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The Coinbase Bitcoin Scandal

Written by Alexandra Perry
Posted August 4, 2017 at 5:28PM

It's been a big week in the world of digital currency...

Bitcoin Cash (BCH) was introduced to the market on August 1st. The digital currency is the result of a Bitcoin fork. And many investors rushed to BCH, viewing it as a potential profit powerhouse.

I say potential because even though BCH surged to $700 highs on Wednesday, it has since then plummeted. As I type this, it's sitting in the $200s — down 30% today:

bitcoin-cash-august-2017

But that initial upward surge sparked investor outrage.

You see, this is the first fork that the market has truly experienced. Ethereum forked a while back, but the currency was still young. Bitcoin has a massive investor base, meaning that more members of the public were involved with the fork, forcing a lot of investors to dip their toes into something quite foreign.

Now a lot of them want their free BCH.

Rage is being directed at the exchanges that are refusing to offer BCH. And the mega-giant taking the bulk of the backlash is digital currency exchange Coinbase.

The Coinbase Scam

In the world of digital currency exchanges, Coinbase often takes the cake...

CoinbaseThe platform is easy to use and requires minimal effort to set up.

It also allows investors to store funds in USD and make instant purchases.

But, despite the positives, Coinbase has had its fair share of issues. Earlier this year, it struggled to cope with Ethereum's popularity surge.

Now, investors are lambasting the company over the way it handled the Bitcoin fork.

Preceding the fork, Coinbase warned investors that it would not recognize BCH.

If investors wanted to make money on the fork, they would need to move their money to different exchanges.

But here's the kicker: Just because Coinbase doesn't recognize the new BCH, doesn't mean that it doesn't have it. It does have BCH and, for the momment, it's outside of investors reach. This seems particularly unfair considering BCH is dropping in price. For investors who are looking to maximize profits, the window could be closing.

And this outcry got a result.

Yesterday evening, Coinbase sent out an email saying that it would reverse its previous stance...

But Wait... Now Coinbase Is Going to Recognize BCH

Facing aggressive customer backlash, Coinbase sent out an email last night saying that it did have plans to support BCH. This is a complete reversal of its previous stance.

The email that Coinbase sent out stresses customer safety and security. Because of this, it says it's going to roll out the currency slowly.

Coinbase wants to have BCH to investors by January 1, 2018.

But here's the problem: BCH may not make it that far. For all we know, it could already be on its deathbed.

There were plenty of Bitcoin investors who are speculating that BCH will die off within a few months of its introduction to the market. It has less support from the Bitcoin community than regular Bitcoin (BTC).

That said, the peak time to make profits would have been when the hype was high. Though it's too early to tell, BCH might not even be valuable by the time it comes onto Coinbase for investors.

Alternatives to Coinbase

So, are you fed up with Coinbase? Are you looking for alternatives?

Sadly, though it's happening, we aren't at a stage where digital currency exchanges are highly regulated. This means that investors really have to pay attention to reputations, transaction fees, and past performances.

For now, Coinbase is one of the best. It allows investors who don't want to get technical to participate in digital currency investing.

That said, there are a few alternatives. One exchange called Gemini has been gaining a lot of traction lately.

Gemini is the first U.S. exchange to be regulated. On its website, it outlines this support:

The first U.S. exchange licensed for bitcoin and ether trading. We are regulated as a trust company by the New York State Department of Financial Services (NYDFS).

It's also a fairly easy exchange to use and has a lot of the same features as Coinbase.

I bopped around it this morning and was impressed by the clean interface. I have not executed any trades on Gemini yet, but plan on writing an "Alternatives to Coinbase" article next week. In the article, I'll explore the features of Gemini and a few other exchanges in depth.

If you want more information about that article, you can sign up for our Wealth Daily newsletter or follow me on Twitter @AlexandraPerryC.

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