Coinbase Exchange Launches, Sort Of...

Coinbase Exchange

Coinbase Exchange, Almost, But Not Quite

Many people, like myself, were waiting and watching with our eyes glued to computer monitors, laptop screens, and tablets as the animated flying stars whizzed faster and faster, streaming longer and longer, and growing more colorful with each moment as it ticked from the countdown clock beneath the space simulated Coinbase launch screen.

Here it was, the first "truly" regulated, FDIC insured, savior of the Bitcoin world, the one, the only, Coinbase Exchange! As the rocket neared the Moon, the anticipation grew to the point of excitement. You could feel it in the air and almost taste the reality of new found coolness the likes of which had never been seen before!

Time itself seemed to slow down with each seconds passing growing closer and closer to the number of no value at all... the almighty zero.

The Big Reveal

With Twitter tweets armed and ready, we hit two minute mark and all of a sudden to everyone's delightful surprise... music began to ease in.

Dark soothing melodies layered bolder as each second peeled from the illuminated countdown display. "This is actually happening", many thought. "This might change everything", one shouted for the nose of the craft that had been so eagerly watch for hours had come face to face with the digital moon. Finally ... it was here .... the time was now ... our searches for any sliver of definition or detail left empty would finally be granted with the answers we sought and this might be the biggest thing of 2015!

The music intensified into a epic orchestration accompanied with what sounded like voices from angels and with the compositions final climatic harmonic chord of emphasis, the clock struck 0, the wait was over, the journey had come to an end, and the rocket so gently kissed the moon.

Eyes widened as a flurry of screen activity rested into a solace of solidity revealing nothing more than a simple statement of closure... "TO THE MOON!" it said "TO THE MOON!" as the journey to the gateway of what might be the next big thing had ended leaving a single object revealed, a pathway into the great unknown vat of answers we had all been seeking. It was a simple button whose sole purpose was to allow access decorated with three simple, yet ever-so-descriptive, words... "to the moon".

After brief moment of reflection, silence erupted into cheers of disbelief and anticipation and like a heard soccer mom's at Wal-Mart's front door on Black Friday ... we daringly entered...

... and then .... nothing....

The damn thing didn't work. The same silly button we were all so astonished by just moments ago was now an annoying square on a dead sequence of animation.

Network congestion of some sort perhaps? An epic failure? Was it all a sick joke?

Quickly, we assembled, noting our notes, grabbing our gear, and switching to alternate networks, devices, smartphones, and other means to enter the land of the sought ...

... and then ... you have to "log in to Coinbase" first.

OK. Damn it .... No problem, let's go back and log in to Coinbase. We agreed and quickly completed the task. 

With the the login now completed, joy filled the room once again as the mysterious "MOON" button let us pass and granted us access beyond its landing page of despair ...

...and then ... you have to pony up some more information.

For verification purposes, and undoubtedly AML and KYC compliance, some additional information is required to move forward. Talk about another "buzz-kill". To top it off this was redundant information that we thought Coinbase already had. In unspoken agreement we decided to move forward realizing that what once seemed like a journey through space and time, floating through the heavens with glee, had turned into a sluggish trek through a muddy trench of annoyance. So back we went...again .... and filled out more crap ... again ... while telling ourselves:

"it's OK", "the promised land is just over the hill".

With verification's verified, and logins logged in, there was nothing stopping us now. It was meant to be ... it seemed as if the world, if for only a moment ... had stopped ... and in slow motion began to excel as the pixels shifted colors revealing what could be the greatest thing since the inception of bitcoin itself ...

Finally... here it was... We had reached the ultimate end!

Coinbase Exchange is not yet available in your state.

Huh? Are you fucking kidding me?!

The Cold Cruel Reality 

As it turns out, Coinbase only has "some" things "in order", in 24 States, and one of those isn't really a state so make that 23. Two of those have no regulation so in all honesty they've only completed the tasks in just 21 states. This is not a half-ass effort, it's not even a half-ass effort. It's a 42% effort to be exact. We'll give it 42.5% since a territory is in there as well .... Puerto Rico.

Coinbase Exchange - State Offerings

If you ask me, Montana, Kansas, Idaho, and Iowa, don't really count either. These are fine states mind you, but Bitcoin community hot-spots they are not. Not even close. So now we're really talking about 17 States or a more realistic and dismal 34%.

Even Cryptsy, Coin X, and a few others of whom we mention in this article have FinCen registrations and licensing within several states but they weren't given the glory of the "first regulated Bitcoin exchange" title so why the hell should Coinbase be handed the tag? They shouldn't, because it really isn't and this was a fail.  

Who's In, Who's Out

California is no problem, it's on the list. Texas, who has specific guidelines allowing Bitcoin business to flourish without rigorous licensing requirements is not on the list. Louisiana, another seemingly Bitcoin friendly state is also not on the list.

Washington, who has come out specifically against Bitcoin operations without strict regulation? Not a problem, its on the list.

New York, almost a requirement, is on the list as are no-brainers like South Carolina and Montana where there is no regulation (nor population). Florida and Colorado two of the strictest and one of the most expensive (CO) are understandably missing but some of the others are a bit perplexing.

To The Moon

No, not yet, I am afraid. One small step for mankind, but not one that others, before Coinbase, had not already taken. A commended step none-the-less, but no moon, not yet, not this time.

We're not the only ones taking notice either, this is amid much frustration, as is evident here, where additional reports of infrastructure issues, regarding the sluggish exchange, are also noted.

If you follow Coinbase closely enough, you may have already known this, and Coinbase may soon open it's door to at least 50% of the Country, to support, at least a half-ass effort, but that time was not today, and today was definitely not the debut of the first US Fully Regulated Exchange. Not even close. This is a title Coinbase does not deserve, and the Winklevoss twins, may have just gotten a another lease on life, in regards to Gemini, for a run at the title. If, and I emphasize if, ... if they open the Gemini exchange, and include the majority of the United States, from day one, they may just take that title after all, and it would be certainly deserved, if they pull it off.

The Coinbase Exchange

In all fairness, we did get a glance at the Coinbase exchange and it's API under the hood. It is nicely done as most Coinbase products are. It's just kind of lame, however ... no, let be honest ... it is very lame that over half the country cannot even use it.

It is pretty and from what we could see works well although the performance is not 100% from day one as many have reported. That will undoubtedly be adjusted. One of the flagship offerings of Amazon AWS is scalability and there is no doubt Coinbase will take full advantage.

Coinbase Map - Feb 2015

Some highlights include 2.5% trading fees, an API, FDIC insurance, no trading fees for the first 60 days (which is an even a bigger kick in the face to the majority of the United States who, at this time, cannot use it), and the exchange prevents self-trading. I'm sure by preventing self-trading they meant technical restrictions because they have already officially succeeded in self-trade prevention right off the bat seeing as the majority of the country cannot use the platform. The best prevention method after all, is abstinence.

The Race To First Place

With that said, however, we live in a country of democracy here in the US and 51% constitutes a victory not 42%, not 42.5%, and certainly not 34%. This is not to impugn the work of Coinbase and its talented workforce, what they have done is incredible and commendable, it's just to say that putting a product out there and labeling it as the first of anything when it's really not and alienating its own client base just to say it was number one, simply takes away from any excellence because everyone begins to focus on what it can't do instead of what it can do.

The fully regulated exchange race or even the mostly regulated exchange race, under those terms, is still very much on. The "just regulated" race of course was won a long time ago... by someone else.

So, it looks like this story isn't over after all ... it has just begun.

We will get to the moon, eventually, but who will be giving us the first ride is still yet to be determined.