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:
Download the app. We're a digital bank that's powered by crypto: https://genesisblock.com/download
KuCoin is an international exchange based out of Hong Kong. I discovered it last weekend and was impressed at first glance from a UI/UX perspective. They officially launched September 15.
I signed up and deposited a small amount of Bitcoin to test it out. So far trades have been as fast and smooth as Binance. I can see this developing into a sister site to Binance. The team has done great work on it so far and it's just beginning. I put together a few details below so you can see what KuCoin has to offer!
KuCoin SharesKuCoin Shares (KCS) are the token that belongs to the exchange similar to BNB on Binance.
Total supply: ~181 million Circulating supply: 91 million ICO price: 0.000055 BTC Current price: 0.00007869 BTC (as of posting) Market Cap: ~$40 million USD
Whitepaper is linked on their Telegram announcements channel
Reasons to sign up!80% trading fee discount (0.02% per trade) until October 27!
KuCoin will add ETH markets on October 14
Kucoin will list WaltonChain (WTC) on October 16
KuCoin shares 90% of trading fees with the users
For example, user Bob holds 10000 KCS in his account on our exchange. In October the average volume of our entire exchange per day is 10000 BTC, according to our current fee rate, the trading fee we collect per day is 20 BTC. So this user will get 20 * 50% * (10000/100000000) = 0.001 BTC per day, 0.03 BTC per month!
- KuCoin keeps 10% of the trading bonus fee
- KuCoin shares 40% to users who invite others to trade on KuCoin via their referral link (note: this is my referral link!)
- KuCoin shares another 50% to users who hold KCS on KuCoin as a KuCoin Bonus! here are my earnings after 1 day of holding ~100 KCS
ETH, LTC, NEO/GAS, OMG, QTUM, PAY, CVC, EOS, SNT, KNC, BTM, BHC
- Pro/TradingView was released today!
- KuCoin only lists quality coins with teams they believe in. Currently listed:
- KYC coming soon, it's a new exchange so everything is still rolling out!
- You earn GAS for holding NEO on the exchange
- Mobile App (iOS/Android) in November
- Will be decentralized in the future with KCS as the fuel
- Each quarter, KuCoin will buy-back KCS with 10% of profits until 100m KCS is destroyed
Development Plan and TimelineOct 2017, Global promotion started. Nov 2017, Mobile apps (Android, iOS) released. Dec 2017, Over 50 mainstream cryptocurrency exchange pairs listed, daily exchange volume expected 5,000+ BTC. Jun 2018, Cryptocurrency exchange pair self-releasing feature available. Dec 2018, 1,000+ cryptocurrencies list, daily exchange volume expected 100,000+ BTC. Jun 2019, One of the Top 10 worldwide cryptocurrency exchange platforms.
TeamMichael Gan (CEO) Former technical expert of Ant Financial (Alibaba Group) with a good understanding of financial solutions similar to Alipay. He has successively held the posts of senior partner in several famous Internet companies like MikeCRM and Kf5.com, etc.
Eric Don (COO) Senior Researcher of the Internet and Systems Architect. He has accumulated over 10 years of experiences in working and starting businesses in the Internet industry and successively held the posts of CTO and senior partner of famous IT companies including Youling, Fengzheng Lianxian and Ruiyun Wulian, etc.
Top Lan (CTO) Technical expert of the Open Source Community and manager of several popular open source projects in github. He has accomplished the design and deployment of Kucoin financial trading system.
Kent Li (Operation Director) Expert of operations development and successively held the posts of Operation Director and architect in several Internet companies. He is also the regional Operation Supervisor of the REAP project initiated by Stanford University in Asia.
John Li (President of the Business Operations Group) President of Jianbang Communication and Project manager of famous domestic group-buying website. He is in charge of over 30 group-buying service centers around China with his main focus on consumer finance.
Jack Zhu (Marketing Director) Operations Director of the southwestern market of iBOX PAY. He is in charge of a marketing team with over 300 employees.
^ This is my referral link! I appreciate anyone who signs up under me!
^ Here is a non-referral link if you don't want to give me credit for providing you with this information. :)
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