Coinbase Crypto Exchange is Emulating Facebook’s Two-Sided Expansion Model
In an excellent article by Anthony Pompliano, the crypto expert outlined his belief in the incredible expansion opportunity of Coinbase, an exchange often hailed as the most user-friendly and easily-adoptable on the markets as of 2018.
The exchange announced just yesterday their plan to increase digital asset adoption in the next few months, an announcement which has already fired up several communities within the cryptocurrency community. In particular, some speculate that Ripple (XRP) and Stellar (XLM) are to be some of the first coins to be integrated into the world-class asset exchange.
But the plan was stipulated to be specific to some countries. This means that currencies will be available in some countries first before expanding slowly around the globe. Though this is partly because the company is likely careful to fit into the compliance standards of each country that they slowly accept into their new coin trading fold, Pompliano argues that this is a revolutionary way for the company to expand its offerings to a clamoring global community.
Though this method will be great in terms of ensuring a supply-side expansion while minimizing regulatory risks, this author is afraid that the method will be both expensive and difficult. With all of the coins and jurisdictions to be negotiated and reconciled, it will be no easy task for Coinbase to expand to countries all around the world with coins from all over the blockchain.
But if Coinbase succeeds, this could be the thing that cements their spot at the top.
In a clear ply to avoid playing too hard into existing crypto hype or slowing down the efficiency of their process, Coinbase has announced three questions which will serve as criteria for accepting or rejecting any given cryptocurrency applying for listing on their site.
They ask if the asset is “legally compliant in this jurisdiction,” if the tech is “technically secure and innovative,” and, most importantly, they ask if “our customers want it.”
According to Anthony Pompliano, the strategy closely mirrors a similarly effective strategy used in the beginning days of Facebook. The monster company decided to avoid creating the Facebook games they became somewhat known for, instead choosing to provide developers with a platform and toolset to create the tools themselves.
Pompliano contends that Coinbase is similarly trying to tap into the concept of a two-sided marketplaces, wherein they will allow cryptocurrencies to work on their own regulatory processes while slowly integrating them for sale to their customers. In doing so, and in making the application process as unbiased as possible, the company can minimize the amount of time and resources required to acquire access to any given currency.
A Hopeful Future
Pompliano concluded with a few key questions still yet to be answered by Coinbase regarding their evolving strategy and structure. He posits that perhaps the company is growing tired of the confusing nature of securities regulation in the United States, and are trying to expand quickly into places around the world to minimize their reliance on US regulators.
Though it is not clear thus far what the exact lowkey motivations hide behind the latest Coinbase move, it is obvious that a period of major growth is still coming for the organization and its followers.