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Finally, Coinbase Is Addressing Its Customer Service Issues

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U.S.-based cryptocurrency exchange Coinbase has announced the hiring of a former Twitter executive to help shore up its fledgling customer service arm. The news comes amid growing criticism of the exchange’s handling of customer service requests, which can take weeks to process.

Twitter Exec Joins Coinbase

The company announced Monday the hiring of Tina Bhatnagar to vice president of operations and technology, where she will oversee the customer support branches of Coinbase and GDAX. Under Bhatnagar, Coinbase plans to double the size of its support team over three months and expand 24/7 telephone assistance to all customers.

When deciding to join Coinbase, I was not blind to the challenges ahead of me,” Bhatnagar said in a statement that appeared on the company blog. “But when I met Brian [Armstrong] and the team, I knew it would be a truly joint effort to run our customer operations how we envisioned it. It’s an exciting time, with Coinbase and crypto in the public eye more than ever before, but that also means it’s an even more critical moment to stake our position. And this can only happen if we do right by our customers every single day.”

In the blog post, co-founder Brian Armstrong described customer service as Coinbase’s top priority moving forward.

The hiring of Bhatnagar is the latest in a growing list of human resource acquisitions designed to beef up client interface. In December, the company hired Asiff Hirji to President and COO. Prior to joining the exchange, Hirji served in senior level roles at TD Ameritrade and HP.

Cypto Exchanges: Too Big, Too Fast

For all its customer service issues, Coinbase has done a better job of scaling than many of its global counterparts. Several of the leading crypto exchanges have either suspended new account registrations or simply failed to fulfill client requests during crypto madness last year. Although Coinbase has crashed on numerous occasions, it has generally not barred new account holders from signing up.

Last November, Coinbase overtook stock brokerage Charles Schwab for total active users. The platform currently has more than 13.3 million users.

Cryptocurrency trading exploded in 2017, with total assets climbing above three-quarters of a billion dollars globally. The market has experienced a huge setback this year on threats of a regulatory crackdown in South Korea, one of the world’s largest hubs for cryptocurrency trading. Even amid the selloffs, Coinbase reported “record volumes and traffic.”

Unlike other exchanges, Coinbase only supports four cryptocurrencies: bitcoin, Ethereum, Litecoin and bitcoin cash. Insiders say Coinbase will likely add several cryptocurrencies to its platform this year, with Ripple XRP among the leading candidates.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.6 stars on average, based on 552 rated postsSam Bourgi is Chief Editor to Hacked.com, where he specializes in cryptocurrency, economics and the broader financial markets. Sam has nearly eight years of progressive experience as an analyst, writer and financial market commentator where he has contributed to the world's foremost newscasts.




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The Effect of Derivatives on Crypto

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Although they have had a slow rollout, derivatives for cryptocurrencies have been gaining support over the last year. Many worried that with Bitcoin ETFs stalling in their adoption, this could extend to derivatives. However, the demand for these products has continued to grow for various reasons we are going to examine in this article.

Derivatives are financial instruments that allow you to speculate on the price movement of a good without having to actually take ownership for that good. Some companies use them in order to hedge their positions and smooth out their income, but at the same time, derivatives were a large part of the volatility that led to the last major recession in 2008.

Current Status of the Market

Right now there are not many big players in the game, but more firms developing their own solutions and releasing them, you can expect to see the competition intensify in the next few months. The landscape includes everyone from privately funded investment funds to public exchanges. A big part of the market is about institutions gaining access to cryptocurrencies in a way that is less risky for their client base.

There are companies like LedgerX, which has experienced continually increasing demand for their cryptocurrency derivative products as 2018 has progressed. But where things get interesting is when existing financial players delve into cryptocurrencies.

The Chicago Board of Exchange (CBOE) started offering Bitcoin futures on December 10th, 2017, and this marked a change in the market. When well-regulated derivatives exchanges begin to acknowledge the legitimacy of cryptocurrency (or at least the high demand from their customers) it is a signal of a larger shifting of the tides in the works.

The plot thickens as recent rumours about Goldman Sachs hiring a cryptocurrency trader seem to be all-but-confirmed. Their goal is to figure out their customers’ direct needs and although they do currently clear Bitcoin futures, they are very cautious about further expansion into the cryptocurrency space.

In terms of sentiment, all of these actions together signal a shift in the way the legacy financial industry views cryptocurrency. A common retort used to be that Bitcoin was not a currency, but now that demand has continued to increase, banks are much more willing to cooperate and cater to their customers.

2nd Order Effects

It may be nice to have cryptocurrency derivative products available, especially for the firms who are making tons of money selling them, but it is also important to think about how this will affect the cryptocurrency market as a whole. Derivatives distribute the risk in a way that allows speculators to make bets without actually owning the cryptocurrency. Bitcoin has gained traction, but it is unclear how this sort of institutionalized speculation would affect it in these early stages.

The general argument for derivatives is that they allow for more liquidity and trading volumes of non-blue chip coins. Companies issuing derivatives for these alt-coins would increase the general awareness of these coins and their quality, which could lead to heightened demand for the coins.

Additionally, with every company, exchange, or investor who trades anything cryptocurrency related, regulators feel further pressure to regulate them more fairly. The current “no man’s land” crypto is in can’t last forever, and if the adoption of derivatives helps, then this is a clear benefit.

On the flip side, derivatives allow for bets against Bitcoin as well as the ability to invest in cryptocurrencies without owning them. This could lead to decreased demand, which may affect it negatively, since it hasn’t reached equilibrium like other currencies have.

Cryptocurrencies are an inherently risky asset, and with the introduction of derivatives, there are a lot of different things that could happen in this space. Increased volatility may ensue, but with it may come increased adoption.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Ethereum

Progress Scaling Ethereum

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In the blockchain technology world, scaling debates are pretty much the centre of everything. It is one thing to create a solution that works on a micro-level, but no one knows how things will look once it is expanded to the global level.

Many people spend time talking about the scaling of Bitcoin, but the efforts to scale Ethereum have been far more interesting. Between sharding and the switch to proof-of-stake, there have been countless solutions provided, and Vitalik Buterin seems to think his hard work is about to pay off.

Ethereum’s End Goal

Everyone knows this, but it is important to restate it: Ethereum wants to become a world computer of sorts. The end goal is to build a giant, decentralized network of computers that are both able to record transactions (using blockchain technology) and produce smart contracts (using artificial intelligence technology).

The combination of these features allows for the development of decentralized applications (DApps), which piggyback off the underlying technology and create a market for Ethereum’s token, Ether.

ERC-20 Standard

Tokens classified as ERC-20 are designed and used on the Ethereum platform, and follow a list of standards that allow for a simpler method of sharing, exchanging, and transferring tokens between users.

DApps use the ERC-20 token standard to represent shares in companies, proof of ownership, or coins of a currency. These tokens have essentially become the building block of any DApps that developers seek to develop on Ethereum. It is important not to confuse ERC-20 tokens with Ether, as Ether is what is used to compensate a user for their computing power, whereas the ERC-20 tokens are endemic to the actual DApps.

This high level of simplicity comes with a cost though. Some vulnerabilities have been found that allow attackers to gain access to a large quantity of tokens. Additionally, tokens may be destroyed by accident with the use of some smart contracts. A new standard, ERC-223, is now being developed to solve this problem.

The Best Alternative

Companies like Golem, which saw the release of its token delayed 3 years, are finding there to be some difficulties integrating with Ethereum. Most of these issues stem from current scaling problems, as was evidenced when Cryptokitties (a popular game building on top of Ethereum) created massive congestion within the system.

The technological barriers become more important once you process the fact you are dealing with other people’s money. There can be no room for error, and this is where much of the delays came from. For example, the verification of basic cryptocurrency transactions is fairly simple, but once you are verifying the results of a smart contract, the system begins to fail.

That being said, Golem’s CEO, Julian Zawistowski, still believes that Ethereum is “by far the most promising blockchain platform”. There aren’t many competitors in the space, and it seems like all the current problems will be solved, or on their way to being solved, soon.

Why Scaling Matters

The critical difference between Ethereum and Bitcoin is the fact that Ethereum acts like a company, whereas Bitcoin is a scarce commodity that is generally unmanaged and has no new offerings. As a result, this puts pressure on the Ethereum foundation to continually improve the capabilities of their platform so it is able to handle the required amount of transactions and tokens.

Not every company wants to build a whole new framework for the operation of their own protocol. The same way that WordPress has made it unnecessary for every company to learn how to code their own website on a deep level, Ethereum hopes to do this for all blockchain companies. Its ability to enable the development of DApps makes it a unique player in the space, and the fact that scaling issues are beginning to be solved (as is evidenced by ERC-20 problems being solved and projects like Golem finally being released) is a great sign for its future.

Featured image courtesy of Shutterstock.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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Altcoins

Why Investors Should Pay Attention to Golem

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Did you know most of us only use a fraction of our computers’ capacity? Thinking about it, you wouldn’t expect most of the tasks we do on a daily basis to take up much computing power. So what do you think happens to the rest of your capacity?

It sits idle, and nothing is done with it. Your computer is still on and consuming electricity and this power goes to waste. Based on this exact “problem” Golem has come up with a solution that ends up being a lot like AirBnb for your computer.

Golem has created a peer-to-peer system for sharing computing power across the network. The result is a flexible, scalable solution that aggregates idle resources and democratizes the payout to the millions of people on the network.

Golem’s Long Road to an ICO

It took 3 years, but Golem finally completed the sale of their GNT token in early April 2018. The platform is built on ETH and utilizes smart contracts to drastically bring down the cost of distributed computing. The sale was completed in under 20 minutes and raised 820,000 ETH ($340 million).

How it works is that suppliers have extra computing power and are willing to be paid GNT in exchange for their computers performing tasks for requesters.

The app is 100% secure and operates in the background, and you can also choose what fraction of your computing power to use, so there’s no worry about getting slowed down by its operation. Ideally, the only time you would notice it is when you earn some ETH for performing tasks for other users.

Golem’s Economics

The mechanics of the market are pretty simple. There is demand (requesters) and supply (providers). The supply is essential, because there are no central servers that are able to perform computations. Providers will come to the network with the goal of earning a few dollars a month in ETH, at virtually no cost to themselves.

On the demand side, you have users who buy GNT tokens in order to pay for providers to perform tasks for them. Requesters generally join the network because of its lower cost. They are able to set the maximum they will pay (their bid) and Golem distributes the tasks appropriately.

A final party to consider are the software developers who enjoy access to a distribution channel that helps them depoy and monetize new software. Golem has a store that enables this function and adds much more value to the network.

The obvious competitors to Golem are big cloud services like Amazon Web Services and Microsoft Azure. The fact is that these services are grossly overpriced because the companies have developed an oligopoly that allows them to collect high margins. This is crazy because computing power is not actually a scarce resource and this is the market inefficiency Golem aims to fix.

Golem’s Long Game

Golem is currently trading at a fraction of a dollar ($0.145) and is down from a high above $1.00. The same downturn has affected many companies in the blockchain space, and Golem has received extra flak for taking so long to release their product. At the same time, another way to look at this is as a major buying opportunity.

Most of this has to do not with ineptitude, but a complex framework (Ethereum) that isn’t perfectly designed for integration yet. However, in the long-run Golem still has huge potential. As more features are released (Clay Golem is next) and they scale to be able to help data centres, there is no limit to how far they can go. The size of the market has been proven by Amazon and Microsoft, and now it is up to Golem to see if they can get a piece of the pie.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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