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Where do you draw the line though? Anyone can invent new tokens and grant them to bitcoin holders; should Coinbase be required to support every one?

This is not a hypothetical question. I particpated in two airdrops this year, Stellar and Byteball. I immediately sold the airdropped tokens and increased my bitcoin holdings by 3%. But I don't think Coinbase should be required to support Stellar or Byteball just because they did airdrops to Bitcoin holders.

Byteball in particular seems like just some guy's random project and only has value because of the current investment bubble in anything that looks like a cryptocurrency. I wouldn't trust it to be secure or work properly. What if Byteball is just a huge scam, and the creator can secretly mint tokens at will? Now Coinbase is participating in a scam!

Yes, Coinbase should be required to support disbursal for every one, with the proviso that it either passes a certain price or passes a number of customers who want to withdraw it.

Why? By using Coinbase you are saying, "I don't want to hold any bitcoins myself, I want a bank to hold some value, denominated in BTC, on my behalf". For all depositers care, Coinbase might have zero Bitcoins issued before the fork.

It's like depositing a dollar to a bank, and then finding out that it had been signed by Andy Warhol in invisible ink and asking for the specific dollar back. Sorry, you shouldn't have deposited in a bank. You can get a dollar back, but not the same one you deposited.

What you're looking for is more like a safety deposit box for Bitcoins. That's a whole separate product, with a different fee structure.

Let's say there is a court case where the judge awards all shareholders of AAPL $100 of compensation for every share held (It's to the shareholders, but not the company, because the court case involved shareholders vs management). The government sends $100 per share to each registered holder. Your investment fund is the registered holder of AAPL securities instead of you. Do you get $100 per share that was held on your behalf, or do the operators of the investment fund get it?

Isn't that just a dividend at that point? In the real world investment funds have fairly complex dividend rules (how much is reinvested in the fund, how much is skimmed for fund manager fees, etc), and regulations have managed to force such funds to disclose all of those policies up front (prospectus) and keep them up-to-date.

In the other fork in this discussion thread, the banking analogy: we're talking about an exotic interest payment of sorts. Again here, banking regulations require banks to disclose interest rates and payment details and management fees up front for accounts. But banks in the real world are largely allowed to reap the majority of profits from an investment that goes well, and doesn't have to apply much if any of that back to the savings accounts from which it utilized stored funds to fund that investment.

Which is to say that Coinbase may be doing nothing wrong according to either real world analogy, with the big difference being the "wild frontier" of existing in an under-regulated space with fewer up-front disclosure guarantees.

Both this and dividends are payments to shareholders but this is different because it's not funded by the company itself. It's a third party electing to pay every shareholder. Also, dividends are regular events, but getting a new asset that can be traded is not.

I guess that depends too on what you think "the company" is in this case, going back to struggling with whether or not this analogizes to a stock split or not.

In the AAPL example, it's not a stock split.

I think that's a great analogy for each of us thinking about our own ethical intuition. But if you're literally asking what would actually happen, I'm guessing the answer is...there would probably be a lawsuit and the courts would figure it out. Which is probably exactly what will happen here, if Coinbase continues to not support the Bitcoin fork and its value holds long enough.

not likely. corporate payouts happen all the time based on share ownership.

Exactly.

The only argument you can make is Coinbase not givint a "reasonable" amount of foresight to users (who would pressumble have the right of advanced time/knowledge to convert to USD, etc and then back to BTC (on another "exchange").

I have no idea is this is true or not, but this is the only criticism of Coinbase you can have here.

> Regardless of the price, an exchange cannot seize customer assets by giving them 10 days notice for withdrawal.

Perhaps, but the legal question is whether a protocol fork as a matter of law creates a new asset owned by the customer, creates a new asset owned by whoever controls the wallet keys, or merely creates an opportunity which someone who controls wallet keys may exploit to generate a new asset by participating in the ecosystem on the new side of the fork.

(Fundamentally, this also lays near the question of legal ownership of Bitcoin or similar cryptocurrency in general and what specifically is “owned” when one owns them.)

While I'm sure that a lawyer can spin in circles arguing semantics over what is bitcoin, the stance that the SEC has taken is that cryptocurrencies are commodity-assets, and therefore any derived assets (forks, etc) are the property of the asset owner.

In what way is a fork a derived asset? Let's say an advertiser, unprompted, decided to send a free DVD to everyone who owns a sailboat. Your sailboat is in storage at a large marina that stores hundreds of sailboats, so the publisher drops a big stack of these DVDs in front of the marina office. Is the ownership of the marina obligated to accept these DVDs and mail one to each owner at its own cost? Receiving unsolicited DVDs is not in your storage contract with the marina.

Interesting analogy! Compare to the one I gave [1]. As you've described it here, I would agree that they don't have an obligation to mail the DVDs out. However, if:

A) The marina owner had entered into a fiduciary relationship with you regarding the possession of your boat to your benefit, and

B) The DVDs were sent to the fiduciary with instructions to be given to the boat owners, and

C) A reasonable person would believe that the boat owner would regard the DVD to have enough value to care about,

Then the marina owner would be obligated to at least ensure that the boat owners can access their DVD, if they wish to, for some reasonable period (say, 60 days). For example, by leaving it with the boat or dropping it in the boat owners' locker at the harbor office, or informing them of their property with the next scheduled communication (in a way that leaves them 60 days etc).

[1] I know "comparing a comparison", but here ya go: https://news.ycombinator.com/item?id=14913261

I'll add another (flawed of course) analogy:

You have a shed to store valuables. Because that's inconvenient for selling your stuff as you live far outside the city, you get a storage unit in the city and move some of your belongings there. There is a big government grant for all storage buildings based on the current value they store. Your shed at home is pretty empty, so you don't get much. The owner of your storage unit gets a lot of money. Does he owe you?

I think about it in a different way. The fact that a certain amount of BTC is also the same amount of BCC is tied to a specific way of owning bitcoins (i.e. "physical" bitcoins in a wallet).

But when you buy a certain amount of BTC on coinbase, you will just buy that abstract amount, there is no wallet tied to you, in the same way that when you have money in a bank you don't own any specific bill. The bank may not even have that amount, at least not in the form of physical cash.

To continue the analogy, let's say that the Central Bank says "in order to fight fake bills, whoever brings old 20 USD bills will get back a new 20 USD bill PLUS a 20 EUR bill." If you have 1000 USD in a bank, are you automatically entitled to 1000 EUR, or are you supposed to get first the bills from the bank ? And if you do, should the bank give you old bills or can it give you the new bills ?

That's a fair analogy. I think implementing the features some people are asking for creates a myriad of additional issues that should be individually considered.

Dealing with this on a case-by case basis (as they seem to be doing) makes more sense.

It might have been nice if they gave more advanced notice, but in my opinion they shouldn't be expected to give ANY notice of this type of thing.

I think they're handling it well.

I would agree, and I would add that people seem to be ignoring that BCH is extremely unstable right now. They've only mined ~18 blocks since inception two days ago (Normal is ~144/day), and the fact that a single Reddit post was capable of keeping miners for mining for a full 12 hours seems to indicate that the hashing power is hardly distributed. Even exchanges that are supporting BCH aren't allowing deposits or withdrawals right now for this reason.

So even if Coinbase did allow people to withdraw BCH, they currently couldn't use it for anything (Because Coinbase is not trading BCH), and they'd be waiting hours or more likely days to reach enough confirmations to have any sense of security over the coins. So doing something about it now vs. considering doing something about it in a couple days after the dust settles makes little difference.

I don't get the "10 days notice" argument. Shouldn't it be the default assumption that they won't support any fork at any point UNLESS they announced support? It's not like they tricked anybody into it, or made it unusually difficult to withdraw BTC.

Their 10 day notice is also consistent with messaging Coinbase has been putting out for months on what their initial fork policy would be.

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

If you have transferred funds to Coinbase and bought a Bitcoin, Coinbase owes you 1 BTC. That is your claim against them. Nothing else.

They do not own you Clams or Stellars or Byteball or any other token that you did not buy.

Keep in mind that this is the fourth coin to be initally distributed to the Bitcoin UTXO set this year alone. If anything, supporting one but not the other would increase their risk exposure, legally as well as support wise. Every token carries risk.

> The organic state of a cryptocurrency fork is that all extant holders receive a new asset, which may or may not be worth anything. A company cannot seize that asset without consideration.

So if I fork Bitcoin into Billycoin, this demands action by Coinbase?

Yes.

(And as I stated in the comment - with a proviso that the price or adoption of the cryptocurrency pass a very low but nontrivial bar.)

Sounds like bdcravens and I should launch Billycoin, but only have it trade on an exchange we control, with no liquidity, so we could push its price through the roof.

I've also just sold 0.000001% equity in my startup to my dad for $10. Does anyone want to invest in my billion dollar idea? Am I a unicorn?

Who says it's without consideration? They're holding onto your BTC for you. That's not a free service. The bank analogy is holding customer cash at zero interest.

Their only obligation is to maintain your BTC balance with BTC defined as the longest chain. It doesn't matter how popular a fork is, it's not their problem.