Coinbase on Wall Street is widely seen as validating bitcoin, but a lot of bitcoiners aren’t feeling validated. Why are so many hardcore bitcoiners so disgruntled?
Well, as others have pointed out, Coinbase just isn’t all that punk rock. The cypherpunk movement from which Bitcoin sprang advocated for privacy and self-empowerment in face of meddling governments and corporations. A centralized exchange – even one responsible for onboarding tens of millions of people into the revolution – is just another intermediary. (And an expensive one at that: 97% of Coinbase’s revenues come from transaction fees that are above industry averages.)
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“The fact that a company like Coinbase went public makes it clear that custodial solutions have product-market fit and, honestly, it’s sad,” perennial nomad and Bitcoin promoter Katie Ananina said in a direct message. If punks chant “Oy,” bitcoiners rally around “not your keys, not your coins,” a reminder that “radical ownership” only comes from taking possession of your money.
In a similar vein, Coinbase’s public listing solidifies the exchange’s place among the Silicon Valley and Wall Street set. For some, the exchange’s “mission-focused” attitude towards crypto adoption is an artifice. So, asking bitcoiners whether they like Coinbase is like asking crust-punks whether they like Johnny Rotten.
Prominent Bitcoin personality Brekkie von Bitcoin says he bought his first BTC from the exchange but thinks Coinbase “has lost the thread.” Perhaps most glaring is that the Silicon Valley-based company has signed surveillance contracts with the government. “They used to be revolutionary,” he said.
Then there’s the exchange’s poly-crypto approach to the industry. Von Bitcoin admits Coinbase was a needed agonist for bitcoin but it’s guilty of “promoting every altcoin under the sun.” New users might confuse various altcoins for cheaper versions of BTC, a sort of identity theft.
Nowhere is this more apparent than in Coinbase’s willingness to list bitcoin forks. Investor Stephen Cole went as far as saying “Coinbase attacked Bitcoin” by supporting competing, payments-friendly versions – “BitcoinXT. Bitcoin Classic. Bitcoin Cash.” – of the original cryptocurrency.
Some are turned off for less ideological reasons, namely Coinbase’s history of going down during market rallies and higher-than-average trading fees. Not to mention the perennial complaints of lackluster customer support.
Bitcoiners are a strong-willed, vocal bunch. But even their calls to blacklist the exchange might be drowned out by traders barking for the exchange to list dogecoin.