Can Cryptocurrency Businesses Go Against Wall Street Companies?
Numerous multi-billion dollar companies have over the past nine years been produced to be the cryptocurrency sector. Particularly, Coinbase, Binance, Bitmain, Bitfinex, UPbit, Bithumb, and Canaan have transformed into billion dollar movements, going against leading companies in regions such as the US, South Korea, and Japan.
San-Francisco-based Coinbase presently has more than 20 million users, almost as assent management giant Fidelity Investments and twice as much as Charles Schwab. Coinbase values itself as an $8 billion company and is looking at the possibility of going in for a more-traditional banking license.
Since 2017m flexibility has been a major concern for blockchain developers and users. When bitcoin price and transaction volume was at its peak in 2017, users could not conduct transactions without attaching $10 + fees. Decentralized application developers found it difficult to set up applications as a result of high cost of gas, which essential to process information on the Ethereum blockchain network.
However, flexibility is also a concern for centralized platform and businesses. Even though companies such as Coinbase and South Korea’s Bithumb have unlimited flexibility in processing data and trades, they find it hard to measure their customer support operations, offline activities, amongst other processes.
Olaf Calson-Wee, the first employee at Coinbase who developed a cryptocurrency hedge find Polychain Capital in 2017, said the effectiveness of Coinbase is thanks to its track record. Coinbase has never gone through a single security breach or a hacking attack throughout its six-year history, compared to Bitfinex, Bithumb and other leading cryptocurrency exchanges that have experienced numerous hacking attacks.
“Not being compromised is one of the big reasons that Coinbase is what it is today,” said Olaf Carlson-Wee.
Since December 2017, Bithumb has kept over $6 billion on behalf of its customers in its wallets and vaults. Coinbase keeps more funds compared to Bithumb, as its operations are global. Coinbase general manager Adam White earlier this month revealed that the companies manage over $20 billion.
“We have leveraged our experience safely storing more than $20 billion of cryptocurrency to create Coinbase Custody, the most secure crypto storage solution available,” said White, adding “Coinbase already offers the deepest pool of liquidity to the largest number of participants in the cryptocurrency space.”
A large amount of the budget of cryptocurrency exchanges like Bitfinex, Coinbase and Bithumb are used on updating security measures and maintaining an infrastructure that is not at risk to security breaches. Furthermore, companies need to seriously work on their customer support team to deal with support tickets and errors that may occur in depositing or withdrawing funds.
