Comment by piqi | Hacker News Reader

Comment by piqi | Hacker News Reader

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> The sad truth is that all the exchanges are going to steal your funds.

> like Coinbase paying out billions in stock-based compensation while losing money

I really wish people put more effort into arguing their side in these discussions. Your point is absurd and lazy.

[public company] pays some % of employee salary in stock >> while "losing money" >> ??? >> customer's property is stolen.

> Did the SEC orchestrate FTX and all the other crypto failures

FTX's problems were amplified by being unregulated, outside the US. The overwhelming majority were not US residents. The SEC didn't have jurisdiction over their International firm. The US version of FTX was handled very differently, but supposedly co-mingled funds. They FAILED to protect US residents by not shutting down the US version. They could have gave warnings about the international firm, instead of working so closely with FTX's founder.

As usual, lots of hand-waving from crypto detractors. You have a clear bias. Sadly, when enough people share a bias, truth and facts are irrelevant. There's a lot to criticize about in crypto. No need to make up irrelevant associations.

When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors. The company itself says that: https://www.bloomberg.com/news/articles/2022-05-11/coinbase-...

Coinbase executives will have enjoyed years of massive pay days selling stock pumped up with customer money. The customers who assumed the money in their accounts is protected like with a bank will be wiped out.

> When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors.

I'm aware. This has nothing to do with your point about "stealing" deposits like other exchanges (e.g. FTX), and is irrelevant to stock-based compensation. It contributes nothing to the discussion. More noise to encourage others to feel safe that their bias is well liked.

> Coinbase executives will have enjoyed years of massive pay days selling stock

More irrelevant and false points. The company has only been public since April 2021. Not even two years. You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense.

Somehow you extrapolate this to "all exchanges" when Coinbase is the only publicly-traded exchange.

remember that Coinbase was audited by the SEC before going public, and is one of the oldest exchanges. If any exchange is safe, it's Coinbase. The problem is the SEC doesn't give clear direction.

Anybody that feels the SEC will "protect" them by forcing coinbase into bankruptcy is welcome to move their assets on-chain. Many people advocate for that.

Again, I'm highlighting how lazy and absurd your argument is.

It doesn’t seem like you know what your argument is.

> “If any exchange is safe, it's Coinbase”

Ok, so other exchanges are worse.

> “Somehow you extrapolate this to ‘all exchanges’”

You just told me the other exchanges are worse.

> “You are attempting to frame them as fat cat wall street types purposefully driving the company into the ground at customers' expense”

It doesn’t have to be purposeful. At the rate Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions. The SEC isn’t going to force a bankruptcy; Coinbase’s own poor management seems to be doing it.

> “… is welcome to move their assets on-chain. Many people advocate for that.”

Oh, I see you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.

>> “If any exchange is safe, it's Coinbase”

>Ok, so other exchanges are worse.

Oof... You are really reaching...

>> “Somehow you extrapolate this to ‘all exchanges’”

>You just told me the other exchanges are worse.

pardon me....? Other non-public companies have executives selling stock?

> At the rate Coinbase is piling up losses

Feel free to cite your source.

> Oh, so you agree with me that nobody should use crypto exchanges in the first place. Because they will lose your money.

No, I don't. You buy it on an exchange, and then move it on-chain. Done. That's the point of a centralized exchange with banking connections. You are welcome to leave it there if you'd like, but you have to accept the risks. Go ahead, try to move the goal posts again.

Every comment you make more irrelevant and false points.

> “Feel free to cite your source.”

You don’t think Coinbase is losing money?

Go to their investor relations page:

https://investor.coinbase.com/home/default.aspx

Open the Q4 2022 shareholder letter. It’s printed right there: a loss of $557M on revenue of $605M.

The loss is nearly as large as their entire revenue! Is that a sign of a healthy business? It’s like selling $5 pancakes that each cost you $10 to make.

You've moved the goal posts from "stealing" funds to highlighting that a business has revenue and costs during a quarter.

> ...a loss of $557M on revenue of $605M.

> It’s like selling $5 pancakes that each cost you $10 to make.

$605m - $557m = $48m (7.9% gain)

$5 - $10 = -$5 (100% loss)

Yup... Exactly the same. More false and irrelevant info. At least you're consistent! Keep the FUD flowing!

> $605m - $557m = $48m (7.9% gain)

In the report ($557M) doesn't mean "expenses". It's an overall loss. A $557M loss means they spent all that $605M in revenue and another $557M on top of that.

Thanks for clarifying.

Their previous statement was not clear:

>The loss is nearly as large as their entire revenue

Their initial claim is "Coinbase is piling up losses, it will eventually be bankrupt, and executives will have accumulated billions while customers will lose billions." And saying this is "stealing" from customers.

I haven't been advocating for purchasing the stock. I don't own it.

Regardless, looks like they had positive net income in 2020 & 2021. Coinbase isn't the only business dealing with losses 2022. I still very much disagree with "piling up losses... eventually be bankrupt"

It’s a good idea not to own a stock if you can’t read the income statement. Fortunately that kind of boring traditional finance stuff is not a problem in crypto.

Me: "I haven't been advocating for purchasing the stock. I don't own it."

You: "It’s a good idea not to own a stock if you can’t read the income statement."

I figured it out! It's your reading comprehension! I was wondering why I had to repeat myself so much in this thread, and why you had been trailing off on tangents away from each point you attempted to pivot around. While ignoring each of your previous statements.

I hope you can sort that out. Wish you the best.

>selling $5 pancakes that each cost you $10 to make.

So the Silicon Valley business model?

They'll make it up in volume.

> No, I don't. You buy it on an exchange, and then move it on-chain. Done.

That is something like 1% of their business. Great, that's one use case where they might not lose all of your money in the event of a bankruptcy.

Anyone actually using it to actively trade will not be so lucky.

> > When Coinbase files for bankruptcy, crypto deposits will be at the back of the line. They are unsecured creditors. > I'm aware. This has nothing to do with your point about "stealing" deposits like other exchanges (e.g. FTX), and is irrelevant to stock-based compensation.

If Coinbase takes money from the people furthest back in line (unsecured creditors) and gives it to people second furthest back in line (equityholders), and the unsecured creditors think they're first in line (bank depositors)… that sounds like stealing to me!

I doubt common shareholders would get anything at all in a case of bankruptcy.

> the unsecured creditors think they're first in line (bank depositors)

Coinbase isn't a bank, and customers' digital assets aren't bank deposits.

> that sounds like stealing to me!

Welp... You're wrong!

As for real banks, feel free to look up current events on "uninsured deposits" at regional banks. You might say banks are "stealing" deposits from accounts >$250k too!

> I doubt common shareholders would get anything at all in a case of bankruptcy.

They get their already-paid dividends or proceeds of what they already sold.

> As for real banks, feel free to look up current events on "uninsured deposits" at regional banks. You might say banks are "stealing" deposits from accounts >$250k too!

None of them have lost a cent.

> They get their already-paid dividends or proceeds of what they already sold.

More irrelevant commentary.... COIN doesn't have dividends, and.... yes.... when you sell the stock.... you are no longer a shareholder.... this needed to be said?

> None of them have lost a cent.

Again.... look up the current events. Just today the Treasury secretary said that additional bank failures won't get the special treatment the big depositors got at the failed banks. They should NOT have been insured above 250k.

In your words, you might say the bank STOLE the money from depositors, and the government reimbursed special depositors for their loses. It was NOT stolen, though. The bank was mismanaged. The government should not have covered the loses above 250k per depositor. The big depositors took a risk keeping that much money there.

I must admit I was surprised to find that Coinbase doesn't create a chain address under which the coins/tokens you buy with fiat are held, then treat the key for that address as an asset held in custody for you.

The fact that they don't do that, when it would be practical for them to do so is a red flag for me.

Those dang crypto detractors and their pesky, “this is a meaningless asset” talk

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