http://fortune.com/2019/03/29/coinbase-crypto-dividend-staking/ By JEFF JOHN ROBERTS 12:15 PM EDT Investing in cryptocurrency is like putting your money in highly volatile growth stocks. Your profits (or just as likely your losses) will be determined by whether the price of your digital assets goes up or down. There is little akin to value stocks that pay out a regular dividend. That’s why it’s intriguing to see Coinbase offer a new service called “staking,” which promises to let cryptocurrency owners collect fixed income. The San Francisco company announced the service on Friday, saying investors who own the digital currency known as Tezos can park it with Coinbase and receive a stream of revenue in return. Tezos is distinct from digital currencies like Bitcoin or Ethereum in that it doesn’t rely on “mining.” The mining process, also known as “proof of work,” has people compete to solve math problems with the winner earning the right to add to the next block to a blockchain ledger and receive a reward. Instead, Tezos is a “proof of stake” system that uses a weighted lottery in order to select who will contribute the next piece of the blockchain. The more units of the currency someone owns, the greater likelihood they will win the lottery, which takes place every 60 seconds, and receive the financial reward for doing so. Currently, anyone who holds 8,000 units—approximately $10,000—of the Tezos currency can participate in the blockchain building process (known in Tezos lingo as “baking”), but it’s a technical affair that requires running a software node. As a result, many Tezos holders may prefer to just sit on the currency rather than deploy it in the baking process. Coinbase’s decision to offer staking changes the calculation. It means investors can offload the technical work to Coinbase, having the company do the “baking” on their behalf, while they passively collect income. According to Sam McIngvale, who leads Coinbase Custody, the company will take a 20% commission for providing staking services. The company says investment funds like Polychain Capital and Andreessen Horowitz’s crypto-focused investment fund plan to use the service. “The launch of Tezos staking through Coinbase Custody serves an acute need that existed up until now—a way for institutional players who want to rely on a custodian while taking an active role in the network,” said Kathleen Breitman, co-founder Tezos. The arrangement comes at a key moment for both companies. Tezos is hitting its stride after overcoming a series of legal dramas that delayed its launch, but is far from mainstream even in the crypto world. As for Coinbase, the staking service promises a new revenue stream at a time when trading commissions—long the company’s bread and butter—remain down dramatically from the highs of 2017. The new service also comes as Coinbase CEO Brian Armstrong seeks to refute what he sees as misperceptions about storing cryptocurrency. In a recent op-ed for Fortune, Armstrong said so-called customers who park their currency in so-called cold storage can nonetheless access it with ease and earn income on it. Meanwhile, Coinbase expects Tezos to be just the first in a series of staking offerings. In the future, the company says it may add other proof of stake blockchains, including Polka Dot. Finally, Coinbase is also planning to unveil a service that will help customers vote on the direction of projects like Tezos and MakerDAO, which have a user governance dimension as part of their protocols. “Decentralized governance cannot work without participation—something that has been difficult, if not impossible, for many institutions holding utility tokens,” said Rune Christensen, CEO and co-founder of MakerDAO. “Coinbase Custody provides a critically important service that will unlock a new level of governance for decentralized blockchain projects.”
(i.e. Japan) Countries printing money to buy debts and giving negative rates? What could go wrong? Wake up! Everything is fake out there, Fed just did a turnaround on rate hikes, free $$$$ bubbles everywhere, stock$ real estate any speculative investment
JPY and USD are backed by central banks, that's the difference. A small company in SF is exactly like the Japanese central bank how?
Seriously? Tezos is not a company, bro. I know you're referring to Coinbase, but this is a Cryptocurrencies forum. Here's the problem with most of the naysayers here at ET, this forum has been around since Bitcoin was less than $20 (2011) and still, most of the naysayers here don't understand the complexities of Bitcoin. I posted the Bitcoin whitepaper at least twice. Bitcoin is hard enough to understand, Ethereum introduced additional complexities by introducing the concept of smart contracts and decentralized apps, and if you think you'll be able to study Tezos and criticize it intelligently, come on now, it's over your head. Am I saying I know everything about Bitcoin or Tezos? hell no, but listen, I'm solo-mining (baking is the correct term) Tezos since last September. I've updated it several times direct from gitlab (open-source), and as a baker, I voted in the first on-chain governance that took place a few weeks ago. Tezos is blockchain 3.0 and if it succeeds, I will take comfort in knowing the naysayers here had not benefited from it.
Wait 3 more years till the market is mainstream. Then the ET ers will trade it with technical analysis and orderflow. At the moment it's just not the right market for hobbyists
Adding more complexity does not make something better. Best ideas are painfully simple as in "why didn't I think of it". You're talking as if it's already a runaway success, which it is not. Lots of garbage stocks have had a good run, does not make them great companies. You bring the typical snobbery of bitcoiners, not surprised, keep you schadenfreude to yourself, it will not matter either way.
Some things by their very nature and functions cannot be made simple. Let's look at the US $, we got M1, M2, M3, MMT, Fed Funds rate, inflation rate target, and still through it all, US debt is $22 Trillion. And how about other countries, Venezuela, Argentina, and others, why have they failed miserably? I do not even know the terms used in the Visa/MC processes but I'm sure they are not simple, heck it takes them several days sometimes longer for a charge to clear especially if weekends are involved. Perspectives matter. From my point of view, bitcoin and cryptocurrencies have been a runaway success. I didn't grow up rich, but I am very fortunate to have a very good job. Still, most of the money that I put into bitcoin (cryptos) came from credit (cc's mainly) as I simply didn't have it in savings or assets (about $7K). I've already gotten back over 10 times that amount and most of it by spending bitcoin. There's a reason I mentioned those 2 things above, as someone who has made hundreds of transactions using bitcoin, the freakin' thing works so beautifully. My cryptocurrencies portfolio (I've concentrated to Tezos and Ravencoin) is worth over 6 figures and yea, it took a massive devaluation hit during this bear market but for someone like me that is an incredibly huge amount. You've always been one of the fairest critics of bitcoin and cryptocurrencies, and we'll have to disagree on the merits (or lack of) this new emerging industry. I am here for the long run even if this whole thing fails and I lose everything.
Well, I think that everybody who is dealing with or in cryptocurrencies has to acknowledge that this stuff has not found it's place in finance in the first world...yet The fiat system has still advantages and it will take a couple of more years for crypto to settle in. I'm not saying that fiat will be replaced, tho. The biggest problem of cryptocurrencies is the fact that mistakes are irreversible. So imagine the average ETer using crypto on a frequent basis. Typos, phising, using a wrong adress, sending the private key instead of the public key, poof your money is gone...and you cannot call Mr. Bitcoin to ask nicely if he could undo your whoopsie. This is just not practical for the 1st world population which is used to delegating responsibility. I bet 90% of crypto critics haven't even read the Satoshi whitepaper, so it's inconceivable that you ask Mom and Pop to get put in a couple of weeks of work to learn a new financial system. If stuff isn't self explanatory, it doesn't work here. It's just not ready yet. However, everybody should be aware of the fact that almost 25% of the worlds population does not have access to banking in general, even more suffer from corrupted government, capital controls, hyperinflation. But 6 out of 7 people own a mobile phone which is everything you need for crypto transactions. In other words, fiat systems depend on the people who govern them...which is fiat moneys biggest issue and on the same hand cryptos biggest strength because it's decentralized. So at the moment it's not a matter of crypto being better than fiat or not. People have to understand were cryptocurrencies fit in.