While Ether has had a bounce in its value buoyed by the successful hard fork, it has also suffered a split with some miners sticking to the discarded Blockchain and starting their own currency called Ethereum Classic. In all of these dramatic happenings, one more piece of news that arrived was the US-based Coinbase exchange’s announcement that they would support the buying, selling, sending and storing of Ether.
Coinbase Co-founder praises Ethereum potential
Medium.com carried a blog by Fred Ehrsam, the co-founder of Coinbase which was full of praise for Ethereum. Fred expressed his opinion that while Bitcoin has only seen infrastructure app development happen, Ethereum has far more potential. He thinks that the scripting language in Bitcoin is too restrictive.
Fred writes:
“Ethereum has taken what was a four function calculator of a programming language in Bitcoin and turned it into a fully fledged computer. We now stand only 9 months out from the beginning of the Ethereum network and the level of app development is already faster than Bitcoin’s.”
Why Coinbase matters
Coinbase is a San Francisco, CA based company with 2.8 million users as of November 2015. All these users will now be able to buy, sell or store Ether in their iOS or Android wallets, not to mention directly on coinbase.com. Coinbase’s reach currently extends to 32 countries.
They also operate GDAX, a digital asset exchange company also based in San Francisco and have added Ethereum trading on this exchange since May 2016. In addition to these measures Coinbase has also announced the Coinbase Buy Widget which is a tool for their partners to embed Coinbase’s buying service within their sites and applications. This Buy Widget will also support purchases made with Ether in addition to Bitcoin.
Will Ether displace Bitcoin?
Coinbase’s move can be seen as a strong endorsement of Ether. Coinbase’s Engineering Manager Varun Srinivasan wrote on a blog recently:
“Ethereum, like all great innovations, is not without inherent risk — the protocol is nowhere near as mature as Bitcoin, consensus around the recent hard fork isn’t universal and the power of its scripting language is a double-edged sword. But what it has brought to the crypto community is a pace of relentless innovation that I haven’t seen since the rise of Bitcoin. This is why we at Coinbase have spent the better part of the last few months bringing Ethereum to our users.”
Yet not all is as rosy as it would appear. The very scripting language that gives Ether its edge can also be the cause of its downfall. Fred Ehrsam mentions this in his piece and also acknowledges that it brings an increased threat of tighter regulatory scrutiny. He also adds technical challenges such as problems in ‘scaling the network’ when mini programs are added, in addition to basic transaction processing.
We talked with David Duccini of Strength in Numbers Foundation about Coinbase’s support of Ether and he says:
“By the numbers ETH is the #2 token by marketcap, however it’s not a store of value. I think their support for Ethereum was premature, announced before The DAO debacle they were largely self-shamed into following through. I think in a lot of ways adding support for Litecoin would have been a safer play for pure transactional purposes. The reality is that we don’t know what other problems ETH is going to face and serious interests will not risk their reputation on it.”
Coinbase has made its bed and it will sleep in it
As far as Coinbase goes they are committed to the idea of Ether and they do genuinely believe that the alt currency has future potential. According to Fred Ehrsam, Ether may blow past Bitcoin.
“What is very real, though, is the possibility that Ethereum blows past Bitcoin entirely. There is nothing that Bitcoin can do which Ethereum can’t. While Ethereum is less battle tested, it is moving faster, has better leadership, and has more developer mindshare. First mover advantage is challenging to overcome, but at current pace, it’s conceivable.”