Coinbase Crosses 650,000 Users

http://blog.coinbase.com/post/70403865643/coinbase-crosses-650-000-users

by danielpal • 13 years ago

121 118 13 years ago

blog.coinbase.com

slg• 13 years ago

Congrats to them, but could a graph be more disingenuous than the one used there that shows Bitcoin prices?

samolang• 13 years ago

At least it's labeled that the BTC-USD price is the daily average for the month.

fuddle• 13 years ago

Explains the timing of the blog post, the graph would look very different next month.

TheBiv• 13 years ago

So the piece about more women was a little bit weird. It appears that as the broader market (made up of ~50% women) begins to use your product, you experience your demographic skew towards the broader markets' average demographic. Breathtaking.

jeremyrwelch• 13 years ago

I think they are trying to illustrate a move towards more mass-market appeal and reach. Depending on which data source you look at, females account for anywhere from 70 to 90+% of consumer purchase decisions in the US. If Coinbase wants to move from being the cryptocurrency enthusiast and tech speculator's toy to actually seeing significant product/service spend in Bitcoins with merchants, increasing their female userbase could definitely help.

chollida1• 13 years ago

Note the title is a bit misleading. They say 650,000 users but the next sentence they state

"we crossed more than 650,000 consumer Bitcoin wallets"

I'm not familiar with their service but I have 20 or so wallets that I've accumulated over the past 20 months, so I'm guessing its entirely possible for a single user to have multiple wallets, infact its so common that I'd label it the norm.

I wonder what percentage of their users, and wallets hold any bitcoins?

modeless4• 13 years ago

You have 20 Coinbase wallets? Unlike regular bitcoin wallets, there's no reason to have more than one Coinbase wallet. A Coinbase wallet can have an unlimited number of Bitcoin addresses and it is generally tied to a real name with a bank account and/or credit card for purchasing and selling bitcoins.

loceng• 13 years ago

Probably to avoid people associating ownership to one person as easily?

OafTobark2• 13 years ago

You don't really have a choice in some cases. Coinbase creates new wallets for referrals and maybe other transactions rather than use the existing wallet

BlackDeath32• 13 years ago

What is the point of having multiples of any wallet? Which wallet would be less effective on its own? Don't they all produce a sufficient (indefinite?) number of pseudorandom addresses?

sprice• 13 years ago

From what I can tell as a Coinbase user, for someone to have multiple wallets they would need to have multiple user accounts. Ie: each user account has 1 wallet.

mrb3• 13 years ago

You probably mean you have 1 wallet, containing 20 Bitcoin addresses.

Not sure why Coinbase uses the terminology "consumer Bitcoin wallet", but it is pretty clear they mean "user accounts", where each account is associated to 1 wallet, each containing possibly multiple addresses.

winthrowe• 13 years ago

Presumably to differentiate them from "business Bitcoin wallets".

https://coinbase.com/merchants

will_brown• 13 years ago

Could someone visit coinbase's career page and confirm that the Apply buttons are not working. https://coinbase.com/careers

Coinbase has one of the more interesting legal positions I have come across in a long time (registration/licensing/compliance work) and I know I will be kicking myself a year from now if I did not make every effort.

superprime• 13 years ago

They work, but they are "mailto:" links.

cjensen2• 13 years ago

Speaking as someone who knows a lot about economics, I think PT Barnum put it best...[1]

Economics is very clear in predicting how this will end up. Bitcoins have no intrinsic value and therefore the long-term price will be precisely zero. Each generation has its tulips [2]; each generation claims that the persistence in tulip price means that there is permanent intrinsic value; each generation is disappointed [3].

The only thing interesting about bitcoins is that this provides an opportunity to watch a bubble: observe the justifications people make, observe how nay-sayers appear to be wrong, and watch the progression.

[1] http://en.wikipedia.org/wiki/There%27s_a_sucker_born_every_m...

[2] http://en.wikipedia.org/wiki/Tulip_mania

[3] http://en.wikipedia.org/wiki/Extraordinary_Popular_Delusions...

d23• 13 years ago

Bitcoins have no intrinsic value

Neither does gold, paper money, or diamonds. And yet they've remained valuable for a long time. What gives?

cjensen2• 13 years ago

Gold and Diamonds have obvious intrinsic value. Paper money does too, but it's harder to demonstrate.

richcollins• 13 years ago

They were initially valued as collectibles (just like gold) and then as a speculative investment. Now that a market exists and there is liquidity, they are valued for other reasons as well (payment system, black market transactions, hide wealth ... etc). Explain how we get to 0 from here since they will always have an underlying value as a collectible and speculative investment?

driverdan• 13 years ago

Just because the long-term price will reach zero doesn't mean you can't profit in the short-term. Defining "long-term" and "short-term" more precisely is key to finding profit though.

schrodinger• 13 years ago

The dollar has a long term price of zero too, doesn't it? If long term is defined far enough out that US is gone...

adrianwaj8• 13 years ago

Just no intrinsic value to you... yet.

But ask people in Cyprus who have had their money confiscated by their bank if they think bitcoins would've been valuable to them, or people in China who've walked across the border with a thumbdrive of bitcoins/litecoins/??coins. Ask anyone who has made an overseas funds transfer if doing so was quicker and more painless than at bank. Volatility is offset by the overall price rise. Saying it has no intrinsic value is a moronic statement.

The main lesson to learn is in the altchains... otherwise it's just replacing one set of paper elites with a crypto elite. That's where the real awakening comes in, anyone can be an early adopter. Also, bitcoin is not a private blockchain, but even central banks could use cryptocoin implementations to move funds around internally. It's a piece of open-source software, that's a very important part of the equation of bitcoin's value: there can be pump and dumps at times, but overall it's severly missing the point to only see it as such.

add: now that I think about it, it'd be interesting for corporations to add the equivalent of an intranet of cryptocoins for budgeting and spending. There are tons of information systems potentials in bitcoin it blows my mind... even without some official government endorsement.. just in the software itself. Some intra/outer mini-exchange interfacing into some b2b portal to then access the public blockchains.

seiji2• 13 years ago

walked across the border with a thumbdrive of bitcoins/litecoins/??coins.

What about walking across the border with the account credentials of a WoW character with a lot of gold?

intranet of cryptocoins for budgeting and spending.

Is there a way to make a "trusted bitcoin" for internal use only where you don't have to do all the computation? I guess at that point it could just be a centralized Excel spreadsheet for all anybody inside the company cares.

erikpukinskis• 13 years ago

I don't think "intrinsic value" is a term in economics. It's a term in investing.

Economics is far from clear about predicting how Bitcoin will end up. The professional economics world has yet to seriously weigh in about Bitcoin. I just searched the top 10 journals on this list: http://faculty.maxwell.syr.edu/whorrace/journals.htm and none of them appear to have anything published about Bitcoin.

That said, Bitcoin does have "intrinsic value" as a payment processor. Think about PayPal. There's two kinds of value in PayPal. First, they have their deposits, which are denominated in various different currencies, and which are backed by various governments and insured. Then there are the people, the servers, the contracts, the buildings, all the other stuff that's necessary for those deposits to actually move around the globe. Ebay didn't buy PayPal's deposits, which aren't really PayPal's, they belong to their customers, eBay bought PayPal's assets.

Think of Bitcoin like that stuff... a distributed payment processing company. It just as reliable as PayPal, except no one can ever freeze your account, and you can only transfer Bitcoins. PayPal was worth $1.5 billion to eBay, so that's a reference for your "intrinsic valuation" that you're working on.

You might be thinking "well PayPal wouldn't be useful if it could only transfer Bitcoins and the value of Bitcoin is $0 so there's a chicken and egg problem!" Except I don't see a scenario where Bitcoin goes to $0. Let's imagine Bitcoin crashes all the way down to $0.01. Bitcoin is still useful if you're trying to get money to your grandma in Cuba, or to pay your Latvian web development contractor. Maybe it's extremely volatile, but that's OK because you otherwise have no way to get your money where it needs to go, and you're only going to keep it in Bitcoins for a few days. You buy some Bitcoins, send where they're going, and the other side cashes them out.

Now why is this relevant? Well, if during those 4 days, there was $1,000,000 worth of money that people were trying to send this way, then there need to be at least $1m worth of Bitcoins to "float" those transactions. Essentially those people all show up on Monday being like "we don't care how much it costs because we're selling them again in three days, we just need $1m worth of Bitcoins to send to our grandma/contractor/etc". Therefore the "value" of Bitcoin goes up to at least $0.05 ($1m/21m).

This is just one of Bitcoin's many "intrinsic" values. It is the "payment processor of last resort" for everyone who falls through the cracks of Western Union/Paypal/etc. This creates a floor below which Bitcoin is unlikely to fall.

walden42• 13 years ago

Exactly, people need to differentiate between the unit and the network. One has intrinsic value and the other does not, but they are also intrinsically connected.

differentView• 13 years ago

Why should I use Bitcoin as oppose to other digital currencies to send money to my grandma?

nvader• 13 years ago

Once all the "free" bitcoins have been mined, the intrinsic value of bitcoin will be the computing power the network is willing to expend in exchange for that coin as a fee.

Quite apart from using it as a store of value, and international payments processing engine, this could in fact be valuable in and of itself for purposes such as document signing and verification, a kind of peer-to-peer twitter[0], and (I guess here Bitcoin bulls speculate) other hitherto unknown uses. The intrinsic value of a bitcoin is therefore proportional to the value of the blockchain itself.

[0] Actually, why _don't_ we have a twitter clone based on the blockchain? Doesn't seem to me that it would be too hard to implement. Of course, messages will take 10 minutes on average to send, be immutable and permanent, and throughput would be limited, but at the very least it would have a novelty factor.

WoodenChair4• 13 years ago

You say you know "a lot about economics" and yet you don't know that currencies don't necessarily need to hold any intrinsic value. They are simply means of exchange. Paper money in the form of US Dollars has no intrinsic value (the value of the cotton paper... less than a cent per bill?). As long as people assign value to something and use it for exchange... it's a valid currency.

Will people all quit on Bitcoin some day and its value will fall to $0? Perhaps. But it won't be because it has no intrinsic value. It will be because they decided it's not a good currency.

Societies have used seashells and wampum in the past as currencies, which also have limited "intrinsic value". They're simply scarce resources that everyone agreed could be used for exchange - just like Bitcon.

lingben• 13 years ago

if you know even basic economics you know that bitcoin is not currency

kaa2102• 13 years ago

I think you have a point here. Money is a medium of exchange (check) and a store of value (?). Fiat currencies are backed by the country of origin. Monetary policy for each respective currency is managed by their Reserve Bank. Who or what backs the full faith and credit of the Bitcoin? Which individual or governing body sets the supply of Bitcoins?

KaoruAoiShiho• 13 years ago

Are you saying this because you've heard all the arguments for Bitcoin's value and think they're bunk or are you saying this because you're unaware of them?

kgo• 13 years ago

Define 'long term' Government's crumble making the long term value of any currency 0.

kenrikm• 13 years ago

or just print more of it until it's near worthless. http://www.xe.com/currencyconverter/convert/?Amount=1&From=Z...

richardlblair• 13 years ago

Congrats. Now, deal with the guy who gave you 35k and in return you gave him _nothing_.

https://news.ycombinator.com/item?id=6929705

blhack• 13 years ago

They did. Before you even posted this.

cheshire137• 13 years ago

Really? Last I saw, they just said they would make it right. We haven't seen confirmation from the original customer saying it was dealt with. Considering all he had gotten from them up to the point of posting on Hacker News was more reassurances that the situation would be fixed, I'm not reassured that it's fixed yet just because there was yet another reassurance given.

MichaelGG3• 13 years ago

Their "dealing" with it was "oops, we rebooted a server and forgot to make sure transactions were run, here's $50 and enjoy your delayed trade".

After screwing up that badly they should have cancelled the order. Instead, they delivered coins paid for at $800+ at today's prices (~$500). I would be surprised, if BTC had jumped to $5000, if they'd have honored the $800 buy price.

The $50 credit is just inane, too. It's more of an insult to offer $50 than to offer no $ and a good apology. I'm not sure how they came to that decision.

Given their funding, they should have immediately taken full responsibility (let's be clear: a financial company's transactions didn't run cause they rebooted something...) and then offered to complete at the original price, or cancel the transaction - truly make the buyer whole. It'd be totally fine for them to do so, because if they fix their stuff, they won't need to worry about "jobs not running". So in this case, even giving the guy a 10% bonus would engender goodwill, as well as show the world they are serious about handling transactions.

I'll resist any snide remarks about Coinbase using MongoDB.

Edit: It seems after further consideration, they decided to give him today's price since it was their mistake.

Ensorceled• 13 years ago

Given that other posting, I was thinking of a completely different meaning for "crosses 650,000 users" ...

znowi• 13 years ago

3.2% of seniors over 65 years old. I hope to be as engaged with innovation and have an early adopter spirit when I'm that old :)

konaseer• 13 years ago

i too signed up in coinbase end of november ,carried away by the hype( before the crash that is)! but thankfully didnt buy any BTC. there may be others like me.

pg2• 13 years ago

Incidentally, Coinbase's graph has an almost misleadingly modest aspect ratio. If you want to compare their growth to other growth graphs you've seen, compress it by at least half horizontally.

markkat2• 13 years ago

pg, if a reasonably intelligent person asked you to describe bitcoin, how would you do it? -if you'd humor me

I ask, because IMO much of the debate about bitcoin consists of people conflating and abusing definitions and talking past each other. As you are obviously interested in it, I wonder what you see, and perhaps what interests you most about it.

pg2• 13 years ago

I would not be the one to ask. I don't understand the details of the protocol. All I could describe is the general idea of a cryptocurrency.

minimax• 13 years ago

Do you actually have to wire up a bank account in order to create a coinbase account? How many coinbase accounts actually have any money in them?

smtddr2• 13 years ago

No money is actually in the coinbase account. It only stores Bitcoin. If you sell bitcoin, the USD balance will immediate be ACH'ed directly to the bank info you have set up.[1] Otherwise, I guess you won't be able to use the sell feature(?). BTC-e.com is different; you can sell all your coins and have a USD balance[2].

You can create a Coinbase account without banking info. But after you've created it, I'm not sure what good it would be to you. I guess you could just use it to manage your bitcoins and have one place to check. But the real service coinbase provides is transforming BTC to USD and vice-versa. If you're not going to enter your banking info to use that feature, you might as well generate a pub/priv key at bitaddress.org and just make sure you don't lose the private key.

1. http://i.imgur.com/LMowl3F.png

2. http://i.imgur.com/3K1JPgR.png

reillyse• 13 years ago

Kudos for a stunningly misleading graph. The manipulation of numbers is impressive.

Whats wrong with it? Bitcoin to USD has dropped by 50% in the last few days. By taking a "monthly average" and graphing that they've been able to hide this discrepancy.

However there is no legitimate reason to graph the "monthly average" instead of just the price. It's a line graph so it can deal with a range of numbers quite well. In fact the graph has a total of 6 data points for the BTC to USD line, the whiff of BS is strong on this one.

ziyan• 13 years ago

Can you please send a search and rescue for your support team? It has been days and there has been no sign of of them any where.

Coinbase Crosses 650,000 Users

Related Stories