The crypto exchange landscape is changing drastically and this could usher in a new world of user experience. The platforms are transforming from the old one stop shop for exchanging, buying and selling of digital coins and tokens to a more user centric outlets where user needs are given first priority.
The growing competition among crypto exchanges has seen the entry of better features and products to entice the user. However, behind all this are the regulator bodies that seem to be waking up from their long slumber. Coinbase and Binance are trying to outsmart the regulator and their communities by tweaking their platforms to get into user good books.
Read also: SEC Charges Kik Interactive (Kin)
Exchanges Torn between User Retention and regulator Demands
It is no doubt that exchanges are holding on to their subscriber bases while trying to please the regulators. The SEC for example has “started working” and already shaking the blockchain industry. The recent SEC- Kik/Kin drama and EtherDelta saga are good show that the regulator is no longer toothless.
Cleaning up the crypto exchange mess is not an easy task and might take a while before things start working out. However, exchanges are smarting out from the old ways of customer retention for their future sustainability.
Coinbase to Address Bitcoin Congestion
Coinbase has already admitted that it has been congesting the Bitcoin MemPool since 2012. This slows down the BTC platform making transaction cost high. This could have been Coinbases’ cash cow since high transaction costs will mean the crypto exchange gets a higher cut in profits.
However, to ease the congestion, the exchange has said it will implement Batch Transactions in the next “few months”. In a tweet yesterday, Coinbase CEO, Brian Armstrong said:
“If we wanted to create a list of culprits slowing down Bitcoin adoption for all, Coinbase would rank pretty high.” He went on to confirm that “batched transactions ‘should be coming out in a few months.”
“Batched transactions should be coming out in a few months. Embarrassing how long it has taken, turns out there is a lot of stuff to build in a growing company :)”
— Brian Armstrong (@brian_armstrong) June 6, 2019
Coinbase Mismanaging the Transaction Infrastructure
According to the Bitrefill CEO, Sergej Kotliar, Coinbase continues to mismanage the transaction infrastructure. For seven years, the exchange has been consuming the largest percentage of the Bitcoin MemPool space and this has led to congestion on the market leader coin network.
Coinbase is among crypto exchanges that charge the highest transaction fees globally and this is an issue it seeks to address since the community is not happy. The consumer demands are set to reign supreme and speed up the implementation of batched transactions. The same storm is brewing at BitPay to lower their transaction fees.
Binance Geo-Targeting a Big Blow to crypto Adoption
From July 1, Binance geo-targeting will come into effect. This will lock out user from 29 countries across the globe from accessing the binance.org website. This move has raised a lot of concerns which prompted the exchange CEO, Changpeng Zhao to clarify that it is not the DEX geo-blocking users but the website through a tweet on June 2:
“The message being passed is wrong. binance.org (the website) blocks certain countries; DEX (the blockchain) does not, it can’t.”
Accessing the Binance website from countries with blacklisted IP is met with a pop-up:
“It seems you are accessing www.binance.org from an IP address belonging to one of the following countries:
USA, Albania, Belarus, Bosnia, Burma, Central African Republic, Democratic Republic of Congo, Democratic People’s Republic of Korea, Cote D’Ivoire, the Crimea region of Ukraine, Croatia, Cuba, Herzegovina, Iran, Iraq, Kosovo, Lebanon, Liberia, Libya, Macedonia, Moldova, Serbia, Somalia, Sudan, South Sudan, Syria, Venezuela, Yemen, or Zimbabwe.”
High Transaction Costs a Consumer Big Issue
As much as cheap is expensive, the consumer is not happy with the current state of affairs especially with Bitcoin (BTC) transaction fees. On the other hand, Coinbase batched transaction delay means the user is the loser and BTC adoption will also be slow.
The future of crypto exchange lies on the regulator effectiveness and the consumer demands; the two cannot be separated. However, these platforms are transitioning from the profitability to retention so as to remain relevant in the fast evolving crypto sphere.