16 ms·

Coinbase S-1

660 points by kacy 6y ago

blhack 6y ago
It's so weird to me that here, on hacker news people have such a hatred of coinbase. Coinbase is a YC company, and if some of the predictions are accurate, will be the highest valued YC company so far.
- seibelj 6y ago
  This is standard operating procedure for HN. Even when the market proves you wrong, continue parroting the same bullshit about tech you know absolutely nothing about.
  - quickthrower2 6y ago
    The market doesn’t prove anything other than the price of something.
- hanniabu 6y ago
  It's because they view crypto like people viewed the internet/computers back in the day. "It'll never work it's too complicated. No need for it, mail workers just fine. It's just used for illegal activity. Why do I need a productivity boost when I have my assistant to do everything. "
  - anonymousab 6y ago
    > It'll never work it's too complicated It usually seems far more nuanced to me. People seem somewhat skeptical on some finer points of cryptocurrencies, blockchains and distributed ledger ideas. But then they see supporters trumpeting 'this is good for Xcoin' on every piece of news, good or bad, and can't help but get a snake-oil-salesman-y feeling from that. Everything in life has many ways in which it can or does suck, and you won't want to trust people who handwaive away or dismiss the sucky parts. So... partially reasonable technical and idea concerns, and partially a PR problem that anything with a particularly large and vocal fanbase will have.
    - fastball 6y ago
      I love HN but I think you're giving it too much credit on this one. Many (most?) of the conversations I see on here around crypto are copiously littered with straight FUD. Very little arguing on the actual nuances and intricacies of crypto. Seemingly low understanding / imagination of the possibilities allowed by the underlying concepts. Histrionics about power consumption in every thread. Disclosure: I liquidated my crypto positions last year, and currently hold $0 worth of cryptocurrency.
      - dodobirdlord 6y ago
        I think the general perspective of Bitcoin specifically around here meshes with the general stance on a lot of topics. Bitcoin is the 1.0 cryptocurrency. It was groundbreaking, but it has technological deficiencies that are/were being addressed by improvements in the general technology of cryptocurrencies. But the Bitcoin protocol itself has demonstrated to be impossible to modernize, as even the most trivial change like a block size increase is not taken up, so progress in this space is happening in the form of other cryptocurrencies. But there are a lot of people, including in the comments of HN, who have a big stake not in the technology or in cryptocurrencies in general but in Bitcoin specifically. They’re perfectly happy to see this area of technology stagnate and be held back by being forced to layer innovation over Bitcoin itself, as with the Lightning network, when much better solutions are available by moving on from Bitcoin. So when I see someone advocating for Bitcoin specifically they come off as transparently self-serving and having no real interest in the technology. I see a lot of parallels to projects refusing to migrate off of Python 2, except in this case Bitcoin enthusiasts are compelled to actively evangelize the inferior technology instead of just sticking to it as the rest of the technology space moves along.
        jsutton 6y ago
        Why does Bitcoin need to modernize? There are other crypto projects that can fill in the holes that Bitcoin leaves (tx fees, slow, etc). Bitcoin is a fully secure, fully self-sufficient, global monetary system. It doesn't need to be lightning fast or super cheap. It needs to WORK, and work very well, which it has demonstrated.
  - tyre 6y ago
    People keep making this parallel to “well they said this about the internet.” People also said that about pets.com, about bloodletting, about horoscopes and communism and hydroxyclorquine and Lizardpeople. It doesn’t replace mail, it isn’t used mainstream for anything but illegal activity and casino speculation, and I’m not sure what productivity boost we are talking about here. At some point you don’t get to make the internet or the “Henry Ford said they’d ask for a faster horse” comparison. At some point you have to deliver the goods. Has coinbase made a shitload of money, sure. Has blockchain done any of the things its prophets have promised? Nope.
    - deleted 6y ago
      [deleted]
    - another_sock 6y ago
      Bloodletting and horoscopes are real.
- ghego1 6y ago
  With this IPO the portfolio of YC is ridiculously successful.
- freewilly1040 6y ago
  Why does being on this site imply a rooting interest in YC’s portfolio?
- orky56 6y ago
  Might get downvoted but HN opinions are based on a minority of people who are more technical and well informed to the point of elitism IMO. When something becomes too mainstream and doesn't cater to the HN demographic, its success is irrelevant and potentially a liability.
- dang 6y ago
  HN is not universally friendly toward YC. As the person who has to keep tabs on this relationship I'd say it's a tricky one.
kgwgk 6y ago
Maybe it will collapse before going public as WeWork did? Hopefully not, it will be interesting to watch.
ArtWomb 6y ago
Looking forward to this IPO. Besides the "crypto comes to main street" cultural aspects. The dark horse may be Coinbase's venture arm. This is quite the portfolio: https://ventures.coinbase.com/ https://ventures.coinbase.com/ Number one priority with the new cash: addressing downtimes in periods of high trading activity / market volatility. https://www.coindesk.com/how-coinbase-is-worth-100-billion https://www.coindesk.com/how-coinbase-is-worth-100-billion
victor22 6y ago
Coinbase is a stain in cryptocurrency's history and will be remembered as that in the future. It still has a chance to change and help, but for now its against everything bitcoin stands for.
- akudha 6y ago
  I don't know what bitcoin stands for anymore. It is consuming insane amount of energy solving silly math problems, it is the perfect example to showcase human greed, it cannot be used for anything practical and the only reason people seem to be interested in it is to make a quick buck. It all started with good intentions, but those seem to be gone now.
  - victor22 6y ago
    Yeah I understand your frustration and I can see how projects can change after it grows (by many factors in bitcoins case), but I dont see bad intentions in play here. Fiat will still be printed non stop across the planet while bitcoin will keep following the same minting rate, locked at the same growth pace and the same 21M max limit. Isn't this a million times better than a system that is by design made to rob us?
simonmales 6y ago
Off-topic: Does anywhere exist where one can read a slightly better formatted version of S-1 documents?
- alex-wallish 6y ago
  I'm working on this. Will post on hn soon.
sebastien_bois 6y ago
Wonder why the first picture with an app shows BTC going down, with the actual price covered up.
xoralkindi 6y ago
Someone on here once said decentralized systems tend to end up centralized, this will be my goto example. A p2p system of exchanging digital tokens end up centralized around the a bank.
- tcoff91 6y ago
  There are so many other options than coinbase for fiat <-> crypto exchange. How is crypto centralized around coinbase? Hell if you really want to be a true cryptopunk you can use bisq for decentralized crypto <-> fiat exchange.
meagher 6y ago
Coinbase is extremely lucky that BTC seems to have established a new floor. I’m curious how bullish they were after the crash a few years ago.
hestefisk 6y ago
Good for them. But am I the only one who finds it slightly ironic that the brainchild of distributed ledger tech and crypto currency capitalism is now filing for IPO in what is the hallmark of old capitalism (regulated markets)?
- capableweb 6y ago
  Coinbase is the brainchild behind cryptocurrencies? How? They were not the first, they are not the biggest, they don't have the most cryptocurrencies/platforms, they are not the fastest/cheapest/best support and so on. In fact, I can't figure out a single thing that Coinbase is the best at in the cryptocurrency industry. So what do you mean with brainchild here?
  - amenod 6y ago
    Note that GP stated they are "brainchild of cryptocurrencies". I don't think that the meaning you imply is what they had in mind.
    - capableweb 6y ago
      "brainchild of distributed ledger tech and crypto currency capitalism" sure sounds like they are implying Coinbase almost invented cryptocurrencies. But English is not my native language so maybe I misunderstand it wrong.
- jcfrei 6y ago
  There's just more money that you can raise if you go down the traditional IPO way. ICO tokens can be very lucrative too (check out BNB) but there's a lot more regulatory uncertainty around them. Plus fund raising is crazy at the moment on Wall Street so this makes perfect sense.
- candiddevmike 6y ago
  It's always better to sell shovels
mlacks 6y ago
I use coinbase as it was the easiest and least sketchy way to buy a couple of years ago. I feel though that a lot of the big gains for a particular coin are made before coinbase authorizes that coin for trade on their platform. Can anyone provide some insight/ ELI5 as to why the coin selection is curated vs a free for all?
- pmorici 6y ago
  It takes work to support trading if a coin. Coinbase in particular is conservative about listing new coins because they don’t want to run afoul of sec rules and list coins that qualify as securities. They blogged about what factors they consider when listing new coins a few years back. Coinbase is often the last to list a coin and rarely the first so if you only use Coinbase you are getting in later to n the game. The exchanges that list every junk coin under the sun though are often offshore and hire risk in many regards.
- yrgulation 6y ago
  > a lot of the big gains for a particular coin are made before coinbase authorizes that coin interesting observation. it seems to be the case for binance as well. i see coins gaining 20-30x before or right when it gets listed. perhaps “insider” trading right before a coin listing? As for coin curation i suppose thats as a means to filter out scams.
  - vidarh 6y ago
    A lot of listing is preceded by extensive campaigns to build support to get a coin listed. It's unsurprising that this leads to prices going up. "Insider" is extremely vague here given that a lot of this will be activity surrounding the dev teams that may or may not have anything to do with the people who started the coin.
  - aww_dang 6y ago
    Perhaps there is also an element of limiting competition for vested interests?
- capableweb 6y ago
brunorsini 6y ago
Does anyone please know where to find the cap table? I assume it should be public by now — am I wrong? Couldn't find it under the document's "Capitalization" section. Thanks
- kacy 6y ago
  Page 184 looks like it has some of the info you’re looking for
newbie578 6y ago
I have no doubt that they have a good business model, and that they are positioned quite nicely in the market. It's just that these valuations are getting crazy.. Everyone is already pricing in like 10+ crazy years of growth. Not everyone can grow like Facebook did...
- dd36 6y ago
  Agree. What’s the upside? How can Coinbase be valued at nearly that of large banks that process orders of magnitude more transactions and can actually earn money on balances? NYSE and NASDAQ are surely not valued at anywhere close to $100b. Does that mean Coinbase can acquire them? Bubbles are bizarre. EDIT: Yes, it is valued at more than ICE and NASDAQ combined with a fraction of the revenue and significant risk. Most optimistic outcome priced in at $100b. Is the benefit of *NoPOs” that there is no underwriter to push back on the valuation? Maybe you can get a few suckers at a super high price therefore you should?
  - kolinko 6y ago
    By „fraction” you mean a quarter of revenue - Coinbase having around 1B in revenue, Nasdaq having 4B in 2020. Then, Coinbase grew 300% in the last year, Nasdaq just 33%. It’s like asking how Amazon can be worth more than Barnes and Noble in 2004 (or what year that was).
    - dd36 6y ago
      Except Amazon had opportunity to move beyond books. Coinbase should be valued nearly as much as Wells Fargo because maybe it will become Wells Fargo?!? Coinbase is tied to crypto inflation. That bubble can keep going but it’s a fraction of the volumes of the large players and I don’t see any long-term competitive advantage if crypto actually becomes useful to daily commerce. EDIT: And fraction was less than 1/10th of the combined entities. Again, where’s the upside? Are you saying this gets to tens of billions in revenue? Wells is at $80 billion and valued at $150 billion. Is Coinbase going to get to $80 billion in revenue? How?
fasicle 6y ago
Could Coinbase have done an Initial Coin Offering (ICO) to raise money for their investors and employees instead, where the coin tracks revenue or something?
- kolinko 6y ago
  They would need to invent a whole new protocol and make sure the token value somehow stays up - which is independent from how much money they earn from fees.
- ceejayoz 6y ago
  Why?
  - deleted 6y ago
    [deleted]
- user-the-name 6y ago
  They could, if they wanted to be sued.
- langitbiru 6y ago
  Binance did ICO, though. https://whitepaper.io/document/10/binance-whitepaper https://whitepaper.io/document/10/binance-whitepaper
- mindcandy 6y ago
  That was attempted by many companies during the ICO craze a couple years ago. It took quite a while for the FTC to issue guidance on just how they expect such offerings to work and remain on the FTC’s good side. What they eventually came up with was useless. Basically, you could pre-sell coupons for service discounts. Pretty much anything else would get you in trouble. And, so we don’t hear so much about ICOs any more.
- ketamine__ 6y ago
  Binance did something like this with BNB.
harporoeder 6y ago
Coinbase is currently trading on private markets at a 77 billion dollar valuation: "Those shares in the largest crypto exchange in the U.S. are changing hands on the Nasdaq Private Market at $303 a piece, according to two people with knowledge of the auction. That implies a total company value of about $77 billion – greater than Intercontinental Exchange Inc., the owner of the New York Stock Exchange." (1). It will be interesting to see how that translates to the public markets. 1. https://www.coindesk.com/coinbase-valuation-nasdaq-private-market https://www.coindesk.com/coinbase-valuation-nasdaq-private-m...
- atian 6y ago
  Secondaries on Bitfinex are trading at $17 a pop equating to a $3.7B valuation for Bitfinex. This seems a bit low compared to Coinbase's for running the hodgepodge operation that is Tether.
  - 0xy 6y ago
    It seems low because Bitfinex has a literal money printing machine that the New York AG doesn't care about as long as they get their kickbacks in the form of fines.
mensetmanusman 6y ago
Do you think BTC is worth $500k? If so buy Coinbase.
- mciancia 6y ago
  Why not just buy bitcoin then? Do you think coinbase will go 10x faster than btc?
  - ketamine__ 6y ago
    Coinbase makes money in a down market because of trading volumes.
    - xadhominemx 6y ago
      I guarantee you coinbase stock is going to be highly correlated to the price of Bitcoin.
      - ghayes 6y ago
        I would disagree. Coinbase's value is based on volume and volatility. If anything, stable values are the worst time for exchanges, as experienced in early 2019.
        smabie 6y ago
        Ehh, sort of. Volume is highly correlated with return due to the wealth affect. When crypto crashes people stop trading.
        xadhominemx 6y ago
        For a normal exchange yes, but for a Bitcoin exchange the long term revenue is going to depend on future interest in Bitcoin which is highly correlated to current price
- rvz 6y ago
  Before you do that, wait for the bear market and when the financial system 'goes back to normal'.
andysinclair 6y ago
-We have applied to list our Class A common stock on the Nasdaq Global Select Market under the symbol “COIN.” This in itself will probably add a few billion in market cap...
glapworth 6y ago
It's interesting that on the first page under the copies to section they reference Satoshi Nakamoto and the genesis block of BTC.
lucasverra 6y ago
I do ask myself if a 100B valuation on public listing is the start of mainstream crypto. Plus the direct listing is a giant middle finger to traditional banking and overall establishment, right? Like : Here are the new rules this new internet will be playing by. Direct, decentralized. Adapt or die?
- zrail 6y ago
  They still hired Goldman and Citi to advise on the listing.
  - mritchie712 6y ago
    yes, little middle finger at best.
- globular-toast 6y ago
  Coinbase play within the rules of the current establishment.
  - nunchuck 6y ago
    And at the same time, they're influencing history. For better or worse, I guess we'll have to see.
  - appplemac 6y ago
    Agreed, I personally view them as a bridge between the traditional brokerage model that more traditional investors can understand and use, and the crypto world that is looking to be separate from the traditional model.
  - lucasverra 6y ago
    Direct listing is kinda novel, nah ?
    - Xixi 6y ago
      Slack and Spotify went the direct listing route, but indeed it’s pretty rare compared to IPOs.
pmurt7 6y ago
I have tried to use Coinbase this past month to buy some ETH. Worst customer support I have ever seen in my life. Have a look at Reddit to see what's going on with this company: https://www.reddit.com/r/CoinBase/new/ https://www.reddit.com/r/CoinBase/new/ It's not ok to brag about your business when many of your customers are in deep emotional stress because you mess with their money.
- swiley 6y ago
  As a former customer of mtgox and someone who hung out in #bitcoin-otc on freenode half a decade ago: they're still better than most of the exchanges.
  - quickthrower2 6y ago
    Hardly a glowing recommendation
- josefresco 6y ago
  You'll find the same situation over at Binance. All of these exchanges (even Robinhood who just updated a ticket I opened weeks ago) buckled under the load of the increased participation.
  - anonisko 6y ago
    This right here. We're in a huge bull run for an emerging asset class with little institutional support. Since no can ever perfectly predict when the herd is going to start to stampede, it's not at all surprising that the exchanges have been overwhelmed by support requests.
- nunchuck 6y ago
  Long time customer of CB. I had a great experience thus far, but haven't been active on them in the last 18 months. Tried to get a family member signed up, their account funded, and some trading accomplished. Phew! The customer support has gone down hill in the form of 4 to 5 days to respond, and when the response finally arrived it was wholly inadequate to solve the issue, which would require a us to reply, triggering another 5 day wait. They were also not very friendly/human in their communications. Tried Gemini, and it was night and day. Same day or next day responses. Friendly communication. Concise answers. Quickly established account, got it funded within 24 hours, and executed a trade. Family member is pleased.
buryat 6y ago
numbers are very good, $1.27B revenue with $322M net income for 2020
dustinmoris 6y ago
I wouldn't be surprised, and by that I mean I actually believe, that organisations like Coinbase are directly manipulating the price of BTC in order to create a big hype and excitement before their IPO.
- ignoramous 6y ago
  Market manipulation is nothing new but with crypto, manipulation is inevitable and unavoidable, partly due to it being born on the Internet. In fact, the way crypto works, I can only see Coinbase' (and other companies in this space) valuation going up, because for all the hype, crypto is still in the very nascent stages of the adoption curve. A lot is left to be figured out, and that's part of the reason why skeptics and proponents disagree so vehemently. Thus far, the skeptics have been losing, and in my opinion, would continue to.
u678u 6y ago
I thought that the point of crypto is low fees? Nice that crypto has a $~1T market cap. But just one broker is going to have a market cap of one tenth of that. Makes no sense.
- Tenoke 6y ago
  >but just one broker is going to have a market cap of one tenth of that. Makes no sense. Especially given that this one exchange itself has only 11% of the top exchange's volume[0]. On the other hand, it's not as easy for institutional money to get into crypto directly as it is to buy Coinbase stock. Additionally, Coinbase is (likely) a less volatile investment in the future of the whole crypto market rather than picking specific winners. 0.https://www.coingecko.com/en/exchanges https://www.coingecko.com/en/exchanges
- ketamine__ 6y ago
  The market cap of crypto is much larger than 1B. It's at least 1 trillion.
  - u678u 6y ago
    You're right, I've updated.
  - CamelCaseName 6y ago
    Clearly a typo given the following sentence...
    - ketamine__ 6y ago
      It wasn't clear to me......
anonu 6y ago
Love reading the risk factors section. First thought: how can a lay person possibly understood the risks as laid out here? Also they view this as a major risk: •the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins; Second thought, what an incredible business and growth. 1.14bn in revenue on 193bn in trading volume: thats 60bps on every dollar traded. These are insane fees ripe for disruption.
- dabeeeenster 6y ago
  I don't quite understand what the risk to coinbase is if Satoshi is alive/identified? Do they think he has a hack or something?!
  - fidrelity 6y ago
    If Satoshi is identified he might also still be alive. This means that Satoshi's BTC (~1mio.) are potentially liquid which would mean a gigantic influx of fresh bitcoins. It's quite plausible that any movement of these old wallets would crash the Bitcoin price for quite a while.
    - XorNot 6y ago
      It's actually a lot worse then that: if anyone gets access to Satoshi's private wallets (i.e. via finding the keys printed out on paper in a personal effects safe or something) then those coins could move. There's no way to absolutely sure that the keys are gone and inaccessible permanently.
      - jcims 6y ago
        I'm a complete n00b so this is coming from a place of ignorance, why is that such a factor in the current price? Someone is sitting on $50B in a $1T market, who cares?
        shawabawa3 6y ago
pk_kinetic 6y ago
Maybe with some public accountability they can finally solve the issue of their servers “going down” every time there is a rush to sell.
arnaudsm 6y ago
Many have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. In the end CoinBase (like every exchange) is a great product, but just a bank. It's centralized, hackable, has economies of scale, etc.
- rawtxapp 6y ago
  It's an exchange, as soon as you're done trading, you can and should withdraw your coins to your personal wallet.
  - waheoo 6y ago
    This is such a trope. Do you pull your funds from interactive brokers after you're done trading? What about vanguard? 401k?
    - spurdoman77 6y ago
      In many cases it is probably goood choice to keep the coins in custodial, but the fact that you have a possibility for self-custody is great.
    - RealityVoid 6y ago
      It's great that you _can_ do this, but... a lot of times it does not make sense. Still, the option to do so is very important and valuable.
    - rawtxapp 6y ago
      I'm not sure how you can pull stocks from an exchange once you're done trading. Personally, I deposit coins into an exchange, do my trade and withdraw it as soon as possible. Not just because I think there's a risk they might get hacked, etc, I also don't want them to hold my funds later on for reason x,y,z.
      - ceejayoz 6y ago
        https://en.wikipedia.org/wiki/Stock_certificate https://en.wikipedia.org/wiki/Stock_certificate
snicksnak 6y ago
Didn't know that Mark Andreessen/a16z own that huge chunk of coinbase.
- ignoramous 6y ago
  a16z are one of the biggest institutional investors in the cryptocurrency space: https://a16z.com/crypto/#vertical-landing-investment-thesis https://a16z.com/crypto/#vertical-landing-investment-thesis
  - neximo64 6y ago
    It's in his personal name not A16Z
    - snicksnak 6y ago
      while his name is listed in the table the footnote says > (4) [..] held by entities affiliated with Andreessen Horowitz, as reflected in footnote 9 [..] footnote 9 attributes the shares to him and a variety of funds
hn8788 6y ago
Created a coinbase account recently and found that there's no way to verify your identity if you have an expired ID. Because of covid, Maryland let expired drivers licenses still be valid for the forseeable future, but Coinbase automatically declines them.
- dgellow 6y ago
  Also, no way to select a country different from your nationality. Whatever country you select they always change it back to the country of the passport or ID card you provide, even if you live in a different country than your nationality...
  - Havoc 6y ago
    Yup. Shovelled a couple countries worth of docs at them. All rejected. And then something got accepted anyway retrospectively. Like uhm ok then.
  - capableweb 6y ago
    I'm was in the same boat a couple of years ago. One email to support fixed the issue for me.
- dumbfounder 6y ago
  I had the same issue trying to buy Sudafed at CVS. Can you use a passport?
  - hn8788 6y ago
    I don't have a passport. The expired ID hasn't been an issue until now, because the state government sent out a letter you are supposed to keep with you that explains the situation, and says the ID is still valid. I ended up scheduling an appointment to get a new ID, but it's a ~3 month wait.
- smoldesu 6y ago
  I am in the same boat, and it's remarkably frustrating since I have a relatively large amount of assets in their service, assets I cannot withdraw without confirming my identity.
purple_ferret 6y ago
43 million users yet the narrative is cryptocurrency is still in its 'infancy.' I wouldn't be surprised if at least 10% of all Americans have dabbled in buying crypto.
- cirowrc 6y ago
  given how big the world is, _yes_, still infancy
  - purple_ferret 6y ago
    Well Coinbase marketshare of crypto buying is small (like 3% volume of bitcoin) so unless you believe every person on the planet will wind up trading crypto, it really isn't.
  - Tepix 6y ago
    Given what users Bitcoin and Ethereum appeal to (those that don't mine high fees), no.
DSingularity 6y ago
They define hodl in the S1. Amazing times.
elwell 6y ago
> Hodl: A term used in the crypto community for holding a crypto asset through ups and downs, rather than selling it. I appreciate the glossary
- ghego1 6y ago
  Pure meme gold. I'd like to see the face of the intern/entry position lawyer to whom they said: define hold. And then went on reddit for several hours
DSingularity 6y ago
So when is the listing?
asasidh 6y ago
Satoshi Nakamoto (page 1)
Ninjinka 6y ago
I loathe Coinbase. Their support team is a joke (over a month with no response) and site stability is non existent.
- Vadoff 6y ago
  Yup, it's been almost two months since I've originally messaged support about being unable to access my account. They said they would schedule a security interview, then never followed through. I don't know how it's legal for a company to lock your account w/ funds with no explanation for this long.
f430 6y ago
when is coinbase going to IPO?
A12-B 6y ago
They don't let you buy dogecoin. I sleep.
baxtr 6y ago
I am somewhat disappointed that they don’t do an ICO.
goat_whisperer 6y ago
Bitcoin made a lot of sense when I first read about it in 2011. Back then I feel like it was primarily used as an anonymous payment method. Think dark web/silk road type stuff. I certainly don't endorse that behavior, but bitcoin as a payment method made a lot of sense. Bitcoin makes 0 sense to me as an investment. It's pure speculation with no underlying intrinsic value. It's the Dutch Tulips 10.0 basically. And now because the value of bitcoin is unbelievably volatile, it now makes 0 sense as a means of payment.
- silentsea90 6y ago
  At what point either in years or market cap or price per coin will you start to question your mental model of Bitcoin?
  - goat_whisperer 6y ago
    Ironically, as the market cap and price per coin increase, I grow more and more skeptical of bitcoin!
    - silentsea90 6y ago
      Why so?
  - graeme 6y ago
    Not OP, but for me it would be about when crypto actually starts doing something. Smart contracts and NFTs show the hint of a possible future use case. But Bitcoin seems to have no use case, and it takes more and more energy as the price goes up. The higher price absent any use case or advantage seems like it only has speculative value. It could become a religious thing where it has value because people value it: a lot of gold’s value exists for this same reason. But I’ll wait to see how things play out with Tether before thinking that is likely. They are under pretty severe reporting requirements for the next two years and if they can’t show reserves for the $30 billion they printed last year they are in trouble.
    - 6y ago
efitz 6y ago
Coinbase’ customer support is crap. You van only get someone on the phone if your account is compromised; anything else goes to email, and they respond when they get around to it. Also their email verification system for transfers fails frequently causing transfers to be canceled. Pretty convenient way for them to keep your money. I am biased but I’m pretty unhappy with coinbase right now.
- Vadoff 6y ago
  Yup, it's been almost two months since I've originally messaged support about being unable to access my account. They said they would schedule a security interview, then never followed through. I don't know how it's legal for a company to lock your account w/ funds with no explanation for this long.
  - leppr 6y ago
    I've had the same problem. They locked my account which I was using since 2015 by invalidating my KYC and refusing new verification attempts. The support emails take days/weeks to get answered or stay ignored, and didn't lead anywhere. Thankfully I had installed the mobile app on an old phone, and I was able to login through the app and withdraw my funds. That's damning both for their customer support and their security. Good thing they have decent existing and upcoming competitors. I don't see the $100B valuation sustaining unless it becomes another meme stock ala TSLA. But then we're back to our issue, most Tesla users love their car, most Coinbase users hate it. How could it get widespread retail endorsement?
  - elliekelly 6y ago
    A regulation-free market at work!
    - leppr 6y ago
      In a regulation-free market Coinbase would not exist or better alternatives would just be forked into existence.
ppierald 6y ago
Argentina is a great example. I am an American and have been there many times. They have extreme inflation and regressive policies against USD or foreign currency. Take a look at https://bluedollar.net https://bluedollar.net. Official rates are buy at 89.98 and sell at 94.98 (ARS). Unofficial rates are buy at 138 and sell at 143. That's a massive spread saying that the people on the street are willing to spend 35% more because they know the Peso will eventually blow up and the USD is more stable which they can sell down the line for more ARS. This is sketchy in country. You might be walking a slightly illegal line. Possessing cash makes you a target for theft. Owning bitcoin makes this money transfer and storage of equivalent money easier.
- mettamage 6y ago
  Awesome comment! Can you elaborate on this? If you can't do so in public, then I'd like to have a conversation about this. I'd like to know more about inflation issues and unbanked issues with regards to cryptocurrencies. To me, it always feels like "crypto marketing" (for lack of a better term), but I am also realizing that I'm living in a far removed bubble and find it hard to get out of it. My email is in my profile if you feel it's handier to have a private conversation instead. I think crypto is fulfilling one need at the moment which is: if you happen to have a super crazy inflationary national currency and you don't have access to actual dollars, then there's always cryptocurrencies that are most likely less crazy (in the inflationary sense).
  - phreack 6y ago
    Yeah that's exactly it. If your coin loses value by the second, you end up turning to whatever other asset you can find. If you can't acquire a state-based currency from a more stable country, real estate, or any other stable asset like stocks or index funds, you turn to crypto. There's lots of people with no tech background investing in stablecoins.
- csomar 6y ago
  Most countries with capital controls have this spread. There is a reason that they have these capital control in place. Most people in the western world don't have any idea how bad it is. Here is how much bad it is: https://tradingeconomics.com/country-list/inflation-rate https://tradingeconomics.com/country-list/inflation-rate
webwielder2 6y ago
So setting aside the merits of Coinbase as a business or the philosoeconomic significance of cryptocurrency, should I buy Coinbase stock? I want to make easy money by buying stock. Think it'll go up after it's listed?
- vmception 6y ago
  Its a tech company that makes money. The market wants more of those. Yes.
azinman2 6y ago
So almost all of the comments here are about bitcoin generally. While that’s not totally surprising, does anyone have any insight on whether or not this S1 reveals interesting data that might inform the public about investing in coin base (eg why they filed an S1)?
- carlineng 6y ago
  From "Use of Proceeds" on p78: "To the extent any registered stockholder chooses to sell shares of our Class A common stock covered by this prospectus, we will not receive any proceeds from any such sales of our Class A common stock." This is a direct listing, so I think its primarily a liquidity event for investors and employees.
  - richardwhiuk 6y ago
    That's standard surely? They will be issuing new stock which they will receive sales?
    - carlineng 6y ago
      In a Direct Listing, the company does not issue new shares. This doesn't mean they can't in the future, but it's just not part of the company's initial listing on the public markets.
    - bostonsre 6y ago
      It sounds like they don't need money.
- ttul 6y ago
  Their growth rate is staggering, and they are enormously profitable. I was most stunned by the gross margins. They spend so little to make so much. It illustrates how feverish the crypto investing world is.
  - atomicnumber3 6y ago
diebeforei485 6y ago
So, how long is the employee lockup period?
lawrenceyan 6y ago
Not a single mention of Monero or privacy coins? Thanks, but I'll be sticking with Kraken where the CEO actually has a spine.
mancerayder 6y ago
Is BTC still a hedge if it's 50k+? I don't know whether it's a good speculation or one to hedge against. I've avoided it all this time and with banks and corps getting on board, I feel left out.
tibiahurried 6y ago
Why would anyone use Coinbase when Binance.US is way cheaper , better product and overall more listed assets ? I honestly don't get it.
6gvONxR4sf7o 6y ago
> Address Not Applicable ^1 > ^1 In May 2020, we became a remote-first company. Accordingly, we do not maintain a headquarters. Total tangent here, but every time I fill out a really old-school form (e.g. loan stuff), it asks for my company's address and phone number. It gets harder every job to figure out what the hell that number should be. In my last job I has to give out one of the founder's cell phone numbers for it.
ConcernedCoder 6y ago
Well the bubble is official now... hang on everyone!
tfang17 6y ago
Biggest surprise on the S1: CPO who joined exactly 1 year ago was given 2M shares, currently valued at $750M.
- thundergolfer 6y ago
  Snowflake’s CEO, Frank Slootman, made a similarly insane amount of money on IPO after being at the company for 18 months. I think he got given what became over $1 billion worth.
  - fshbbdssbbgdd 6y ago
    If these execs with fancy credentials make investors trust the company more, and then the investors give the company an eleven-figure valuation, it’s not hard to argue the execs contributed 1% of the share price. It’s a better deal than the SPACs, where the big name gets 5% of the equity for doing even less.
berniemadoff69 6y ago
answer: the word 'fiat' appears 40 times in the comments of this kind of hn thread
hankchinaski 6y ago
in a gold rush sell shovels
carlineng 6y ago
Trading volume of "Other Crypto Assets" (non-BTC/ETH/LTC) made up 44% of revenue in 2020, which they attribute to DeFi crypto assets. I wonder how 13% of their assets drives 44% of their revenue? The section on Applications talks about DeFi as peer-to-peer financial agreements, which implies there's some underlying economic activity going on, as opposed to just speculation, but I haven't been able to find anything else that digs deeper into that piece.
- quickthrower2 6y ago
  People gamble more on shit coins but hold on to BTC and ETH
ipnon 6y ago
Coinbase is critical to the widespread adoption of crypto because it acts as a bridge between everything-is-regulated and anything-goes. Cryptocurrencies are only bound by the rules of the programs that run them, but they exist in the "real world" where powerful states have guns and nukes and can pass laws that would make using cryptocurrencies too risky for the general public, even if it would still be technically feasible. Coinbase is clearly the leader in this bridge-space and I suspect this IPO will go nicely.
quickthrower2 6y ago
Do they have a moat? What’s to stop 100 other US exchanges popping up?
didip 6y ago
Transaction revenue increased $633.2 million, or 137%, for the year ended December 31, 2020 compared to the year ended December 31, 2019 primarily due to a 142% year over year increase in Trading Volume. Subscription and services revenue increased $25.0 million, or 126%, for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Wow, $1B transaction revenue and $44M subscription revenue. These guys are making a lot of money for a pure digital product.
jsutton 6y ago
I find it interesting (sad, actually) that most other S-1 posts on here are congratulatory for the most part, giving kudos to the teams (look at the DO one today). However, when it comes to anything crypto related, the emotions really come out. It's all "bitcoin/crypto is useless, doesn't solve any problem, waste of talent." For a community of hackers, there really seems to be a lack of vision when it comes to crypto specifically.
- entropea 6y ago
  I don't know if you're considering what Coinbase is when in alignment with cryptocurrency. It is exactly what cryptocurrency was supposed to not be. It's centralization, it's a bank. I personally have no emotion towards it, but I definitely understand those who do as the cryptocurrency project was quickly taken over by the same old financial interests.
  - beaner 6y ago
    False. The objective of crypto isn't to force everyone out of the banking system, it's to provide an ability to opt-out and be your own bank for those who need or want it. If you want to use a traditional bank or custodian instead, go for it. And indeed, for many people who cannot and should not be managing their own keys, it's the preferable option.
    - xirbeosbwo1234 6y ago
      Bitcoin was supposed to replace banks but isn't up to the job. It is completely impossible to "opt-out" because people want to be able to pay for their groceries without waiting a half an hour and paying half the cost of the things they bought in transaction fees.
  - ketamine__ 6y ago
    You need fiat on ramps for crypto to work. Contrary to what other commenters have suggested you can't legally help other individuals convert their dollars to BTC. That's acting as a money transmitter.
quartus 6y ago
Anyone else care to comment on the S-1 itself? Revenues doubling, and a rare example of a tech company that is actually profitable before IPO (to the tune of $320M net profit on $1.1B in revenue). Seems like a great business to me! Given current market conditions, I wouldn't be surprised to see a market cap on first day of trading of $50B or more
- carlineng 6y ago
  Some sources say Coinbase has already been trading at >$100B on private markets [1]. I find it interesting that about 2/3 of their trading volume (and thus revenue) is from institutions. Also that 44% of their trading volume is from "Other Crypto Assets", which implies that there must be a rather large bit of institutional activity in "Other Crypto Assets", and it's not just the stereotypical retail crypto investor trading in alt-coins. [1]: https://www.axios.com/coinbase-valued-100-billion-direct-listing-9b43e316-7ff7-4f6a-a1db-4dc2481a93ee.html https://www.axios.com/coinbase-valued-100-billion-direct-lis...
- quickthrower2 6y ago
  I wonder if they are buying Bitcoin with profits like is all the rage these days
aplummer 6y ago
I don't know much about the future of crypto, but I do know that for now, people love to buy and sell it.
hrpnk 6y ago
The compensation table looks interesting. $1M in salary and $56M from stock options. 2-3x higher base salary and 10-25x higher than in the case of DigitalOcean.
dang 6y ago
Threads are paginated for performance reasons (yes we're working on it), so to see the rest of the comments you need to click More at the bottom of the page, or like this: https://news.ycombinator.com/item?id=26262170&p=2 https://news.ycombinator.com/item?id=26262170&p=2 https://news.ycombinator.com/item?id=26262170&p=3 https://news.ycombinator.com/item?id=26262170&p=3 (If you've already seen a bunch of these, I apologize for the annoying repetition.)
TeeMassive 6y ago
How do I invest?
henron 6y ago
I'm not a fan of crypto as it exists today, but setting that aside, I feel like coinbase is at an unstable equilibrium as a business. If bitcoin becomes more mainstream, the high fees will not fly indefinitely, and margin drops. If bitcoin falls, then there's no growth proposition.
abarrak 6y ago
Waiting patiently for HashiCorp! I tried through EquityZen but no luck.
hikerclimber 6y ago
Hopefully this company fails.
aleggg 6y ago
What does the "Satoshi Nakamoto 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa" on page 1 means?

660 points by kacy 6y ago

It's so weird to me that here, on hacker news people have such a hatred of coinbase. Coinbase is a YC company, and if some of the predictions are accurate, will be the highest valued YC company so far.

seibelj 6y ago
This is standard operating procedure for HN. Even when the market proves you wrong, continue parroting the same bullshit about tech you know absolutely nothing about.
- quickthrower2 6y ago
  The market doesn’t prove anything other than the price of something.
hanniabu 6y ago
It's because they view crypto like people viewed the internet/computers back in the day. "It'll never work it's too complicated. No need for it, mail workers just fine. It's just used for illegal activity. Why do I need a productivity boost when I have my assistant to do everything. "
- anonymousab 6y ago
  > It'll never work it's too complicated It usually seems far more nuanced to me. People seem somewhat skeptical on some finer points of cryptocurrencies, blockchains and distributed ledger ideas. But then they see supporters trumpeting 'this is good for Xcoin' on every piece of news, good or bad, and can't help but get a snake-oil-salesman-y feeling from that. Everything in life has many ways in which it can or does suck, and you won't want to trust people who handwaive away or dismiss the sucky parts. So... partially reasonable technical and idea concerns, and partially a PR problem that anything with a particularly large and vocal fanbase will have.
  - fastball 6y ago
    I love HN but I think you're giving it too much credit on this one. Many (most?) of the conversations I see on here around crypto are copiously littered with straight FUD. Very little arguing on the actual nuances and intricacies of crypto. Seemingly low understanding / imagination of the possibilities allowed by the underlying concepts. Histrionics about power consumption in every thread. Disclosure: I liquidated my crypto positions last year, and currently hold $0 worth of cryptocurrency.
    - dodobirdlord 6y ago
      I think the general perspective of Bitcoin specifically around here meshes with the general stance on a lot of topics. Bitcoin is the 1.0 cryptocurrency. It was groundbreaking, but it has technological deficiencies that are/were being addressed by improvements in the general technology of cryptocurrencies. But the Bitcoin protocol itself has demonstrated to be impossible to modernize, as even the most trivial change like a block size increase is not taken up, so progress in this space is happening in the form of other cryptocurrencies. But there are a lot of people, including in the comments of HN, who have a big stake not in the technology or in cryptocurrencies in general but in Bitcoin specifically. They’re perfectly happy to see this area of technology stagnate and be held back by being forced to layer innovation over Bitcoin itself, as with the Lightning network, when much better solutions are available by moving on from Bitcoin. So when I see someone advocating for Bitcoin specifically they come off as transparently self-serving and having no real interest in the technology. I see a lot of parallels to projects refusing to migrate off of Python 2, except in this case Bitcoin enthusiasts are compelled to actively evangelize the inferior technology instead of just sticking to it as the rest of the technology space moves along.
      - jsutton 6y ago
        Why does Bitcoin need to modernize? There are other crypto projects that can fill in the holes that Bitcoin leaves (tx fees, slow, etc). Bitcoin is a fully secure, fully self-sufficient, global monetary system. It doesn't need to be lightning fast or super cheap. It needs to WORK, and work very well, which it has demonstrated.
- tyre 6y ago
  People keep making this parallel to “well they said this about the internet.” People also said that about pets.com, about bloodletting, about horoscopes and communism and hydroxyclorquine and Lizardpeople. It doesn’t replace mail, it isn’t used mainstream for anything but illegal activity and casino speculation, and I’m not sure what productivity boost we are talking about here. At some point you don’t get to make the internet or the “Henry Ford said they’d ask for a faster horse” comparison. At some point you have to deliver the goods. Has coinbase made a shitload of money, sure. Has blockchain done any of the things its prophets have promised? Nope.
  - deleted 6y ago
    [deleted]
  - another_sock 6y ago
    Bloodletting and horoscopes are real.
ghego1 6y ago
With this IPO the portfolio of YC is ridiculously successful.
freewilly1040 6y ago
Why does being on this site imply a rooting interest in YC’s portfolio?
orky56 6y ago
Might get downvoted but HN opinions are based on a minority of people who are more technical and well informed to the point of elitism IMO. When something becomes too mainstream and doesn't cater to the HN demographic, its success is irrelevant and potentially a liability.
dang 6y ago
HN is not universally friendly toward YC. As the person who has to keep tabs on this relationship I'd say it's a tricky one.

kgwgk 6y ago

Maybe it will collapse before going public as WeWork did? Hopefully not, it will be interesting to watch.

ArtWomb 6y ago

Looking forward to this IPO. Besides the "crypto comes to main street" cultural aspects. The dark horse may be Coinbase's venture arm. This is quite the portfolio: https://ventures.coinbase.com/ https://ventures.coinbase.com/ Number one priority with the new cash: addressing downtimes in periods of high trading activity / market volatility. https://www.coindesk.com/how-coinbase-is-worth-100-billion https://www.coindesk.com/how-coinbase-is-worth-100-billion

victor22 6y ago

Coinbase is a stain in cryptocurrency's history and will be remembered as that in the future. It still has a chance to change and help, but for now its against everything bitcoin stands for.

akudha 6y ago
I don't know what bitcoin stands for anymore. It is consuming insane amount of energy solving silly math problems, it is the perfect example to showcase human greed, it cannot be used for anything practical and the only reason people seem to be interested in it is to make a quick buck. It all started with good intentions, but those seem to be gone now.
- victor22 6y ago
  Yeah I understand your frustration and I can see how projects can change after it grows (by many factors in bitcoins case), but I dont see bad intentions in play here. Fiat will still be printed non stop across the planet while bitcoin will keep following the same minting rate, locked at the same growth pace and the same 21M max limit. Isn't this a million times better than a system that is by design made to rob us?

simonmales 6y ago

Off-topic: Does anywhere exist where one can read a slightly better formatted version of S-1 documents?

alex-wallish 6y ago
I'm working on this. Will post on hn soon.

sebastien_bois 6y ago

Wonder why the first picture with an app shows BTC going down, with the actual price covered up.

xoralkindi 6y ago

Someone on here once said decentralized systems tend to end up centralized, this will be my goto example. A p2p system of exchanging digital tokens end up centralized around the a bank.

tcoff91 6y ago
There are so many other options than coinbase for fiat <-> crypto exchange. How is crypto centralized around coinbase? Hell if you really want to be a true cryptopunk you can use bisq for decentralized crypto <-> fiat exchange.

meagher 6y ago

Coinbase is extremely lucky that BTC seems to have established a new floor. I’m curious how bullish they were after the crash a few years ago.

hestefisk 6y ago

Good for them. But am I the only one who finds it slightly ironic that the brainchild of distributed ledger tech and crypto currency capitalism is now filing for IPO in what is the hallmark of old capitalism (regulated markets)?

capableweb 6y ago
Coinbase is the brainchild behind cryptocurrencies? How? They were not the first, they are not the biggest, they don't have the most cryptocurrencies/platforms, they are not the fastest/cheapest/best support and so on. In fact, I can't figure out a single thing that Coinbase is the best at in the cryptocurrency industry. So what do you mean with brainchild here?
- amenod 6y ago
  Note that GP stated they are "brainchild of cryptocurrencies". I don't think that the meaning you imply is what they had in mind.
  - capableweb 6y ago
    "brainchild of distributed ledger tech and crypto currency capitalism" sure sounds like they are implying Coinbase almost invented cryptocurrencies. But English is not my native language so maybe I misunderstand it wrong.
jcfrei 6y ago
There's just more money that you can raise if you go down the traditional IPO way. ICO tokens can be very lucrative too (check out BNB) but there's a lot more regulatory uncertainty around them. Plus fund raising is crazy at the moment on Wall Street so this makes perfect sense.
candiddevmike 6y ago
It's always better to sell shovels

mlacks 6y ago

I use coinbase as it was the easiest and least sketchy way to buy a couple of years ago. I feel though that a lot of the big gains for a particular coin are made before coinbase authorizes that coin for trade on their platform. Can anyone provide some insight/ ELI5 as to why the coin selection is curated vs a free for all?

pmorici 6y ago
It takes work to support trading if a coin. Coinbase in particular is conservative about listing new coins because they don’t want to run afoul of sec rules and list coins that qualify as securities. They blogged about what factors they consider when listing new coins a few years back. Coinbase is often the last to list a coin and rarely the first so if you only use Coinbase you are getting in later to n the game. The exchanges that list every junk coin under the sun though are often offshore and hire risk in many regards.
yrgulation 6y ago
> a lot of the big gains for a particular coin are made before coinbase authorizes that coin interesting observation. it seems to be the case for binance as well. i see coins gaining 20-30x before or right when it gets listed. perhaps “insider” trading right before a coin listing? As for coin curation i suppose thats as a means to filter out scams.
- vidarh 6y ago
  A lot of listing is preceded by extensive campaigns to build support to get a coin listed. It's unsurprising that this leads to prices going up. "Insider" is extremely vague here given that a lot of this will be activity surrounding the dev teams that may or may not have anything to do with the people who started the coin.
- aww_dang 6y ago
  Perhaps there is also an element of limiting competition for vested interests?
capableweb 6y ago

brunorsini 6y ago

Does anyone please know where to find the cap table? I assume it should be public by now — am I wrong? Couldn't find it under the document's "Capitalization" section. Thanks

kacy 6y ago
Page 184 looks like it has some of the info you’re looking for

newbie578 6y ago

I have no doubt that they have a good business model, and that they are positioned quite nicely in the market. It's just that these valuations are getting crazy.. Everyone is already pricing in like 10+ crazy years of growth. Not everyone can grow like Facebook did...

dd36 6y ago
Agree. What’s the upside? How can Coinbase be valued at nearly that of large banks that process orders of magnitude more transactions and can actually earn money on balances? NYSE and NASDAQ are surely not valued at anywhere close to $100b. Does that mean Coinbase can acquire them? Bubbles are bizarre. EDIT: Yes, it is valued at more than ICE and NASDAQ combined with a fraction of the revenue and significant risk. Most optimistic outcome priced in at $100b. Is the benefit of *NoPOs” that there is no underwriter to push back on the valuation? Maybe you can get a few suckers at a super high price therefore you should?
- kolinko 6y ago
  By „fraction” you mean a quarter of revenue - Coinbase having around 1B in revenue, Nasdaq having 4B in 2020. Then, Coinbase grew 300% in the last year, Nasdaq just 33%. It’s like asking how Amazon can be worth more than Barnes and Noble in 2004 (or what year that was).
  - dd36 6y ago
    Except Amazon had opportunity to move beyond books. Coinbase should be valued nearly as much as Wells Fargo because maybe it will become Wells Fargo?!? Coinbase is tied to crypto inflation. That bubble can keep going but it’s a fraction of the volumes of the large players and I don’t see any long-term competitive advantage if crypto actually becomes useful to daily commerce. EDIT: And fraction was less than 1/10th of the combined entities. Again, where’s the upside? Are you saying this gets to tens of billions in revenue? Wells is at $80 billion and valued at $150 billion. Is Coinbase going to get to $80 billion in revenue? How?

fasicle 6y ago

Could Coinbase have done an Initial Coin Offering (ICO) to raise money for their investors and employees instead, where the coin tracks revenue or something?

kolinko 6y ago
They would need to invent a whole new protocol and make sure the token value somehow stays up - which is independent from how much money they earn from fees.
ceejayoz 6y ago
Why?
- deleted 6y ago
  [deleted]
user-the-name 6y ago
They could, if they wanted to be sued.
langitbiru 6y ago
Binance did ICO, though. https://whitepaper.io/document/10/binance-whitepaper https://whitepaper.io/document/10/binance-whitepaper
mindcandy 6y ago
That was attempted by many companies during the ICO craze a couple years ago. It took quite a while for the FTC to issue guidance on just how they expect such offerings to work and remain on the FTC’s good side. What they eventually came up with was useless. Basically, you could pre-sell coupons for service discounts. Pretty much anything else would get you in trouble. And, so we don’t hear so much about ICOs any more.
ketamine__ 6y ago
Binance did something like this with BNB.

harporoeder 6y ago

Coinbase is currently trading on private markets at a 77 billion dollar valuation: "Those shares in the largest crypto exchange in the U.S. are changing hands on the Nasdaq Private Market at $303 a piece, according to two people with knowledge of the auction. That implies a total company value of about $77 billion – greater than Intercontinental Exchange Inc., the owner of the New York Stock Exchange." (1). It will be interesting to see how that translates to the public markets. 1. https://www.coindesk.com/coinbase-valuation-nasdaq-private-market https://www.coindesk.com/coinbase-valuation-nasdaq-private-m...

atian 6y ago
Secondaries on Bitfinex are trading at $17 a pop equating to a $3.7B valuation for Bitfinex. This seems a bit low compared to Coinbase's for running the hodgepodge operation that is Tether.
- 0xy 6y ago
  It seems low because Bitfinex has a literal money printing machine that the New York AG doesn't care about as long as they get their kickbacks in the form of fines.

mensetmanusman 6y ago

Do you think BTC is worth $500k? If so buy Coinbase.

mciancia 6y ago
Why not just buy bitcoin then? Do you think coinbase will go 10x faster than btc?
- ketamine__ 6y ago
  Coinbase makes money in a down market because of trading volumes.
  - xadhominemx 6y ago
    I guarantee you coinbase stock is going to be highly correlated to the price of Bitcoin.
    - ghayes 6y ago
      I would disagree. Coinbase's value is based on volume and volatility. If anything, stable values are the worst time for exchanges, as experienced in early 2019.
      - smabie 6y ago
        Ehh, sort of. Volume is highly correlated with return due to the wealth affect. When crypto crashes people stop trading.
      - xadhominemx 6y ago
        For a normal exchange yes, but for a Bitcoin exchange the long term revenue is going to depend on future interest in Bitcoin which is highly correlated to current price
rvz 6y ago
Before you do that, wait for the bear market and when the financial system 'goes back to normal'.

andysinclair 6y ago

-We have applied to list our Class A common stock on the Nasdaq Global Select Market under the symbol “COIN.” This in itself will probably add a few billion in market cap...

glapworth 6y ago

It's interesting that on the first page under the copies to section they reference Satoshi Nakamoto and the genesis block of BTC.

lucasverra 6y ago

I do ask myself if a 100B valuation on public listing is the start of mainstream crypto. Plus the direct listing is a giant middle finger to traditional banking and overall establishment, right? Like : Here are the new rules this new internet will be playing by. Direct, decentralized. Adapt or die?

zrail 6y ago
They still hired Goldman and Citi to advise on the listing.
- mritchie712 6y ago
  yes, little middle finger at best.
globular-toast 6y ago
Coinbase play within the rules of the current establishment.
- nunchuck 6y ago
  And at the same time, they're influencing history. For better or worse, I guess we'll have to see.
- appplemac 6y ago
  Agreed, I personally view them as a bridge between the traditional brokerage model that more traditional investors can understand and use, and the crypto world that is looking to be separate from the traditional model.
- lucasverra 6y ago
  Direct listing is kinda novel, nah ?
  - Xixi 6y ago
    Slack and Spotify went the direct listing route, but indeed it’s pretty rare compared to IPOs.

pmurt7 6y ago

I have tried to use Coinbase this past month to buy some ETH. Worst customer support I have ever seen in my life. Have a look at Reddit to see what's going on with this company: https://www.reddit.com/r/CoinBase/new/ https://www.reddit.com/r/CoinBase/new/ It's not ok to brag about your business when many of your customers are in deep emotional stress because you mess with their money.

swiley 6y ago
As a former customer of mtgox and someone who hung out in #bitcoin-otc on freenode half a decade ago: they're still better than most of the exchanges.
- quickthrower2 6y ago
  Hardly a glowing recommendation
josefresco 6y ago
You'll find the same situation over at Binance. All of these exchanges (even Robinhood who just updated a ticket I opened weeks ago) buckled under the load of the increased participation.
- anonisko 6y ago
  This right here. We're in a huge bull run for an emerging asset class with little institutional support. Since no can ever perfectly predict when the herd is going to start to stampede, it's not at all surprising that the exchanges have been overwhelmed by support requests.
nunchuck 6y ago
Long time customer of CB. I had a great experience thus far, but haven't been active on them in the last 18 months. Tried to get a family member signed up, their account funded, and some trading accomplished. Phew! The customer support has gone down hill in the form of 4 to 5 days to respond, and when the response finally arrived it was wholly inadequate to solve the issue, which would require a us to reply, triggering another 5 day wait. They were also not very friendly/human in their communications. Tried Gemini, and it was night and day. Same day or next day responses. Friendly communication. Concise answers. Quickly established account, got it funded within 24 hours, and executed a trade. Family member is pleased.

buryat 6y ago

numbers are very good, $1.27B revenue with $322M net income for 2020

dustinmoris 6y ago

I wouldn't be surprised, and by that I mean I actually believe, that organisations like Coinbase are directly manipulating the price of BTC in order to create a big hype and excitement before their IPO.

ignoramous 6y ago
Market manipulation is nothing new but with crypto, manipulation is inevitable and unavoidable, partly due to it being born on the Internet. In fact, the way crypto works, I can only see Coinbase' (and other companies in this space) valuation going up, because for all the hype, crypto is still in the very nascent stages of the adoption curve. A lot is left to be figured out, and that's part of the reason why skeptics and proponents disagree so vehemently. Thus far, the skeptics have been losing, and in my opinion, would continue to.

u678u 6y ago

I thought that the point of crypto is low fees? Nice that crypto has a $~1T market cap. But just one broker is going to have a market cap of one tenth of that. Makes no sense.

Tenoke 6y ago
>but just one broker is going to have a market cap of one tenth of that. Makes no sense. Especially given that this one exchange itself has only 11% of the top exchange's volume[0]. On the other hand, it's not as easy for institutional money to get into crypto directly as it is to buy Coinbase stock. Additionally, Coinbase is (likely) a less volatile investment in the future of the whole crypto market rather than picking specific winners. 0.https://www.coingecko.com/en/exchanges https://www.coingecko.com/en/exchanges
ketamine__ 6y ago
The market cap of crypto is much larger than 1B. It's at least 1 trillion.
- u678u 6y ago
  You're right, I've updated.
- CamelCaseName 6y ago
  Clearly a typo given the following sentence...
  - ketamine__ 6y ago
    It wasn't clear to me......

anonu 6y ago

Love reading the risk factors section. First thought: how can a lay person possibly understood the risks as laid out here? Also they view this as a major risk: •the identification of Satoshi Nakamoto, the pseudonymous person or persons who developed Bitcoin, or the transfer of Satoshi’s Bitcoins; Second thought, what an incredible business and growth. 1.14bn in revenue on 193bn in trading volume: thats 60bps on every dollar traded. These are insane fees ripe for disruption.

dabeeeenster 6y ago
I don't quite understand what the risk to coinbase is if Satoshi is alive/identified? Do they think he has a hack or something?!
- fidrelity 6y ago
  If Satoshi is identified he might also still be alive. This means that Satoshi's BTC (~1mio.) are potentially liquid which would mean a gigantic influx of fresh bitcoins. It's quite plausible that any movement of these old wallets would crash the Bitcoin price for quite a while.
  - XorNot 6y ago
    It's actually a lot worse then that: if anyone gets access to Satoshi's private wallets (i.e. via finding the keys printed out on paper in a personal effects safe or something) then those coins could move. There's no way to absolutely sure that the keys are gone and inaccessible permanently.
    - jcims 6y ago
      I'm a complete n00b so this is coming from a place of ignorance, why is that such a factor in the current price? Someone is sitting on $50B in a $1T market, who cares?
      - shawabawa3 6y ago

pk_kinetic 6y ago

Maybe with some public accountability they can finally solve the issue of their servers “going down” every time there is a rush to sell.

arnaudsm 6y ago

Many have forgotten why we used cryptocurrencies in the first place. The original promise of cryptocurrency was to become independent from banks. In the end CoinBase (like every exchange) is a great product, but just a bank. It's centralized, hackable, has economies of scale, etc.

rawtxapp 6y ago
It's an exchange, as soon as you're done trading, you can and should withdraw your coins to your personal wallet.
- waheoo 6y ago
  This is such a trope. Do you pull your funds from interactive brokers after you're done trading? What about vanguard? 401k?
  - spurdoman77 6y ago
    In many cases it is probably goood choice to keep the coins in custodial, but the fact that you have a possibility for self-custody is great.
  - RealityVoid 6y ago
    It's great that you _can_ do this, but... a lot of times it does not make sense. Still, the option to do so is very important and valuable.
  - rawtxapp 6y ago
    I'm not sure how you can pull stocks from an exchange once you're done trading. Personally, I deposit coins into an exchange, do my trade and withdraw it as soon as possible. Not just because I think there's a risk they might get hacked, etc, I also don't want them to hold my funds later on for reason x,y,z.
    - ceejayoz 6y ago
      https://en.wikipedia.org/wiki/Stock_certificate https://en.wikipedia.org/wiki/Stock_certificate

snicksnak 6y ago

Didn't know that Mark Andreessen/a16z own that huge chunk of coinbase.

ignoramous 6y ago
a16z are one of the biggest institutional investors in the cryptocurrency space: https://a16z.com/crypto/#vertical-landing-investment-thesis https://a16z.com/crypto/#vertical-landing-investment-thesis
- neximo64 6y ago
  It's in his personal name not A16Z
  - snicksnak 6y ago
    while his name is listed in the table the footnote says > (4) [..] held by entities affiliated with Andreessen Horowitz, as reflected in footnote 9 [..] footnote 9 attributes the shares to him and a variety of funds

hn8788 6y ago

Created a coinbase account recently and found that there's no way to verify your identity if you have an expired ID. Because of covid, Maryland let expired drivers licenses still be valid for the forseeable future, but Coinbase automatically declines them.

dgellow 6y ago
Also, no way to select a country different from your nationality. Whatever country you select they always change it back to the country of the passport or ID card you provide, even if you live in a different country than your nationality...
- Havoc 6y ago
  Yup. Shovelled a couple countries worth of docs at them. All rejected. And then something got accepted anyway retrospectively. Like uhm ok then.
- capableweb 6y ago
  I'm was in the same boat a couple of years ago. One email to support fixed the issue for me.
dumbfounder 6y ago
I had the same issue trying to buy Sudafed at CVS. Can you use a passport?
- hn8788 6y ago
  I don't have a passport. The expired ID hasn't been an issue until now, because the state government sent out a letter you are supposed to keep with you that explains the situation, and says the ID is still valid. I ended up scheduling an appointment to get a new ID, but it's a ~3 month wait.
smoldesu 6y ago
I am in the same boat, and it's remarkably frustrating since I have a relatively large amount of assets in their service, assets I cannot withdraw without confirming my identity.

purple_ferret 6y ago

43 million users yet the narrative is cryptocurrency is still in its 'infancy.' I wouldn't be surprised if at least 10% of all Americans have dabbled in buying crypto.

cirowrc 6y ago
given how big the world is, _yes_, still infancy
- purple_ferret 6y ago
  Well Coinbase marketshare of crypto buying is small (like 3% volume of bitcoin) so unless you believe every person on the planet will wind up trading crypto, it really isn't.
- Tepix 6y ago
  Given what users Bitcoin and Ethereum appeal to (those that don't mine high fees), no.

DSingularity 6y ago

They define hodl in the S1. Amazing times.

elwell 6y ago

> Hodl: A term used in the crypto community for holding a crypto asset through ups and downs, rather than selling it. I appreciate the glossary

ghego1 6y ago
Pure meme gold. I'd like to see the face of the intern/entry position lawyer to whom they said: define hold. And then went on reddit for several hours

DSingularity 6y ago

So when is the listing?

asasidh 6y ago

Satoshi Nakamoto (page 1)

Ninjinka 6y ago

I loathe Coinbase. Their support team is a joke (over a month with no response) and site stability is non existent.

Vadoff 6y ago
Yup, it's been almost two months since I've originally messaged support about being unable to access my account. They said they would schedule a security interview, then never followed through. I don't know how it's legal for a company to lock your account w/ funds with no explanation for this long.

f430 6y ago

when is coinbase going to IPO?

A12-B 6y ago

They don't let you buy dogecoin. I sleep.

baxtr 6y ago

I am somewhat disappointed that they don’t do an ICO.

goat_whisperer 6y ago

Bitcoin made a lot of sense when I first read about it in 2011. Back then I feel like it was primarily used as an anonymous payment method. Think dark web/silk road type stuff. I certainly don't endorse that behavior, but bitcoin as a payment method made a lot of sense. Bitcoin makes 0 sense to me as an investment. It's pure speculation with no underlying intrinsic value. It's the Dutch Tulips 10.0 basically. And now because the value of bitcoin is unbelievably volatile, it now makes 0 sense as a means of payment.

silentsea90 6y ago
At what point either in years or market cap or price per coin will you start to question your mental model of Bitcoin?
- goat_whisperer 6y ago
  Ironically, as the market cap and price per coin increase, I grow more and more skeptical of bitcoin!
  - silentsea90 6y ago
    Why so?
- graeme 6y ago
  Not OP, but for me it would be about when crypto actually starts doing something. Smart contracts and NFTs show the hint of a possible future use case. But Bitcoin seems to have no use case, and it takes more and more energy as the price goes up. The higher price absent any use case or advantage seems like it only has speculative value. It could become a religious thing where it has value because people value it: a lot of gold’s value exists for this same reason. But I’ll wait to see how things play out with Tether before thinking that is likely. They are under pretty severe reporting requirements for the next two years and if they can’t show reserves for the $30 billion they printed last year they are in trouble.
  - 6y ago

efitz 6y ago

Coinbase’ customer support is crap. You van only get someone on the phone if your account is compromised; anything else goes to email, and they respond when they get around to it. Also their email verification system for transfers fails frequently causing transfers to be canceled. Pretty convenient way for them to keep your money. I am biased but I’m pretty unhappy with coinbase right now.

Vadoff 6y ago
Yup, it's been almost two months since I've originally messaged support about being unable to access my account. They said they would schedule a security interview, then never followed through. I don't know how it's legal for a company to lock your account w/ funds with no explanation for this long.
- leppr 6y ago
  I've had the same problem. They locked my account which I was using since 2015 by invalidating my KYC and refusing new verification attempts. The support emails take days/weeks to get answered or stay ignored, and didn't lead anywhere. Thankfully I had installed the mobile app on an old phone, and I was able to login through the app and withdraw my funds. That's damning both for their customer support and their security. Good thing they have decent existing and upcoming competitors. I don't see the $100B valuation sustaining unless it becomes another meme stock ala TSLA. But then we're back to our issue, most Tesla users love their car, most Coinbase users hate it. How could it get widespread retail endorsement?
- elliekelly 6y ago
  A regulation-free market at work!
  - leppr 6y ago
    In a regulation-free market Coinbase would not exist or better alternatives would just be forked into existence.

ppierald 6y ago

Argentina is a great example. I am an American and have been there many times. They have extreme inflation and regressive policies against USD or foreign currency. Take a look at https://bluedollar.net https://bluedollar.net. Official rates are buy at 89.98 and sell at 94.98 (ARS). Unofficial rates are buy at 138 and sell at 143. That's a massive spread saying that the people on the street are willing to spend 35% more because they know the Peso will eventually blow up and the USD is more stable which they can sell down the line for more ARS. This is sketchy in country. You might be walking a slightly illegal line. Possessing cash makes you a target for theft. Owning bitcoin makes this money transfer and storage of equivalent money easier.

mettamage 6y ago
Awesome comment! Can you elaborate on this? If you can't do so in public, then I'd like to have a conversation about this. I'd like to know more about inflation issues and unbanked issues with regards to cryptocurrencies. To me, it always feels like "crypto marketing" (for lack of a better term), but I am also realizing that I'm living in a far removed bubble and find it hard to get out of it. My email is in my profile if you feel it's handier to have a private conversation instead. I think crypto is fulfilling one need at the moment which is: if you happen to have a super crazy inflationary national currency and you don't have access to actual dollars, then there's always cryptocurrencies that are most likely less crazy (in the inflationary sense).
- phreack 6y ago
  Yeah that's exactly it. If your coin loses value by the second, you end up turning to whatever other asset you can find. If you can't acquire a state-based currency from a more stable country, real estate, or any other stable asset like stocks or index funds, you turn to crypto. There's lots of people with no tech background investing in stablecoins.
csomar 6y ago
Most countries with capital controls have this spread. There is a reason that they have these capital control in place. Most people in the western world don't have any idea how bad it is. Here is how much bad it is: https://tradingeconomics.com/country-list/inflation-rate https://tradingeconomics.com/country-list/inflation-rate

webwielder2 6y ago

So setting aside the merits of Coinbase as a business or the philosoeconomic significance of cryptocurrency, should I buy Coinbase stock? I want to make easy money by buying stock. Think it'll go up after it's listed?

vmception 6y ago
Its a tech company that makes money. The market wants more of those. Yes.

azinman2 6y ago

So almost all of the comments here are about bitcoin generally. While that’s not totally surprising, does anyone have any insight on whether or not this S1 reveals interesting data that might inform the public about investing in coin base (eg why they filed an S1)?

carlineng 6y ago
From "Use of Proceeds" on p78: "To the extent any registered stockholder chooses to sell shares of our Class A common stock covered by this prospectus, we will not receive any proceeds from any such sales of our Class A common stock." This is a direct listing, so I think its primarily a liquidity event for investors and employees.
- richardwhiuk 6y ago
  That's standard surely? They will be issuing new stock which they will receive sales?
  - carlineng 6y ago
    In a Direct Listing, the company does not issue new shares. This doesn't mean they can't in the future, but it's just not part of the company's initial listing on the public markets.
  - bostonsre 6y ago
    It sounds like they don't need money.
ttul 6y ago
Their growth rate is staggering, and they are enormously profitable. I was most stunned by the gross margins. They spend so little to make so much. It illustrates how feverish the crypto investing world is.
- atomicnumber3 6y ago

diebeforei485 6y ago

So, how long is the employee lockup period?

lawrenceyan 6y ago

Not a single mention of Monero or privacy coins? Thanks, but I'll be sticking with Kraken where the CEO actually has a spine.

mancerayder 6y ago

Is BTC still a hedge if it's 50k+? I don't know whether it's a good speculation or one to hedge against. I've avoided it all this time and with banks and corps getting on board, I feel left out.

tibiahurried 6y ago

Why would anyone use Coinbase when Binance.US is way cheaper , better product and overall more listed assets ? I honestly don't get it.

6gvONxR4sf7o 6y ago

> Address Not Applicable ^1 > ^1 In May 2020, we became a remote-first company. Accordingly, we do not maintain a headquarters. Total tangent here, but every time I fill out a really old-school form (e.g. loan stuff), it asks for my company's address and phone number. It gets harder every job to figure out what the hell that number should be. In my last job I has to give out one of the founder's cell phone numbers for it.

ConcernedCoder 6y ago

Well the bubble is official now... hang on everyone!

tfang17 6y ago

Biggest surprise on the S1: CPO who joined exactly 1 year ago was given 2M shares, currently valued at $750M.

thundergolfer 6y ago
Snowflake’s CEO, Frank Slootman, made a similarly insane amount of money on IPO after being at the company for 18 months. I think he got given what became over $1 billion worth.
- fshbbdssbbgdd 6y ago
  If these execs with fancy credentials make investors trust the company more, and then the investors give the company an eleven-figure valuation, it’s not hard to argue the execs contributed 1% of the share price. It’s a better deal than the SPACs, where the big name gets 5% of the equity for doing even less.

berniemadoff69 6y ago

answer: the word 'fiat' appears 40 times in the comments of this kind of hn thread

hankchinaski 6y ago

in a gold rush sell shovels

carlineng 6y ago

Trading volume of "Other Crypto Assets" (non-BTC/ETH/LTC) made up 44% of revenue in 2020, which they attribute to DeFi crypto assets. I wonder how 13% of their assets drives 44% of their revenue? The section on Applications talks about DeFi as peer-to-peer financial agreements, which implies there's some underlying economic activity going on, as opposed to just speculation, but I haven't been able to find anything else that digs deeper into that piece.

quickthrower2 6y ago
People gamble more on shit coins but hold on to BTC and ETH

ipnon 6y ago

Coinbase is critical to the widespread adoption of crypto because it acts as a bridge between everything-is-regulated and anything-goes. Cryptocurrencies are only bound by the rules of the programs that run them, but they exist in the "real world" where powerful states have guns and nukes and can pass laws that would make using cryptocurrencies too risky for the general public, even if it would still be technically feasible. Coinbase is clearly the leader in this bridge-space and I suspect this IPO will go nicely.

quickthrower2 6y ago

Do they have a moat? What’s to stop 100 other US exchanges popping up?

didip 6y ago

Transaction revenue increased $633.2 million, or 137%, for the year ended December 31, 2020 compared to the year ended December 31, 2019 primarily due to a 142% year over year increase in Trading Volume. Subscription and services revenue increased $25.0 million, or 126%, for the year ended December 31, 2020 as compared to the year ended December 31, 2019. Wow, $1B transaction revenue and $44M subscription revenue. These guys are making a lot of money for a pure digital product.

jsutton 6y ago

I find it interesting (sad, actually) that most other S-1 posts on here are congratulatory for the most part, giving kudos to the teams (look at the DO one today). However, when it comes to anything crypto related, the emotions really come out. It's all "bitcoin/crypto is useless, doesn't solve any problem, waste of talent." For a community of hackers, there really seems to be a lack of vision when it comes to crypto specifically.

entropea 6y ago
I don't know if you're considering what Coinbase is when in alignment with cryptocurrency. It is exactly what cryptocurrency was supposed to not be. It's centralization, it's a bank. I personally have no emotion towards it, but I definitely understand those who do as the cryptocurrency project was quickly taken over by the same old financial interests.
- beaner 6y ago
  False. The objective of crypto isn't to force everyone out of the banking system, it's to provide an ability to opt-out and be your own bank for those who need or want it. If you want to use a traditional bank or custodian instead, go for it. And indeed, for many people who cannot and should not be managing their own keys, it's the preferable option.
  - xirbeosbwo1234 6y ago
    Bitcoin was supposed to replace banks but isn't up to the job. It is completely impossible to "opt-out" because people want to be able to pay for their groceries without waiting a half an hour and paying half the cost of the things they bought in transaction fees.
- ketamine__ 6y ago
  You need fiat on ramps for crypto to work. Contrary to what other commenters have suggested you can't legally help other individuals convert their dollars to BTC. That's acting as a money transmitter.

quartus 6y ago

Anyone else care to comment on the S-1 itself? Revenues doubling, and a rare example of a tech company that is actually profitable before IPO (to the tune of $320M net profit on $1.1B in revenue). Seems like a great business to me! Given current market conditions, I wouldn't be surprised to see a market cap on first day of trading of $50B or more

carlineng 6y ago
Some sources say Coinbase has already been trading at >$100B on private markets [1]. I find it interesting that about 2/3 of their trading volume (and thus revenue) is from institutions. Also that 44% of their trading volume is from "Other Crypto Assets", which implies that there must be a rather large bit of institutional activity in "Other Crypto Assets", and it's not just the stereotypical retail crypto investor trading in alt-coins. [1]: https://www.axios.com/coinbase-valued-100-billion-direct-listing-9b43e316-7ff7-4f6a-a1db-4dc2481a93ee.html https://www.axios.com/coinbase-valued-100-billion-direct-lis...
quickthrower2 6y ago
I wonder if they are buying Bitcoin with profits like is all the rage these days

aplummer 6y ago

I don't know much about the future of crypto, but I do know that for now, people love to buy and sell it.

hrpnk 6y ago

The compensation table looks interesting. $1M in salary and $56M from stock options. 2-3x higher base salary and 10-25x higher than in the case of DigitalOcean.

dang 6y ago

Threads are paginated for performance reasons (yes we're working on it), so to see the rest of the comments you need to click More at the bottom of the page, or like this: https://news.ycombinator.com/item?id=26262170&p=2 https://news.ycombinator.com/item?id=26262170&p=2 https://news.ycombinator.com/item?id=26262170&p=3 https://news.ycombinator.com/item?id=26262170&p=3 (If you've already seen a bunch of these, I apologize for the annoying repetition.)

TeeMassive 6y ago

How do I invest?

henron 6y ago

I'm not a fan of crypto as it exists today, but setting that aside, I feel like coinbase is at an unstable equilibrium as a business. If bitcoin becomes more mainstream, the high fees will not fly indefinitely, and margin drops. If bitcoin falls, then there's no growth proposition.

abarrak 6y ago

Waiting patiently for HashiCorp! I tried through EquityZen but no luck.

hikerclimber 6y ago

Hopefully this company fails.

aleggg 6y ago

What does the "Satoshi Nakamoto 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa" on page 1 means?