Coinbase vs. Robinhood shows the Crypto App Wars are Just Beginning
SMS apps like Line and P2P payment apps like Square Cash are realizing that if you add crypto into your product it wildly boosts adoption and retention rates among Millennials. Thus the attention economy around apps like Coinbase and Robinhood are really fun to watch.
While Coinbase flirts with addition 5 new coins, namely Cardano, Basic Attention Token, Stellar, Zcash and Ox, they can’t guarantee those tokens will be added.
Robinhood, that has no transaction fees, is a California-based brokerage known for pioneering free stock trading, is indeed diving deeper into the world of cryptocurrencies with the addition of Litecoin and Bitcoin Cash.
Of particular interest to me is how Coinbase keeps up the hype when Bitcoin’s price has diminished somewhat so far in 2018.
Sure naming 5 new potential altcoins is good PR and somewhat attractive. Cardano and Stellar are in particular salient here.
- Cardano (ADA)
- Basic Attention Token (BAT)
- Stellar Lumens (XLM)
- Zcash (ZEC)
- 0x (ZRX)
But Robinhood have been offering free Bitcoin and Ethereum trading. Robinhood have been effectively going after Millennials, some might even dare to say that its app has been the darling of younger and inexperienced traders. For the impoverished lot of Millennials, they don’t want to pay the fees Coinbase is known for. So over the last year, Robinhood have been hiring developers to support trading of new coins.
To learn more about crypto trading on Robinhood, go here.
Exciting times! If you aren’t familiar with the new coins being proposed by Coinbase, I have reproduced below exerts created by Coinbase on them:
Coinbase Review of 5 Potential New Altcoins
- Cardano (ADA)
The Cardano protocol was created by Charles Hoskinson, one of the co-founders of Ethereum. Cardano’s Bitcoin-like Settlement Layer (CSL) mainnet is live and it has a functional wallet for its built-in ADA cryptocurrency. It has also taken a different technical direction from other blockchains on several axes, like its Ouroboros proof-of-stake algorithm, its use of Haskell, and its focus on formal verification. While Cardano’s Computation Layer (CCL) is not yet live, the project has published long-term roadmaps, has shipped working software, and appears to have a growing community.
2. Stellar Lumens (XLM)
Stellar is an open-source protocol for value exchange developed by Stanford CS professor David Mazieres, Rust language author Graydon Hoare, and Jed McCaleb. Lumens (XLM) are the native asset of the Stellar network. Stellar’s consensus protocol is different from proof-of-work in that it allows and requires individual nodes to choose the set of other nodes they trust as a group (a “quorum slice”) to give them accurate information about the state of the Stellar network. Stellar allows for the creation of anchors that can issue assets, use bridge servers to interface with existing banks, and follow Stellar’s compliance protocol. Initially funded by Stripe, Stellar’s board members include Khosla Ventures partner Keith Rabois, Stripe cofounder Patrick Collison, Wordpress founder Matt Mullenweg, YCombinator President Sam Altman, MIT DCI head Joi Ito, and AngelList founder Naval Ravikant.
3. Zcash (ZEC)
Zcash is a cryptocurrency which uses recent advances in cryptography to allow users to protect the privacy of transactions at their discretion. The distinction between Zcash’s “transparent” and “shielded” transactions is analogous to the distinction between unencrypted HTTP and encrypted HTTPS. In both cases, the unencrypted/transparent version of the protocol allows third parties to see metadata associated with the communication or transaction, while the encrypted/shielded version protects this information. The Zcash protocol has been live since 2016 and the development team has published technical improvements that may reduce the memory consumption associated with transaction privacy by 98%.
4. 0x (ZRX)
5. Basic Attention Token (BAT)
Coinbase is trying to be cautiously transparent, i.e. doing PR on this, and we have to remember when they say:
“These assets will require additional exploratory work and we cannot guarantee they will be listed for trading.”
Stellar and Cardano make sense, not so sure about the other three, however ERC-20 assets are likely (BAT/ZRX).
In the rise of Coinbase, it’s not clear if Robinhood or Circle Invest will seriously challenge them, at least anytime soon. Circle Invest currently supports Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic and Litecoin. If Coinbase is like the Uber of the market, Robinhood is like the Lyft, a growing challenger without the base fees.