is fine, but then you have to make up for it in volume.
- How much value is stored in smart contracts that actually do anything interesting
- How many Venezuelans have actually been protected by us from hyperinflation?
- How much actual usage of micropayment channels is there actually in reality?
- The answer to all of these questions is definitely not zero, and in some cases it's quite significant. But not enough to say it's $0.5T levels of significant. Not enough.
Market cap is misleading. Example, this week. The market cap of one first 100 coins, as seen at coinmarketcap, grew with $3M because of a trade of $2000.
The reason is simple. Say 1 coin is valued yesterday at $1, there are 300M coins, so the market cap is $300M. The total coin trade today was such that one instance when somebody bought at $3/coin, for $2000, makes the coin price today to be $1.01 and $0.01 X 300M coins = $3M so called growth in market cap.
A scalable solution to one of these problems will likely experience exponential growth (product market fit). The current market cap (and volatility) reflect this.
I believe VB's statement was: are we building a successful platform or allowing speculation to drive the value. In my opinion, VB believes in Ethereum / crypto, but he wants more developers to improve the platform and build on it. This is in line with Coinbase's stated vision.
Coinbase still didn't implement transaction batching.
Whenever Bitcoin's price drops for a few months the company forgets that its system needs to be solid and scale 10x for the next bull run. They should be already be preparing for Schnorr signatures support (not a year after it's in production). There's a lot of things they could do to solidify their business instead of spraying money around.
This is the fault of the bitcoin project, not coinbase. Bitcoin transactions should just work without the end user not having to worry about what's under the hood. Why the bitcoin client cannot just use segwit / schnorr automatically? Why it doesn't provide a simple API for batching? All that stuff is up to the end user to develop.
I don't want bitcoin to go up, because it attracts the wrong type of people.
Bitcoin should go up when the technology is ready to handle the increase in demand. As it stands right now it's not ready yet.
If people want to store their investments into a much more centralised crypto currency like Eth then they can go ahead. not my problem. I also hear Ripple is pretty good at handling massive scale, same with Doge coin.
Coinbase only supported Bitcoin Cash support after some backlash. They'd previously announced (pre-fork) they would not be supporting it and that you should withdraw your Bitcoin if you wanted access to the forked currency post-fork. Did Armstrong publicly change his mind?
They could have handled it much better. It was very pathetic for a multi billion dollar company.
Also Coinbase has stated that they want bigger blocks. They have not contributed at all to the development of 2nd layer scaling like LN. They also took too long to finally adopt Segwit.
For Coinbase, it's much easier to increase the blocks. This means they don't have to invest in their own Bitcoin infrastructure to make it more efficient.
I wouldn't say he's anti Bitcoin but I would say he's anti core. He's been paying attention to core's intentional failure to scale since the early days of the block size debate. Here's an article where he's trying to get support for non-core clients.
It's hard not to be anti core, given the time they've taken to actually make changes to.. anything. A decentralised store of wealth will probably end up working, but a decentralised governance model (unless the software is mostly finished) poses significant challenges.
It's about aligning your expectations. Do you know how the Bitcoin Core operates? They are extremely conservative. If you want Move fast and break things, then Bitcoin is not for you.
Follow him on Twitter, it's pretty obvious by looking at the things he likes on there. Just today he liked some non sense that Roger Ver posted. Coinbase also wanted bigger blocks.
Coinbase has become a giant on the back of the work of Bitcoin Core developers and will continue to do so however, they have given NOTHING back to Bitcoin Core. Not a single BIP, they don't sponsor any core developers and they are not helping at all with Lightening Network.
It's very easy for them to sit back and complain about the state of Bitcoin, but Bitcoin is an open source project and they have the money to invest some money into Bitcoin core to improve it. But they rather prefer to pump shit coins and engage in insider trading. In my opinion Armstrong doesn't care about Bitcoin, they are short sighted and don't believe in the long term vision of Bitcoin.
If you compare core to the Ethereum community then it really is a world of difference. They both have their problems, but from a development point of view, one tends to be open and embracing of changes, and the other one is often hostile and inflexible.
This thing is exactly why i want this endeavor to fail. I don't know who the guy is but it seems like an attempt from an SV millionaire to capture the future cryptomarket value (SV has already captured the entry gates with coinbase, it seems). I thought cryptocoins were not about being territorial. They 'd better use their energy to create easy to use crypto solutions for commerce / websites.
