There are probably not many people who are trading, investing or following Bitcoin and didn’t hear about Coinbase previously, so we will make the intro short. Coinbase is one of the biggest Bitcoin exchanges and wallet service providers on the planet. The CEO Brian Armstrong got listed on our crypto rich list from a few days ago. The exchange has been awarded with several rounds of funding from different sources, no wonder, as they surpassed 13 million users in last December. One would think that their life is easy and that they really don’t need to do much to keep people happy. Well this isn’t entirely true as they have upset the Bitcoin community a few times in the past and now they are trying to gain back the trust. Let’s see what they did and how they want to redeem themselves.

Segwit2x Hard Fork controversy

Coinbase was one of the companies and exchanges who signed the Bitcoin Scaling Agreement at Consensus 2017. This was a scaling agreement that meant that the companies who signed will only support the SegWit implementation (needed for Lightning Network) together with a block size increase of the Bitcoin network from 1MB to 2MB. This could have only been achieved with the help of a hard fork, instead of only doing a soft fork for SegWit.

Most active and vocal Bitcoin community members found on several forums, twitter and on conferences have never agreed to this proposal, but these businesses made a deal behind closed doors and wanted to force it on the users. Later the SegWit2x fork failed, it both lacked developers and supporters, but still it was labeled as the fork with most hashing power and relevant company support before it finally vanished.

Bitcoin Cash addition drama and insider trading accusations

Coinbase is at the size and volume where you would think that they have a strict policy on introducing a new altcoin pair for trading, specially since they were always considered as a mainly Bitcoin exchange. Addition of Bitcoin Cash (the fork of Bitcoin that surfaced, because a majority of users insisted on a blocksize increase) has been pre-announced by a few months, but no concrete date was gives publicly. One day, surprisingly, Bitcoin Cash started pumping in price on most exchanges hours before Coinbase announced the opening of the markets. The community was furious and a lot of users and followers of the scene started pointing out that this was the result of insider trading and information leaking. After a few hours Coinbase halted Bitcoin Cash trading and the price crashed. Not much later Coinbase gave out an official announcement that they will investigate the claims of insider trading.

Bitcoin Cash before SegWit & the lack of transaction batching

After signing the New York Agreement (NYA) at Consesus it seemed like Coinbase wanted to scale Bitcoin, right? Well a lot of time passed since and they didn’t really do anything meaningful in this regard. SegWit was adopted in the end as a soft fork by the miners and the community, but it’s an opt-in method, meaning that users can decide to use it. Coinbase thought that adding an altcoin to the exchange is a bigger priority for them currently.

Recently it also turned out that it’s possible that a bigger wallet provider or entity is partially responsible for clogging up the network. During a massive spike in transactions and fees Coinbase and their service had an unexpected error and during the downtime the “transaction spam” that kept adding to the mempool simply vanished. This resulted in people realizing that Coinbase is not batching transactions for their users. This is both costly for their own users and for the network’s user base as well as they are raising the transaction fees.

Not the Bitcoin fan we used to know

In a portrait made by Fortune.com CEO Brian Armstrong we are being told that he personally owns now more Ethereum than Bitcoin. This in itself is a big statement considering one was the very first fairly launched cryptocurrency and the other has been crowdfunded via an ICO. There is no doubt that Ethereum transformed the way we look at cryptocurrencies today, but for most people, Bitcoin is still the original cyberpunk dream.

Redemption

Recently Coinbase has been tweeting a lot on their official twitter page. Most of these official announcements contained positive news towards the Bitcoin community. Firstly they issued a description that contained their framework for adding new assets in the future.

A more recent tweet by Brian Armstrong announced the coming SegWit support and transaction batching. Even if a bit late, but it will still result in a more stable network load.

https://twitter.com/brian_armstrong/status/951869357931425792

Thirdly they announced a lot of new employees in the form of a hiring spree on their official twitter account. To mention some, we all probably welcome a new costumer relations professional and a new VP of Operations to lead its customer service efforts.

Another recent announcement included the Coinbase Open Source Fund that will donate 2500 USD monthly to open source projects.

The most recent good news showed us that they finally decided to hire senior software engineers who can do open source work on Bitcoin, Ethereum, Lightning Network or any similar cryptocurrency or token protocol. These will be hired for full time employment. They are not the first company to do this, but we welcome everyone who moves forward with a project like this.

Conclusion

Will this be enough to please the community after the massive uproar on the different channels like, twitter, reddit or general bitcoin forums? We really can’t tell. What we can hope for is that if they go through with all the announcements, we might have a better user experience with their products in the future. It might also take away a good amount load from the Bitcoin network with the help of their batching of transactions and SegWit integration. Coinbase adopting these would give a good example for the rest of the exchanges who didn’t adopt these steps previously. The upcoming Lightning Network will also help to scale the network and will be able to manage micro transactions for exchanges.