| >There is no way any institution trading any type of instrument, asset, commodity, security etc should ever do this. And I doubt they do this. Your doubts don't make it any less true. Most such institutions allow you to deposit funds with them first so your purchases come from your deposits. Coinbase has opted not to allow deposits, reportedly to sidestep certain regulatory requirements. So, they use ACH. Coinbase is not an exchange or trading platform, BTW. >Again this is based on the most likely false premise that they do buy the goods before the payment is cleared. This is simply insane. Not sure how else you think they can allow buyers to lock in a price before the funds clear. Think about it: if Coinbase is allowing the buyer to lock in the current market price, then using ACH to capture the buyer's money, then by definition there is risk to Coinbase, no matter how they work it out behind the scenes. What they have tried to do is minimize their risk by verifying the customer's identity and having them link a bank account. For instant buys, they require a credit card as a backup method in the event that the ACH ultimately fails. But, there is still risk to Coinbase, obviously. Listen, anyone who hangs out a shingle on the Net is wide open for fraud, whether it's e-commerce, bitcoin trading, payment procesing, or otherwise. That's just part of the risk. Coinbase has calculated that it's an acceptable risk for now, which is partly mitigated by their verification process and daily buy limits. But, I would bet that part of this $25M raise will go to tackling the regulatory issues that will allow them to keep deposits on account. >What we need to find out is, in case of a delay on large order where the price of BTC went up did they honor the original quoted rate or the current rate? This is not a great mystery. The answer is yes. I am a customer and speak from experience. Your buy price is locked in, which can work for or against you. You don't have any experience with Coinbase, but you're making these declarations about what they may or may not do, and acting as if we need you to dig into this great mystery to determine what's really going on. It never ceases to amaze me how many universal experts hang out on this one lil' old site. |
That question was not directed at if the buy rate is locked in, that is well established and not in dispute. Rather the question was specifically for the cases where "there is a delay", i.e. an unreasonable one like with the OP of this post and the previous post[0].
The problem is not how they conduct their market making(or selling a product by definition the definition you presented).
An unreasonable delay adds added risk of financial loss which is akin to, while not quite as dire as; if it was possible for someone to buy a pace-maker of Amazon, to be delivered overnight (up to two days) and it was not known to the buyer could not survive past 4 days without it and for some technical reason Amazon was unable to ship it for 5 days, would the law hold Amazon responsible for not living up to their end of the commitment and unintentionally causing the buyers demise.
Though stepping away form my overly extreme and unrealistic example, as an after thought my original question may have been nonsensical. "If coinbase does buy the goods before the price is locked and BTC rises, regardless of the situation there is no risk for coinbase or the customer."
The risks on these transactions would only occur in case of BTC dropping.
> You don't have any experience with Coinbase, but you're making these declarations about what they may or may not do, and acting as if we need you to dig into this great mystery to determine what's really going on.
You're right I have no experience with an unreasonable delay that could cause financial loss. But "any experience", how did you deduct that?
> It never ceases to amaze me how many universal experts hang out on this one lil' old site.
Right back at you :)
[0] https://news.ycombinator.com/item?id=6929705