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Comment by slg | Hacker News Reader

What I find interesting about all these new merchants accepting Bitcoin is what happens to the Bitcoin they receive. It is a safe bet that all of these Bitcoin are converted to USD immediately as part of the payment processing by someone like Coinbase. The question is, can Coinbase sell these coins as quickly as they receive them? If not, what kind of exposure do they have to the violatility of the price of Bitcoin? Is that exposure high enough that these companies could be brought down by a drop in Bitcoin pricing and would that lead to a collapse of the Bitcoin economy (i.e. are any of these too big to fail)?

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"The question is, can Coinbase sell these coins as quickly as they receive them? If not, what kind of exposure do they have to the violatility of the price of Bitcoin?"

That's a great question and I had wondered the same after reading the coinbase site the other day. How do they keep the balance between buyers and sellers and shield against that volatility? Further even if they do that today, this week, etc what will happen if there is an event in the future which alters the market?

Right now it seems like there is a "rising tide" which might be working in coinbase's favor. [1]

[1] This is more of a question than a statement and I'd be curious what others think along these lines.

I think it will be a big deal for Bitcoin when (if?) some of the bigger players decide to start publishing their dollar side volume (so that spectators gain some visibility into the net flow of dollars).

Coinbase quotes exchange rates that account for their risk.

Impressive. You managed to turn the most positive news for Bitcoin into a post about the "collapse of the Bitcoin economy", through a very flimsily constrcted series of assumptions. There should be like a new version of Godwin's law wherein all positive Bitcoin news will lead to its collapse in three steps.

But slg raised interesting questions. That was the first thing I thought about as well after reading the article: will Dell (and other companies) keep the bitcoins? Rather not, the Coinbase will convert them to dollars immediately.

Likewise, any negative news about Bitcoin will be turned into "actually good news".

Why don't you try and counter or answer what he is saying instead of attacking him for saying it.

Because it smells like a manipulative post. The goal (it seems) is not to discuss the topic, but to deformm the opinion of the readers and the general mood of the thread.

If you want an answer, it is easy: companies like coinbase or bitpay know very well what they are doing, and participate in the market in ways that minimise the exposure risk. OP does not deserve to be top post in a site that is supposed to have quality debate like HN.

> If you want an answer, it is easy: companies like coinbase or bitpay know very well what they are doing, and participate in the market in ways that minimise the exposure risk.

So the question is: how they do it?

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