> Also the amount of equity sold by the CFO at the public listing indicated little confidence in the long term prospects.

As you note, since it was a direct listing and not an IPO, there isn't really an analog to many other companies.

My opinion about why they did a direct listing is because institutional investors didn't want to touch it, and that memetail traders (a portmanteau of meme and retail) are undiscerning at any valuation.

The company didn't sell any shares or make any money from the direct listing itself, so that means the only people that could make money or provide any shares for making a market at all would be existing shareholders that have a lot of shares. It's impossible to levy criticism both ways simultaneously, just to smugly pat yourself on the back, but there are other reasons to.

The other benefit of an IPO (to a trader looking for earliest exposure) is the stabilizing bid from the syndicate, a brief period of more legal market manipulation where a consortium props up the price. A significant reason I avoided Coinbase's attempt at a 100 billion dollar direct listing is because there would be no stabilizing bid and retail doesn't have enough capital to simulate one.

> The other benefit of an IPO (to a trader looking for earliest exposure) is the stabilizing bid from the syndicate, a brief period of more legal market manipulation where a consortium props up the price.

Do you mean that you would have gotten the shares and would sell your shares at this point with a certain guarantee on the price, or something else?

In an IPO, the company sells a bunch of shares to banks, and this is a funding round for the company. The banks then immediately try to sell the shares at a slightly higher price to retail, and also collude and post a bunch of money on the buy side of the order books to give the illusion of demand. Psychologically this is commonly effective at getting retail to hop in front of these orders and purchase at higher prices and feel like they can sell at any time, leading them to be less discerning about what price they'll purchase at. And yes, they can sell directly into the stabilizing bid. It doesn't guarantee a price, thats too strong of a word for what this is. The bid can be removed at any time, the only thing exceptional is that the bid can be placed at all, as this would otherwise be sanctionable activity by the regulator or private litigants.

https://www.investopedia.com/terms/s/stabilizingbid.asp#:~:t....

The participation of the banks is really spot on. And at peak mania you could see companies pop 100% on listing day despite having been bumped 100% the day prior to listing. The underwriting for the shares is a total farce, also shepherded by the same banks with insider holdings, and hence a conflict of interest to be honest with it.

Yeah IPOs are a meticulous theatrical performance

There is dilution in a “final” equity round, and then the banks are immediately flipping them to people that believe they are helping the company but are just getting dumped on by the banks, as all help was done by the banks

I theoretically like direct listings more, but I don’t like retails tolerance of getting screwed in a different way because the valuations are unsupportable

I just like exposure and liquidity, so float the shares one way or the other! People should be pragmatic about what they are participating in

Slack and Spotify did direct listings as well.

Not sure if those are the best examples. In my personal opinion they both have dubious business models, and they've both made no profit.

No offense to the companies intended, I like both of their products.

I told them something similar (didn't know about the CFO, I don't care enough to pay attention).

I'm also amused by the headhunter I heard from who apparently was trying to specialize in whatevercoin/NFT/etc. startups. I politely told him I would entertain any non-"web3" plays, and he started telling me how I was making the worst career choice of my life and turning away money, etc.

Wonder how he feels about his career right now.

I will admit to a little schadenfreude, but more generally it just saddens me. Idiot greed is eternal, I know, it is just a bit depressing to watch the destructive nonsense play out.

> ...amused by the headhunter...

> Wonder how he feels about his career right now.

Pretty good, for all the money he collected placing developers in these crap bubble jobs. A little sad, that recruiting is going to be down for a couple years before he can start cajoling developers to take some other kind of new-fangled job that he doesn't understand.

I honestly don't get the point of Coinbase. Isn't it a centralized system to manage what is supposed to be decentralized and that kinda defeats the purpose? I may be dumb.

You are indeed not dumb. Coinbase is a bit of an oxymoron. If decentralized value exchange takes off, that will surely be the end of Coinbase. To a degree, Coinbase's demise is baked into crypto's success - which is kinda funny to think about. Coinbase has always seemed like a bit of a money grab, and crypto veterans sort've treat it this way.

i expect the coinbase value-add is that you do not need to have key security (you trust them to handle it for you).

Email is a decentralized protocol and the fact that you use a centralized provider such as gmail only somewhat defeats the purpose of email being a decentralized protocol instead of Google Messenger.

Email is _a bit_ similar, but the analogy doesn't work too well. While email might be a decentralized protocol, participation in the protocol requires quite a bit of technical effort. Whereas in crypto (e.g., Bitcoin) you can participate by just downloading a simple client and sending transactions via a nice little UI. In your example, Google actually provides a pretty huge value add by abstracting the complexities of participating in the email protocol away from the user. Crypto protocols (insofar as the assets provided by Coinbase) don't really get _that_ complex

It's even weirder than that, it's like if Google received your messages for you and bundled them up with everyone else's, then allowed you to read your share of the bundle but never actually delivered them to you as far as the protocol is concerned.

The email protocol isn't complicated though. Back before spam was a thing, lots of people could just open a port and manually talk SMTP (you could send messages as Santa, or whatever). The only service Gmail provides that's not trivial (and I mean, something that can be done in a whiteboard interview) is the spam protection.

With the accessibility of ML these days, I'm less convinced that spam protection is that hard, if you have a little bit of patience. The spam I get is repetitive and bad, and I get enough of it that I think I could get a workable model simply by using Gmail's spam tagging to train it.

Back in the day ('noughties through 2015 or so) there was POPFile, which did Bayesian classification of emails for spam filtering. John Graham-Cumming wrote it, and it worked reasonably well. I still think of him as the POPFile guy first, then remember he's the Cloudflare CTO.

A more advanced classifier certainly do better these days.

You have a point but not quite the same. Email is not a speculative instrument which makes Coinbase a very risky proposition for people who are using it for transactions. I can also change Email providers (can be painful sure but possible).

By that metric banks are decentralised too - my bank only speaks to another bank over a protocol but fundamentally just trusts the other side is good for it

I'm not very familiar with the subject but I don't believe the protocols used in banking are very decentralized. I'd be very surprised if you told me SWIFT was permissionless, for instance.

Crypto is indeed a decentralized system (well, the well-functioning ones at least).

However, it's also a closed system and you need to get crypto from somewhere. A centralized exchange is the most efficient facilitator of buying/selling crypto, and after that you can withdraw it and enjoy digital transfers without a centralized party.

(You can also get crypto buy mining or selling things for it, or even buy it for cash, but an exchange like Coinbase is much faster and more convenient.)

More and more serious investors and traders are moving to decentralized platforms

That’s where the biggest money and the highest yield is achievable anyway. And the quality of decenttalized offerings is rapidly improving.

As we all know our beloved Terra offered 20%, and this is definitely on the lower side! Pls buy into it now while it is on discount and don't ask where the money is actually supposed to come from.

It lowers the barrier of entry for retail buyers

Coinbase is the lowest-friction, most legal, way to buy into crypto. They make it easy for nontechnical novices to get set up, and they comply with KYC laws etc. This has helped them build a large customer base and stay on regulators' good sides. Think of them as Crypto Robinhood, if that helps, though once you get into the weeds they have very different business models.

It's a brilliant strategy in the DeFi/CenFi space.

Note that Ted Gioia (in his interview with Rick Beato) said the same thing about Spotify: insiders had no lockup period, so they dumped the stock right away.

Crypto has boom and bust cycles. It will be back again, and mania will happen again.

Past booms are no guarantee of future booms. Fundamentals of crypto don't appear sound to me. So I wouldn't put much stock in them.

General sentiment is too many people made too much money not to give it another go.

Pyramids don't resolve upside down.

The next will be the same as this one, s*tcoins will lose most value, while Bitcoin and Ethereum will retain a reasonable amount of value. The problem is suckers think the altcoins are going to be their ticket to riches. Those that get in early do indeed gain, but those that are late to the scheme end up holding the bag.

Yah. I think distributed ledgers are here to stay, as are some tokens of stored value. But I don't think the insane bidding up of many tokens will ever happen again.

> I think distributed ledgers are here to stay

What exactly makes you think that? As far as I can tell, it's still unclear if distributed ledgers are really effective tools for much of anything. What real problems have they solved?

Non-repudiation is an important problem. Some things we can rely upon trusted third parties, but all kinds of things we rely on imperfect systems with notaries and trusted third parties can be more effectively solved with ledgers.

A whole lot of the interesting applications are non-monetary-- proving that a record was produced and made available before a certain time and has not been tampered with since.

As a world economy, we spend like $100B/year on notarizing things and related kinds of non-repudiation record keeping. If it was really cheap, we'd do much more. And a big fraction of this could be done cheaper and with a higher agree of assurance by distributed ledgers than notaries.

> big fraction of this could be done cheaper and with a higher agree of assurance by distributed ledgers than notaries

These theoretical benefits have been around for 10+ years with little to show for it. Ledger-based solutions tend to focus on a tiny technical step of a big process without considering whether that's a bottleneck or even a non-negligible part and whether improving it actually results in a better solution.

I used to sympathize and engage with the theoretical arguments; but at this point a more productive approach is: if the advantages are such and such, where are the companies benefiting from this competitive advantage? Maybe this competitive advantage doesn't exist at all?

> These theoretical benefits have been around for 10+ years with little to show for it.

The closest analog to crypto distributed ledgers is, well, ledgers. If you look around you, there probably isn't a single product that could have been produced without the adoption of double entry accounting. And yet that adoption process took around 300 years.

Crypto is on the exact same trajectory. When people look around them in 300 years, there probably won't be a single product that could have been created without distributed ledger technology. But obviously this isn't going to happen in any of our lifetimes.

The IQ test is being able to see the trend even though crypto is currently at literally 0.00% adoption (on the basis of total financial transactions). Sooner or later, reality always goes to par with the math.

> math

I do not think that word means what you think it means.

> And yet that adoption process took around 300 years.

People used ledgers right after they were created, by definition, and long enough to go through all these years without that practice disappearing and without speculation to prop them up. So they brought value from the very beginning. Speculation prevents this logic from applying to blockchains (the value is making money by extracting it from gullible users).

> the trend

Which trend? If anything it's stagnant with just more scams, I still don't know anyone who uses cryptocurrencies for anything other than speculation.

>>Which trend?

1. Uniswap now has deeper liquidity on several major trading pairs than the leading centralized crypto exchanges, including Coinbase and Binance:

https://uniswap.org/blog/uniswap-v3-dominance

2. The volume of stablecoins on the blockchain is growing rapidly, notwithstanding the recent collapse of LUNA/UST:

https://www.statista.com/statistics/1255835/stablecoin-marke...

> notwithstanding the recent collapse of LUNA/UST

If anything, that's an invitation to wait the next financial crisis to see what really is left of the "trend".

> I used to sympathize and engage with the theoretical arguments; but at this point a more productive approach is: if the advantages are such and such,

Distributed ledgers are being used for real business cases in banking. Realizing these full benefits will take a very slow process of societal adoption and legal/evidentiary recognition.

I said "not going away". These use cases are going to slowly grow and become ubiquitous, but it will be a very slow process. It isn't some overnight disruption where notaries vanish and banking is dis-intermediated in the next 5 years.

> where are the companies benefiting from this competitive advantage

E.g. JP Morgan and Liink are quietly connecting hundreds of banks and using it to more robustly and quickly move payment-related information between banks.

> Distributed ledgers are being used for real business cases in banking. Realizing these full benefits will take a very slow process of societal adoption and legal/evidentiary recognition.

Looking at JPMorgan's Liink, there is no proof that this is anything more than a cynical publicity stunt to try to capture some of the money sloshing around in the crypto hype. Most of its touted features are things that could have been done without blockchain and should have been done decades ago if they were willing to invest in modernizing things.

> cynical publicity stunt to try to capture some of the money sloshing around in the crypto hype

It's not being sold to end-user rubes. It's a way to try and suck banks into JPMorgan's technology ecosystem (promising to settle repurchase agreements faster and save lots of interest intraday).

It's not huge yet-- only about $1 billion per day flows through it.

> JP Morgan and Liink are quietly connecting hundreds of banks and using it to more robustly and quickly move payment-related information between banks.

At this point you're trusting JP Morgan and link to run the ledger. What if I disagree with a transaction and fork the ledger? How is this any different to JP Morgan running a SQL database and speaking a common protocol?

> At this point you're trusting JP Morgan and link to run the ledger.

Liink is ETH derived, so it's hybrid proof-of-stake and proof-of-work.

(Of course, JP Morgan likely dominates both at this point, but they don't have to).

> (Of course, JP Morgan likely dominates both at this point, but they don't have to).

So what happens if someone comes along and stakes $X Billion and becomes the majority stakeholder? Do you _really_ think that JP Morgan will just sit and let that happen? That they won't fork? That Deutsche Bank will continue to stand by the ledger if a group of anonymous traders from China become the majority stake?

It's a technical solution to a political problem.

To quote Bruce Schneier:

> Private blockchains are completely uninteresting. (By this, I mean systems that use the blockchain data structure but don’t have the above three elements.) In general, they have some external limitation on who can interact with the blockchain and its features. These are not anything new; they’re distributed append-only data structures with a list of individuals authorized to add to it. Consensus protocols have been studied in distributed systems for more than 60 years. Append-only data structures have been similarly well covered. They’re blockchains in name only, and—as far as I can tell—the only reason to operate one is to ride on the blockchain hype.

https://www.schneier.com/blog/archives/2019/02/blockchain_an...

> (By this, I mean systems that use the blockchain data structure but don’t have the above three elements.)

Liink appears to have all three elements Schneier describes-- an immutable ledger distributed over many participants that any of the participants can read; the ETH consensus algorithm; and the third is a US-dollar backed stablecoin.

> In general, they have some external limitation on who can interact with the blockchain and its features.

Yes, there's a limited number of participants with varying degrees of mutual trust. So this criticism is accurate, but I don't find the actual mechanism you get worthless.

In any case, note that what I said was not that blockchain was here to stay, but distributed ledgers. So even if one got rid of the specific consensus algorithm and the value token, you'd still have a distributed ledger.

As the other commenters have pointed out already, it seems to be a permissioned blockchain if anything, exactly what Schneier describes as already having existed for decades, nothing new, just marketing.

In particular it's not about having many trusted participants, it's about being public without any trust (from the blog post: "This ledger is public, meaning that anyone can read it").

Again, I never said "blockchain is here to stay"-- just distributed ledgers. And, yes, distributed ledgers have existed forever, but their use by market participants at arm's length is new, as are many new tools we can use to build useful distributed ledgers (including blockchains!).

Dude I knew someone who work on that, it's not actually used for anything, just exist so that Jamie can check off "blockchain" in the next shareholders meeting. Private blockchain makes 0 sense.

It's quite useful for buying drugs.

Don't hear of as many murder for hire plots involving it these days though

I don't know, maybe Stripe, Moneygram, TransferGo, Namecheap, Porkbun, etc seem to think otherwise?

These distributed ledgers are here to stay in fact. Unless in less than 5 years or so, they are all going to go away 100% totally guaranteed?

Paperclips are here to stay, but would you invest in a company that only makes paperclip maximizers?

https://www.lesswrong.com/tag/paperclip-maximizer

Be the paperclip maximizer, instead https://www.decisionproblem.com/paperclips/

Nowhere did I suggest investing in crypto (indeed, I have a track record of the opposite, and I was mostly agreeing with someone who was suggesting the opposite), so your comment is unhelpful.

It'll happen again. It will just be a new set of coins/tokens, with new promises of new utility, and a new set of gullible people being takem advantage of. The sad part is schemes of the sort damage the image of actual future usefulness of blockchain technology. For now the crypto winter sets in, until the next thaw.

Haha, I lived through so many of these cycles im crypto, e.g., the ICO scams of 2017 and yet everybody said, now crypto is dead...

How many of those cycles were decades-long?

at this point there’s so much investment and attention dedicated to it that it will be willed into continued relevancy as much as anything happening organicly

Yet everyone will tell you that the stock market only goes up

The stock market goes up because the world economy goes up, allowing companies to make more profit. Someday that might stop, but it’s been going strong since the industrial revolution.

Cryptocurrencies don’t have that kind of track record. They also provide dubious value to society at best currently.

Also this is true of the American stock market, where companies

* represent a broad swathe of the diverse American economy and more or less correlate with it as a whole

* have to issue regular, public, audited statements about their balance sheets

Crypto is none of those things.

The stock market does two things crypto doesn't: - generates consistent cash flows - produces real economic value

The Japanese stock market peaked December 29, 1989. It has yet to reach those heights again, 32 years later.

At least (unlike bitcoin), holders of this stock have received the odd dividend now and again.

Heard of DeFi?

Maybe not. Crypto has never been through a general recession. A lot of net-loss stuff, from Uber to WeWork, was propped up by zero interest rates. That's over.

There will be other bubbles in future, but probably in other areas.

Like tulips.

Still waiting for the bull market there.

https://en.wikipedia.org/wiki/Tulip_mania

Fun fact, Tulip mania is mostly a myth.

https://www.smithsonianmag.com/history/there-never-was-real-...

> So if tulipmania wasn’t actually a calamity, why was it made out to be one? We have tetchy Christian moralists to blame for that. With great wealth comes great social anxiety, or as historian Simon Schama writes in The Embarrassment of Riches: An Interpretation of Dutch Culture in the Golden Age, “The prodigious quality of their success went to their heads, but it also made them a bit queasy.” All the outlandish stories of economic ruin, of an innocent sailor thrown in prison for eating a tulip bulb, of chimney sweeps wading into the market in hopes of striking it rich—those come from propaganda pamphlets published by Dutch Calvinists worried that the tulip-propelled consumerism boom would lead to societal decay. Their insistence that such great wealth was ungodly has even stayed with us to this day.

"merchants really did engage in a frantic tulip trade, and they paid incredibly high prices for some bulbs. And when a number of buyers announced they couldn’t pay the high price previously agreed upon, the market did fall apart and cause a small crisis—but only because it undermined social expectations."

Yes, I referenced tulip mania to the Coinbase recruiter.

It's probably going to collapse worse.

Losing everything ... what a nightmare

„Taiwanese Ends His Life After Losing $2 Million Luna Investment„

https://coinquora.com/taiwanese-ends-his-life-after-losing-2...

The problem for Coinbase, is that on the next boom cycle, a significant number of traditional stock exchanges will be slurping their milkshake.

Coinbase has only gotten as big as it is because they were effectively the most legit American exchange selling crypto. With Robinhood, Square, Paypal, and even legacy exchanges getting in the game, they won't have that advantage next time around.

Every pyramid scheme eventually runs out of new suckers.

How are those beanie babies doing?

Beanie babies and pokemon cards actually did quite well in this last mania.

Beanie babies are actually a tangible object though. :)

Still waiting on the next gold rush to unload all my shovels

The fundamental unit of value backing crypto is mania.

That logic didn’t apply to tulip bulbs

The next wirecard?

Just like tulips!

>Also the amount of equity sold by the CFO at the public listing indicated little confidence in the long term prospects.

Where do you find this information? I'm really new to this. Is it using stock charts or something similar?

SEC Filings - https://investor.coinbase.com/financials/sec-filings/default.... Look out for "Statement of Changes in Beneficial Ownership" to see stock grants/ sales for insiders (executives and directors).

But, scouring SEC filings can be demanding, so there are several websites that specialize in extracting and displaying such information, for example - https://www.marketbeat.com/stocks/NASDAQ/COIN/insider-trades...

I think OpenInsider has a good interface for this: http://openinsider.com/COIN

It's part of most stock listing pages under "Insider Transactions". Here's one for Alphabet: https://finance.yahoo.com/quote/GOOGL/insider-transactions/

You can read the public filings with the SEC here: https://www.sec.gov/edgar/browse/?CIK=1679788

But if you don't know what you're looking for it can be tedious.

Here are insider purchases and sales in an easier to navigate format: https://www.nasdaq.com/market-activity/stocks/coin/insider-a...

This is a simple, clean site that I like:

https://www.secform4.com/insider-trading/1679788.htm

Insiders sell stock whether executives or employees. Otherwise why work for a company and get compensated in stock if selling it was banned / frowned upon?

You can find the puically filed SEC form 4s online

I think Brian Armstrong downsized his stake from ~300k shares to ~30k late last year. Has any company ever done well after such a sell-off from insiders?

Might be a bubble, but I paid off my student loan and a car by investing in bitcoin. I’m certainly glad I ended up on the right side of the bubble.

That's how bubbles work and why they are so alluring. Where people get burned is when they confuse that kind of luck for smarts.

Some people also win the lottery. But I would hardly call it a sound investment.

investment is a pretty strong term for what a lot of us did to make money at btc.

I made quite a bit of money by throwing my ex-gaming 4870x2 radeon machine into a closet for a year.

my investment was a few bucks in energy, and an old computer that was going to become e-waste, and a few minutes time.

I got lucky that at the time this was a feasible strategy before ASIC domination -- but this 'investment' wasn't anything like the rest of my portfolio by any means.

Mining can be an investment, if you can stomach the volatility and have a plan to mitigate the risk. But buying a currency with the mere hope that it will go up is just speculation, pure and simple.

Growing tulips isn’t any more of an “investment” than buying tulips… Regardless of whether or not it’s profitable, it’s a speculative endeavour.

Tell that to the Dutch companies currently making tens of millions of years growing and selling tulips of all colors!

See https://scitechdaily.com/dutch-tulip-fields-come-into-bloom-...

It's a reference to the tulip bulb mania.

"investing"