This column is part of a weekly series from cryptocurrency expert George Tung. To read more of his work, head here.
Whether you like Coinbase or not, it is by far the most popular exchange in both the United States as well as other parts of the world. Despite reports of horrible customer service, allegations of insider trading with Bitcoin Cash and numerous flash crashes of Ethereum, Coinbase continues to add millions of new users to its platform every month.
The reason is that Coinbase is unbeatable in its simplicity and user convenience. There is no other exchange out there in the world that is anywhere close to Coinbase’s platform. Crypto traders know that using Binance, Bittrex and other exchanges are quite difficult at first, and most of them do not allow fiat buying options. Coinbase allows anyone to create an account, hook up a debit card or bank account and buy Bitcoin and three other altcoins instantly.
In other words, Coinbase would be where you tell your mom or grandmother to go to to buy Bitcoin. But today I’d like to talk a bit about Blockport, which has all the right ingredients to become a Coinbase contender.
It’s very obvious Coinbase is the inspiration Blockport is using for its platform. However, Blockpoint isn’t trying to be a copycat; it will try to do much more. There are five unique problems the team sees in today’s cryptocurrency exchanges: lack of liquidity, lack of usability, lack of security, lack of transparency and lack of education.
The biggest problem with most Coinbase competitors is the issue with liquidity. Coinbase has billions of Bitcoin, Ethereum, Litecoin and Bitcoin Cash on hand that it uses to sell to consumers. Most startups do not have this kind of liquidity.
Blockport plans on solving this issue by utilizing internal trading by matching buys and sells from people within the platform and by utilizing external exchanges for trading when internal trading is not available. With both utilized, Blockport asserts that liquidity issues are going to be a thing of the past.
In terms of usability, Blockport will come up with two different interfaces. One as pictured above will be for the newcomers in the space. There will be another for more advanced traders. Blockport also plans on integrating fiat purchases just like Coinbase.
It will also solve security by having the wallet structure and private key off of its exchange. This way, there are no concerns about breaches or hacks on their hybrid exchange since the funds are held within your own wallet off the exchange.
As far as transparency, the platform plans on stopping the arbitrage between exchanges (due to price fluctuations and fees) by utilizing multiple external exchanges. This is detailed in their solution for liquidity. It also plans on tackling education by utilizing a knowledge base, facilitating a forum and allowing users to copy off other users that want to share what they are trading. This is a “co-investing” model and another way users on the platform can earn tokens.
Blockport’s Price Potential
It’s important to note that Blockport has no platform yet, and everything mentioned above is still being developed. However, the team lead by Sebastiaan Lichter has shown with his past startups that he has what it takes to make this project a successful one. And having the CFO and co-founder of Ark, Lars Rensing, as an advisor certainly doesn’t hurt.
Blockport’s roadmap is ambitious and the first beta platform release is coming next month. Continuous improvements will be made throughout 2018 until it is complete in Q1 of 2019.
Blockport has come out of ICO for about a month now, and each BPT token sits around $0.60 with the overall market cap at $31 million. Seeing how Coinbase’s annual revenue now tops over $1 billion a year, you can see the potential of Blockport — if they are able to execute with a Coinbase-killer platform.
This article reflects the opinions of the author and is neither intended to be financial counsel nor recommendation.