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Comment by Aaronstotle | Hacker News Reader

Who is this even for? The crypto maximalists won't spend crypto on a small purchase, and everyone else will use a credit card.

If someone at Coinbase is reading this, I'd sincerely like to know the rationale behind this product launch

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There have been times than I was more liquid in cryptocurrencies but it would take 3-5 business days (up to 8 actual days) before it would be in a bank account, and so therefore I was essentially illiquid.

There have been times when I don't want some financial institutions to get transactions from crypto financial institutions, which comes into play when I am considering a wire transfer from an OTC desk. OTC desks require larger amounts before talking to you.

Coinbase for example doesn't always have wire transfers available for withdrawals.

So just being able to spend from a debit card - which also gives rewards - is good.

The conversion possibilities between crypto and fiat change practically every month though. With the paypal and instant debit integration coming out over just the last few weeks after a decade of not existing and being specifically one of the financial institutions I wouldn't want to see my crypto use because their compliance officer would freak out on autopilot.

Regardless, I don't know or care how many people do it, I don't write blog posts or contribute to international headlines just because it was a solution for me. I have a transferwise card too, shrug.

I assume this is marketing play to get more people into crypto by at least somehow creating the appearance of it being an actual currency already. I doubt many people will actually use it, but it may convince more crypto-curious folks to actually join the "movement"

Stablecoins. I can get 3-4% interest on holding DAI, and with this, I get to spend it as well. What's nice about holding DAI is that if I ever want to exchange it for crypto, I just send it to Uniswap. Never have to leave the ecosystem, and I have easy access to decentralized services.

Could you share how this works, getting 3-4% owning a stablecoin? Are there any risks associated with this, or is it a viable alternative to money that would be in a savings account?

You can earn 2% directly on coinbase [0] or 3% on compound [1] (actually closer to 6% if you include selling the governance tokens you receive - with some additional shenanigans you can push this up to 20 - 30%, but that would require a longer post). One neat thing about compound is that your returns can technically be considered capital gains rather than dividends, which is beneficial if you hold longer than one year.

Risk rise, you're holding DAI for both approaches, so you are exposed to smart contract risks from Makerdao + some market based risks (in cases where there are very large price swings). With compound, you take on additional smart contract risks from the compound platform.

[0] https://help.coinbase.com/en/coinbase/trading-and-funding/ot...

[1] https://app.compound.finance/

Plus 4% rewards on a no-fee card? Pretty compelling offer if it holds up. Comments above re tax liability on every transaction give me pause though.

DAI is stable(ish), so there's no effective tax liabilities since your cost basis will always market price.

The tax issues come up if you're storing BTC (or other alts), not DAI.

There are fees involved when purchasing DAI though. (and fees for spending as well..)

This is actually good for the true crypto maximilist because it allows them to keep their money in crypto until the exact moment it is needed.

Probably to convince people to keep their crypto-I-want-to-spend-as-fiat in coinbase instead of PayPal.

I feel like that decision comes down to if people have a PayPal account or Coinbase account.

I would expect most people to have both.

"Crypto maximalists" are idiots, PERIOD. Bitcoin Cash and Ethereum are where the real users are now and both groups enjoy using crypto as it was designed and described in the White Paper.

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