As we head towards the close of 2019, Rohit and I recently sat down to discuss the year that has been for cryptocurrencies and what it has meant for the industry in general. A major trend this year has been the emergence of new financing avenues through DeFi (Decentralized Finance), and regulatory interest in Stablecoins and government-backed CBDCs (Central Bank Digital Currencies). Consequently, it has led to an influx of new participants (both individuals and institutions) making their first plunge into crypto.
It would be nice to disclose if you got paid to promote some of the businesses in your article or not.
There are some little errors in the article -
- Coinbase is not the largest crypto-exchange or trader in bitcoin, there are much larger ones;
- the exchanges have already wallets and can list assets; moving assets out of crypto-exchange comes with withdrawal fees;
- credit cards that can be supplied with crypto-coins have coin-fiat rate several percent different than the one on crypto-exchanges
Thank you for taking time out to go through the article.
No, we haven’t been paid by all these businesses to promote them.
That is correct. But we believe “not your keys, not your funds”. Hence, we recommend storing assets in own wallets. The options for hot and cold wallets are therefore points 2 and 4 respectively and don’t appear earlier since moving funds to personal wallets will happen further down the journey for a new crypto entrant. They could of course trade with decentralized exchanges. But this article is for novices and handling a Dex is, frankly, for advanced users. Maybe a v2.0 article could explore Dex’es.
Also agreed. However, we are exploring debit cards and not credit cards here. Many of these platforms have partnerships with exchanges to have nil arbitrage when it comes to crypto-fiat rates (though rates were not the point of contention here). For example, the debit card business mentioned in the article i.e. 2gether has a partnership with Kraken to allow same rates as the exchange.
Ok, thank you for clarifying.
Regarding Coingecko’s Estimated Reserves - the metrics depend on identifying if a coin address belongs to a specific crypto-exchange. Usually exchanges do not reveal wallet addresses of their customers. The Coingecko can co-relate some transactions, but they do not know what else is missing. In addition using ‘lightning network’ protocol transfers further obscures ownership specifically for BTC.
Regarding crypto-fiat debit cards - the fees charged and arbitrage percentage pocketed has to be in total less than the 2-3.5% credit card fee, or it would be a rip-off.