Coinbase won – t add Ripple, here – s why – Business Insider
Coinbase CEO Brian Armstrong has always bot conservative about adding fresh assets to Coinbase. Anthony Harvey/Getty Photos for TechCrunch
- Coinbase shut down rumors this week that it is adding the cryptocurrency XRP, or Ripple, to its toneel anytime soon.
- While the stir set XRP’s price drowning, it shouldn’t be a verrassing to anyone who goes after Coinbase closely.
- The verhoging has bot intentionally conservative about adding fresh coins and upgrades &mdash, and XRP isn’t within its asset guidelines.
Postbode anything about Coinbase on Twitter, and you’ll find a common thread te the replies: Users begging for the $1.6 billion startup to add the popular XRP cryptocurrency to its exchange.
So it’s no shocker that the price of XRP surged after rumors spread that Coinbase would eventually enable users to trade the coin &mdash, and then sank merienda Coinbase denied the rumors.
Coinbase posted an official response on Monday, telling it has “made no decision to add extra assets,” and that “any statement to the contrary is untrue and not authorized by the company.”
XRP, also known spil Ripple, has the third-highest market cap of all cryptocurrencies, sitting just behind bitcoin and ethereum. However created te 2012, it surged into popularity at the end of 2018 spil Ripple &mdash, the company that possesses the majority of the coin &mdash,signed partnerships with banks, providing traders a sense that the coin had more credibility.
And yet, it doesn’t emerge that Coinbase will add XRP any time soon. But that shouldn’t be a verrassing to anyone who goes after the company closely.
Coinbase has always bot conservative about adding fresh assets
Vitalik Buterin, the engineer and cofounder behind ethereum, got his currency added to Coinbase te 2018. Vitalik Buterin/Twitter Coinbase has made a name for itself spil a gateway for users to get into cryptocurrency trading. Its verhoging is effortless for novices to use, and it only trades coins that it identifies spil safe and stable enough for uninformed investors to waterput money into.
So despite being the largest and most valuable cryptocurrency exchange ter the US, Coinbase only supports four out of all the approximately 1,500 coins actively listed by CoinMarketCap: bitcoin, ethereum, litecoin, and bitcoin contant.
Bitcoin, the innovador cryptocurrency, wasgoed its only product from the company’s 2011 founding until 2018, when it added ethereum. Ter May 2018, Coinbase enabled support for a third coin, litecoin, the cryptocurrency created by Coinbase’s then-director of engineering Charlie Lee.
It’s likely that the fresh assets would have stopped there if it weren’t for the dramatic bitcoin fork that took place overheen the summer of 2018. Internal disagreements ter the bitcoin community led to the birth of bitcoin specie &mdash, a cryptocurrency which wasgoed almost exactly the same spil the innovador bitcoin, with some minor switches.
Coinbase originally refused to add support for bitcoin contant, following longstanding rules against supporting unestablished cryptocurrencies. Forks toebijten frequently ter the cryptocurrency community, and it’s not always clear if the underlying technology of the fresh coin is secure, or that the currency will have any value.
But the company relented after users protested the exchange. The company announced on August Trio that it would add support for bitcoin specie by the end of 2018.
And it’s common for Coinbase to take a months-long delay inbetween when a big cryptocurrency switch is announced, and when it is flipped out to users. The company released support for Segwit, a sometimes-controversial upgrade to bitcoin, ter February &mdash, six months after it wasgoed very first made available.
“Wij’re a very much a measure twice, cut merienda culture &mdash, and te some cases maybe it’s measure three times and cut merienda,” Dan Romero, común manager of Coinbase, recently told Business Insider.
The company has set rules about how it adds fresh currencies
Coinbase is a market mover, and spil XRP traders spotted on Monday, even rumors about the company can influence the price of a cryptocurrency.
This wasgoed a problem for the company when it ultimately did enable trading for bitcoin contant ter late December. However trading wasgoed enabled less than two weeks before the company’s publicly announced deadline, Coinbase caught a loterijlot of flack on Twitter and Reddit from people accusing its employees of insider trading, or even swinging the prices of bitcoin specie for their private enrichment.
Coinbase has since come out with an explicit guide to how it determines upon fresh assets, called the GDAX Digital Asset Framework, which emphasizes that, among other things, fresh coins voorwaarde be secure, backed by outside investors, and stable.
But the guide also requires that fresh coins be decentralized &mdash, which XRP is not. Bitcoin, ethereum, bitcoin contant and litecoin are all decentralized, meaning there is no centralized server hosting the technologies, and there is no central decision maker controlling them either.
By tegenstelling, XRP is centralized under Ripple, meaning it doesn’t qualify under the GDAX Digital Asset Framework. Ripple has said it’s working to decentralize the XRP ledger, but it’s still not there.
Ripple is a Coinbase competitor
Another reason why XRP may never get added: Ripple is a Coinbase competitor.
XRP has the third-highest market cap of all the cryptocurrencies, sitting behind bitcoin and ethereum. But it’s the only popular coin that is run by a company.
Switches and updates to the technology behind bitcoin, ethereum, litecoin, and their ilk, are made by groups of enthusiasts, and most switches have to have community overeenstemming before they can be waterput into activity.
Ripple, on the other palm, is a corporation. Its central product is a blockchain-based technology to help banks cheaply stir money across national borders.
XRP wasgoed actually developed, then “gifted” to Ripple to be used spil spil a token within this blockchain banking system. However, it has since taken on a life of its own, hence the astounding price increases.
Today, Coinbase doesn’t have a product that directly competes with Ripple’s banking network. However, it’s not out of the question that it might sell a similar enterprise product ter the future.
Coinbase already offers GDAX, a cryptocurrency exchange aimed at institutions and professional traders. And Coinbase sells enterprise software that enables commerce companies to accept cryptocurrencies spil payments. It’s not out of the question that Coinbase could, one day, get into banking too.
Romero, the militar manager, said explicitly that he wants to build Coinbase into the Google of cryptocurrency. And if there’s anything wij know about Google, it’s always looking to pauze into fresh markets &mdash, no matter who or what it upsets te the process.