Coinbase’s surprise announcement that they are to be releasing a layer 2 scaling solution for Ethereum has been met with mixed thoughts from the cryptocurrency community, with some celebrating the announcement and others lamenting the direction that Coinbase is taking.
What is Base?
Base is Coinbase’s new Ethereum layer two scaling solution that allows for people to make transaction in a much faster and cheaper way than is currently possible on Ethereum’s layer one.
Coinbase has stated that they believe this will be a huge asset to the community, and will help to significantly reduce gas fees paid by retail users.
1/ We’re excited to announce @BuildOnBase.
Base is an Ethereum L2 that offers a secure, low-cost, developer-friendly way for anyone, anywhere, to build decentralized apps.
Our goal with Base is to make onchain the next online and onboard 1B+ users into the cryptoeconomy. pic.twitter.com/RmwZFJzGGs
— Coinbase (@coinbase) February 23, 2023
Coinbase is still yet to implement the Lightning Network
One of the main complaints that has been levied against Coinbase recently is the fact that the company has still not implemented the Lightning Network for Bitcoin, despite it being the premier scaling solution for the most significant crypto asset in the space.
Other companies, such as Square and Strike, have had the Lightning Network functioning perfectly now for quite some time – even Twitter has it enabled for tipping of US users.
Despite the fact that this would bring a lot of enhanced utility to Coinbase, the exchange continues not to implement it, with some suggesting that the reason behind this could be the CEO Armstrong’s frustration that Bitcoin refuses to change in light of the blocksize wars, where Coinbase played a large role on the “big block” side.
Cathie Wood doubles down on Coinbase
Many large capital allocators, such as Cathie Wood, have reacted positively to the news. Wood has doubled down on her investment and continued to allocate more capital to the stock.
She has recently bought another $13m of COIN, in addition to the $9m of stock that she bought earlier this month for ARK.
This has proven to be a fruitful investment thus far, with the value of COIN up by over 85% YTD.
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