What’s the Point of Coinbase’s Coin Article?
It was very out of character for such a big crypto company, but there could be clues.
Cryptocurrency is still a very, very young frontier combining the most complex aspects of software and finance. Bitcoin was not the first time cryptocurrency was thought of but it was the first to be born successfully, which brought a wave of construction of building toward the place we’re at today.
One of those early constructions was Coinbase, a company with an intended focus to have a worldwide financial impact on how crypto will change our lives in terms of finance, payments, and peer to peer exchange. In the early years, Coinbase was known for just a Bitcoin wallet with the ability to send and receive payments (which honestly is STILL a big deal today on a mobile device) and also known for hiring the now creator of Litecoin, Charlie Lee.
A Tale of Institutional Integration
Since those early days, Charlie left for the Litecoin Foundation (which just recently bought part of a bank) and Coinbase has become the forefront of cryptocurrency action in the United States and most of the world. They have created the first ever crypto Index Fund, custodial services for institutions, and more.
Customer service was one of the biggest things heard about Coinbase, but in a negative way. Many people claimed to have thousands of dollars stuck in limbo waiting for their money without knowing when, or if, they would get it. Claims of Coinbase being forced to report their users to the government for tax purposes was also a major complaint. Since then, Coinbase has grown exponentially but also in the area of institutional investments. It’s no surprise at all that Coinbase is heading to be the major storefront of institutional money and peer to peer exchange and investing. It’s becoming a centralized hub for the second wave of the frontier, in which some like and some don’t.
The Coinbase Effect
One ongoing trend that many don’t understand is that all ears are focused on Coinbase for any announcements. As such, whenever they talk about adding a coin to their exchange, people go wild to gather and market buy the coin on other exchanges. The first time was saw this was with Bitcoin Cash, a hard fork of Bitcoin from August 2017. Prices soared on that random Thursday night and despite the listing showing only $3000+ now, buyers were shown as high as $8k per coin. Today that same coin is around $697.
That happened in the last lap of the bull run going wild. Community claims of Ripple being the next coin, as well as Ethereum Classic, and many others to join were the rumors for the rest of the month. Whenever there was a connection from any coin to Coinbase, that coin would revive a small jump in investment. This has particularly happened to Basic Attention Token, which Brian Armstrong has has many discussions with, and with 0x with their protocol token literally down the street from Coinbase. They made an official announcement last month to support Ethereum Classic on the exchange, which received a good pump.
On July 13th, Coinbase published on their blog a public consideration of the following coins: Basic Attention Token, Cardano, ZCash, Steller, and ZRX.
Out of Place
Regardless of how you feel about Coinbase, we know two things about them: they have major influence in the crypto world and the markets, and that they are usually not this speculative on declaring progress or roadmaps. This blog article comes as a surprise, especially from seeing BCH and ETH being added. Perhaps there’s more to the story. Initially, a good reason they published as that they’d like to prove a change on how they operate. Many feel burned and legally motivated about the Bitcoin Cash addition and Coinbase was accused of insider trading. With Ethereum Classic, they made an announcement that it would be added in the coming months (and hasn’t been at the time of this writing). We already saw that they wanted to approach things differently. These other coins however, are even less committed. Coinbase openly admitted they may list all of them or even have them available in every country. They also admitted they may be transferred the same way as other coins or exchanges.
Wait, what? That’s very confusing. It seems likely that Coinbase has plans outside the scope of recent crypto thinking.
Speculative Thinking on Coins
We really can’t think much about these coins other than speculation. But here are some thoughts on Coinbase themselves:
- We know they are trying to be a institutional company for crypto worldwide adoption.
- We know they are tying to give worldwide access to crypto that traditional fiat cannot.
- We know they are very welcome to Ethereum and ERC tokens.
- We know they are leaders of the crypto world.
So what about Coinbase in relation to what the coins they speculated about?
- ZCash — this could be the easiest one to figure out. It’s likely not from the nature of the coin (it’s optional privacy) because it’s from a centralized company, but from a competitive standpoint. The Winklevoss twins are planning ZCash integration as well as Robinhood. It would make sense to have something available that’s already going to be mainstream.
- ZRX — this is the next easiest because 0X has a good relationship with them and their protocol layered token is one of the best quality tokens today. This may be up to speculation about being listed on their exchange because they can use this token for its use case, much like Radar Relay does.
- Basic Attention Token — this is another easy guess to be added because of Brian Armstrong’s relationship with BATs CEO. Also, they advertising nature of the coin (ad companies pay with BAT to deliver ads to people) could be useful for Coinbase not on an exchange but for its use case like 0X.
- Steller — this one is slightly confusing but does pair with Coinbase’s business model. Steller is a currency spending coin but tends to advertise itself as a international means of money transfer (which every coin can already do). This matches with Coinbase and their vision to make financial stability possible around the world. One thing that’s ironic about this that Steller is a “fork” of Ripple, which the Ripple community has been asking for. It’s very likely this announcement was also meant as a way to tell Ripple holders that a Coinbase listing may never happen.
- Cardano — probably the most confusing listing, ADA works as a security and governed smart contracts system: think “Ethereum Secure”. What’s confusing is that Coinbase already has ETH and coins/tokens should always emphasize on security (CRYPTOcurrency). It’s possible this is only a use case consideration and not an exchange listing.
What Comes Next?
In the end, we can’t do anything but wait for listings and features. Coinbase plans to create a system for ERC tokens and ZRX, Cardano, and BAT make sense for that progress to happen both in their use case and as a distribution of exchange. It’s possible that ZCash and Steller are the only two on the list to be directly used as a payment option.
The speculation is just as a confusing as the article itself. Perhaps Coinbase is trying to be extra public about crypto in general to help gain more mainstream adoption.
But that’s part of the crypto frontier.
It’s just begun.