Yeah yeah I've heard that convo before. Look I'm not going to argue their EULA puts liability on Coinbase for losses of your funds. And yes I fully agree that in time it'd become ridiculous if they hold on to this part of their TOS (and will probably let it go because large institutions won't be comfortable with the lack of assurance).
But I will argue that if they insure customer funds and say $5m of them get stolen by a malicious engineer (again, noting their security practices this is extremely unlikely) they're not going to tell their customers 'sorry you're all losing money' when they get that money reimbursed and it'd destroy their business to do a greedy one-time money grab like that. Hell we even saw this with Bitstamp who paid for the $10m of lost customer funds themselves, despite zero such liability in their TOS, and despite the fact they were not insured and had to pay it out of their own pockets. (amounting easily all of revenues, let alone profits, for all of 2014 by the way, paid in full by themselves, without any obligation to do so).
To think Coinbase would then not give back these funds to the consumer despite it not costing them and being insured for that is a ridiculous assumption. It goes completely against them continually claiming that customer funds are insured against non-user related losses (e.g. not when a user gives his PW to his friend and he gets his money stolen, but rather say when Coinbase has a fuckup). And yes, I know technically Coinbase is the recipient of the insurance and that the EULA claims it's not liable, it's besides the point.
I mean, what do you think that insurance is ultimately going to be there for? Do you really think Coinbase will insure customer funds, and when they're lost say 'sorry, they're lost', and then keep whatever amount was lost after the insurance pays them out? It's a ridiculous assumption and much less likely than 'we've got you covered, we're not perfect but your funds are safe with us either way'.
So while I appreciate that you're not granted protection strictly by law (although I have my doubts about whether this part of the EULA stands up when it conflicts with so many written and implied statements by Coinbase which yes, do matter in the court of law), I hope you also appreciate that a statement like this:
> Their insurance only helps you if you are a beneficiary of the insurance
Is absolutely myopic. It's more likely that Coinbase will make their customers whole, especially with their insurance policy, than not. To say that Coinbase is no better than other low-rent bitcoin exchanges is also completely ridiculous, even if neither of them were insured, there's a gigantic difference between Coinbase and say Mt. Gox.
But I will argue that if they insure customer funds and say $5m of them get stolen by a malicious engineer (again, noting their security practices this is extremely unlikely) they're not going to tell their customers 'sorry you're all losing money' when they get that money reimbursed and it'd destroy their business to do a greedy one-time money grab like that. Hell we even saw this with Bitstamp who paid for the $10m of lost customer funds themselves, despite zero such liability in their TOS, and despite the fact they were not insured and had to pay it out of their own pockets. (amounting easily all of revenues, let alone profits, for all of 2014 by the way, paid in full by themselves, without any obligation to do so).
To think Coinbase would then not give back these funds to the consumer despite it not costing them and being insured for that is a ridiculous assumption. It goes completely against them continually claiming that customer funds are insured against non-user related losses (e.g. not when a user gives his PW to his friend and he gets his money stolen, but rather say when Coinbase has a fuckup). And yes, I know technically Coinbase is the recipient of the insurance and that the EULA claims it's not liable, it's besides the point.
I mean, what do you think that insurance is ultimately going to be there for? Do you really think Coinbase will insure customer funds, and when they're lost say 'sorry, they're lost', and then keep whatever amount was lost after the insurance pays them out? It's a ridiculous assumption and much less likely than 'we've got you covered, we're not perfect but your funds are safe with us either way'.
So while I appreciate that you're not granted protection strictly by law (although I have my doubts about whether this part of the EULA stands up when it conflicts with so many written and implied statements by Coinbase which yes, do matter in the court of law), I hope you also appreciate that a statement like this:
> Their insurance only helps you if you are a beneficiary of the insurance
Is absolutely myopic. It's more likely that Coinbase will make their customers whole, especially with their insurance policy, than not. To say that Coinbase is no better than other low-rent bitcoin exchanges is also completely ridiculous, even if neither of them were insured, there's a gigantic difference between Coinbase and say Mt. Gox.