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Comment by aresant | Hacker News Reader

Most fascinating to me has been Coinbase's position throughout this.

Which was essentially they are treating the new Bitcoin cash as a shitcoin, aka not supporting it.

They took the position that if you want your "free" Bitcoin Cash, move your BTC out of Coinbase.(1)

This led to the inevitable service decay & delays that CoinBase has become well known for in the bitcoin community whenever leading up to a high volume event. (2)

And yet their internal PR team has given somewhat measured responses that "if Coinbase decides to support Bitcoin Cash in the future, it will distribute the balances that accrue at the time of the August 1 fork." (3)

The article w/that nugget goes on to state that when Ethereum split "Coinbase eventually let customers withdraw their share of the new currency, known as "Ethereum Classic," even though it still does not allow it to be bought and sold on the Coinbase site."

Seems like a risky bet not to just say something closer to "Hey if Bitcoin Cash is a thing and worth more than 1% of the original BTC we'll support it. If it's not at the end of 90 days we'll give you a way to take it out either way."

Judging by the volume of concern and disdain from newbies in the Bitcoin forums a lot of people got woken up by this event and what it means to have your decentralized currency controlled by a central authority.

(1) https://blog.coinbase.com/update-for-customers-with-bitcoin-...

(2) http://bitcoinist.com/mass-exodus-from-coinbase-spawns-12hou...

(3) http://fortune.com/2017/07/31/bitcoin-fork-coinbase/

View on HN

Coinbase CEO here - apologies for the confusion on that.

I certainly wouldn't say we are treating it as a "shitcoin". I tweeted out a few thoughts here to share how I think about it:

https://twitter.com/brian_armstrong/status/89248668753155686...

Hope it helps. Thx!

That's fine but there is obviously demand for BCH trading and by not supporting it, Coinbase/GDAX is forcing otherwise happy customers onto competing platforms.

Definitely wish Coinbase had just taken care of it for me. Instead, I withdrew everything to a personel wallet and will be depositing my BCC to Kraken. I'll probably just deposit my BTC to Kraken as well since I'm going through the trouble. I like that Kraken will give me access to a bunch of other coins to get exposure to. On the plus side, all this is motivating me to deepen my understanding of the cryptocoin tech/ecosystem.

Did the same, but from. Bitstamp to Kraken (Bitstamp took the same position as Coinbase). Kraken supports USD now, which it didn't used to last time I traded there, so I'll probably just stick with Kraken.

I imagine most of the exchanges that didn't support BCH are going to lose a lot of customers over it.

Folks like us voicing this stuff may make them rethink things and they retroactively make it right for the people who didn't bother to be proactive. Which would then just add insult to injury for us! Well at least I got some good experience out of it...

Honestly this seems like an off shoot thread to try to submarine and try and give legitimacy to the fork while taking swipes at those that opposed it.

I didn't know much about the fork up until a few days ago, but I did know to make sure I unloaded everything off of Coinbase if I wanted to benefit and double my tiny little bit of BTC since there had been a notice for weeks now about how they won't support it and a cursory Google search showed what you needed to benefit.

...so update -- it came true. Coinbase has buckled under the backlash and will make everyone's BCC available to them. Your welcome to everyone who was too lazy to withdraw their funds. You didn't have navigate the byzantine manual process to claim your coins. :)

The same can be said for other cryptocurrencies besides BTC, ETH, and LTC...

Meanwhile, Kraken supports Bitcoin Cash from minute one:

http://blog.kraken.com/post/1150/bitcoin-cash-and-a-critical...

http://blog.kraken.com/post/1183/bitcoin-cash-and-a-critical...

Here's Coinbase's original statement, which seems to be exactly what the grandparent comment was saying: https://twitter.com/coinbase/status/890986442674941953

"Coinbase does not intend to interact with the Bitcoin Cash blockchain."

Then go to Kraken!

The point is, splits and civil wars cause customer confusion and are harmful for bitcoin adoption. Coinbase is throwing some political weight around by saying "We won't support BCH." Their competitors do, so are customers supposed to think it's a technical challenge to support BCH?

It's just strange that Coinbase either wasn't prepared or sees BCH as a threat. Balkanization of bitcoin is unnecessary. Why refuse to support what everyone else supports? https://twitter.com/Yelka_Pineda/status/891020902066003968

Why exactly should Coinbase support every new altcoin? I seriously can not understand your point.

In my view, as a bystander with no skin in the game, the BCH fork is very much political, so there's no reason why exchanges should not take a political stance in response. It's hardly a question of supporting what "everyone else" supports, Bitstamp has the same position for instance.

>the BCH fork is very much politica

There are political elements, for sure, but the overall reason for it is there are a genuine segment of people who believe segwit is kludge, and on chain scaling is the way forward.

Whether or not those people are correct, this chain represents their version of the bitcoin vision, dismissing it as a political move is a tad arrogant.

Doesn't Coinbase reduce the amount of customer confusion by offering fewer cryptocurrencies to purchase?

It perhaps makes sense from a business standpoint: why support a new coin from day 1 instead of waiting for the ecosystem to mature? Coinbase already doesn't support other coins like XRP or Monero or whatnot.

It's a little different in the case of BCH, as it is with ETC. They aren't mere altcoins. They're forks, and if you owned coins on the chain before the splits, you now own those coins on both forks. Coinbase offers the illusion that you owned actual coins. To be fully faithful to the illusion, coin you owned on Coinbase before the split should have the same properties it would have if you owned the coins on their blockchains.

> splits and civil wars cause customer confusion and are harmful for bitcoin adoption

I agree with this point, and I see Coinbase's comm as trust-building with their (perhaps nonvocal majority?) customers.

The future of this technology cannot work if you must understand the jargon and consequences of a fork (and whatever else can happen), and then form an opinion of your exchanges as a mainstream adopter based upon how they deal with these intricacies. Most people just want something easy to use. Coinbase has allowed that happy path to continue, and I trust them as a result of the manner in which they handled this event.

(Now, for people in-the-know, things are different. But I'd bet that Coinbase's target audience is not blockchain hackers.)

If you believe that splits cause customer confusion, and balkanization is unnecessary, then one way to help this problem is to use all your weight to ensure that BCH fails, not only to fix this split but also to demonstrate for any future splits that they will have little to gain.

Helping the split in any way (e.g. by making the split easier to use or by acknowledging it as a reasonable alternative) means facilitating future splits and future balkanization, driving down long term value of BTC.

Thank you for linking the prior statement. I read it, and disagree with your conclusion that it's the same as the grandparent.

It simply says, not supporting BCC now, but might in the future -- we will not acquire the BCCs for Coinbase.

There is nothing to "acquire" - the private keys are the same, they and they alone already have control over the funds.

"Wait and see" is usually a reasonable stance for companies to take, but in the case of securities splitting in two, withholding the new securities until their value changes - potentially even keeping them yourself - really shows your hand.

Among other things, this split has thrown into relief the stances various exchanges take with regard to their clients, and anyone researching which exchange to use should take a good hard look at moves like this when considering who to invest with.

This is completely off topic, but does it bother anybody else that we live in a world where the CEO of any technologically savvy company disseminates announcements as a picture of text?

Well, that's kind of the de facto standard for tweeting large blocks of text that don't read well as a sequence of tweets.

I think the idea was more along the lines of "Remember blog posts?"

Do any screen readers do OCR or read the comment of a picture for sight impaired users?

It's better than the old days of hearing nothing except press releases.

An executive's Twitter is a press release. Let's not pretend they don't realize we're watching.

No more than a world where college-educated professional programmers communicate using memes and emojis.

It's merely what passes as presidential these days.

Bitcoin cash represents 7-8% of the value of a bitcoin pre-split. How is it user friendly to "tax" coinbase bitcoin holders by that amount? Is coinbase just going to sell those bitcoin cash for its own profit? Some transparancy would be greatly appreciated. Thanks

Answered here: https://twitter.com/coinbase/status/892499250273107968

Will Coinbase keep BCC coins for itself?

No. Coinbase does not intend to support or interact with the new blockchain in any way. If this were to change, Coinbase would make those coins available for customers to withdraw, not keep them.

Makes sense but if the value BCC is at sustains itself, it would make sense that customers see that value as considerable and lost if they can't reclaim it later on.

Ironically, not "interacting" with that chain only serves to create more dead coins and thus push up value. Imagine if the value grows considerably... customers might be changing their tune if they feel that they lost out and feel they were misinformed.

You can bet I'll be removing every last coin I have from coinbase as soon as all of this is over. They gave a whopping three days notice. For those of us who had our coins in a vault, which adds a 48 hour delay to any transfers, this gave almost no time at all to react. In my case, I wasn't able to get it out in time and it essentially means I just lost money. Coinbase of course has no way to get a hold of anyone. I just have to watch my money swirl down a drain.

3 day notice? Did you check your emails from coinbase? I got an email on 7/19 warning about the fork.

The email laid out the process if you want access to the fork.

I got an email mid July

Except it really is a shitcoin. A scam to ensure that the mining pools can keep exploiting ASICBOOST. Ignore it and move on in life.

Nice drive-by propaganda comment that ignores a massive amount of context and subtlety.

Except it doesn't, really. Cuts straight to the point.

Right, because leveraging efficiencies should be a prohibited activity in a "Free" Market system, where said efficiencies cannot be enjoyed by incumbents. Clearly the correct action in such a case is to limit innovation and remove advantages developed by non-incumbents.

Can you fix your exchange/company?

Downtime should be unacceptable and exceptional for a financial marketplace.

On Coinbase however, downtimes and unexpected behavior are common place, and happen multiple times a week.

It's outright fraudulent when you allow your employees to trade during those downtimes.

What the hell.

Appreciate your statement.

Many that left their BTC assets on CB in interest of your core benefits - simplicity, security - will watch with interest for further communication in the coming weeks as price of bt cash stabilizes.

But will you hand over the private keys for the wallets your customers have with you so that they can use the BCH, or will you only transfer money to another BTC wallet and so the ship has sailed?

Anyone who doesn't understand Coinbase's reluctance to add support for BCH, or any other altcoin, needs to understand this hypothetical scenario:

1) I'm a long time miner who owns a massive wealth of Bitcoins.

2) I fund some developers to create a hardfork.

3) I dedicate a small percentage of my mining power to prop up the new coin.

4) Coinbase adds support for the new coin.

5) I deposit all my new split coins at Coinbase, trade for BTC, and withdraw BTC.

6) Using the rest of my mining power I then reverse the depositing transactions to Coinbase by double spending.

7) Profit.

I think it's positively absurd that _any_ exchange is supporting BCH.

But to each their own peril.

6) says that coins with smaller mining pools are more susceptible to double spending attacks correct?

Yes, since it is easier to gain 51% of the available mining power. that's why coins live or die by miner adoption.

It would take a lot of computing power to reverse (at least) 6 blocks worth of transactions.

No, it just takes a miner with >51% mining power. Any of the big pools could do it without flinching.

Not really, if someone had the insane power of 60% mining power, the probability of mining 6 consecutive blocks would still be 0.60^6 only ~4.67%, but this falls exponentially, so if they wait a few more minutes and have to reverse one more block, that's 2.8%

It's just very unlikely this could work. Possible, but very unlikely.

Edit: Also, if you have a very large amount of coins, you probably want to sell it off slowly, instead of tanking the market in one go. This makes it even more difficult since if you're caught reversing the first few transactions, your account will be flagged.

In what world is 2.8% sufficiently small to be ignored?

That's not how the 51% attack works.

If you have >51% of the mining power, you can overpower the rest of the network. Simply pick a block in the past and start mining from there, ignoring everyone else. With >51% of the hashrate you _will_ overcome the rest of the network and enforce your new chain.

They can do it in secret. Build a secret parallel chain while they transact, then release the chain after they've got their BTC.

And 51% is not "insane". It's absolutely tiny. As I said, _any_ of the large pools could do it, right now.

OK I must be missing something here: how can any of the large pools have 51% of the mining power?

How can you have more than one pool, each with more than half the power?

EDIT: OK I see where you're coming from I think... you mean any of the pools could 51% the forked branch, right?

I assume it means any of the larger pools in Bitcoin could switch over to one of the smaller altcoins and overwhelm the much smaller pool of miners there.

Yes 51% of the branch you are attacking. They have hard forked, any bitcoin mining pool could easily control 51% (like 80%) of the bitcash mining worldwide.

I don't follow this stuff closely, so I'm clearly missing an important detail here: how can several different entities simultaneously have the ability to "easily" control 51% of the hashrate?

I kind of think it is a little bit like this.

Imagine a new sport called zoccer. It's just like regular soccer, but if a team scores 5 goals within the 90 minutes, they automatically win the match.

Right now there are only a few small teams playing. But Nike has said they are willing to sponsor a tournament, if there is enough interest.

At any point, Barcelona or Manchester United or Real Madrid or Chelsea or AC Milan or any other large soccer team team can just say "we are now a zoccer club" and swoop in take Nike's money.

They all have the power to switch and dominate the new scene.

Bitcoin (BTC) and Bitcoin-cash (BCH) share the same Proof-of-Work (PoW) algorithm. Thus, mining power is split between these two networks. Most mining power is currently on the BTC, which means that it is at least possible that multiple miners on BTC have more than 51% of the mining power currently deployed on BCH.

Having 60% of the mining power means you mine 1.5 blocks on the "false" chain for every block on the "real" chain.

You don't need to mine 6 blocks in a row against the other miners, you just need to have a longer chain. So you simply fork the chain, and then submit that as the "real" chain.

With 60% of the mining power and a 6 block deficit, you'd overtake the main chain in 120 minutes (approx; 12 blocks), since you're making up half a block of deficit per block they mine.

If you really had 60% of the mining power, you could undo 3 days of transactions in about a week of mining.

You are making a way bigger deal out of this than it is.

Exchanges can quite easily protect themselves.

All they have to do is increase the confirmation time before they "accept" coins.

The longer you wait, the more secure your coins are. I would suspect that a day is easily enough time to be confident that a double spend won't happen.

A 51% attack can reliably undo any number of confirmations.

It is not as easy as that would suggest.

Sure, you can build a longer blockchain, but nothing forces other people to accept that blockchain.

IE, people can checkpoint the chain.

Also, if 51% attacks consistently started to happen, that would cause the price if that chain to plummet to 0.

There is no point stealing money that is worth 0.

A 51% attack could be done by someone who hopes to dump their gains before the market reacts, or it could be done by someone who wants to see the value go to zero. Bitcoin Cash could start checkpointing itself, but at that point it'd be centralized and you're right that its value would probably go to zero.

That is for adding trading support. Any forks which have worked out the replay protection problem - which includes BCH - are trivial to add withdraw support for, and many exchanges have offered this from day one (demonstrating they're likely above board as far as handling users' funds go).

Coinbase and others saying they'll "wait and see" is really just another bump on a long road of screwing users out of funds. They once again profit off of later price information - and in this case can even decide to argue that they held the assets and so own the BCH - essentially just earning another piece of their users' pies.

I'm amazed people still stick with Coinbase. Any exchange that even nominally 'puts users first' (i.e. isn't trying to screw them for profit) has offered withdrawal of BCH from the get-go. Though OTOH anyone who has seen how Coinbase operates with price fluctuations and so on would have guessed they'd end up doing this for the fork.

Pick your partners wisely folks. :)

Yeah that was a pretty crappy attitude considering BCC is trading at $200 right now. I imagine a lot of early bitcoin buyers used coinbase and are sitting on like 10+ btc.

Not really cool to be ambiguous about stealing $2000+ from your users.

In what way is deciding not to support BCC stealing?

It's more akin to a forex brokerage deciding not to support EUR when it first came out over the lira. You can easily use someone else, Coinbase is hardly the only service around.

It's more like HP shares splitting into HP and Agilent, and your brokerage deciding that it won't track your ownership stake in Agilent and not giving you any further access to obtain your Agilent stock.

Under these circumstances, you'd have serious reservations about passively parking any assets with that particular broker...

That's one possible analogy. Another analogy would be: an unrelated third-party decides to give, to everyone who has HP shares, an equivalent number of shares in a new company. In that case, a broker would be under no obligation to give you these new shares.

Which analogy is the best one depends on your point of view on this debate.

> a broker would be under no obligation to give you these new shares.

No obligation would exist, but I'd rather take my business to a broker who would do so, given the choice.

How about a third-party company that awards a free trip to a timeshare resort (some obligations apply) to every HP shareholder?

Correct. I have not studied securities law but I don't think Coinbase's users have any recourse claiming their BCC and Coinbase decides their stance is that it was always theirs as they held the relevant private keys.

This analogy doesn't work because people could've transferred their Bitcoin to a personal wallet while the same can't be said of stocks.

Actually... with many brokerages, you can still obtain actual paper stock certificates -- it's just that the overhead and fees to do that make it highly unattractive.

Furthermore: It is possible to directly transfer stocks from one brokerage account (similar to a wallet) to another at a different brokerage without having to liquidate assets.

I don't know if you have a historical example of that happening but it would most likely be illegal to accept lira but not EUR.

I don't have an actual historical example, it was more of a thought experiment.

Illegal where? Perhaps inside the Eurozone but that wouldn't be enforceable anywhere else.

If you have pre-fork BTC on Coinbase, you have no way of capturing its value as BCC since you don't own the wallet.

You had a way to capture its value as BCC by withdrawing the BTC to your wallet - it's not a surprise, and it was communicated by Coinbase before the split.

In your example, it is like everyone who has EUR being entitled to 1:1 notes of a newly-created currency called lira, with owners simply entering their EUR notes' serial numbers and being credited the lira.

Your "forex brokerage" then decides they're "not going to mess with this newfangled currency", leaving you none the wiser with how they're handling the newly created funds if at all.

If it goes up, they could shrug and say that they had the serial numbers so it was theirs the whole time. If it crashes, they could credit everyone the decreased value of the lira out of money they made by selling off earlier and pocket the rest. (Or take option A and pocket all of it, if the 'good' PR is not worth the slightly decreased profits.)

Considering the prices people end up having gotten "locked-in" on after price fluctuations when using Coinbase, this wouldn't even be "far-fetched" for them so much as par for the course.

If you don't hold your keys, you're subject to the decisions of those who do. Coinbase is a good enough steward of most people's bitcoins that it's a fine trade-off.

keeping 10+btc in coinbase is immensely stupid.

don't keep your bitcoin in exchanges. it defeats three of the main appeals of bitcoin: autonomy, trustlessness, anonymity

> anonymity

Bitcoin itself isn't anonymous at all: All transactions are public. Only via a Laundry you can cover up your tracks.

Zerocoin and Zcash were created to fix that.

transactions are public but if no one knows that a public key is yours it's difficult to trace. and like you said, there's tools to anonymize your bitcoin transactions completely

As soon as you buy/sell something, someone will know your public key.

The laundry scheme isn't tied to Bitcoin, that's why I think it's wrong to say that one of Bitcoins advantages is anonimity.

>As soon as you buy/sell something, someone will know your public key.

So make a new key, and tumble the Bitcoins until you feel safe again.

Since all transactions are public, he can easily follow the tracks to your new public key.

Tumbling is supposed to make tracking non-trivial. Anyways you can always convent to another coin, especially one with more anonymity, and then back to Bitcoin.

EDIT https://news.ycombinator.com/item?id=14918545 This just started getting popular if you want to talk more about tumbling.

> Not really cool to be ambiguous about stealing $2000+ from your users.

Serious question: under what legal theory (not loose analogy) is the BCH corresponding to a wallet held by Coinbase property of Coinbase's users and not Coinbase?

Security laws. Stuff like this happens all the times in spinoffs and the rules are very clear about who is entitled to the proceeds.

> Security laws.

That's hardly specific.

> Stuff like this happens all the times in spinoffs

There's a reason I specifically excluded loose analogies.

> the rules are very clear about who is entitled to the proceeds.

And the specific rules that specifically apply to a fork of a cryptocurrnecy and a firm providing wallet services like Coinbase are...what, precisely?

Perhaps general securities laws are written in a way which encompasses this scenario, but I'm asking about the specific applicable laws that cover the situation at hand.

Sounds a bit harsh. He's suggesting securities law is a good place to start; a reasonable thing that adds something to the discussion. Consider hiring a paralegal to research the issue for you and write you a well-documented brief to meet your standards of proof.

That's idiotic, securities do not spontaneously split on their own. In a split, agents agree upon how it should be carried out, specifically to avoid this problem.

As a non-early adopter of blockchain tech, I appreciated the clarity that Coinbase decided on here. "You don't have to worry about anything."

Which, if you aren't familiar with what the word "fork" means in the developer world, was exactly what I wanted to hear from a legitimate company like Coinbase.

Kraken made it also quite clear, like 1 BTC in your account = 1 BCC.

And BCC will start at 0.01 BTC.

To me you don't need to be a developer to understand that.

"What's the difference? Will this happen again? Do I automatically have any of this newfangled bitcoin cash?"

"Does that mean I got free money? Is it a paper version of Bitcoin? Why can't they create it from scratch? Are they affiliated? Why is it called a fork? Should I buy Bitcoin before a fork? What's the point? Why 1 BTC = 1 BCC? Who decided that? Is it same on other exchanges? Why does BCC start at 0.01 BCC?"

"Sure, no, they could, no, software term, if you want to, independence, because of how the software works, see previous, for any that support them, because that's what it's valued at right now.

Any other easily-googlable questions? :)"

FWIW I moved ~80 BTC out of Coinbase almost instantly yesterday.

It's not unreasonable to expect some delays accessing their cold storage (which is key split across geographically disparate safe deposit boxes, last I heard)

That said, I was around during Mt. Gox's failure (fortunately didn't lose anything then) so I get a little skittish when I hear about a wallet/exchange experiencing withdrawal delays...

I'm curious. If you were around during Mt. Gox's failure, why on earth are you holding ~80 BTC in somebody else's wallet? That seems kind of crazy, so I wonder if there is an advantage that I'm missing...

Good question. It's a combination of things.

First of all, I've always trusted Coinbase a lot more than most other Bitcoin services. They're a US company, a YC company, I've met the founders, I know some of the employees, they at least appear to be very serious about security, etc.

Second, those 80 BTC are not all of my Bitcoin. I don't completely trust myself to securely store Bitcoin, so I like having some diversification of risk.

But yes, some of it comes down to laziness. I should probably figure out a better way diversify the risk without needing to trust a 3rd party.

Anyone can create infinite forks similar to BCC/BCH. Should Coinbase support them all?

No, but they should support forks with significant hashing power and exchange value behind them.

BCH has ~2% mining power behind it. That's not "significant".

According to what definition? 2% of BTC mining power is still more than most other coins.

Coinbase doesn't support most other coins either. There are exchanges that are enthusiastic about supporting all of the altcoins out there, but Coinbase isn't one.

It's already in the top 4 coins in market cap. Seems like a reasonable coin to support at this point.

It's been extremely volatile so at this juncture price means little. Give it some time before arguing it has any value, the market hasn't decided yet.

Right at this moment it's values at $717.00 per BCH vs $2694.42 for a BTC.

You'd argue it's better for me to have wait until the price stabilizes at 2% of BTC before I'm allowed to cash out?

Market cap is not a useful metric. It hase very low liquidity at the moment.

That market cap is illusionary because there's no way to deposit BCH into exchanges right now. ViaBTC apparently requires 20 confirmations which would take about a week at the current hash rate, the other exchanges like Kraken and Bittrex aren't accepting deposits at all and don't plan to for a few days yet. So essentially all of the BCH making up that market cap cannot in fact be sold at all right now; the only BCH can be is from Bitcoins that was in exchanges that support BCH at the time of the split.

Depending on the interest in the coin I would say yes. Not doing so will cost them customers.

Their particular position is one thing, but giving only 4 days notice is quite another. Especially considering any BTC held in their "vault" service takes 48h to transfer into standard wallet. I (and I'm assuming many other folks) would have happily withdrawn if I had the time and wasn't busy doing things over the weekend.

They can have any stand they want. But they deny me my property.

Imagine a bank anouncing they would keep all the dividends of one particular stock, because the didn't like it. That's what coinbase is doing. It plain and simply theft.

> But they deny me my property.

Is it your property? It's a benefit that people have decided to extend to whoever controls existing Bitcoin wallets. Do you have an agreement with Coinbase that obligated them to transfer to you any such benefit that should accrue to the Bitcoin wallet they control for you?

Of course. The Bitcoins are still mine, even i keep them in a coinbase wallet. (ownsership vs perssesion). Now every btc owner gets bcc. The owner is me, not coinbase. I gave the persession of by btc to coinbase to trade them eventually, not to give up ownership. And as the owner that never 1) gave away usufruct I'm entiled to all profits from them. See the share/divident analogy.

1) At last not legaly binding, that had to be there at the very least in red flashing letters, possibly even then it would have been void.

> The Bitcoins are still mine, even i keep them in a coinbase wallet.

Right, that's governed by your contract with Coinbase, and is the service they offer.

> Now every btc owner gets bcc.

No, everyone controlling a BTC wallet is now also controlling a BCC (or BCH, I've seen both used as the abbreviation) wallet with an equal number of coins.

I'm guessing rights to coins on alternative chains that Coinbase ends up controlling due to BTC forks are not covered in your contract with Coinbase.

Edited my comment to make it clearer.

There is a difference between ownership and possion. Technically (in the meaning "how it is realized in computer code") bcc is given to the person possessing btc. But by the law the owner is entitled to the profits of a thing. But coinbase does not own my coins, it merely posses them.

> There is a difference between ownership and possion

Yes, ownership is a matter of law. By what law does the act of a fork which grants possession of BCH to controllers of BTC wallets grant ownership to anyone else?

> But by the law the owner is entitled to the profits of a thing

That's, at best, imprecise. I own money, which I hold on a bank, which contracts a certain rate of interest (which may be zero) to be paid on it while I hold it there. I absolutely do not own any profits the bank is able to realize through holding the money (any more than, beyond those contracted, I am liable for any costs associated with their holding of money); indeed, their ownership of the net profits realizable by having the money in their hands is central to their business model. (There are restrictions on their ability to use the money they are holding to prevent undue risk of them not being able to pay my money back, but if they gain a windfall, I don't share in it.)

The real question seems to be legally whether BCH is a gift to those owning BTC or those possessing it. In the absence of very strong evidence to the contrary, I think the law is likely to say that who possession was given to also determines who ownership was given to. If I give a thousand dollars cash to everyone I see wearing a green hat, and one of those people had borrowed the hat, the owner of the hat is going to have a difficult time arguing that they own the thousand dollars.

>The real question seems to be legally whether BCH is a gift to those owning BTC or those possessing it. In

Bch is not a gift. Who should have gifted it? Who is the previous owner? How did the previous owner aquire it? It is a "fructus" of btc. And that belongs to the owner.

This right can be signed away, with life estate or usufructus. But that's a big deal. That can't be somewho implied in a sentence hidden somewhere in a long ToS.

You don't own Bitcoin if you don't control the keys. If you read the Coinbase ToS,

> Coinbase securely stores all Digital Currency private keys in our control in a combination of online and offline storage.

And if you read the whole thing,

> supported Digital Currency

is mentioned multiple times.

[1] https://www.coinbase.com/legal/user_agreement?locale=en-US#1....

>You don't own Bitcoin if you don't control the keys.

That's wrong, and obviously so. That concept is "possession" and not "ownership".

What they write in their ToS doesn't matter, it does not change fundamentals of porperty law. (Well, as every legal argument on the internet it depends on your jurisdiction and the jurisdiction of the coinbase, as coinbase resides in multiple)

The spelling is "possession", by the way.

I'm not sure if "the Bitcoins are still mine" is an appropriate interpretation - (just as with banks) you don't own those particular BTC that you deposited, these now belong to Coinbase, what you have is a claim, a debt, an IOU, a statement from Coinbase that they'll give you a particular amount BTC on demand. If the standard banking regulations apply (and why wouldn't they? Coinbase is licenced as a money transmitter) there are no any particular "named" BTC held in escrow particularly for you, there's an "account" that tallies how much BTC you "have", i.e., how much BTC Coinbase owes you - as their user agreement states, "you are the owner of the balance of each of your Currency Wallets".

In the absence of any specific agreements with Coinbase regarding usufruct rights, you wouldn't have them (just as you don't have usufruct rights when depositing currency in a bank account) - you don't own that BTC, Coinbase owes you some fixed amount of BTC, and that's that.

Of course, that would be a nice thing to test in courts - after all they decide who owes what to whom, not the algorithms of BTC/BCC.

You don't have property, you have an account. If you had wanted to have bitcoin, you should have stored your bitcoin in a bitcoin wallet.

I got three notifications from Coinbase, dating as early as July 19th; that's way more than 4 days notice.

I received zero notifications. I'm assuming they selectively decided to notify users based on how recently they had logged in perhaps, meaning that there may be a large amount of cumulative bitcoin whose owners were not notified. I only heard of anything from being on Hacker News.

Maybe, but they must have had a strange priority. While I think I logged in recently, my account has always had a zero balance.

In what form? I got one email on July 27

Email on the 27th, and also on the 19th and 20th.

What's the difference between Bitcoin Cash and a Bitcoin clone that anyone can set up?

Nonzero miner and community support.

That's the crux of it. BCC is truly the end result of the years long civil war within Bitcoin, and so represents a significant minority of users and miners who really wanted larger blocks over Segwit and are willing to put their money where their beliefs are. This hard fork has been a very long time coming, unlike some Bitcoin clone that anyone could set up.

I don't see a problem with how this was handled by Coinbase. It's obvious they're a central authority. When people make the choice of Coinbase over managing their own wallet they're sacrificing freedom for a sense of security.

Disclaimer/FYI/FWIW: Coinbase was YC S12.

PS: Suprised to see no mention after 14+ hours on the entire sub-discussion that their tech stack appears to still depend on MongoDB (re: "service decay & delays").

Not sure what happened on this month's job thread (too late to delete?); it's not like it's a secret!

https://news.ycombinator.com/item?id=14902743 vs. https://www.coinbase.com/careers/477665

  King_mansur 17 hours ago
  [flagged]
	
  AvenueIngres 17 hours ago
  >* Our APIs are currently powered by Rails with a MongoDB backend

  Everything makes so much sense now (Coinbase's single digit SLA)

  --

  In case you are wondering what technologies we use at Coinbase, we’re built using a combination 
  of Ruby, Node.js, PostgreSQL, MongoDB, Redis, Swift (for iOS), and Java (for Android).

The original design of Bitcoin Cash would have required active work by Coinbase to ensure they could later distribute balances that accrued at the time of the fork and that some of the coins wouldn't accidentally be transferred along with the corresponding bitcoins. It was changed a few days before the fork so that all they had to do to ensure they could make that promise was to do nothing.

> They took the position that if you want your "free" Bitcoin Cash, move your BTC out of Coinbase.(1)

> when Ethereum split "Coinbase eventually let customers withdraw their share of the new currency, known as "Ethereum Classic," even though it still does not allow it to be bought and sold on the Coinbase site.

Note the ETC withdrawal option came after ETC spiked in price and retreated like 80%. Coinbase then ended ETC withdrawals at the end of 2016. I suspect you'll see the same with BCH.

It's not particularly fascinating for anyone who's kept an eye out for Coinbase's business practices. Most people who've used or heard about using them during any sort of price fluctuations (transactions delayed until the dust settles, after which they "conveniently" made a loss or only a slight win even before fees) would not have been surprised and likely could have guessed that this is how they'd approach the fork.

Pretending like you're "staying out of it" works 9 times out of 10 for businesses, but in this case it's pretty transparent that they're banking on the ignorance/apathy of users who decide to leave their funds with CB despite warnings so that CB can trade or even pocket the BCH and profit off of deciding based on future price information.

I wouldn't be surprised to see them cross the line into out-and-out fraud someday. Until then, I'd keep my money somewhere else.

Coinbase has a lot of issues - they need to raise more VC and hire some support temps to get through the current shitstorm.

My biggest issue with Coinbase is that they claim insured wallets, but actually only insure the 2% of bitcoins stored in their hot wallets. Cold storage is uninsured. If their cold storage gets lost/stolen/hacked, all holders are going to lose 98% of bitcoins. That's not insurance.

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