Coinbase was one of the original gangstas of the crypto industry, offering users a plethora of services that allowed them to interact with digital assets on-the-fly. Apart from acting as an exchange, the service was also quite popular as a trading platform and a wallet. In recent times, it has been rapidly expanding in the space of new blockchain developments, providing users with the ability to view their NFT holdings and engage in a number of activities like project launches and ICOs.
But if we consider the development of Coinbase or any other exchange from the point of view of market traction, we should also take into account the fact that they all exist thanks to the liquidity entrusted to them by various average users. Combined, that liquidity has given the exchanges the power they need to charge commissions, pay salaries, fuel research and develop in general. Acting much like banks, exchanges provide a number of services that users can resort to and thus conduct their operations. For a price, of course. That money, or rather the amount charged by each exchange, is a matter of debate, given that there is no average and each exchange has the right to set its own commissions without ever bothering to ask the users.
One could say that the other payment methods involved in exchanges, such as MasterCard or Visa, have also acted as major floodgates of liquidity. Such services as PayPal have also leveraged the traction of the cryptocurrency industry to achieve their aims and expand, giving rise to new divisions and tapping into new audiences of users. However, despite the abundance of means of pooling money onto an exchange, the bank card still remains the preferred method.
Can I Use Credit Card on Coinbase?
Cryptocurrencies as such are rather worthless. Though some would argue that digital assets abide by the law of supply and demand, a more thorough examination reveals that there are other factors involved that have shaped their price actions. For example, no cryptocurrency can be conceived without an element of perceived value. If said value is lower than users expect, demand for it will be nil. And perceived value can be construed as either utility within a certain system or ecosystem, or speculative value. More correctly, the ability to earn on future price increases.
Luckily, Coinbase does provide transaction processing through credit cards and allows its users to make purchases using leveraged funds. The blockchain does not care where funds come from, as it is interested only in receiving those funds and using them for its own purposes. Many users have their wallet addresses on Coinbase tied to a credit card and use them to buy cryptocurrencies in hopes of redeeming the money spent with future gains.
The takeaway
Needless to say, such an approach is flawed at the start, since one should never borrow money to buy cryptocurrencies. And no matter how Coinbase or any other exchange tries to lure users into thinking that an asset just listed on it will rise in price, one must never believe such claims. The reason for that is simple – marketing and advertising on the part of the project team, which pays the exchange for advertising placement and festive claims about its prospects. The sad reality we have witnessed has proven that every project in crypto space should be deemed untrustworthy and speculative by nature with little or no utility attached to it.
