Can the early success of major crypto exchanges propel them to winning the broader consumer finance market?submitted by mickhagen to genesisblockhq [link] [comments]
This is the first part of Crypto Banking Wars — a new series that examines what crypto-native company is most likely to become the bank of the future. Who is best positioned to reach mainstream adoption in consumer finance?
While crypto allows the world to get rid of banks, a bank will still very much be necessary for this powerful technology to reach the masses. We believe a crypto-native company, like Genesis Block, will become the bank of the future.
In an earlier series, Crypto-Powered, we laid out arguments for why crypto-native companies have a huge edge in the market. When you consider both the broad spectrum of financial use-cases and the enormous value unlocked through these DeFi protocols, you can see just how big of an unfair advantage blockchain tech becomes for companies who truly understand and leverage it. Traditional banks and fintech unicorns simply won’t be able to keep up.
The power players of consumer finance in the 21st century will be crypto-native companies who build with blockchain technology at their core.The crypto landscape is still nascent. We’re still very much in the fragmented, unbundled phase of the industry lifecycle. Beyond what Genesis Block is doing, there are signs of other companies slowly starting to bundle financial services into what could be an all-in-one bank replacement.
So the key question that this series hopes to answer:
Which crypto-native company will successfully become the bank of the future?We obviously think Genesis Block is well-positioned to win. But we certainly aren’t the only game in town. In this series, we’ll be doing an analysis of who is most capable of thwarting our efforts. We’ll look at categories like crypto exchanges, crypto wallets, centralized lending & borrowing services, and crypto debit card companies. Each category will have its own dedicated post.
Today we’re analyzing big crypto exchanges. The two companies we’ll focus on today are Coinbase (biggest American exchange) and Binance (biggest global exchange). They are the top two exchanges in terms of Bitcoin trading volume. They are in pole position to winning this market — they have a huge existing userbase and strong financial resources.
Will Coinbase or Binance become the bank of the future? Can their early success propel them to winning the broader consumer finance market? Is their growth too far ahead for anyone else to catch up? Let’s dive in.
BinanceThe most formidable exchange on the global stage is Binance (Crunchbase). All signs suggest they have significantly more users and a stronger balance sheet than Coinbase. No other exchange is executing as aggressively and relentlessly as Binance is. The cadence at which they are shipping and launching new products is nothing short of impressive. As Tushar Jain from Multicoin argues, Binance is Blitzscaling.
Here are some of the products that they’ve launched in the last 18 months. Only a few are announced but still pre-launch.
Can they create a cohesive & united product experience?
Binance WeaknessesBinance is strong, but they do have a few major weaknesses that could slow them down.
Binance Wrap UpI don’t believe Binance is likely to succeed with a homegrown product aimed at the consumer finance market. Their current product — which is focused heavily on professional traders and speculators — is unlikely to become the bank of the future. If they wanted to enter the broader consumer market, I believe it’s much more likely that they will acquire a company that is getting early traction. They are not afraid to make acquisitions (Trust, JEX, WazirX, DappReview, BxB, CoinMarketCap, Swipe).
However, never count CZ out. He is a hustler. Binance is executing so aggressively and relentlessly that they will always be on the shortlist of major contenders.
CoinbaseThe crypto-native company that I believe is more likely to become the bank of the future is Coinbase (crunchbase). Their dominance in America could serve as a springboard to winning the West (Binance has a stronger foothold in Asia). Coinbase has more than 30M users. Their exchange business is a money-printing machine. They have a solid reputation as it relates to compliance and working with regulators. Their CEO is a longtime member of the crypto community. They are rumored to be going public soon.
Coinbase StrengthsLet’s look at what makes them strong and a likely contender for winning the broader consumer finance market.
Coinbase WeaknessesLet’s now look at some things that could hold them back.
Coinbase Wrap UpAt Genesis Block, we‘re proud to be working with Coinbase. They are a fantastic company. However, I don’t believe that they’ll succeed in building their own product for the broader consumer finance market. While they have incredible design, there are no signs that they are focused on or capable of internally building this type of product.
Similar to Binance, I think it’s far more likely that Coinbase acquires a promising young startup with strong growth.
Honorable MentionsOther US-based exchanges worth mentioning are Kraken, Gemini, and Bittrex. So far we’ve seen very few signs that any of them will aggressively attack broader consumer finance. Most are going in the way of Binance — listing more assets and adding more pro tools like margin and futures trading. And many, like Coinbase, are trying to attract more institutional customers. For example, Gemini with their custody product.
Wrap UpCoinbase and Binance have huge war chests and massive reach. For that alone, they should always be considered threats to Genesis Block. However, their products are very, very different than the product we’re building. And their approach is very different as well. They are trying to educate and onboard people into crypto. At Genesis Block, we believe the masses shouldn’t need to know or care about it. We did an entire series about this, Spreading Crypto.
Most everyone needs banking — whether it be to borrow, spend, invest, earn interest, etc. Not everyone needs a crypto exchange. For non-crypto consumers (the mass market), the differences between a bank and a crypto exchange are immense. Companies like Binance and Coinbase make a lot of money on their crypto exchange business. It would be really difficult, gutsy, and risky for any of them to completely change their narrative, messaging, and product to focus on the broader consumer market. I don’t believe they would ever risk biting the hand that feeds them.
In summary, as it relates to a digital bank aimed at the mass market, I believe both Coinbase and Binance are much more likely to acquire a startup in this space than they are to build it themselves. And I think they would want to keep the brand/product distinct and separate from their core crypto exchange business.
So back to the original question, is Coinbase and Binance a threat to Genesis Block? Not really. Not today. But they could be, and for that, we want to stay close to them.
Other Ways to Consume Today's Episode:
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The Binance exchange platform is now going through very challenging times due to the worldwide financial crisis that threatens to transform into a full-blown recession. As of the day of writing, the total trading volume across all exchanges has decreased by 18%, continuing the downslope that began from the very first day of March. The volume associated with Binance, though, has dropped even ... Binance just sold all my alts at market rate and I have got just the Bitcoin now. " level 2. Tomatoshi. 63 points · 1 year ago "What are we going to do. I jut lost 21500 vechain. Over 100k$ of my money is gone and all I have is 1000 via coin and a tiny bit of bitcoin" "Take a look at the FEES BINANCE CHARGED FOR SELLING and BUYING!!!!! I was charged over 50% for all the sells!!! BINANCE ... Over $7.00 to send bitcoin now. That's pointless. It makes no sense to buy something like that. Telling people lightning is cheap right now is a lie..transactions aren't cheap on lightning at all. Unconfirmed transaction for over 2 days. Let's review some "use case" of Bitcoin. *Payment - failed : Slow as fuck(2 days lol). Highly volatile. $7 ... In fact, they are probably the exchange with the most coin pairs listed out of all of the major exchanges. In total, there are over 127 coins in total. Many of these coins are crossed with Bitcoin, Ethereum and Binance Coin. This means that Binance has a total of over 382 trading pairs on their order books. The fans are the bread and butter of the exchange. Binance Angels are also located in different regions to promote the exchange. Decentralized Exchange (DEX) A newly launched decentralized exchange by Binance for advanced users who value privacy. Cryptocurrency support. 1100+ cryptocurrencies. Binance.com supports more than 1100 cryptocurrencies, including: Bitcoin (BTC) Ethereum (ETH) Cardano ... Binance DEX is Binance’s new decentralised exchange, or rather, a “decentralised order matching engine”, as the main page will tell you. It was launched on April 23rd, 2019, on Binance’s new blockchain: Binance Chain, and is meant to be the quickest platform when it comes to exchanging assets – it boasts a throughput of a couple of thousand transactions per second (TPS). At the start, the exchange will support the common major currencies: Ethereum and Bitcoin. Along with this, the USDT and BUSD stablecoins will be supported, alongside the Binance Coin and the BKRW. It is one of our favorite crypto wallets as seen in our How to Buy Bitcoin guide. Binance Main Exchange. Now to the bread and butter of Binance, the crypto exchange. Binance is one of the truly global exchanges out there. They’ve been very creative as well for those countries that have banned crypto exchanges or that impose regulatory risk. For example, in July 2019, Binance removed access ... Binance; Livecoin; Bitfinex; After finding the platform with desired trading pairs, the next thing is to check the exchange’s liquidity for that pair. If the liquidity is good – meaning that there’s a high trading volume – then the trades will be easier and faster to complete. This also means that the traders are able to sell the currency without the price being significantly affected ... Cryptocurrency exchange Binance is enabling citizens in five further countries to buy cryptocurrency using Visa debit and credit cards with their national fiat currencies. The new service, announced April 10, will extend card support for the Colombian peso, the South Korean won, the Kenyan shilling, the Kazakhstani tenge and Peru’s neuvo sol.
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