Coinbase is the new Bank?

[Tenchi-R]

Hi everyone, I have just created an account to become more active in the crypto scene, I hope what I am about to say resonates with some people, as I feel not enough people are talking about it, or maybe I am looking in the wrong place...

Today there were huge drops in the crypto scene, Ethereum was rapidly falling and had knocked off 15% since yesterday. As i sat at my desk refreshing coinmarketcap every half an hour I watched the crypto market cap fall about 15 billion in the space of a couple hours, pretty much every coin was in negative and were looking like they weren't slowing down.

So I go on Coinbase to see what their prices are and they are "down for maintenance", now lets not forget 2 days ago the exact same thing happened, coins crash down and Coinbase goes offline. Considering how huge Coinbase is, by them preventing people from selling their coins for fiat, they are obviously preventing and slowing down the drop in prices of the cryptos. So they literally prevent the panic selling that would lead to price deflation, then wait for the panic to be over, reopen, then everyone who sees the price has gone down buys and pumps the price back up to normal. To me this sounds like an incredibly artificial market, and not decentralised at all, we have a huge exchange who can essentially prevent price drop (which is obviously in their best interest, financially) and then reopen when they want.

Considering all of this I don't see how Coinbase are that different to a Bank, they will literally freeze your assets and their service when it isn't convenient for them, and furthermore they control the market. Is there anyone who is talking about the power of exchange services in detail? I feel like it is bullshit and is leading to a path where cryptos are not as free as we think.

As you can see my knowledge in this spectrum is not exactly sophisticated, but I think it is obvious that they are abusing the system and are becoming so powerful that they can completely manipulate the market.

What do people think about all of this?

[mrcash02]

Your point is very interesting and make much sense.

But we can't say with sure if they are doing this purposely to stop the crash in BTC price and even they are doing this, people don't need to use Coinbase to sell or buy their Bitcoins, it's not a monopoly, there are many other exchanges that could be used and that aren't going down simultaneously with Coinbase.

I would agree with you if Coinbase had the monopoly of Crypto-Currency exchanges and everyone would depend only their service.

[cpfreeplz]

I could see q small dip because of coinbase but they don't have a majority of the customers so it doesnt make sense for the 20% or so dip we saw since the last ATH we hit. I'm not worried. A correction was needed at this point.

[Tenchi-R]

I have a question, why is CoinBase not on coinmarketcap when clicking on the market pages for the currencies ? It is definitely dealing with millions yet it is no where to be seen on Ethereum, Bitcoin or Litecoin market?

[btc_angela]

Your point is very interesting and make much sense.

But we can't say with sure if they are doing this purposely to stop the crash in BTC price and even they are doing this, people don't need to use Coinbase to sell or buy their Bitcoins, it's not a monopoly, there are many other exchanges that could be used and that aren't going down simultaneously with Coinbase.

I would agree with you if Coinbase had the monopoly of Crypto-Currency exchanges and everyone would depend only their service.

I totally agree. They might not be doing it purposely, but the timing is quite odd for me. I think the OP has raised some valid point as well. Only thing I'm seeing is that coinbase does not have a majority of the crypto traders and if they are doing it purposely, only a few traders can be affected. And what benefit does coinbase doing this? for profit? I think they are doing it wrong, because customers will likely go to other trading platforms and as a result, coinbase will suffer from it.

[Tenchi-R]

Also, am I right in saying that Coinbase provide an exchange where you can purchase cryptos for fiat, and sell your cryptos for fiat, with the exchange/company itself. Where as Poloniex and Bittrex for example provide a platform that provides you with a place to your Fiat inside it, then you can trade your fiat with other people who want to sell their cryptos. Obviously the major difference I am trying to highlight is that Coinbase are actually providing a buying service that as a company they sell you a coin, where as Poloniex etc provide a platform, not the currencies themselves?

If this is true, you can see how for Poloniex they have no reason to try and control the market as they charge fees for trade, where as Coinbase want to sell you expensive coins.

Also I may have just answered my own question, Coinbase are not on Coinmarketcap because they are not a trading service, but more like a retailer. For me, a resident of England UK, Coinbase behaving like this is hugely problematic to my obtaining coins.

[AjithBtc]

I could see q small dip because of coinbase but they don't have a majority of the customers so it doesnt make sense for the 20% or so dip we saw since the last ATH we hit. I'm not worried. A correction was needed at this point.

Maybe that's true and a correction is highly required. The same correction should not take the price downwards. Soon the FOMO too will generate a large selling of bitcoin as the value decline seems to continue for a long. Even now big investors make use of the chance to buy low and​profit big.

[Limbor]

Already many times I met information about creating Bitcoin Bank or another structure for crypto currency as a bank, but this idea worries me a little. Although I am more concerned with the legal aspect of this issue. Will such a bank be able to defend the interests of users of crypto currency?

[Idrisu]

You have make a reasonable points and many people are complaining not just now but when ever there is a dropped in price of bitcoin and others major crypto currencies. Coinbase been a leading fiat/coins exchangers is not suppose to be played this games of manipulation.

[spatifilium]

I think if they do it it's because they do not have big losses because they also have to sell the ETH, I do not believe they have so many ETH accounts on their own that they can influence the price development.
They protect their interests even though it's not ok for users and these procedures only give bad reviews about them

[mindrust]

Coinbase is one of the worst exchange there is. Yes it is more like a bank than an exchange.

They go maintenance mode every time the price crashes and this alone is enough for anyone to stay away.

They have so many legal obligations because of USA is being ruled by insane paranoiac retards lately, you should be an insane person to send there any money.

http://www.zerohedge.com/news/2017-06-14/you-wont-believe-stupid-new-law-against-cash-and-bitcoin

[xypos]

Coinbase is probably like you said a big bitcoin bank. Obviously if you trust anyone with your coins whilst you don't hold the actual private keys yourself you don't owe the bitcoin.

The thing is that to transact eith bitcoin across the globe you do not need a bank to help you with this, you can do this directly on the decentralized network of bitcoin. This as opposed to fiat you have to use banks or western union.

You could choose to use coinbase but I don't see the reason for using them. You're going to have to pay a fee anyways for transacting after they implemented a fee.... Just get a desktop client.

[Tenchi-R]

Coinbase is one of the worst exchange there is. Yes it is more like a bank than an exchange.

They go maintenance mode every time the price crashes and this alone is enough for anyone to stay away.

They have so many legal obligations because of USA is being ruled by insane paranoiac retards lately, you should be an insane person to send there any money.

http://www.zerohedge.com/news/2017-06-14/you-wont-believe-stupid-new-law-against-cash-and-bitcoin

That article is unsettling yet not surprising, i have been expecting regulations with the increase in value, the government and banks are terrified at the thought of not getting a cut and not being able to control assets, though there will be ways around this, there is no way they can trace all the cryptocurrency use and exchange, we may live in a panopticon but they simply don't have the capacity.

In terms of Coinbase i think they are a disgusting company/bank, i would not use them except i live in UK England and they are very popular here, though i think i will move to Kraken now or maybe Coinfloor (who also have pretty bad rates tbh). We are seeing the beginning of the crypto war, regulations and companies are trying to control that which was once decentralised and free, it will be interesting to see how it plays out.