[ISL]

Trades internal to Coinbase don't have to happen on the blockchain.

Source: http://blog.coinbase.com/post/57483182558/you-can-now-send-m...

If decentralized microtransactions could be done at sufficiently-negligible (sub $0.01? ) cost, I think it could have a major impact on the web. Nobody's yet figured out how to make it effortless, though. This implementation from Coinbase doesn't appear to be different from Flattr, which hasn't yet taken off.

Edit: With further thought, Coinbase may have more users than Flattr, and they already have real money in their accounts. Those differences alone could be significant.

[hobo_mark]

So if I understand correctly, coinbase creates a private internal "wallet" for you, "hidden" from the public ledger, and owns the private key to it?

Thank you, it's funny how GP talks about an "open, interoperable network" then...

[tubbzor]

For what its worth, this is only for convenience purposes for those who want to use Bitcoin without having to handle managing their own keys (ie. grandma and grandpa) or want to avoid transaction time/costs that come with operating on the blockchain.

Coinbase offers multi-sig support which puts control back into the user's hands in the event Coinbase went down or was compromised.

Coinbase is a great service for acquiring coin but I generally move it out to my preferred wallet after I purchase it.

[ISL]

Yes. As I understand things, Coinbase provides at least two major services. They're a major US USD<-->BTC exchange, and they also host wallets.

Those things are separable, as you can make a USD->BTC exchange, then transfer to another wallet for safekeeping, or do the reverse to get back to more-traditional currency.

[jacques_chester]

> Nobody's yet figured out how to make it effortless, though.

I'm working on it; the insight that I and others before me have had is that:

1. It needs to happen without having to think about it,

2. I shouldn't have to decide whether to pay in advance, and

3. I should be able to cap to total.

That requires a model based on tracking usage then dividing out payments at the end of the month. It's rather more difficult to do this securely, which is what I've worked on.

[hckr1292]

Flattr doesn't seem to be getting much traction unfortunately. I think there might be some growth potential for Coinbase to popularise bitcoin and micropayments (one can hope anyway)