Bitcoin Forum

This alarm bell went off in my head as well. Why now? I'm never mad at a company changing focus, but at such a critical /uncertain time, given blocksize/halving/eth competition concerns, why? Is someone aware of something we don't know? Because this transition is not free, capital and manhours will be spent to accommodate this rebranding/restructuring. and given how shrewdly this company has been ran, I don't expect a capital outlay without commiserate return.

This alarm bell went off in my head as well. Why now?

Wow another spam thread from Eth scammers.  Nowhere in the article does it mention anything about "mass exodus".  The only mass exodus is going to be when the $130 million denominated in Eth in the DAO can be sold on May 28th.  The single entity pumping Eth right now is going to pull the plug and dump long before that date comes.  Then the Bitcoin halving will also cause Eth to crater on top of that.  Eth is in a huge bubble and has 2 events coming that are going to destroy it (not that it even has any fundamentals in the first place).

Pretty simple to answer. Ethereum trading volumes are sky high, competitors such as Gemini are already trading it. You don't even have to consider anything about Bitcoin to see this makes sense for Coinbase to do, at least viewed short term.

Bitcoin refusing to scale onchain bottom line is what's going to blow it up.  Also it's what is driving the value to Eth.

Armstrong is forward looking due to this.  The value of a chain is fungibility - offchain scaling ruins that.  A network that is refusing to increase capacity is worthless to investors.

I agree Eth is in a massive pump.  Partially because of what you said "If bitcoin doesn't increase in value before/at/soon after the halving - it will be considered a failure."

People are starting to wonder if that's going to happen and eth is exploding.  

Yep.  It seems the focus of most exchanges is altcoins, not necessarily bitcoin trading.  It totally makes sense Coinbase is doing this.

Ethereum verification costs are vastly higher than Bitcoin

Brian Armstrong has been a strong advocate of on chain scaling.  In fact, Theymos banned his support people who were trying to help people with deposits on /r/bitcoin for something Brian said on Twitter about bigger blocksizes (not /r/bitcoin).  Based on that and the way Blockstream ignored exchanges it has been my belief for awhile that Brian has had his eyes open for what would satisfy onchain scaling and be adoptable by the masses.  (All my theory).

Ethereum volume has been hard to ignore - it looks like he's taking a big risk.  Even R0ACH says if bitcoin doesn't go up significantly pre-halving that it can be considered a failure ... it's looking to me like it's going to go down which in conjunction with the halving of rewards could pull miners off and overload the already overloaded blockchain.

Which could be bad.

Watch things closely over the next several weeks.

The next block reward halving is coming up in July. Let’s say that miners on average are able to mine a coin for $250 (I don’t know the exact number, so this is a guess). After the halving in July their cost to mine a coin will double to $500. If the bitcoin price stays around $425, it will be unprofitable for a number of miners to continue mining.
The implication of this is that we could see a reduction of hashing power on the network at the July halving date. Perhaps in the range of 10–50% (I don’t have a good way to estimate this, if anyone does please post it).
In a worst case, let’s say that 50% of hashing power turns off at the block halving because it is no longer profitable for those miners. This would mean that we start getting blocks mined every 20 minutes on average instead of 10 minutes. But blocks are already 70% full today. If the average confirmation time goes to 20 minutes, it means that we will be at 140% of capacity on every block, and start accumulating a backlog.
Bitcoin has a mechanism to adjust the difficulty of proof-of-work when hashing power changes. This happens every 2,016 blocks, which is normally about two weeks. But if we’re mining a block only every 20 minutes, then this will take four weeks.
It gets worse. Even after four weeks of being over capacity waiting for the difficulty to adjust, there is still up to another two weeks of backlog to churn through before getting back to “normal” (70% capacity and occasional delays). So you are looking at about a six week period of ~2 week confirmation times or drastically higher transaction fees. In addition, with so many pending transactions the mempools of most nodes will fill up, meaning it is likely that most bitcoin transactions will not even relay, much less confirm. This could prevent merchants and wallets from getting a notification about a transaction for weeks.
If this causes the bitcoin price to fall, it will make mining less profitable, and a negative spiral could happen.
It’s unclear what the likelihood is of the above scenario (admitedly, I’ve described a worst case scenario). With the new supply of bitcoin halving, this could also drive the price up. And it’s difficult to estimate what % of hashing power could turn off at the halving. It could be much less than 50%. But I also feel that there is no reason to risk it and it’s incredibly irresponsible to play things so close to the edge. The network today, with 70% of blocks full, is already experiencing congestion issues and backlogs. Any reduction in hashing power will exacerbate the problem.
The fact that bitcoin core has allowed the network to reach this point is incredibly negligent, and I think says a lot about their motivations and competency as a team. There is no reason to roll the dice and see if this failure scenario comes to fruition.

I'd be much more worried about how much the Eth price is going to implode.  It's a single entity pumping it who is going to exit before the Eth DAO can dump on May 28th.  So first the Eth pumper dumps, then the DAO people dump, then the Bitcoin halving happens to dump Eth more.  What do you supposed the Eth price is going to be after 3 mega dumps?

Have fun looking at this Bitcoin chart that's going to implode Eth you shills and scammers:

https://twitter.com/bbands/status/733009813815222273

https://i.imgur.com/QQT33J3.png

https://medium.com/the-coinbase-blog/what-happened-at-the-satoshi-roundtable-6c11a10d8cdf#.5t9b4f9t4

Armstrong is hedging against a scenario he lays out here:

We now have a full house of exchanges that trade ether against fiat: Coinbase, Kraken, BTC-E, Bitfinex and Gemini.

Nobody believes any of you lying shill Eth scammers.  Ethereum verification costs are vastly higher than Bitcoin, which makes scaling more important for eth - yet Eth doesn't scale.  Don't give me your ridiculous lies about partitioning either with chains that can't interact with each other.  Since all recursive systems (PoS) are permissioned ledgers, it's the equivalent of Eth being an Amazon VM dealership, except instead of paying Amazon to supply you the hardware, you have to pay Vitalik for coins from his pyramid scheme (gas) + supply your own hardware too.

Pretty simple to answer. Ethereum trading volumes are sky high, competitors such as Gemini are already trading it. You don't even have to consider anything about Bitcoin to see this makes sense for Coinbase to do, at least viewed short term.