Update for customers with Bitcoin stored on Coinbase
blog.coinbase.com
blog.coinbase.com
Their decision is rational even if you don't view them as an influencer. If the fork dies, they were smart to ignore it. If it thrives, they can add support later and nobody but short-term traders (who wouldn't have kept their funds in Coinbase to begin with) will have missed out on anything.
They might well decide, afterward, to provide a means of cashing out the "alternate" currency after all. But even if they do, and even if they plan to at this point, there's PR value in them not saying that.
As you say, Coinbase is a respectable firm, and it seems unlikely it would choose this tactic. But it would be consistent with a strategy to ensure the fork fails to thrive.
I can't see how the BCC price can go anywhere but down if all Coinbase customers suddenly gain this ability ("Do you want extra BTC. Yes/no?").
That's exactly what I want. (That or a "convert BCC to cash" button, they're equivalent.) They already charge transactions fees. Just write a careful announcement saying something like "due to the nature of the fork, anyone with 1 BTC at time X is entitled to 1 BCC as well, and we're providing a service to cash in that BCC for you".
0) https://steemit.com/bitcoin/@kingscrown/if-you-were-not-awar...
Easiest thing is to just give the user access to the new chain and it's "parallel"-coins. Then he can decide when and how to sell them.
That was the point.
Yeah, wasn't their original pitch to be the "Gmail of the Bitcoin world" or something like that. The warm blues, friendly emails, YC backing, etc all point in that direction.
This cannot be underscored enough if BitC* is to be used for anything more than modern day drug dealing. The paper trail is important for things like paying taxes, and obeying sanctions[0] that businesses follow.
[0] https://www.treasury.gov/resource-center/sanctions/SDN-List/...
The value of BTC after the fork will presumably be the value of BTC + BCC after the fork. If BCC has any value at over the coming months, then that is effectively yours but inaccessible. And if it retains value, Coinbase is going to be in a very awkward situation where they're sitting on an asset that may or may not be yours any more.
-- EDIT:
Actually, the savviest move is probably to sell. Coinbase's position mean that it's more than likely that a lot of BCC is inaccessible even if it has value. That means BTC drops with no way to recover the lost value. Either the value of BCC drops to zero (and BTC recovers over time) or Coinbase eventually releases BCC (people who held it get BCC equivalent to the loss in BTC value). Either way if you sell immediately before the fork and purchase when it drops, you should retain the lost BCC value.
(This assumes that BTC itself doesn't lose out).
Given those assumptions, you might break even (or gain if you're particularly quick/smart) if you sell the BCC after the fork, but it would seem like you near guarantee a profit if you sell BTC before and buy back after. That profit is off the back off value locked up in BCC by users who didn't pull it out.
Compare around July 20, 2016:
I'd be interested in knowing if this were the same with Ethereum (Classic), since I would assume it would put a large selling pressure on the minority fork (the greater the minority the greater the relative selling pressure).
However there's no saying what exchanges will do in this case.
If you have your own BTC you will have BTC and BCC after the fork which you can sell.
Yes. There was no replay protection (transactions were valid on both chains) but soon after the fork people created smart contracts that got initialized to a different state on each of the chains. So you could, e.g., send your coins to the smart contract which then would forward it to your address A on the first chain and to your address B on the second chain.
Of course this stuff swings all over the place - you're as likely to get stung by some random swing in values as anything else I guess.
'wipeout' is a total longshot and we ought to be able to see it coming. either way it's not really a problem unless you have transactions on both versions to reconcile, and you can avoid that by simply not spending coin for a couple days. Coinbase can't just freeze everyones coin so having to reconcile with a fork after it achieves majority hashrate would be a real nightmare.
I'm not going to, I'm just curious if anyone provides options for these speculative assets.
Disclaimer: I've never used them and don't know how credible they are. In my mind everyone in the Bitcoin space should be approached with caution.
Why not allow deposits of USD instead of the USDT workaround, you may ask? My theory is so that the exchange is not subject to the same level of oversight as it would if it accepted dollars - look at the BTC-e situation for example. What's amazing about Poloniex is that they're one of the most popular Bitcoin/altcoin exchanges, and almost nothing is known about those running it (it's US based).
Is Tether a centralised currency or a crypto currency?
I've been long-only, thus far.
Anyone can create an altcoin fork of Bitcoin at any time, and they can do it as many times as they want. Coinbase may not even know about it.
ABC isn't the first fork to award coins to existing Bitcoin users, there have been several others like Clams and bitcore (https://bitcointalk.org/index.php?topic=1883902.0) (how deceptive these jerks are...).
In spite of the seriously short notice coinbase had done an admirable job taking a clear and consistent position and communicating it to the public. It's a position that can be applied to any further such events. In ABC's case they took serious bludgeoning just to get the most basic replay protection into place-- and they still have many unnecessary conflicts with Bitcoin: duplicate address types, duplicate p2p port, duplicate p2p magic, duplicate data dir... all making it unnecessarily complicated and risky for people who want to use their altcoin.
Consider if they went another way-- what about the next one? and the one after it? People could effectively flood them with them, a fork a week-- forks that contain malware backdoors that steal Bitcoin keys, forks that will never have more than a few dozen users. forks that are only publicly announced months after they split off (but pretend to have been public all along).. etc.
No one can reasonably keep up with that. If you want to chase some of these silly things, that is your decision-- one which you have the freedom to make by keeping your Bitcoin's in your custody. Expecting other people to deal with those potentially unbounded costs on your behalf wouldn't be reasonable.
the original client is here https://github.com/bitcoin/bitcoin
Or are the Segwit chains completely irrelevant here?
No, segwit is an optional backwards compatible protocol extension that people can choose to use... not a fork. You can bridge an original bitcoin node onto the network using segwit and modulo segwit unrelated software bugs that just make it get stuck, it will reach consensus with the network fine.
It is true that BCC will be a continuation of the original chain, and it is also true that in some substantial sense bitcoin cash can be said to be a continuation of the original bitcoin blockchain and incentive model to a greater degree than bitcoin core will soon be, as bitcoin core moves over to segregated witness with a "block weight cap" rather than "block size cap".
I therefore rate MichaelBurge's sentence "BCC is not actually a fork but is the original chain/software, isn't it?" as false (it is a fork), true (it is a continuation of the original chain), and true (it is a continuation of the original software).
Aside from the timing of the announcement. A few days isn't enough warning for something like this, especially with how long it can take to withdraw.
Just a couple weeks ago this "UAHF" thing was something Bitmain saying they would only do if BIP148 resulted in a split chain (which seemed pretty unlikely).
If BCC is even 10% as valuable as the main chain(Ethereum Classic is still at ~$15 vs. $200 for Ethereum main, it looks like), then why wouldn't people take the free money?
A "run on the bank" would be annoying for them because it would mean they have to pull a bunch of money out of cold storage. But I suppose allowing BCC withdrawals would have the same problem, and might add even more risk since there'd be temporary code involved.
I wonder if they plan to sell customers' unclaimed BCC for themselves if it later retains any significant value.
They are at least consistent: They did the same thing with Stellar earlier. Which makes sense, since there seem to be a lot of fork-like ways to get alternative cryptocurrencies if you hold Bitcoin, and it's probably less hassle to not deal with each unique situation.
- If BCC really goes to zero, nobody will care and it will fizz out.
- If BCC has value, users can benefit from that value like the rest of the ecosystem.
Frankly, I don't see how what they're proposing is even legal.
That said, Coinbase has played the regulation game better than anybody else (they're the only entity allowed to sell cryptocurrency in New York last I checked) so credit where credit is due.
Unless of course Coinbase plans to run away with everyones money long before the class-action suit is filed.
Because they also want to make a statement to influence the viability of the forked coin.
Downloaded Bitcoin-core for OS X, went to Receive and got a QR code, pointed the Coinbase App at my screen and sent the funds (tested it first with a few dollars worth). Then did the big bucks.
Note: the most painful part was downloading the entire block chain. Took many many hours.
Copied the wallet.dat to a few other hosts and I'm done. Hopefully this will be helpful to anyone else on the fence.
IMO, they're neither good nor credible custodians of their customers' assets.
Sounds like time to call the local Nope dealer and tell him he's got some stuff competition.
To be clear, Coinbase should have adequate Bitcoins on hand to cover 100% of customer balances. Even if every single customer withdraws every single Bitcoin, the only effect on Coinbase should be a few engineers, accountants, and customer service people getting overtime ensuring the process goes smoothly (e.g. by manually taking coins out of cold storage, answering phones, double-checking balances, etc.).
This is a very different thing than the traditional "run on the bank" scenario where the bank potentially ends up bankrupt because they don't actually have the funds to cover every deposit.
This applies to all online wallets and exchanges. You should have all Bitcoins in your own off-line wallet before the fork. Then your coins are available on both blockchains.
Look what happened when Etherium forked. Etherium Classic is still around and tradable. It dropped, but not to zero. Why give up that value? Bitcoin Cash might get some traction. If not, you haven't lost anything.
The most simple way for coinbase to distribute the coins would be if coinbase "listed" the forked coin. They would also be compelled to do this when other coins airdrop based on holdings of BTC (eg. Stellar and Byteball). This would set a precedent resulting in large numbers of ropey forks and altcoins trying to do drops to push coinbase to list them.
In 20 years maybe it won't be so uncommon to have 20TB lying around, but I know I don't have a lot of things on my computer that take up more than 1TB and only ever grow. I certainly won't have two of them...
I'm not being disingenuous, I had coins in a cold offline wallet, and it was a serious endeavor to get them out to where I could spend or cash them. I had to spend days downloading a block chain and the only thing that kept me from freaking out was that I knew this would work, having done it plenty of times when the chain was shorter. I couldn't find any way to retrieve coins from a wallet.dat without downloading the block chain first. I had thousands of dollars tied up for days while I waited.
I can't imagine what it would be like when the block chain was 8x its current size, or if I had more than one cold wallet and I needed to empty all of them in any kind of a hurry (like, in time to capitalize on a bubble before it pops!)
You basically get free money if you withdraw, because you can split the coins so that they can be spent on both chains. But you need to be able to do this without messing anything up, which has gotten more difficult since 2013 or whenever.
Wallets have new features to protect privacy, but the trade off is that they are more dangerous to work with. A few years ago the best practice was to make a cold wallet and then delete the private key from your computer, but doing that with a modern wallet can result in losing all your coins.
If you have it on your own, you can technically use it on both chains independently. The history breaks August 1st. From there are on it is basically two currencies.
Though in general you should keep your bitcoin close to home. If Coinbase gets hacked or just ceases operations your money could just be gone if the fallout is lost in litigation hell.
A very small futures market is predicting about 20% of the current BTC value to go to BCC. If that's correct, you'll miss out on about 20% of the value of your holdings if you don't withdraw prior to August 1st. This number is very uncertain though, I think it could end up being anywhere between 5% and 50%.
In my opinion, market cap is too superficial to capture what happens in the market. A better measure would be market depth: how many coins can you sell into the market before the price goes to zero? This figure very well might split into two, since otherwise it would require action on part of the market makers, i.e. entering the BCC/USD or BCC/BTC market.
https://www.reddit.com/r/Bitcoin/comments/6q0hx8/psa_coinbas...
> 7.2. Arbitration; Waiver of Class Action.