Category Archives: homeless

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Ex-Coinbase User Claims Account Lock Caused Homelessness, Swears Off Exchanges

A Coinbase user has bitterly claimed that exchanges do not “act in the spirit of Bitcoin” and have “turned Bitcoin into something worse than fiat currency”, after being locked out of his account with the popular US cryptocurrency exchange. The user has recounted a torrid experience without access to funds, including a period of homelessness.

“Bitcoin is supposed to be better than fiat currency since it gives control of money back to the people through cryptographic decentralization… but exchanges have ruined that,” said the user.

The Coinbase user, who wished to remain anonymous, told Bitcoin News that he utilized Coinbase several times before to convert Bitcoin paychecks into US dollars for rent, food and basic necessities. The person claims to be a low-income earner depending entirely on these paychecks to stay out of homelessness, with no extra money to use in case of emergency.

The user and his partner lived in a weekly motel without tenant rights. He had developed a routine of depositing Bitcoin earned from freelance work two days before rent was due, as it typically took up to two days before Coinbase withdrawals were reflected in their bank accounts.

Unexpected glitch

On the last occasion on 10 May, the user was locked out after a third unsuccessful login attempt. The user recounts:

“I put the right password, the right 2-FA code. I use the same device for every login but always received an email to confirm a new device. This time, the link from the confirmation email bugged out every time. After my third attempt, I received a notification that my account was locked for 24 hours.”

All attempts to reinstate access via phone support did not work as Coinbase support claimed it had no control over account lockouts even if the user was able to verify identity.

By the time the user was able to log in to sell, Bitcoin’s price had fallen. Making matters worse, the funds had not arrived on the day rent was due. Coinbase could only tell the user that it was not responsible for his loss of money. An unsympathetic landlord threw the user and his partner out of the rental, after which they lived on the streets for several days.

Be wary of exchanges

The user told Bitcoin News that he no longer trusted Coinbase or even other exchanges with his funds and would now seek alternative ways of converting Bitcoin to fiat. He suggested that he might try peer-to-peer trades or look up decentralized exchanges, but admitted he was not sure how they worked.

Decentralized exchanges, as the name suggests, involve trading of currencies without the need to deposit funds onto a centralized wallet where users no longer control their private keys – which is the case with centralized exchanges like Coinbase. Peer-to-peer platforms like Localbitcoins have also been popular among Bitcoin users as they involve direct exchanges between people or traders, eliminating the need to trust intermediaries.

“Let this be a warning to everyone when depositing Bitcoin into Coinbase or any other exchange; the moment you deposit your bitcoin you lose control of your money due to the centralized nature of exchanges. Do not deposit Bitcoin unless you completely trust an exchange,” concluded the user.

Coinbase has not responded to requests for comment. Coinbase receives USD 1 billion of revenue per year.


Image source: Flickr – Charlie Cowins

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Blockchain Helps the Homeless in Texas Capital

Texas capital city Austin is piloting a blockchain platform that attempts to address the problem of identity management for its homeless population.

The pilot program plans to address issues such as unemployment, lack of medical services and government financial support for the city’s 2,000 homeless, who often can’t access these essentials due to proof of identity issues. A census taken earlier this year shows that several thousand more of the population are at various stages of transition, which could well equate to 7,000 homeless.

The project is financed through the Mayors Challenge Program sponsored by the charity Bloomberg Philanthropies.  Austin was one of 35 cities across the US to be awarded pilot grants, and the top city from that group will ultimately be awarded USD 5 million for making the most significant social impact.

The main purpose of the project is to ensure that homeless citizens’ identities and personal records are securely stored, while at the same time permitting facilitators to access the information.

The city’s chief innovation officer, Kerry O’Connor argues that the needs of the homeless often don’t gel with the facilities they interact with, which is the problem that the program wants to address.

“People who are experiencing homelessness have their own needs, they don’t really care about our needs,” said O’Connor, who pointed out that these things might be “access to a birth certificate, or a social security number, or a rental history”.

O’Connor argues that a blockchain-backed ID system will allow those in need to easily obtain the services they need to get back on their feet. The program will allow homeless service providers to verify information using cell phones and also facilitate the storage of medical records of the city’s homeless population, allowing medical professionals access to relevant patient history.

Austin’s recent rapid economic growth has attracted professionals from hubs like San Francisco. The cost to the city has been a rise in house prices which has increased the homeless rate.

There are currently other US cities experimenting with blockchain programs to improve social conditions for its citizen, such as Berkeley California and Lafayette, Louisiana, which both have programs either in operation or scheduled for implementation.


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