Coinbase, one of the most popular Cryptocurrency platforms for buying, selling, transferring and storing digital currency has announced its support for ERC20 Tokens. ERC stands for Ethereum Request for Comments and piggybacks on the Ethereum network, hosted by Ethereum addresses and sent by Ethereum transactions. It’s the main technical standard used for smart contracts on the Ethereum blockchain. ERC20 defines the common rules that the Ethereum token has to implement, and has because of this become very popular amongst companies using Initial Coin Offerings (ICO).
Bitcoin Magazine quoted Coinbase’s blog post posted on March 26th, 2018, about the announcement –
“We’re excited to announce our intention to support the Ethereum ERC20 technical standard for Coinbase in the coming months. This paves the way for supporting ERC20 assets across Coinbase products in the future.”
ZDNet carefully analyzed the technicality of the announcement and what the future holds. A future adoption of products which include EOS, Tronix, ICON, VeChain, and Bytom will be supported on Coinbase. However, legal checks, a risk analysis, and approval by a committee of executives using the Digital Asset Framework will be done before Coinbase further supports ERC20 assets.
CCN predicted how this new addition could affect the overall structure of Coinbase.
One such aspect of Coinbase it will affect is the Coinbase Custody, which is known for being a digital asset custody service that provides secure storage and financial controls of large holdings. With the introduction of ERC20, it is bound to open up a more diverse set of cryptocurrency trusts.
CCN released another article in view of Ethereum’s fall from $500 to $460 with a market capitalization of $45.3 billion. This fall was seen even despite the significant announcement of the introduction of ERC20 on Coinbase. More specific details of what was to be offered by Coinbase would have helped regain Ethereum’s market share.
According to the Etherscan Website, there are more than 50,000 ERC20 token contracts and making this upgrade is necessary for Coinbase, since it will support the safe recovery of ERC20 assets that are sent to Coinbase’s Ethereum addresses.
A few months ago Coinbase took a huge hit after a Bitcoin Cash controversy. GDAX, the cryptocurrency trading part of Coinbase halted trade after two minutes of going live with Bitcoin Cash due to the high volatility.
Hence, Coinbase could succeed with the addition of ERC20 provided it does it slowly and carefully. This will lead to users being able to invest in growing startups which can increase Ethereum’s market share in the long run.
Coinbase is known to be a major market determiner with strong evidence in the past. In January, for example, Ripple dropped by 20% due to Coinbase refusing to support it.
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