Coinbase Custody is currently considering the addition of several coins and tokens. Will veteran cryptocurrency insiders think it’s worth using?
Coinbase Custody Set to Add Several New Cryptocurrencies
Coinbase Custody is currently considering adding to the list of coins and tokens that can be stored on its platform. The storage service is separate from Coinbase’s exchange services and, thus, has no bearing on the cryptocurrencies that can be traded on its exchange. The Coinbase Custody team says it chose to make this announcement both publicly and privately for the sake of transparency.
Coinbase Supporting Variety of Cryptocurrencies and ERC20 Tokens
The cryptocurrencies being considered include, but are not limited to, Bitcoin Gold, BitShares, Blockstack, Bytecoin, Cardano, Dash, Decred, DFINITY, Dogecoin, EOS, Hedera Hashgraph, ICON, Kik, Monero, Nano, NEM, NEO, Ontology, Qtum, Ripple, Siacoin, Steem, TaTaTu, Telegram, Tezos, TokenCard, TrustToken, Wanchain, and Zcash. As part of the consideration of these new cryptocurrencies and tokens, customers may occasionally see APIs for them but this does not mean that the new cryptocurrencies have officially been added. This is merely part of the process of developing and releasing the infrastructure needed to support them.
Coinbase has also announced plans to support Ethereum’s ERC20 standard to pave the way for adding Ethereum-based tokens to its current lineup of exchange, asset management, and custody platforms. It will also enable Coinbase to recover assets that customers accidentally sent to the platform, making it one of the first exchanges to promise assistance for customers that mistakenly sent the wrong tokens to an exchange.
Good idea? Or bad?
This may seem like a good thing for newcomers who are currently exploring the world of cryptocurrencies and have not yet gotten as far as setting up their own wallets. On the surface, the third-party custodial service feels like a bank, supposedly safe and secure and definitely convenient.
For all Coinbase Custody’s claims of being a safe way to store cryptocurrencies, though, cryptocurrency insiders who have been around the block a few times will tell you stories about exchanges and other third party services that were hacked and their funds stolen. Even some semi-popular exchanges like Mintpal have disappeared, and of course there’s the infamous Mt. Gox case. Despite recent claims from John McAfee, there are very few cryptocurrency exchanges and wallets that outright cannot be hacked.
There aren’t many good solutions except to take responsibility for one’s own security even if it means a certain amount of inconvenience and additional up-front expense. Don’t buy a hardware wallet on eBay even if it seems like a good deal, for instance. That’s a good way to lose thousands of dollars. Buying a genuine hardware wallet straight from the source is still a better option than storing cryptocurrencies with a third party if one intends to hodl cryptocurrencies long-term.
Of course, that won’t stop newcomers from chasing convenience even though they subconsciously know that there’s a trade-off between convenience and security. They may see Coinbase Custody as a convenient way to store their crypto with an established cryptocurrency business and will be lured by the promise of a secure platform that can quickly show them cryptocurrency prices that represent the value of their portfolios.