It’s hard to ignore the fact that nowadays, ‘classic’ fiat money is being consistently pushed aside by cryptocurrencies. This increasing dominance has led to the emergence of new types of business, like crypto CFD trading and crypto exchange. Actually, these days, exchange firms pop up like mushrooms after rain. Despite all this affluence, like in many other sectors of business, one company manages to stand out from the crowd: Coinbase. How did this name become the market’s go-to for all things regarding crypto exchange?
I, Ofir Bar, am a veteran investor with a special interest in entrepreneurship and innovation, and also a crypto enthusiast. For many years the world of digital tokens has suffered from the image of unseriousness, and I can understand that: This field was (and still is) infested with scammers and unprofessional companies. But, to me, the arrival of professional exchange firms like Coinbase and Binance symbolized the beginning of a new era, in which crypto is as legitimate as centralized money. But how did Coinbase become a market standard? Let’s dive into it.
Novelty is a basic human need
As far as I can see, people usually choose the exchange firm they want to work with by filtering – first, they rule out the companies that seem somewhat ‘dubious’.
As I mentioned, the crypto world has rightfully earned the ‘honor’ of being considered a hub for fraudsters. But Coinbase managed to acquire a reputation as reliable and safe. This company is well-known for being super-strict about security: It stores the vast majority of deposited funds offline, and those stored online are insured at up to 250,000$ per customer. No wonder it has never been hacked. Can any potential client stay indifferent to this résumé?
Right after the initial filter – security – people tend to rule out firms that do not offer a sufficient selection of tradable tokens, which is yet another aspect in which Coinbase leads the market. It offers an immense selection of cryptocurrencies, and the numbers keep on growing. The human mind naturally seeks novelty and this company seems to recognize this fact. They make a true effort to ensure their customers don’t get bored of the same-old Bitcoin over and over.
Positive and negative filters
Let’s address the elephant in the room: Price is always an integral part of a product’s popularity. Being too low-cost might make some people suspicious, and others might just think little of you without even checking what your company has to offer. Being too expensive might automatically deter the vast majority of potential customers – the average Joe. Seemingly, Coinbase has found the right balance between the two. Their fees aren’t low, but are also not higher than acceptable for the ordinary person.
So far we’ve discussed ‘negative filters’, meaning the tool with which potential users sift through exchange firms that, in their eyes, seem ‘bad’. But there’s one major filter that is ‘positive’ in nature – and it’s as powerful as the negative ones: user experience.
Handling money is hard enough for the average layperson – and it’s no different when managing cryptocurrencies. Even more so, the crypto exchange world requires users to learn a whole new set of concepts that are nonexistent in the fiat finance world. That’s why Coinbase’s intuitive design and approach are so attractive. It offers educational content and even a slick app – which is as user-friendly as the desktop platform. All these factors together sum up to an exchange that makes crypto transactions easier and more approachable to anyone, anywhere.
Customers are not indifferent
As an investor who’s interested in entrepreneurship and new ideas, I can’t help but be impressed by companies that manage to stand out even though they act in a saturated market. If you ask me, it’s not a matter of a specific advantage, but a matter of perception. Truly inspiring companies are the ones that have a long-term vision and are not just busy with making as much money as possible in the shortest possible time period. As we witness with Coinbase, when a business does its best to be the best for the client, users and potential customers usually cannot stay indifferent to that.
