Humans have been using the currency for thousands of years. Various things were used as currency over the years. But the modern currency that everyone uses is notes and coins that belong to the nation they are living in. There have been various changes in the way notes were printed this is because the governments wanted to tackle the problem of counterfeit currency. Just a few decades ago the problem of counterfeit currency was huge which is not the case today. Today you can send money to anyone from anywhere within minutes. All you need is a smartphone and an internet connection. But the problem with this is that you can only send money to the people who are living in the same country as you. If you want to send money to someone living in a different country then it is a different process altogether which is very bad for businessmen.
When you are doing international trade you want things to happen as quickly as possible. Otherwise, you may incur losses. On top of that, you also have the risk of your money getting stolen during the transaction or your account information can get stolen. So the most efficient way to transfer money is through cryptocurrencies. Most people might have heard about cryptocurrency but don’t know how they work. Cryptocurrencies are a form of digital currency that uses blockchain technology to monitor each transaction. This currency doesn’t have any centralized system. So it is not controlled by a single organization. Your transactions are quick and completely safe as your currency is encrypted. It is great for businessmen who are involved in international trade. But the problem is most people don’t know where to buy or sell cryptocurrencies. This article will introduce you to a place where you can buy or sell cryptocurrency.
What is Coinbase?
For those of you who don’t know Coinbase is a platform that allows people to buy, sell, and store their cryptocurrency. Here you can store any type of cryptocurrencies like Bitcoin, Ethereum, and others. Fred Ehrsam and Brian Armstrong in the year 2012. The idea came to Brian Armstrong when he was working as a software engineer for Airbnb. There I saw that more $500 million transactions were happening every year. They were receiving money from different countries across the world. All of the transaction methods they used were charging some amount of money on every transaction. This was the time when Bitcoin was just starting out and only a few people were interested in it. One day Armstrong met Ben Reeves who had a site called Blockchain.info that tracked every Bitcoin transaction. They exchanged several ideas and thought it would be great if they had something like PayPal for cryptocurrency.
Ben Reeves was also part of the initial founding team. Brian Armstrong and Ben Reeves wanted to go ahead with this idea and got a chance to pitch their idea to Y-combinator. Y-combinator is known as the most famous startup accelerator program in the world. But Ben Reeves left due to some disagreement. After this Brian Armstrong joined hands with Fred Ehrsam and launched the company. The company was an instant success and by the first year, they were already selling more a million Bitcoins every month. As the years passed Coinbase emerged as the most successful Bitcoin startup in the world. It became the number one app on the iOS store in 2017 when the price of Bitcoin rose. By 2019 the company had more than 30 million people using their app. One of the reasons why Coinbase has been very successful in that it was able to resist all types of hacking attacks.
How does Coinbase work?
As you already know Coinbase is like an online marketplace where you can buy or sell various types of cryptocurrencies. You can actually sell or buy twenty different types of cryptocurrencies on this platform. For people who are serious about cryptocurrency, it also has subscription programs. Coinbase Pro and Prime have several features that help both individuals and businessmen as it ensures that their trade is smooth. One can use the API of Coinbase to get real-time market data. They can use this to create bots that can help them with trade. The other thing that Coinbase offers is a Coinbase wallet. This is different from the exchange that it offers. Coinbase wallet has to be downloaded separately from the app store. This application is more secure compared to the other wallets as it stores the information in the devices of the users.
People can use these wallets to post jobs and pay using cryptocurrency. Apart from that Coinbase has its very own cryptocurrency USDC. One USDC is equivalent to one dollar. Coinbase also offers courses to people so they can know about the new cryptocurrencies that are available in the market. If you want you can also get a Visa card from Coinbase. All you have to do is order one. It provides tools for other companies that will enable them to accept cryptocurrency. Coinbase does this through Coinbase Commerce.
Business model of Coinbase
The business model of Coinbase basically depends on the problems it has solved for cryptocurrency enthusiasts. It has made several things possible for the people who use cryptocurrency. So let’s take a look at the things that helped it succeed.
Making digital currency accessible to all
Coinbase is truly a revolutionary platform when it comes to dealing with cryptocurrency. When people started learning about cryptocurrency they didn’t know where to buy them. Even the people who used cryptocurrency needed a platform where they could easily do trade. Coinbase has done a fantastic job of making cryptocurrency accessible to everyone. It is one platform where you can buy, sell, and store your cryptocurrency. Not only that but you can also pay using this platform. It helps traders get real-time information about the market. Coinbase provides you with a wallet where you can store your cryptocurrency safely. It also has courses that help individuals learn about how cryptocurrencies work. Coinbase is a platform that can be used by anyone who is dealing with cryptocurrency.
A single system for everyone to exchange cryptocurrency
If you are talking about currencies in general there are a lot of rules and regulations when you are transferring money from one country to another country. Not only that but there are different systems for different countries if you want to transfer money. They have to convert the transferred money to the currency of the country where it has been transferred to. But cryptocurrency is different. The money transaction laws of a country do not apply to cryptocurrency unless cryptocurrency is banned in that country. So you can transfer money to any part of the world. Coinbase has provided users with a single platform where they can send cryptocurrency to any part of the world. Users from across the globe can buy or sell cryptocurrency using this platform.
Users are the ones that have to buy or trade using this platform. Coinbase knows that its success depends on the satisfaction of the users so they left no stone unturned to make sure that the users have everything they need to trade or buy cryptocurrency. Whether it is individuals or professionals traders it has provided them with all the tools and services that make it easy for them to use their platform. One of the most important things that they have been able to do is provide users great security. This is a big reason for their success.
How does Coinbase make money?
Coinbase deals with cryptocurrency currency so most of the money they earn is also through cryptocurrency. Compared to its initial days Coinbase has more number of ways in which it generates revenue. Let’s look at the different ways in which it makes money.
Commissions on trade
This is something that you must have already predicted. Like any other platform that deals with currency transactions, Coinbase also charges fees on every transaction that is made using its application. A major chunk of its money comes from fees on trade. The number of money changes depending on the volume of the transaction. You will be charged a certain amount if the transaction is less than $10 and a different amount of it over $200. Users will also be charged a fee for payment processing. This fee also changes depending on which part of the world you are in.
Coinbase Pro and Prime
As mentioned earlier Coinbase Pro and Prime are the premium plans designed for people who are interested in trading. It offers them a lot of additional features that will help them in doing successful trades. The tools offered by them are free but the users will be paying when they trade.
Coinbase offers courses to its customers so that they can learn more about the new cryptocurrencies. Once they complete the course and make cryptocurrency currency that the course was about the users will have to pay a certain amount of money to Coinbase.
This is a service that provides security to clients. It stores various kinds of information related to the cryptocurrency of the clients. But one has to deposit at least a million dollars to avail of this service. This tool can also be integrated with Coinbase Pro and Prime.
As mentioned earlier Coinbase also provides a Visa card if you order one. This card can be used to transfer money in the real world. Each time the card is used a payment fee is charged. This payment fee also depends on the volume of the transaction.
This is the business model of Coinbase. It is the best application in the market to buy, store and trade cryptocurrency. You can learn about other interesting business models on Zeen like the business model of Wish.