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Comment by codegeek | Hacker News Reader

I honestly don't get the point of Coinbase. Isn't it a centralized system to manage what is supposed to be decentralized and that kinda defeats the purpose? I may be dumb.

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You are indeed not dumb. Coinbase is a bit of an oxymoron. If decentralized value exchange takes off, that will surely be the end of Coinbase. To a degree, Coinbase's demise is baked into crypto's success - which is kinda funny to think about. Coinbase has always seemed like a bit of a money grab, and crypto veterans sort've treat it this way.

i expect the coinbase value-add is that you do not need to have key security (you trust them to handle it for you).

Email is a decentralized protocol and the fact that you use a centralized provider such as gmail only somewhat defeats the purpose of email being a decentralized protocol instead of Google Messenger.

Email is _a bit_ similar, but the analogy doesn't work too well. While email might be a decentralized protocol, participation in the protocol requires quite a bit of technical effort. Whereas in crypto (e.g., Bitcoin) you can participate by just downloading a simple client and sending transactions via a nice little UI. In your example, Google actually provides a pretty huge value add by abstracting the complexities of participating in the email protocol away from the user. Crypto protocols (insofar as the assets provided by Coinbase) don't really get _that_ complex

It's even weirder than that, it's like if Google received your messages for you and bundled them up with everyone else's, then allowed you to read your share of the bundle but never actually delivered them to you as far as the protocol is concerned.

The email protocol isn't complicated though. Back before spam was a thing, lots of people could just open a port and manually talk SMTP (you could send messages as Santa, or whatever). The only service Gmail provides that's not trivial (and I mean, something that can be done in a whiteboard interview) is the spam protection.

With the accessibility of ML these days, I'm less convinced that spam protection is that hard, if you have a little bit of patience. The spam I get is repetitive and bad, and I get enough of it that I think I could get a workable model simply by using Gmail's spam tagging to train it.

Back in the day ('noughties through 2015 or so) there was POPFile, which did Bayesian classification of emails for spam filtering. John Graham-Cumming wrote it, and it worked reasonably well. I still think of him as the POPFile guy first, then remember he's the Cloudflare CTO.

A more advanced classifier certainly do better these days.

By that metric banks are decentralised too - my bank only speaks to another bank over a protocol but fundamentally just trusts the other side is good for it

I'm not very familiar with the subject but I don't believe the protocols used in banking are very decentralized. I'd be very surprised if you told me SWIFT was permissionless, for instance.

You have a point but not quite the same. Email is not a speculative instrument which makes Coinbase a very risky proposition for people who are using it for transactions. I can also change Email providers (can be painful sure but possible).

Crypto is indeed a decentralized system (well, the well-functioning ones at least).

However, it's also a closed system and you need to get crypto from somewhere. A centralized exchange is the most efficient facilitator of buying/selling crypto, and after that you can withdraw it and enjoy digital transfers without a centralized party.

(You can also get crypto buy mining or selling things for it, or even buy it for cash, but an exchange like Coinbase is much faster and more convenient.)

More and more serious investors and traders are moving to decentralized platforms

That’s where the biggest money and the highest yield is achievable anyway. And the quality of decenttalized offerings is rapidly improving.

As we all know our beloved Terra offered 20%, and this is definitely on the lower side! Pls buy into it now while it is on discount and don't ask where the money is actually supposed to come from.

It lowers the barrier of entry for retail buyers

Coinbase is the lowest-friction, most legal, way to buy into crypto. They make it easy for nontechnical novices to get set up, and they comply with KYC laws etc. This has helped them build a large customer base and stay on regulators' good sides. Think of them as Crypto Robinhood, if that helps, though once you get into the weeds they have very different business models.

It's a brilliant strategy in the DeFi/CenFi space.

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