Guest post by Vang
I think we can all agree, that it’s difficult to understate how badly Coinbase blows. Lets quickly give it a shot though:
First off the fees are exorbitant. This might be acceptable, if you could at least trust the platform to keep your information private (You know, kind of what we’re trying to achieve with cryptography? Yeah.) but Coinbase just agreed to disclose ID, name, birth date, address, and transaction records of over 12000 accounts to the IRS.
On top of that, the issue with overcharging accounts, where Coinbase erroneously overcharged users accounts (up to 50 times!), causing overdraft fees and generally holding customers money hostage. Arguably VISA’s fault, but nonetheless reflects badly on the company.
And that’s not even mentioning the frequent wire transfer delays, Ethereum flashcrash, suddenly adding Bitcoin Cash without ample liquidity, which caused an out of control spike in the market, and probably worst of all, failing to implementing Segwit instead of their legacy Bitcoin addresses, which has contributed to the overinflated fees and slow transactions on the bitcoin network, thus doing comprehensive damage to the adoption and usage of bitcoin for many months.
By the way, they are also being sued for several of these indiscretions
And it’s not like they don’t have the means to fix these issues. Coinbase is projected to have had a revenue of over 1 billion last year. That’s with a b.
Absolutely appalling disrespect for the ecosystem and their customer base, or just straight up incompetence? You decide. Either way, the crux of the issue is that they simply are the first movers and have set up a system, which have made it very easy to aquire cryptocurrency. Meaning? It is a lot of newbies entrance into the world of crypto, which gives them a lot of power and influence over the ecosystem.
I simply believe we can do better. And that’s where Ethos comes into the picture.
The project has been ongoing since mid-2017 under the moniker Bitquence. How will they out do Coinbase? By doing everything Coinbase does, but better.
They are launching a new universal wallet, which will have fiat pairs for all long list of alt coins, and not just tether, but cold hard cash, such that you will be able to cash out from here. This, obviously, is absolutely massive for the space, and is undoubtedly going to be a game changer. Liquidity and flexibility has been needed for these markets to remain healthy.
Among other planned implementations in the universal wallet is the ability to store stocks and bonds, managed portfolios, predictive and social platform and IRS friendly reports if you’re into the whole “paying your taxes” thing.
But the most important thing: They will make it easy. I have always said, the biggest roadblock to crypto is the complexity. People want things that are easy and not difficult to deal with. If you can buy with a single click, the vast majority of people don’t mind paying 4,5% in fees or being derived of privacy.
This is also why the awful Coinbase has been such a success, along with being one of the first movers in the space. You just click and you have your cryptos, no weird bitcoin addresses or annoying bank transfers, just input your card number and there you have it.
Ethos are banking on this model as well.
Wait, theres more?
Ethos are also working on something called Smartkeys, which allow you secure self-custody or custodial management of hundreds of different coins, tokens and currencies with a single key, along with a processing and development platform that can run scalable applications, broadcast data and verify identity and source of funds on the blockchain with build in API’s for easy industry and business integration. Token will function as an intermediary for this platform.
Oh, and their strategy and compliance manager is an ex-Blackrock COO (The biggest investment manager in the world basically)
Does all this mean that Ethos becomes the new Coinbase? Ofcourse not. Networks effects are huge, and Coinbase has the first mover advantage. Just because there are better alternatives, does not mean these will automatically be used, the world sadly isn’t that straight forward or logical.
A parallel would be Bitcoin, which certain segments of the cryptosphere feel are less efficient and worse than the alternatives (Ironically partly due to Coinbase incompetence), but Bitcoin is still by far the most used cryptocurrency. (Whether these alternatives actually are better is a discussion for another time).
Whatever your take on that discussion, Ethos is certainly worth a look. It ticks all the boxes to be a solid nextgen exchange/wallet solution. A lot of these are cropping up lately, and a lot of them are great on paper. Which one will become the preferred one, if any? Will it be Ethos? Time will tell.
Only thing that is certain is that Coinbase does not deserve your business.