About The #DeleteCoinbase Movement
Coinbase is one of the most well known and longest operating cryptocurrency exchanges. It is one of the most liquid exchanges and is often the first place that newcomers go when they are making their first cryptocurrency purchase. However, recently a social trend has been starting against Coinbase advocating that users delete their Coinbase account. Known as #DeleteCoinbase, this trend has picked up some momentum but is it a legitimate threat to the dominant position of Coinbase in or is it just another fad in the never-ending drama surrounding crypto businesses?
The Background
The catalyst for the outrage was when Coinbase announced the acquisition of blockchain analytics firm Neutrino. The outrage is not explicitly linked to Neutrino but is related to the Neutrino team being made up of key members of the controversial software company Hacking Team. Hacking Team is an Italian software company that sells surveillance software to governments and corporations. Examples of attacks that their surveillance software can carry out are remotely activating the webcam and microphone of target’s computers and deciphering encrypted emails and messages. Hacking Team generated significant amounts of controversy for selling this software to authoritarian regimes and getting tied up in huge scandals regarding human rights. Their license to sell software to companies outside of Europe has since been restricted. Neutrino was founded by some of the key members of the Hacking Team which was brought to the attention of the public by both crypto analysts and the media. The CEO of Neutrino, Giancarlo Russo, was ex-COO of the Hacking Team. Coinbase has since made the snap fire decision to fire any Neutrino employees that have been involved with Hacking Team but the history of Hacking Team still haunts users and the #DeleteCoinbase still has some traction.
Although the Neutrino news was the catalyst, tensions have been building among Coinbase users for a far longer time. There is a long list of concerns that customers have been raising regarding how Coinbase operates its services. The level of KYC required to use the service along with the discretionary blocking of some accounts have been labelled as authoritarian and a sign that Coinbase is gaining too much power. Another sign which has been pointed out that Coinbase may be in too dominant of a position is the high fees charged. Coinbase is one of the most popular choices for beginners to make their first cryptocurrency purchase but beginners may find that they are charged around 10% in total fees. There is also the increased listing of altcoins causing outrage among some users. Coinbase was once one of the most careful selectors when listing cryptocurrencies. However, it has listed numerous cryptocurrencies in the last year that many are opposed against. The recent listing of Ripple’s XRP is a prime example of a listing decision that did not have widespread approval.
Arguments in favour…
Coinbase has long had one of the most intensive KYC processes, collecting numerous pieces of information on their customers and carrying out identity verifications. However, the acquisition of Neutrino means that Coinbase will be delving even deeper into the data of their customers. For customers who are concerned about what happens their data and their personal privacy, this represents a legitimate concern.
It is also true that Coinbase has risen to an enormous scale. They are likely the most influential business across the whole cryptocurrency industry. If anything, we are likely to see their fees go up as opposed to down despite the fees already being significantly above competitors.
Arguments against…
Despite all the concerns, Coinbase remains one of the most liquid exchanges for top cryptocurrency to fiat trading pairs. Their service for professional traders, Coinbase Pro, is an especially attractive option for traders that are speculating in US Dollars, Great British Pound, or Sterling. The fees are also zero for market makers on this exchange that provides liquidity by placing limit orders.
Blockchain analytics also serves its purpose. If Coinbase did not acquire Neutrino, they would still be executing blockchain analytics but possibly with subpar software. Coinbase is a company that operates at a huge scale so they would have invested a lot of resources into making whatever they believe the correct decision was regarding blockchain analytics. As for some of the positives that can come from this type of analytics, it has served to shine some light on the recent scandal regarding the lost funds from QuadrigaCX.
Should you #DeleteCoinbase?
As with any decision, there are tradeoffs. Even if the trend continues and you do decide to delete your Coinbase account, it is unlikely that the trend will progress to the point where an exchange as dominant as Coinbase goes out of business. Stranger things have happened but it is unlikely nonetheless. This is really more of a personal decision than it is a legitimate attack on Coinbase. If you are not happy with how Coinbase deals with its data and its company policies, it is well within your right to delete your account. However, if you don’t mind complying with KYC and how your data is treated, then it is likely you will continue to find a highly liquid exchange in Coinbase. It is always good however to know the ins and outs of the services that you use. If nothing else, the #DeleteCoinbase trend has shone a brighter light on one of the leading exchanges.
