San Francisco headquartered Bitcoin wallet and exchange Coinbase has finally added Ethereum support for its retail clients that can now buy, sell, send, and store ETH in their accounts. The move has been expected since May when Coinbase added Ethereum trading on GDAX, its institutional digital asset exchange.
Marking the occasion, Fred Ehrsam, the co-founder of Coinbase, went on an AMA on Reddit to answer questions from the community. He talked about restoring CAD accounts once they find a payment service provider or bank in Canada, his views on the cryptocurrency market and blockchain development as well as experimenting with dapps.
One of the most interesting questions regarding Ethereum was about the possibility of smart contracts or decentralised p2p exchanges one day disrupting Coinbase’s business model. Ehrsam answered: “My current thought is it is very challenging to run a performant decentralized exchange though. I love that they exist, but it feels like it is going to be a while before they can handle the type of volume that is going through digital currency exchanges right now, let alone what it will be in a year or two.
There are literally thousands of updates to the orderbook a second, more at the Wall St volume levels. That’s a lot to do decentralized. Maybe there is a good solution here with something similar to payment channels? If people have thoughts on that I would love to hear them.”
A Swift Kick
One subject that Ehrsam was not willing (or was not at liberty) to discuss is the news that Coinbase helped U.S authorities to shut down the most popular torrent site in the world, KickassTorrents (KAT), and track down its operator 30-year-old Artem Vaulin.
The lengthy criminal complaint detailing the investigation by Special Agent Jared Der-Yeghiayan, Homeland Security Investigations, (coincidentally the same agent from the Silk Road investigation) explains the matter:
On or about August 8, 2012, KAT’s Frequently Asked Questions page of its website listed the question, “Is it possible to make a donation to the site?” followed by the response, “Yes, you can donate with bitcoin to this address: [Bitcoin Address]” (“KAT Bitcoin Donation Address”). Records received from the bitcoin exchange company Coinbase revealed that the KAT Bitcoin Donation Address sent bitcoins it received to a user’s account maintained at Coinbase. This account was identified as belonging to Artem Vaulin located in Kharkov, Ukraine, with a backup email address of firstname.lastname@example.org. The telephone number listed on the Coinbase account was the Vaulin Phone Number, i.e., the number listed for KAT Websites 2, 3 and 4. The KAT Bitcoin Donation Address shows at least one transaction being moved from its account on or about August 20, 2014, to a Coinbase account in Vaulin’s name. A total of $72,767 worth of Bitcoin (valued at the time of transaction) was deposited into Vaulin’s Coinbase account.