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Merged Bitcoin - Part 3

ChrisBFRPKY said:
A transaction on Coinbase is instant, no waiting if your coins are already there. As are transactions for the crypto based cards instant. The transactions on the cards actually clear faster than normal card transactions from a bank.
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What happens if\when Coinbase joins the dozens of bitcoin exchanges that have ceased to exist? ;)
 
lomiller said:
What happens if\when Coinbase joins the dozens of bitcoin exchanges that have ceased to exist? ;)
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Same thing as if/when your bank ceases to exist. They're US based and FDIC insured so Uncle Sam turns over your cash same as if your bank failed. They'd also have to return your assets in this case Bitcoin or other coins you have there, same as your bank would have to return your safety deposit box contents etc.

Overseas exchanges are known for fly by night activities and you can bet they're not regulated by US banking or exchange laws. It's best to stick with a US based company.
 
ChrisBFRPKY said:
Same thing as if/when your bank ceases to exist. They're US based and FDIC insured so Uncle Sam turns over your cash same as if your bank failed.
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https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured

Digital currency is not legal tender, is not backed by the government, and digital currency accounts and value balances on Coinbase are not subject to Federal Deposit Insurance Corporation or Securities Investor Protection Corporation protections.
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The do have some "insurance" provisions, but this mainly takes the form of USD accounts and USD denominated holdings .IOW they don't really hold bitcoin, they hold other assets. This could be a potential issue as well because with the increase in bitcoin prices these USD denominated assets cover less than the actual bitcoin that was deposited on the exchange.

https://www.investopedia.com/tech/coinbase-what-it-and-how-do-you-use-it/

Coinbase provides insurance by pooling Coinbase balances and holding them in USD custodial accounts, USD denominated money market funds, or liquid U.S. Treasuries.
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lomiller said:
https://help.coinbase.com/en/coinbase/other-topics/legal-policies/how-is-coinbase-insured



The do have some "insurance" provisions, but this mainly takes the form of USD accounts and USD denominated holdings .IOW they don't really hold bitcoin, they hold other assets. This could be a potential issue as well because with the increase in bitcoin prices these USD denominated assets cover less than the actual bitcoin that was deposited on the exchange.

https://www.investopedia.com/tech/coinbase-what-it-and-how-do-you-use-it/
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Coinbase definitely does hold Bitcoin. You are mistaken on this point. They may not hold cash.


They do not convert your Bitcoin into cash and invest it. What would happen if the price of Bitcoin increased? How would they rebuy?


If you'll check into it a bit further about the good old "safety" deposit boxes at your bank:

"A safe deposit box is not a deposit account. It is storage space provided by the bank, so the contents, including cash, checks or other valuables, are not insured by FDIC deposit insurance if damaged or stolen. Also, financial institutions generally do not insure the contents of safe deposit boxes."
Coins in Coinbase are covered by insurance and you'll get those back. I think that's much better than the bank option of uninsured deposit boxes.

Again, if Coinbase were to go bust they'd have to return your cash (FDIC) and assets even if they were stolen. In contrast if the bank goes bust they would have to return your cash (FDIC) and contents of safe deposit box UNLESS IT WAS STOLEN, in which case you're SOL with the box contents.
 
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FYI

There have been coordinated Bitcoin short squeezes taking place over the last couple of hours.
 
ChrisBFRPKY said:
Coins in Coinbase are covered by insurance and you'll get those back.
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They can't get back bitcoin that has been transferred out of the companies wallets. The only insurance comes in the form of holding assets other than bitcoin.

Depending on how much reserve they have in other assets they may be able to pay out a few pennies on the dollar. As you yourself pointed out, it's impossible for them to be holding enough other assets to pay out the full market value of bitcoin that has been signed over to them.
 
lomiller said:
They can't get back bitcoin that has been transferred out of the companies wallets. The only insurance comes in the form of holding assets other than bitcoin.

Depending on how much reserve they have in other assets they may be able to pay out a few pennies on the dollar. As you yourself pointed out, it's impossible for them to be holding enough other assets to pay out the full market value of bitcoin that has been signed over to them.
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You're making an issue out of something that does not exist.

Coinbase has secure hot wallets online, and offline cold storage for Bitcoin.

They do not trade nor invest with your BTC.

Cash reserves are another matter. I'm sure they have lucrative banking deals in which they make money from holding customer cash deposited. I would.
 
Well, I still don't know anything about what really drives bitcoin or crypto in general, but I do know I personally love the stupid digital currency! I haven't bought anything with it or used it in any way; but, dang! Over the last couple of years, I slowly bult my bitcoin holding, a 10th of a coin, here, another quarter coin there. At the time I was buying, it's value was ranging from 3k-7k and I would just look for it to dip and buy a little. I ended up with a little over 6 bitcoin total (including 3 I bought at ~$15 and never sold) and then I thought, what the hell am I doing gambling so much on such a volatile thing? So I just held on to it. Well, I wish I had had the guts to gamble and buy more. This morning, I sold 4 bitcoin at right over $47000 per. I am very tempted to sell my last two coins, but what the hell? At this point, I can hold a little more.

I still have 300 Electroneum coins that have actually declined significantly in value since I bought them like in 2017 or 2018 at about .01 a coin. I also have a bunch of free coins that coinbase gave me just for watching videos to learn about them. I got like $6 worth of Maker coins (and traded a bunch of other free coins for Maker) in December when it was valued at around $500; it's now worth about $2500. I got $10 worth of Stellar Lumens (XLM) in November when it was worth .05; it's now worth .46. At my son's urging, I bought some Doge on a lark (5000 coins) when it was worth less than a penny; it's now worth .07.

So yeah . . . don't ask me what the hell any of those coins are actually good for or where I can use them. Instead, ask me how awesome my new Tesla is . . .
 
ChrisBFRPKY said:
A transaction on Coinbase is instant, no waiting if your coins are already there. As are transactions for the crypto based cards instant. The transactions on the cards actually clear faster than normal card transactions from a bank.
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If one of the big features of bitcoin is intermediary-less transfers then it isn't logical to make a feature of the fact that you can use a third party to help speed up your transactions. You can also use the Ripple or Stellar network to make transactions faster but you still need to be able to trust the intermediary that you run the transactions through.

Better to admit that Bitcoin isn't especially useful for over the counter transactions. Bitcoin is designed to take mistrust into account so you aren't going to find too many merchants who will accept zero confirmations before letting go of their wares.
 
xjx388 said:
Well, I still don't know anything about what really drives bitcoin or crypto in general,
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I imagine part of that is the same thing as Dutch 17th century, tulip bulb trading

What Was the Dutch Tulip Bulb Market Bubble?
The Dutch tulip bulb market bubble, also known as 'tulipmania' was one of the most famous market bubbles and crashes of all time. It occurred in Holland during the early to mid 1600s when speculation drove the value of tulip bulbs to extremes. At the height of the market, the rarest tulip bulbs traded for as much as six times the average person's annual salary.

https://www.investopedia.com/terms/d/dutch_tulip_bulb_market_bubble.asp
 
Matthew Ellard said:
I imagine part of that is the same thing as Dutch 17th century, tulip bulb trading
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Wow! I have never heard of this before - apart from the thousands of times it has been brought up in this thread.

For those who have been paying attention, what is the difference between the tulip mania and bitcoin?
 
psionl0 said:
If one of the big features of bitcoin is intermediary-less transfers then it isn't logical to make a feature of the fact that you can use a third party to help speed up your transactions. You can also use the Ripple or Stellar network to make transactions faster but you still need to be able to trust the intermediary that you run the transactions through.

Better to admit that Bitcoin isn't especially useful for over the counter transactions. Bitcoin is designed to take mistrust into account so you aren't going to find too many merchants who will accept zero confirmations before letting go of their wares.
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I agree that there are faster products than Bitcoin. However, there are cards available that allow you to use your deposited Bitcoin as if it was cash in the bank. A store of value.

By using Bitcoin as a store of value, then combining that with the convenience of a bank card, it's no issue to buy a cup of coffee instantly with that card. In the end you are using your Bitcoin to pay for the coffee exactly the same as if you were using a bank card funded by cash deposits. Except the Bitcoin funded card clears faster than the cash funded bank card.

Also with a BTC funded card, you may find you have more available cash value at the end of the month than you had at the beginning. Not many bank cards can do that.
 
xjx388 said:
Well, I still don't know anything about what really drives bitcoin or crypto in general, but I do know I personally love the stupid digital currency! I haven't bought anything with it or used it in any way; but, dang! Over the last couple of years, I slowly bult my bitcoin holding, a 10th of a coin, here, another quarter coin there. At the time I was buying, it's value was ranging from 3k-7k and I would just look for it to dip and buy a little. I ended up with a little over 6 bitcoin total (including 3 I bought at ~$15 and never sold) and then I thought, what the hell am I doing gambling so much on such a volatile thing? So I just held on to it. Well, I wish I had had the guts to gamble and buy more. This morning, I sold 4 bitcoin at right over $47000 per. I am very tempted to sell my last two coins, but what the hell? At this point, I can hold a little more.

I still have 300 Electroneum coins that have actually declined significantly in value since I bought them like in 2017 or 2018 at about .01 a coin. I also have a bunch of free coins that coinbase gave me just for watching videos to learn about them. I got like $6 worth of Maker coins (and traded a bunch of other free coins for Maker) in December when it was valued at around $500; it's now worth about $2500. I got $10 worth of Stellar Lumens (XLM) in November when it was worth .05; it's now worth .46. At my son's urging, I bought some Doge on a lark (5000 coins) when it was worth less than a penny; it's now worth .07.

So yeah . . . don't ask me what the hell any of those coins are actually good for or where I can use them. Instead, ask me how awesome my new Tesla is . . .
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:thumbsup:
 
a_unique_person said:
Losing your password.
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This is a great point and a likely culprit leading to the loss of many BTC. For those who choose to keep their Bitcoin at home in a wallet. Make sure to record your password in a safe but memorable place(s).


Make a copy your wallet.dat file found in the Windows "roaming" folder and place copies on multiple jump drives. Place them in separate but memorable place(s). Have a backup plan for every foreseeable mishap. "What if the house burns?", "What if my hard drive fails?", go to plan B etc.

This may seem a bit silly if you only have a few sats of a BTC, but if you have a few hundred or a few thousand BTC it's perfectly reasonable to entertain a bit of paranoia while forming a security plan.
 
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