Comment by sneak | Hacker News Reader

Comment by sneak | Hacker News Reader

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I spoke to him on the phone within a few hours of that post, as I had already prototyped an app to do what was described.

I didn't launch mine, nor participate in his (obviously). I suggested that a business in that space, if successful, would result in a similar outcome as happened to other founders of international money transmission systems that weren't under direct government control: i.e. swatting.

He was not dissuaded, to his credit. Score one for the "founders must have grit" camp.

To be honest, I'm still not sure why the hammer hasn't come down on something like Coinbase by now. It seems that cryptocurrencies in general are the exact opposite of the regime outlined by the BSA, PATRIOT, et c. My unsubstantiated theory is that it has something to do with pmarca, but that's just a guess. The founder of Kraken has expressed his feelings that it's coming soon.

I'm glad that Coinbase has permitted so many to participate in the ecosystem, but I wonder about how much of a benefit heavily regulated, custodial wallets bring to the ecosystem as a whole. It seems to me that Bitcoin existed to replace banks, and here we have a bank serving as the Bitcoin equivalent of gmail, re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace. The fact that they're listed on a stock exchange and not as an ERC-20 or other permissionless token tells the whole story, in my view.

I have a special respect for those who can function in heavily regulated, guilty-until-proven-innocent style markets like financial services in the USA. I personally would not be able to handle it.

If the last few decades tell us anything, it’s once you’re large and have a lot employees, you’re above any regulation that would put you out of business. Slaps on the wrist are the worst you can expect.

Backpage was pretty big when it was deep sixed by the Feds.

Did Backpage have institutional money behind it?

Wirecard did.

My hunch is that it has more to do with the amount of money you've taken from prominent/powerful/connected Rich Guys than how strictly large you are or how many you employ.

There's a lot of hidden soft power in the USA amongst the ultra-wealthy, I've come to learn.

(Note that this is not a criticism specifically against Coinbase, per se; more an indictment of the lack of equal protection under the law in the USA in general. All animals are equal, but some animals are more equal than others.)

Arthur Andersen and their ~85,000 employees would like a word.

After rubber stamping the squandering of California's energy market into a complete fraud of a company. I think that's a very high bar to cross, requiring damaging a lot of rich people in the process to call attention to it, to be punished.

> I'm still not sure why the hammer hasn't come down on something like Coinbase by now

Perhaps you have a answered yourself: “re-centralizing everything in a place that is easily and instantly censored by the exact system it was built to replace”.

If compromising the permissionlessness of Bitcoin is the only way for Bitcoin to come to a certain market, then perhaps it would be better for companies like Coinbase not to exist, and people who want to use Bitcoin should have to take the steps involved in self-custody.

To me, it's a shame to see. Now that Gmail and Coinbase have captured so much of their markets, they (or anyone who can coerce them) are now free to start censoring what goes in or out, turning a federated, permissionless system into effectively a dictatorship.

https://cryptobriefing.com/bitstamp-begins-track-off-exchang...

I really hope that's not what ends up happening. It's a bummer that financial services in the global west engage in such legally-mandated gatekeeping, locking billions out of the most lucrative payments markets. The internet and cryptocurrencies present a new opportunity there, and re-using the same decades old regulation to segregate the technology into the haves and have-nots is, to me, a tragedy.

The coins stored on Coinbase (and other crypto exchanges for that matter) are at all time lows, people are self-custodying their coins and using them on decentralized protocols where they don't have to trust centralized 3rd parties. Coinbase is just one player in the whole space.

Coinbase is custodying 760k BTC or so... thats more than 5% of all BTC in existence.

They claimed that they were holding about 11% of crypto market cap on their exchange.

I hope you're a) right, and b) it stays that way.

I fear that neither is true.

>censored by the exact system it was built to replace

Bitcoin was designed to replace fiat money, it can't replace swats.

Charlie Shrem (BitInstant) was a bit less lucky, or maybe it was "too early"?

You see no benefit to a flat system in crypto where everyone can participate equally, vs traditional finance / stock brokerages where large institutions like hedge funds automatically get a better deal vs any retail trader?

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