This content originally appeared on Level Up Coding - Medium and was authored by Dmytro Spilka
The Path to Decentralized Domination: Why Coinbase’s NFT Marketplace will Turn the Platform into an Omnipresent Force
It’s already the second-largest cryptocurrency exchange in the world, but Coinbase’s plans for a comprehensive NFT marketplace are set to turn the platform into an omnipresent resource at the pinnacle of the cryptocurrency ecosystem.
Coinbase co-founder, Brian Armstrong, is extremely buoyant on the future of non-fungible tokens, and believes that the assets may eventually become outstrip cryptocurrency trading.
“We are very excited about NFTs, this is going to be a very large area for crypto in the future, and it already is today,” Armstrong said, adding that “it could be as big or bigger” Coinbase’s cryptocurrency exchange.
(Image: The Defiant)
Despite concerns regarding the longevity of the NFT market, the total market capitalization for non-fungible tokens is set to surpass $20 billion by the end of 2021, according to statistics from The Defiant.
Significant growth is currently being driven by the rise of virtual real estate as investors seek to make purchase virtual land as the emergence of the metaverse continues to grow.
(Image: Arover)
As the chart above shows, OpenSea is currently the most dominant NFT marketplace by some margin, with monthly trading volume briefly peaking above $3 billion across the platform, but it’s believed that Coinbase’s built-in cryptocurrency exchange can make the process of buying, selling, and holding NFTs far more seamless for users.
For instance, to make a transaction on OpenSea, users are required to first purchase cryptocurrency on exchanges like Coinbase and set up a wallet like MetaMask, which connects to the platform. However, with Coinbase’s simplified integration with fiat currencies, it’s likely to be far more straightforward for users to make purchases on the exchange directly via a credit or debit card.
“The company is betting on differentiating itself with a simple [user interface] that demystifies the NFT process and makes it more accessible to the everyday creator and collector,” Mike Proulx, vice president at Forrester explained.
Whilst NFTs still have plenty of catching up to do in order to compete with the levels of volume we’re accustomed to seeing across the cryptocurrency landscape, integration into Coinbase’s 68 million strong user base will provide unprecedented levels of exposure to the space, which currently only has around 10,000 active NFT wallets weekly.
Seamless Socially-Driven Investing
Speaking about Coinbase’s NFT marketplace, Brian Armstrong said that the company is intent on developing a platform that offers a social experience alongside the ability for users to buy and sell non-fungible tokens. The move, Armstrong believes, will make Coinbase’s platform more similar in structure to Instagram than eBay.
The marketplace, which is set to launch in the first half of 2022, will seek to outpace its rivals across the formative stages in the growth of the NFT market.
“I think having people follow your favourite artists or creators, and having a bit of content that gets populated from those people you follow, that can be really powerful,” said Armstrong, highlighting his intentions for a socially-driven NFT space. “And in addition, you can go there and buy an NFT if you really like it and showcase it in your own social profile.”
“So just simple things like, how do you connect your wallet? You know, hopefully, you don’t have to install a Chrome extension,” Armstrong said, indicating that Coinbase’s marketplace may be more user-friendly than current platforms. “If your identity and your payment methods and everything are just already connected from your Gmail account, buying could be hopefully a one-click experience.”
Reaping the Rewards on Wall Street
Significantly, Coinbase’s growth into non-fungible tokens may mean that the company’s share price will be less dependant on the performance of Bitcoin in order to appreciate.
Following the launch of COIN on the Nasdaq, we can see that the stock has experienced much of the famous volatility that comes with the cryptocurrency market. This is unsurprising, given that the platform solely operates within the cryptocurrency ecosystem, but will still come as a disappointment considering that COIN is currently still trading behind its launch price despite BTC reaching new all-time highs in November.
(Image: CoinGecko)
Over the same period of time, we can see that the value of BTC has moved in extremely similar patterns to that of COIN, illustrating how dependant the exchange is on the fortunes of the world’s most famous cryptocurrency.
“Coinbase’s recent growth is primarily due to the bitcoin rally, as the assets are pretty solidly correlated with each other, while the company also has additional growth drivers,” explained Maxim Manturov, head of investment research at Freedom Finance Europe.
Along with the emergence of the company’s dedicated NFT marketplace, Manturov also highlights the development of the platform’s Prime service for institutional investors, which “combines cutting-edge technology within a single solution to allow more assets to be traded.”
In innovating beyond traditional cryptocurrency trading, Coinbase has the power to break from the shackles of Bitcoin dependency — even if many crypto enthusiasts will argue that historically this is no bad thing — and secure growth on its own terms.
Non-fungible tokens are still a divisive presence in the world of investing, but Coinbase’s work to accommodate the buying and selling of NFTs may well pave the way for more widespread acceptance. In doing so, the platform may well become an omnipresent force across the crypto landscape.
The Path to Decentralized Domination: Why Coinbase’s NFT Marketplace will Turn the Platform into an… was originally published in Level Up Coding on Medium, where people are continuing the conversation by highlighting and responding to this story.
This content originally appeared on Level Up Coding - Medium and was authored by Dmytro Spilka
Dmytro Spilka | Sciencx (2021-12-28T12:42:14+00:00) The Path to Decentralized Domination: Why Coinbase’s NFT Marketplace will Turn the Platform into an…. Retrieved from https://www.scien.cx/2021/12/28/the-path-to-decentralized-domination-why-coinbases-nft-marketplace-will-turn-the-platform-into-an/
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