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Comment by blueblisters | Hacker News Reader

> But virtually all money is being made on being a broker for people speculating on Bitcoin as if they're buying gold, with no significant intent to use bitcoin.

And there is a ton of other exchanges that are both user-friendly for regular people who are looking to buy Bitcoin (Cash App) and trader-friendly for people looking to trade bitcoin (Kraken/Binance).

Most serious Bitcoin enthusiasts don't prefer Coinbase over the alternatives, so I'm not sure what Coinbase's real moat is? How is it able to charge higher fees than most other crypto exchanges?

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I think it mostly boils down to a trusted brand and good UX. alternatives are pretty crap atm.

Fiat onramps.

Americans cannot access most of the other crypto venues because they are rampant money laundering machines. Coinbase is one that at least plays by some of the US KYC/AML.

There is no compelling evidence they are 'rampant money laundering machines'. Even to prove money laundering happened, you have to prove a crime happened that generated illicit revenue that was then laundered, in which case prosecuting for the AML violation would be redundant, as the offender could be successfully prosecuted on the root crime.

This is why AML laws make much more than money laundering illegal, why in the vast majority of cases of AML law violation, no money laundering was proven to have taken place, and why none of the analyses on the volume of money laundering use this burden of proof when formulating their estimates on the scale of the phenomenon.

What you could say is that other venues are less compliant with warrantless surveillance requirements of US financial crime regulators. That is the phenomenon that is actually provably rampant in non-US-regulated crypto exchanges.

> There is no compelling evidence they are 'rampant money laundering machines'.

Reggie Fowler and Crypto Capital were convicted of money laundering for crypto companies just a couple years ago. This was Bitfinex’s bank, which caused big balance sheet problems for iFinex and likely spawned the current era of the Tetheral Reserve.

Compelling evidence? The biggest exchanges’ banks are being thrown in jail for laundering. I’m not sure how much clearer it could be.

Being convicted of violating anti-money laundering laws is not proof that they engaged in money laundering. Like I explained, to prove money laundering occurred, you have to prove that money was generated in a criminal enterprise, which would require the party who provided the funds to be convicted in a court of law of some crime that generated the income.

In the vast majority of cases where a financial intermediary is convicted of violating an anti-money laundering law, this doesn't happen.

It would make discussions more constructive if you read the comment in full before responding to it.

Security. While many other exchanges have been hacked or simply walked away with users' money, coinbase is one of the oldest that is still around, and has remained professional and secure throughout.

They refused to support various blockchains until they were sure they could do it securely and reliably.

In a way it's somewhat poetic, as they sell trust for a trustless ecosystem.

Binance UI feels like a labyrinth if you're a begginer. Coinbase is much simpler.

Great point. Hard to have a moat when your commodity is open by design/nature.

GitHub managed it, so. Centralisation has benefits.

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