The Next Coin
Coinbase CEO Brian Armstrong announced that Coinbase will be adding “many more” altcoins in 2018, but he didn’t specify which ones. Given that Coinbase is usually a cryptocurrency purchaser’s first stop, it’s likely that any coin listed on Coinbase will experience rapid price growth.
Coinbase will likely need to find currencies that have an existing large market cap, good scalability, and complement their existing offerings - Bitcoin, Ethereum, and Litecoin. They’re also likely to avoid crypto-tokens that are primarily tied to a specific company’s utility, such as OMG or QTUM. So which coins are contenders?
Monero hits the sweet spot for Coinbase - it’s market cap is nearly $5 Billion, it’s been in use as a currency since 2014, and it’s got way better privacy than Bitcoin. While a coin so focused on privacy may scare off some companies, Coinbase got their start with Bitcoin back when people assumed was only for buying drugs, so that aspect is unlikely to scare Coinbase off. And the Monero dev team has proven that they’re more focused on building a great cryptocurrency than on marketing, making it likely that Monero will get even better as time goes one.
For more information about Monero, check out our post - What is Monero?
Ripple is the number three coin by market cap, even bigger than Monero. It got there by focusing on it’s use case as a settlement system for banks, and has licensed their technology to over 100 of them. That sheen of legitimacy may be very appealing to Coinbase as they try and take cryptocurrencies mainstream.
Additionally, its incredibly fast transaction times has to look like a big plus to Coinbase, which has been suffering growing pains. And at a price point below $1, it may be more appealing to new users who get sticker shock when they look at the existing Coinbase offerings.
For more information about Ripple, check out our post - What is Ripple?
Dash has several interesting features such as instant-send and private-send, is better marketed than most coins, and is in the top 10 cyrptocurrencies by market cap. Adding it to Coinbase could be easier than the other coins as it started as a fork of Litecoin, and because of the marketing hype the company could bring to bear.
For more information about Dash, check out our post - What is Dash?
IOTA is one of the first non-blockchain cryptocurrencies. Instead, it uses a Directed Acyclic Graph (DAG) that works by forcing each new transaction to verify two previous transactions. Because of this, transactions have no fees and happen instantly, at least theoretically.
IOTA already has a large market cap, but it has a few negatives that may make Coinbase avoid it. The networks hasn’t yet proven that it can scale (the IOTA foundation behind it runs a centralized “coordinator” to protect the network) and has suffered long delays in confirming some transactions recently. The IOTA foundation claims these delays will go away as the network grows, but it has to prove it before IOTA can go mainstream.
For more information about IOTA, check out our post - What is IOTA?
Ark is a relative new-comer in terms of cryptocurrencies, having launched earlier this year, but it has one of the easiest to use wallets around, 8-second transaction time, and the goal of becoming the centerpiece in a network of blockchains. It has a decent-sized market cap at nearly $500 million, nearly double where it was a month ago.
Coinbase may not be ready to add such a new coin until it’s proven itself a bit more. On the other hand, they may be attracted to a new blockchain that may soon have other blockchains relying on it, allowing Coinbase to add new currencies easily in the future.
Stellar started life as a fork of Ripple, but instead of focusing on banks, it focused on the “unbanked” - think of it as a bottom-up approach compared to Ripple’s top-down. It has similar transaction time to Ripple and an even lower price.
Unfortunately, given how similar Stellar is to Ripple, Coinbase may choose Ripple since it has a higher market cap.
For more information about Stellar, check out our post - What is Stellar?
The most successful of the recent Bitcoin hard-forks, Bitcoin Cash increased the size of the blocks in the Bitcoin blockchain to allow for more transactions to fit into each block. Given the network congestion that Bitcoin has been facing, this seems to have been a smart move. Bitcoin cash has a lot of backing, Coinbase is familiar with the tech, and the Bitcoin name would be familiar to Coinbase users.
Unfortunately, it would likely be too confusing for Coinbase users to try and figure out whether they want Bitcoin or Bitcoin Cash. If Bitcoin Cash rebrands, they may have a chance, but otherwise Coinbase is likely to pass for now.
Called the “Ethereum of China”, Neo is another cryptocurrency that supports Smart Contracts . It’s gotten a lot of press this year and grown to a market cap of nearly $3 billion, which might be attractive to Coinbase.
However, Neo is still going through growing pains in terms of documentation and proving that it can host successful Distributed Applications like Ethereum can. It may just be too new for Coinbase to consider.