How many btc/month would Coinbase have to sell to become the largest exchange?

[cilphex]

It seems so much easier to use than MtGox, so I'm just wondering.

[1714191642]

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[notig]

I don't think they can possibly because of all the limitations they have to impose. I think they are meant for lower volume so they could never become the highest volume exchange that isn't their market area. 

[cilphex]

Can you explain what you mean by "all of the limitations they have to impose" and "isn't their market area"?

[notig]

well when you buy bitcoins through them they essentially give you a microloan. For instance if I suddenly saw the price of bitcoin drop to 29 dollars again I could go on coinbase and buy some... even though my money wouldn't get there for a week or so. By then the price of the bitcoins might have risen several dollars but you still get them for what you paid even though they didn't get your money until a week later. I don't think that translates into *huge* orders. We are coming upon a time where people are going to be investing hundreds of thousands of dollars in bitcoins through an exchange like the new mtgox/coinlabs deal. So I think that coinbase is *meant* for your average american. not "institutional investors" . but by definition institutional investors are going to be the biggest part of the market since they have so much money. Just my opinion

[justusranvier]

https://bitcointalk.org/index.php?topic=147270.msg1564043#msg1564043

2013-01-10: Coinbase raises bitcoin buying limit to 100 BTC per day for verified customers.
2013-01-15: The approximate start of the rally as noted above.
2013-02-08: Coinbase announces that customers are buying $1 million worth of bitcoins per month.
2013-02-26: Coinbase announces that customers are buying $3 million worth of bitcoins per month.

[Bugpowder]

$50 million / month.

[HappyScamp]

The hell with coinbase.

I am yet another jilted customer, and I am here to let people kn ow to stay away from them.

See: https://bitcointalk.org/index.php?topic=147341.0

[Stephen Gornick]

It seems so much easier to use than MtGox, so I'm just wondering.

Ironically, they are likely having to buy coins to meet demand and thus most Coinbase business probably is transacted through Mt. Gox anyway.

[cilphex]

It seems so much easier to use than MtGox, so I'm just wondering.

Ironically, they are likely having to buy coins to meet demand and thus most Coinbase business probably is transacted through Mt. Gox anyway.

Oh really?  I didn't know that this was how it was done.  I didn't know that Coinbase goes through MtGox.  Why do you say that they do?  I must admit I don't understand things to that level yet.  Is MtGox really the only way for btc and dollars to be exchanged right now?  Does everything out there claiming to be an exchange actually rely on MtGox?  What's preventing other services such as Coinbase from becoming real exchanges themselves?  How would bitcoin as a whole be affected if there were more than one real, actual exchange?

[Walter Rothbard]

It seems so much easier to use than MtGox, so I'm just wondering.

Ironically, they are likely having to buy coins to meet demand and thus most Coinbase business probably is transacted through Mt. Gox anyway.

I would imagine they are one of Tangible Cryptography's large private buyers.

[DeathAndTaxes]

It seems so much easier to use than MtGox, so I'm just wondering.

Ironically, they are likely having to buy coins to meet demand and thus most Coinbase business probably is transacted through Mt. Gox anyway.

I would imagine they are one of Tangible Cryptography's large private buyers.

I don't think they have used our service.  If they are, they are using an intermediary.

[Cubic Earth]

It seems so much easier to use than MtGox, so I'm just wondering.

Ironically, they are likely having to buy coins to meet demand and thus most Coinbase business probably is transacted through Mt. Gox anyway.

Oh really?  I didn't know that this was how it was done.  I didn't know that Coinbase goes through MtGox.  Why do you say that they do?  I must admit I don't understand things to that level yet.  Is MtGox really the only way for btc and dollars to be exchanged right now?  Does everything out there claiming to be an exchange actually rely on MtGox?  What's preventing other services such as Coinbase from becoming real exchanges themselves?  How would bitcoin as a whole be affected if there were more than one real, actual exchange?

That would be just one way to do things.  MtGox could always buy from Coinbase too.  But first any exchange will attempt to match buy and sell orders in house.  If there are leftover buys or sells, the exchange could then adjust the rates and let someone else perform the arbitrage, or the exchange could go searching for more supplies of USD or BTC itself.

[Cubic Earth]

I didn't realize Coinbase was an exchange.

Any place where you can convert currency from one form to another is an exchange.  Coinbase allows exchange between USD and BTC, both ways.

[DeathAndTaxes]

Coinbase isn't an exchange (and doesn't claim to be one).  They don't allow the creation of bids and asks.  They simply offer a quote with a fixed margin from spot.  What spot price ... MtGox's ticker.  That always requires an outside pool of liquidity.  

Note this isn't an attack on coinbase they have seen some impressive growth but think about it for a second.  Imagine right now nobody on coinbase wants to sell and one person wants to buy what happen?  Where does the coin come from?  Either coinbase needs to become the counterparty on everytrade, or they need an outside source to avoid going to long or short.

Broker =/= exchange.  Now coinbase probably could become a full exchange in the future if they wanted to but they aren't one.  My guess is they have no intention on becoming one either.  APMEX isn't a gold futures exchange but they sell and buy a LOT of gold as a broker.

[Cubic Earth]

Coinbase isn't an exchange (and doesn't claim to be one).  They don't allow the creation of bids and asks.  They simply offer a quote with a fixed margin from spot.  What spot price ... MtGox's ticker.  That always requires an outside pool of liquidity.  

Just because they are a broker does not mean they aren't an exchange.  Just Google "Exchange broker".  I agree they don't present themselves the same way that Mt.Gox does, but just because they have a simplified trading interface with only a 'market order' option doesn't mean they not an exchange either. That Mt.Gox doesn't have trailing stop and OCO orders doesn't mean they are not an exchange.

**Edited for Grammer

[DeathAndTaxes]

Have fun splitting hairs.

[Cubic Earth]

  APMEX isn't a gold future exchange but they sell and buy a LOT of gold as a broker.

APMEX = American Precious Metals Exchange, Inc
I don't know anything about them, but they do call themselves an exchange.

[Walter Rothbard]

It seems so much easier to use than MtGox, so I'm just wondering.

Ironically, they are likely having to buy coins to meet demand and thus most Coinbase business probably is transacted through Mt. Gox anyway.

I would imagine they are one of Tangible Cryptography's large private buyers.

I don't think they have used our service.  If they are, they are using an intermediary.

Interesting.

[cilphex]

So nobody actually knows how Coinbase works under the hood?