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Coinbase and the Widespread Adoption of Cryptocurrency

We love talking about how great it would be to get the entire world using cryptocurrency for everything, but there’s a massive elephant in the room.

It’s time to live in the now

We love talking about how great it would be to get the entire world using cryptocurrency for everything, but there’s a massive elephant in the room.

Actual usability.

To the average person, cryptocurrency simply isn’t that usable in its current state. Especially when they can whip out their debit card and pay for something in three seconds.

I love cryptocurrency as much as the next writer on Medium, but expecting my mom to wait eight minutes for a confirmation and account for ever-changing miner fees isn’t realistic.

It’s not always about the future

In cryptocurrency’s case, it’s definitely about the now. The problem with the crypto world isn’t a lack of innovation, it’s a lack of realistic applications. Creating a decentralized version of the internet (and just about anything else you can think of) is important, but it’s not going to help with the widespread adoption of cryptocurrency in a world where most governments, to say the least, are skeptical of its use cases.

And that’s where Coinbase comes in. While Coinbase may not be the world’s largest cryptocurrency exchange (primarily because it’s limited to US residents), it did recently become the first broker to offer SEC-regulated cryptocurrency securities.

Coinbase is focused on the now; providing everyone with an easy and secure way to purchase and store cryptocurrency assets.

Despite hundreds of massive, multi-billion dollar ICOs from companies that all claim to be changing the world using crypto, the actual usability hasn’t changed that much in the last few years.

No matter how hard you try, you can’t use cryptocurrency to solve a problem that doesn’t exist yet

People all over the globe (especially the US) definitely started to talk more about cryptocurrency when the price peaked at $20K last December, but there’s still a massive rift between owning crypto assets and actually being able to use them.

The reason is simple: nobody wants to solve the boring problems. Most new cryptocurrency startups are so obsessed with developing the “next version of X blockchain/coin” that they’re failing to see the problems that actually need solving.

Crypto-first thinking isn’t going to get us anywhere. If we’re after widespread adoption, we need to start thinking usage-first.

What Coinbase is doing well

  1. In terms of approachability, Coinbase’s user experience is second to none. The design is both confidence-inspiring and easy-to-use for new investors.
  2. While other platforms like Binance and Kraken can feel daunting to the uninitiated, Coinbase makes it incredibly easy to sign up and start trading — this is what played such a massive role in the sudden surge of new investors during the market’s most recent rally.
  3. The team is focused on doing one thing and doing it really well. At Coinbase, it’s all about making it as easy and secure as possible for all types of investors to purchase cryptocurrency assets.
  4. Coinbase is the only exchange actively working to bridge the gap between big fiat and big crypto. Large hedge funds and accredited investors haven’t been quick to jump aboard the cryptocurrency train due to a lack of regulation and security. When you purchase a digital asset on an exchange, you don’t actually own it. Until you withdraw your coins into a third-party wallet, all you have is a glorified IOU. If the exchange gets hacked, shuts down, or locks your funds up, you’re shit out of luck. As the first broker of SEC-regulated cryptocurrency securities, the Coinbase Index Fund aims to provide high net worth investors with a secure way to get started.

What Coinbase isn’t doing so well

  1. Making it easy for anyone to buy cryptocurrency is a double-edged sword at the moment. Scaling is a constant issue in terms of transaction times and fees, and inexperienced buyers are significantly more vulnerable to hacks and investment scams.
  2. And while Coinbase has remained relatively untouched by any massive security breaches, the exchange definitely has its own problems with scaling. A quick Google search will reveal hundreds of unanswered support requests, API problems, and some shady internal business practices.

But remember, it’s not all Coinbase’s fault.

As with any drastic shift in technology, the majority of people are going to drag their feet. Blockchain-based projects are definitely starting to gain momentum (like IBM and the Australian government), but optimizing the world’s financial system for the digital era is a whole different beast.

And right now, it’s all about baby steps.

So is Coinbase designing the future of cryptocurrency?

Coinbase may not seem especially innovative compared to other crypto startups, but it’s paving the way for future development by perfecting the now. If other companies continue to skip over what’s happening now in favor of developing technology that will be relevant 12 years down the road, we’re just not going to get anywhere.

You can’t change the financial system of every country in the world overnight. The entire crypto community is largely anti-fiat, but it’s impossible to inspire change unless more companies focus on integrating cryptocurrency seamlessly into the world’s current financial system and finding its best use cases.

Featured image from Unsplash

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