Coinbase just announced it will be supporting the trade of ERC20 tokens. A lot of times in the crypto world I look and shake my head and I just can’t stop with this one. I could see if Coinbase wanted to support actual currencies like Ripple, Lumens, Monero etc… those are reasonably safe currencies to invest in.
ICOs which are essentially crowdfunding/pseudo-stocks (depending on who you ask) are extremely risk and I would say about 90% of those are fraudulent in that they collect your coins and never intended to deliver anything. I think we can all agree at any rate that ICOs are extremely risky and HODLING may be as useful with those tokens as holding RIM stock.
Coinbase has a huge client base and is one of the easiest ways for people to get into cryptocurrency. However, they risk bringing regulatory wrath and also dampening new investors from coming in when they get burnt on these ICO scams.
It’s recently come to my attention that some people weren’t aware that Ethereum Smart Contracts or ERC20 tokens are not vetted, supported or approved by the Ethereum team in any way. This is huge issue of course and why I am so against smart contracts at the moment. Let’s get cryptocurrency as an infrastructure in terms of B2B,B2C,C2C etc… working fast, efficiently, securely and easily before biting off more than we can chew!
I am also at a loss as to how the Coinbase legal team approved this one? Did they run it by any counsel at all? I think if and when people lose massive amounts that Coinbase could be held liable regardless of waivers and disclaimers for losses in some of the huge ICO busts and scams to come. Especially when there are so many other avenues and stable currencies they could have directed their customers to.
I am fearful for the investors, for Coinbase and the cryptocurrency market as a whole but should these warnings go unheeded and “things go terribly wrong” then it would be a good, fresh start for the industry. Investors also need to do their diligence and exercise good understanding and judgement before making investment decisions.
It will be interesting to see where this leads but I would never recommend any friend or family member to invest in any Ethereum Based Token ICO and to stick with solid and real cryptocurrencies that solve the problems of today.