Coinbase are one of the world’s most notorious cryptocurrency firms. They have been in the industry from almost the very start and aim to provide one things - a complete, regulated and safe space for the facilitation of cryptocurrency storage, payments and transfers. Of course, Coinbase doesn’t come without its flaws, though the service provided by Coinbase is often second to none, especially given that recently the Coinbase exchange has been able to list a huge number of altcoins too.
Until 2018, Coinbase had limited themselves to just listing a handful of major cryptocurrencies including; Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic and Litecoin. This was down to the fact that within Coinbases’ license and their own rules and regulations, they could only list cryptocurrencies that met very specific criteria. During 2018 however, the team at Coinbase realised a need to expand in order to access a wider investor market. After a thorough review and a change of policy, Coinbase eventually announced that they would be set to list a number of altcoins. Since the middle of 2018, this list has grown and now covers tokens such as XRP, XLM and even BAT.
It is thanks to this innovation and this need to grow that Coinbase has seen such a huge amount of success over the years. Tie this in with a clean and easy to use interface, and you’ve got a perfect product ready to help drive cryptocurrency adoption.
What will the next step be
Many believe that for Coinbase, the next step in their journey will be integrating with larger mainstream companies in order to help attract a mainstream audience and display a sort of certificate of trust. If a major firm like Google (for example) get behind Coinbase, the general population will find it far easier to actually trust that Coinbase are legitimate and that their operations are safe and secure.
How this might come about is hard to pinpoint, Coinbase aren’t exactly going to offer Google a lot, so therefore they need to give Google a good reason to want to enter a partnership. They do say that everybody has their price however, let’s face it, a Coinbase and Google partnership will rake in the big bucks, so perhaps there is a financial incentive for Google in this?
We are of course just speculating, there are no big indications that Coinbase plan to partner with Google or Apple, or any major tech firms any time soon, recent reports however do suggest that at the very least, Coinbase are starting to integrate with some of the services that the likes of Google and Apple provide. According to Cointelegraph:
“San Francisco-based cryptocurrency exchange Coinbase announced that users of its Coinbase Wallet can now back up their private keys on cloud storage, namely on Google Drive and iCloud. The move has received mixed reaction from crypto community and cybersecurity experts, some of whom seem skeptical about the idea of storing private keys on centralized servers. Others are confident about the new feature, stressing that it entails encryption.”
Your private key is the password to your Coinbase holdings. If you lose your private key, you are unable to move any of the assets stored within your Coinbase wallet, or other secure cryptocurrency wallet. It’s hard to remember your private key as generally speaking, they are very complex passcodes, so having the ability to back up your private key within an encrypted filestore service such as Google Drive is quite an exciting idea, providing that as investors, you remember to use Google Drive safely and activate 2-factor authentication, as well as having a secure password and practicing normal online safety procedures.
With their official announcement, Coinbase have cited the risk of losing private keys as their main justification for this new Google Drive/Apple iCloud integration:
“The private keys generated and stored on your mobile device are the only way to access your funds on the blockchain. Owners of ‘user-controlled wallets’ like Coinbase Wallet sometimes lose their devices or fail to backup their 12 word recovery phrase in a safe place, thus losing their funds forever.”
The cryptocurrency community however do seem to be a little less optimistic about this, with Taylor Monahan, the CEO of MyCrypto saying:
“Regardless of the strength of the encryption, the weak link will always be the user selected password (on both their wallet AND their cloud storage account). People simply aren't capable of generating a password with enough entropy, nor do they always use unique passwords for every service. Players like Coinbase should not be encouraging this type of unsafe behavior. I understand the desire for a better user experience, but the worst user experience is one where people lose all their crypto assets due to theft.”
This does not mark a Coinbase partnership
We have to reiterate that this does not suggest Google and Coinbase, or Apple and Coinbase are entering a partnership, it is interesting however to consider how Coinbase are using ready made technologies like iCloud and Google Drive to improve their own service, regardless of what the crypto community thinks. This is a good thing for cryptocurrency adoption and, providing that you use Google Drive and iCloud safely, it’s quite a good way to ensure you don’t lose access to your Coinbase wallet through forgetting or misplacing your private key.
Hopefully, this could be the start of a new move towards the adoption of newer and more mainstream technologies by Coinbase, perhaps after all, a Google/Coinbase partnership could be on the horizon?