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Comment by brianvli | Hacker News Reader

Coinbase is more about turning non-crypto currencies into crypto currencies while UNI/SUSHI are more about turning crypto currencies into different crypto currencies.

In my POV, there's only two ways to get into crypto:

- Centralized exchanges with KYC

- Mining

Coinbase is a KYC centralized exchange and enables people to turn their bank account $$s into crypto. Uniswap and Sushiswap are only relevant once someone has crypto and needs to exchange between various tokens.

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Don't forget working for it by doing stuff and receiving payment in them. That's my personal philosophical favorite.

True, though in practice “stuff” means “drug dealing”. \s

It's fairly normal to receive payment in cybercoins if you're working for a company in the space. At least it was in the ICO era.

Yep. And then you can go spend them on

USD

Farmville

Iykyk

yes, if you don’t have marketable skills there are artificially crippled growth industries involving drugs or your body

that isn’t new with crypto

Coffeeshops here in NL only accept either cash or plastic.

There's already an entire industry growing up around enabling cryptocurrencies to be spent using traditional payment rails too, though, for those who don't want to see their governments print away the value of their money.

Coinbase itself has a debit card that deducts directly from your crypto balance and allows you to swipe the card anywhere that normally takes Visa. They're even a card issuer for Visa in their own right, so they don't have to do it through partner banks.[0]

Spending crypto is easy, whether the vendor opts into using it or not, so if you do get paid in it, it's easy to use.

[0] https://cointelegraph.com/news/coinbase-becomes-direct-visa-...

>for those who don't want to see their governments print away the value of their money.

The sad reality is that governments fail to do so. The irony behind your comment is that if they could, they would have stopped a long time ago.

I think we must be talking past each other or something. The purchasing power of every single fiat currency has trended down since the elimination of hard money standards, so as far as I can tell, every single government is printing away the value of its money.

I don't see how that's "failing to do so" if "so" refers to "printing away the value of their money"?

and yet, almost nobody does this. Because it's impractical so far. I would look forward to the day when it does become practical, but i cannot see when that may be.

It’s not that unfathomable, it’s just not something you’re about to get in place of a direct deposit any time soon. I’ve seen internet artists and musicians offer to take commission payment in crypto before. Assuming the ecological issues of cryptocurrencies are possible to sort out, this kind of peer-to-peer usage feels nearly ideal, especially when many smaller businesses have trust issues with internet peer to peer payment providers such as PayPal.

No one wants to pay you for legal above-board work in bitcoin[0] because bitcoin is not a useful currency (for reasons that have been rehashed plenty of times in HN comments.

[0] within margin of error

I don’t understand why people think this is true. I use it often with my business and it works great.

What is the benefit for you or your customers?

My assumptions:

You may save a miniscule amount on transaction fees.

For your customers It’s just a new hoop they have to jump.

Does it worth it?

If your customer is willing to spend BTC they own for your services, and you’re willing to exchange your services for some amount of BTC — then it’s very straightforward, zero extra hoops to jump.

Imagine now your customer is in a non-US country, and you are in another non-US country with another currency. Using USD wire transfer is jumping through hoops in this context, and might not always be fast, cheap, or possible at all with some pairs of countries.

> If your customer is willing to spend BTC they own for your services[..]

In this scenario, would one's rate be set in BTC, or fiat?

I'm struggling to understand how a (non-crypto) business could want to hire a contractor at - let's say - 0.016 BTC/day, then watch the real (fiat) cost of that rate change value as the crypto markets move.

"We hired a contractor at what was $100/day but right now it's costing us $1000/day because we agreed to fix her rate in BTC" ?

Isn't this essentially like agreeing to pay someone in gold, or any other random commodity?

It would be foolish for a business to enter into BTC-denominated contracts because that would expose them to a huge foreign exchange risk in return for nothing.

So you're saying these people don't want to use BTC? If they used BTC exclusively for everything this wouldn't be an issue. Dollar denominated contracts only matter if all you have is dollars. By that I mean that if you buy 0.01 BTC today and hold them until the contract is completed then you face zero foreign exchange risk.

If you don't possess the BTC on the day you signed the contract then you basically created an option with a zero dollar strike price. You aren't truly using the currency the way helloworld1 and others imply.

If they used BTC exclusively they wouldn't have foreign currency exchange risk. Instead they would have alternating periods of hyperinflation and hyperdeflation, coupled with highly uncertain tax liabilities, because taxes are still paid with real money. So, not much better. And this is assuming that there are no technical limitations or prohibitive costs preventing the adoption of BTC as exclusive currency.

People don't "want" to use credit cards or PayPal, either.

They do so because it gets the job done.

You'll get really tired from all of these gymnastics trying to convince everyone already using cryptocurrency that nobody's using cryptocurrency.

> In this scenario, would one's rate be set in BTC, or fiat?

You set the rate in USD, and do the currency conversion upon sending.

> I'm struggling to understand how a (non-crypto) business could want to hire a contractor at - let's say - 0.016 BTC/day

You’re right, BTC is too volatile to set the price in it in advance. But it is a perfectly good payment method.

It’s true that if you need the money you receive in BTC to feed your family tomorrow or they starve, then BTC is not convenient and too risky due to price fluctuations. But if you’re a reasonably compensated professional or a business with healthy margins, there’s very little downside in receiving 10—20% of money as crypto, and potentially very high upside.

This doesn't really address the comment it replies to though. Paying someone for work in a dollar stablecoin still obviates their need for a crypto onramp.

1) Not everyone has a job where they can be paid in crypto. 2) Some people want to invest larger amounts into crypto. Both these cases require an onramp.

Nonsense. I have been getting paid in BTC or (when BTC fees ramp up temporarily) in other coins like Ethereum and XRP for years for completely legal, non-criminal, not even grey work and know of many jobs, job forums and other compensation sources that happily pay in crypto for perfectly legal work, either by default or if you request it as your method of payment. You basically just invented a fact and casually stated it as if true.

I also should note that for work done for clients outside my country of residence, I preferred crypto payments because local exchanges allowed me to have the payment in my bank account, in local currency in minutes 24 hours a day, any day of the week, as opposed to waiting 24 hours or even days by any other non-crypto payment method

As others mentioned you're forgetting an economy which just uses crypto as the means of exchange, which for many has always been the long term goal.

But you're also forgetting P2P crypto marketplaces like LocalCryptos[1], which (for Ethereum) allows you to have smart contract escrow and therefore the middle-man is only really required in the case of disputes. I personally have transacted > $100k with LocalEthereum, not once having an issue with a trade, and most settling in under 30min.

[1] https://localcryptos.com/

> As others mentioned you're forgetting an economy which just uses crypto as the means of exchange, which for many has always been the long term goal.

Taxes are owed in income or capital gains, whatever form that income or capital takes, but taxes can only paid in legal tender. Until the IRS et al hang out a wallet address for payments you will still need to touch the ordinary financial economy.

A good number of people (in the US at least) legally pay no taxes every year. So it's hypothetically possible to live entirely within crypto (legally) already.

But yes, that was more talking about the future. That is the matter at hand, after all – Coinbase's future (or lack thereof).

A good number of that good number of people that dont pay taxes are children that dont participate in the economy first hand.

I'm not talking about children...

Who are you talking about?

Presumably people who make less than $22,000 USD and have no capital gains, which definitionally cannot apply to anyone dealing with cryptocurrencies (as they're securities).

The long-term capital gains rate is 0% for single people whose income and short-term capital gains are under $40k per year, or married people under $80k.[0]

"People who pay no income tax" absolutely can apply to people using cryptocurrencies.

[0] https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...

Thanks, was about to claw my hair out.

Every time I have a discussion about crypto on HN I want to go buy lots of crypto because there are clearly still some smart people that really don't get it, to the point of seeming deliberately obtuse.

I stand corrected. I can be absolutely fiat-free if I choose to beggar myself.

Given that the median family income in the U.S. is almost 15% less than $80k[0], the majority of U.S. households don't have to worry about this problem.

You can try to make it out to sound really widespread if you want, but the facts don't support you.

And the fact that people with lower incomes stand to benefit more from crypto than people of higher means who already have access to reliable banking systems is part of the point.[1]

[0] https://www.census.gov/library/publications/2020/demo/p60-27... [1] Bitcoin's genesis block, which cites the bailout of banks at the expense of sound money.

My top level point is still the same. The government won't settle debts in crypto. Taxes are the main one, but there are also fees, levies, duties etc etc which will need to be settled in fiat. That is not likely to change.

can you help me understand the income point you made? I'm not sure I totally follow.

If I make less than $40k a year, I pay 0% capital gains? But what about income tax? You have to have some form of income, which will be taxable. I don't see how to keep that so low your effective taxation will be 0% while having enough money to live on? Am I missing something? Forgive my unfamiliarity with the tax regimes here.

Ty for sharing!

I did totally forget to mention local exchange

Yesterday someone asked for me to pay them in Bitcoin rather than PayPal/CashApp.

I'm kind of at a loss for how to do this...

You can send, receive and even buy Bitcoin with fiat with CashApp after you go through their KYC procedures within the app. [1] https://cash.app/bitcoin

If you had said this 6 years ago I would have laughed, now I'm just sad at how bastardized this project has become. You know you can just... use a bitcoin wallet and do an on-chain transfer?

You do know a lot lot lot of people would still be at a loss when it comes to doing what you describe in your last sentence.

As a Canadian, there's basically no fast and _safe_ way to turn _serious_ amounts CAD into BTC without using a large exchange.

Given the choice, I would immediately choose the option where I can pay in CAD and not BTC.

Coinbase tells me there are no fees for crypto to crypto conversion, just when I initially buy crypto with cash. What does a decentralized exchange give me that beats that?

There are fees for every exchange, not sure where you saw the no fees part.

Do you mean they give me a slightly worse exchange rate than I could get somewhere else? The “fee” line when I do an exchange is $0.00

They make money off the spread on exchanges. Exact same principle as Forex “no fees” - it’s the difference between buy/sell rates.

On the OTC side (which I guess you’re referring to?, CB sets their own spread , which makes it more akin to a fee. Even if CB is technically correct saying “0 fee”, they can still charge any price they want for buying vs selling.

> What does a decentralized exchange give me that beats that?

Owning the actual asset and not just an IOU

Doesn't Coinbase give you a wallet? What am I missing?

You don't have the private keys. If coinbase loses them, you're out of money. Possibly. They're insured supposedly, but if you have your own private keys then the only entity you have to deal with in this case is yourself (this can be both a positive and a negative, depending on how careful you are)

I'm less worried about coinbase losing my keys than them randomly shutting my account down.

For the average person, Coinbase is less likely to lose your coins than you are to lose your private key or get hacked.

There is a "Coinbase Wallet," though, which is somewhat confusingly a separate app where you actually do hold your own private keys.[0]

You can seamlessly link your exchange account and your Wallet account so you can move the money right into your own Coinbase Wallet with your own private keys as soon as you're done with the exchange.

I'm not sure the parent comment meant that wallet, but Coinbase does "give you a wallet" if you want, complete with your own private keys.

[0] https://wallet.coinbase.com/faq/

You need to transfer the funds from your Coinbase account to Coinbase wallet. You’ll never have access to the private keys on Coinbase.

At that point, Coinbase wallet is the equivalent of Metamask et al

It would be, except that you can easily link the two accounts. Sure, that's roughly equivalent to making sure you have the Coinbase exchange address assigned to your wallet loaded into Metamask and your Metamask address loaded into the Coinbase exchange, but that takes a level of understanding that linking Coinbase Wallet to Coinbase exchange doesn't require.

Coinbase does "provide you a wallet." It just isn't part of the exchange.

You can transfer from Coinbase to your own wallet.

Until you can't.

Uh that'd be stealing and would make them immediately lose credibility. But if you're really concerned about it, move funds to your wallet as soon as you buy.

Because that's never happened (see: QuadrigaCX, Cryptopia, ...)

Yes, but while you have it on Coinbase you just own a marker.

This will change in some years though. Conversion will cost less gas with L2. Things are progressing quickly on those problems. Dexs and liquidity pools will have near zero fees.

Personally, I think unless coinbase pivots, their current business model is not sustainable in the long term. But right now, coinbase is capturing value in a way that the early majority of crypto's adoption curve can digest.

There are p2p market places where you can exchange regular currency for crypto too (with a huge benefit that you actually own it from day one).

I'd also add on that Coinbase is in a position to build payment features (e.g. chargebacks) a la Paypal for transactions within their platform, that a DEX cannot provide.

bisq and p2p exchanges exist

but yeah buying from miners/mining is the safest way to get into crypto

Bisq is surprisingly smooth if you want to exchange fiat to crypto without intermediate centralized exchange. Great to see a solid implementation of colored bitcoins in the wild with great UX.

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