Update: On July 13 Coinbase officially announced that they are exploring the addition of several new assets including: Basic Attention Token, Cardano, Stellar Lumens, Zcash, and 0x. According to the announcement the BAT and ZRX assets will be the first specific ERC20-based assets explored for addition to the platform.
On March 26, Coinbase, the popular cryptocurrency exchange and wallet service, announced that they will add support for Ethereum ERC-20 tokens. While no specific tokens have been been publicly announced, it’s very clear that Coinbase intends to add ERC-20 tokens at some point in the near future. This leaves investors speculating on which token(s) will be added to the platform, I strongly believe this will be Basic Attention Token (BAT), because of the reasons laid out below:
1. Coinbase will only add Apple verified virtual currencies
During the end of 2017, Coinbase became one of the most popular gateways for new cryptocurrency investors. In fact, the Coinbase app was at one point the #1 app on the Apple iOS app store. Being listed on the App Store gives Coinbase a huge advantage over it’s competitors, by keeping the barrier of entry as low as possible, it doesn’t get any easier than installing an app on your phone.
The thing is Apple has rules about which virtual currencies (cryptocurrencies) can be sold or accepted on the iOS store:
“If your app enables people to purchase goods or services that will be consumed outside of the app, you must use purchase methods other than in-app purchase to collect those payments, such as Apple Pay or traditional credit card entry. Apps may facilitate transmission of approved virtual currencies (e.g. Bitcoin, DogeCoin) provided that they do so in compliance with all state and federal laws for the territories in which the app functions.”
This means Coinbase will only add Apple verified virtual currencies to their platform.
Currently only a few cryptocurrencies are officially listed in the terms & conditions (e.g., Bitcoin), but according to ios-blog.com, the current list of approved currencies are: Bitcoin, Bitcoin Cash, Dogecoin, Dao, Dash, Digicash, Americoin, Ethereum, Ethereum Classic, LiteCoin, Lisk, Monero, Ripple, Steam, Tether, Waves and ZCash.
Last month Brendan Eich (CEO of BAT/Brave) gave a talk in London and announced that Basic Attention Token (BAT) is the first, and currently the only, ERC20 token to be accepted on the app store.
This means, unless any other ERC-20 tokens get verified, that BAT is currently the only viable option for Coinbase.
2. BAT is a perfect fit for Coinbase
Coinbase recently acquired Earn.com, an app that lets users earn cryptocurrency for answering emails and completing tasks. After this Brian Armstrong made multiple tweets, essentially saying that most “people will get their first crypto by earning it, not buying it.”
This and the acquisition of Earn.com give us an insight into their long term plans, Coinbase is preparing for a major spike in mainstream adoption, which according to them will be enabled by earning cryptocurrency.
The official Coinbase Twitter further confirmed this by announcing their next phase, the utility phase. Which will bring real use cases that enable people to use, earn and transact with products like Earn.com, Toshi and Coinbase Commerce. Pay close attention to the phrasing of this sentence, they are saying “products like”, implying something similar but different. This could just be me over-analyzing their tweets, but considering the context and fact that these announcements are carefully written and checked by multiple employees, which do you think is more likely?
BAT does exactly this, it gives users to ability to earn cryptocurrency by simply browsing the web and viewing ads, like Earn.com it lets users complete a simple task (passively watching ads) and then rewards them (with BAT) for completing it.
CNBC also reported that, Coinbase is preparing for a monster increase in trading, the company doubled the size of its full-time engineering staff and has overhauled much of the the platform’s code to gear up for more activity. Further confirming the suspicion that Coinbase is preparing for a major increase in users and activity.
3. Coinbase employees tweeting about/in reference to BAT
Brian Amstrong, Coinbase founder/CEO, has tweeted about BAT multiple times. Most notably, he replied to his own tweet about the BAT-project, saying: “exactly the sort of token we’d like to support on Coinbase.”
Brian indirectly tweeted about the Brave browser, which has a similar service to Youtube Red and will have a native Ethereum-wallet, last month.
Brian tweets in favor of creating utility and helping others, implying coins like BAT align with their vision.
Dan Romero, Vice President and General Manager of Coinbase Consumer, has tweeted about BAT in 2016.
4. Previous partnership and ties with Coinbase
The team has previously partnered with Coinbase in 2016, to provide Bitcoin wallets and purchasing tools for the Brave Ledger, a Bitcoin-based micro-payments system which automatically and anonymously pays the users favorite websites. This feature has currently been replaced by BAT payments a decentralized version of the system, which essentially does the same thing.
To assume that a similar partnership, involving BAT, is quietly being worked on by both companies, wouldn’t be a big stretch.
Ankur Nandwani, Product Manager of Coinbase, is a adviser of Brave.
The Coinbase and Brave HQs are located within 15 minutes of each other, this might not seem like a big deal, but physical proximity plays a huge part in deciding potential partnerships.
5. BAT is classified as a property with utility, not a security
Coinbase is has not yet registered as a licensed brokerage firm and electronic-trading venue, according to The Wall Street Journal.
Registering with the SEC would let Coinbase expand the cryptocurrencies traded on its platform to include those coins that the SEC identifies as securities, which they currently can’t.
This means, since Coinbase wants to stay fully compliant with the SEC, they can currently only list currencies or tokens that without any doubt aren’t securities.
According to the BAT FAQ, the team and their counsel at Perkins-Coie are confident that the Basic Attention Token is properly classified as property with utility on the platform they are building, and not a security.
Disclaimer: This article is my opinion and is for information purposes only, it is not intended as investment advice. Seek a licensed professional for investment advice.