[2019-07-30] Largest Wallet Blockchain Just Launched Its First Crypto Exchange

[LeGaulois]

Blockchain.com launched its exchange platform called The PIT https://pit.blockchain.com/
It can be integrated to non-custodial Blockchain wallets for 'nearly instant transfers' they say. There are 26 pairs to trade... and USD/EUR deposit and withdrawal...  
I can't believe the ecosystem is built around just a few companies leader in this industry :/

https://www.coindesk.com/bitcoins-largest-wallet-blockchain-just-launched-its-first-crypto-exchange

PIT could be posed to attract more liquidity than competitors.

Execute in Microseconds. Trade at 10x the industry speed.

Sherrod added the exchange will measure speed in “microseconds,” like traditional asset exchanges. However, an anonymous industry expert was skeptical about whether that theoretical speed with remain constant under real pressures. The source said many infrastructure dependencies are “almost impossible to model out,” so the system will only prove itself when tested by “real-world trading volumes.”

Blockchain is applying for new licenses in various jurisdictions, Sherrod said, but failed to specify which ones. In the meantime, the exchange won’t operate in any jurisdiction that requires a license, a spokesperson added

[figmentofmyass]

It can be integrated to non-custodial Blockchain wallets for 'nearly instant transfers' they say.

i think this might just be gimmicky wording. the exchange is custodial. it's not a DEX. i don't know what they mean by "nearly instant transfers". it may just be like the bitpay wallet where they credit zero-confirmation transactions if they pay high enough fees.

only 4 coins will be listed---BTC, BCH, LTC, ETH. the rest of the markets are fiat currencies or stablecoins.

i wonder how big their liquidity could get. they seem to be restricting most USA states, though some are available. mandatory KYC from the looks of it:

Your access to one or more Blockchain Services may be contingent upon successful completion of onboarding processes, which includes verification of your identity and source of funds, and additional information we may request from time-to-time.

[timerland]

That's great, but I agree with figment and I don't think it's a DEX. "Nearly instant transfers" just probably means you can trade coins and deposit/withdraw them easily (most exchanges you need to wait 4-5 minutes for your transaction to be sent, maybe PIT instantly sends it). I don't think it's anything revolutionary, but Blockchain is a pretty good company and hasn't been engaged into untrustworthy activities unlike other exchanges that are similar.

From a look at availability (https://pit.blockchain.com/availability), there seems to be a large number of countries that are restricted. Is this just for the beta phase/testing, or from the entire exchange as a whole? Looking at it, seems like 70% of all countries are banned - although I do see some available US states, which is interesting.

More of exchange for people that aren't very invested in crypto. Most people that'll use this are the people with blockchain wallets, and it seems like they've made it even easier for those people - https://pitsupport.blockchain.com/hc/en-us/articles/360031214691-How-do-I-connect-my-Blockchain-wallet-to-The-PIT-.

[bryant.coleman]

Blockchain.com have been behaving quite strangely for the past few months and users need to be careful about them. When I created my first wallet with them in 2012 (back then it was Blockchain.info), they had the option of exporting the private key. They have disabled this option for the newer version of the wallets. Also, back then all you needed was an email address, if you wanted to create a wallet. They are slowly making KYC mandatory now (yet to be implemented). As of now, they are trying the carrot and stick approach. They were offering $25 worth of XLM to anyone who would undergo the KYC. Their plan flopped because very few of the users fell in to this trap.

And I am not very sure about this proposed exchange. Even earlier Blockchain.com had this option of converting your BTC to ETH/XLM or USDPAX (and vice versa). I was never able to use this service because I refused to undergo KYC.

[timerland]

Blockchain.com have been behaving quite strangely for the past few months and users need to be careful about them. When I created my first wallet with them in 2012 (back then it was Blockchain.info), they had the option of exporting the private key. They have disabled this option for the newer version of the wallets. Also, back then all you needed was an email address, if you wanted to create a wallet. They are slowly making KYC mandatory now (yet to be implemented). As of now, they are trying the carrot and stick approach. They were offering $25 worth of XLM to anyone who would undergo the KYC. Their plan flopped because very few of the users fell in to this trap.

And I am not very sure about this proposed exchange. Even earlier Blockchain.com had this option of converting your BTC to ETH/XLM or USDPAX (and vice versa). I was never able to use this service because I refused to undergo KYC.

Oh wow. I forgot all about that previously, because I do remember being able to export my private keys from their wallets and then move it onto other wallets(I used their wallet for a bit before exporting the keys to electrum and a mobile wallet). It does seem they are moving away from decentralization as they implement other polices like KYC, etc.

I did some more research and it looks like there are only 2 options for verification and they work differently for their exchange:

Their first verification tier - Silver requires these details and you'll only be able to trade $1,000 worth of crypto on Swap. I personally feel like this is useless and

Country of residence
First name, last name, and date of birth
Residential address

Their second tier makes a lot more sense - Gold level verification means you can trade up to $25,000 a day on Swap and also join their airdrop.

Upload identity document
Take a picture/video of yourself

So basically - it's impossible for you to use blockchain.com without doing KYC now due to these restrictions.

[Kakmakr]

I also created wallets when it was still Blockchain.info.    I even recommended it as my first choice online wallet provider, because it was user-friendly and it did not require all those KYC nonsense. Now, they are trying to legitimize their service and they are implementing full KYC requirements and they are launching a 100% KYC compliant Crypto exchange.  

This is becoming a new trend now, because we also saw how https://localbitcoins.com/ changed their service to become 100% KYC/AML Compliant.  

Money and profit is more important than protecting people's financial privacy now. 

[timerland]

I also created wallets when it was still Blockchain.info.    I even recommended it as my first choice online wallet provider, because it was user-friendly and it did not require all those KYC nonsense. Now, they are trying to legitimize their service and they are implementing full KYC requirements and they are launching a 100% KYC compliant Crypto exchange.  

I loved blockchain.info because they had a block explorer I'd always use and you'd actually have control of your private keys, unlike other online wallets.

Pretty crazy to see them move away from the user-friendly mindset they have had since the start of crypto and become much more greedy and profit-based. I would say with certainty that if Blockchain didn't want to make an exchange to generate them more profits, they would have kept their old wallets and not enforced KYC.

This is becoming a new trend now, because we also saw how https://localbitcoins.com/ changed their service to become 100% KYC/AML Compliant.  

Yep, and they also removed cash trades to enforce it even harder. They are no longer as decentralized and trusted as before and that's one of the reasons why I've moved over to localethereum for some of my trades.

[Slow death]

I wonder what they hope to achieve by creating this exchange?

The exchange has few pairs, with these few pairs will not attract many customers, they could have worked harder so that they could offer services that other exchanges cannot yet offer, for example:



Imagine if they could offer bitcoin purchase option using debit card in many countries, and if they could partner with many banks? But, the cryto world problem is just copy/paste. People who create exchanges, ICOs or altcoins don't strive to bring something different, something better.

[gentlemand]

Blockchain.com have been behaving quite strangely for the past few months and users need to be careful about them. When I created my first wallet with them in 2012 (back then it was Blockchain.info), they had the option of exporting the private key. They have disabled this option for the newer version of the wallets.#

Isn't that purely because they've switched to HD wallets? Coinomi wallet sends you to the Ian Coleman Bip39 page if you want to export now. Blockchain's process is weird. Most wallets force you to write and verify the seed before opening but in Blockchain you have to seek it out.

I think they're knobs but you can't blame them for attempting to capitalise on their user base. I'd be surprised if the wallet itself ever went KYC ish but you never know.

[buwaytress]

A non-custodial exchange, near-instant, I guess we don't have enough of them lying about.

@gentlemand, they kinda did, with their "free crypto" giveaway if you did KYC. Smart way of doing it, I guess!

P.S. Largest wallet, really? I knew it was big but surely not bigger than the ones who use actual non-web based clients? Have I been underestimating them all along?

[gentlemand]

@gentlemand, they kinda did, with their "free crypto" giveaway if you did KYC. Smart way of doing it, I guess!

P.S. Largest wallet, really? I knew it was big but surely not bigger than the ones who use actual non-web based clients? Have I been underestimating them all along?

Well, the giveaway was optional. You're free to ignore.

I can well believe it's the biggest wallet by quite a long way still. Mycelium is showing 500,000+ downloads on Google play and that's been out for ages.

[roosbit]

Am guessing the airdrop they had going for a couple of months was more of a marketing strategy to get more people hooked to its current and future services...and tbh I think everything is falling in place for them and the exchange could easily return this money, just hoping security is on top of their agenda.

And with such news we are getting a step closer to mass adoption just Hope they are bringing a healthy competition to the ecosystem above all.

[ABCbits]

Honestly i worry about the security, functionality and ease-of-use of this crypto exchange. Their blockchain is buggy for years, the UI sometimes is confusing and their wallet had severe vulnerability few years ago.

This is becoming a new trend now, because we also saw how https://localbitcoins.com/ changed their service to become 100% KYC/AML Compliant.  

Money and profit is more important than protecting people's financial privacy now. 

Because their only other option is to close their service due to regulation.

The phrase "you either die a hero or live long enough to see yourself become the villain" applies on most bitcoin services which has been around for years and unfortunately most of them become "villain"

[1Referee]

Am guessing the airdrop they had going for a couple of months was more of a marketing strategy to get more people hooked to its current and future services...

I'm not sure if it was related to this event specifically, but with how stupidly greedy people are here, giving away $20 worth of shitcoins is an easy way to turn a lot of non paying users into potentially paying users.

They conveniently made it so that you have to do KYC in order to claim the shitcoins. They said it was to prevent people from claiming the airdrop twice, which to a lower level might be true, but the main reason is to build up a fully verified user base that has done the KYC part and can buy crypto without problems and thus generate revenue. Smart business move.

[BitHodler]

P.S. Largest wallet, really? I knew it was big but surely not bigger than the ones who use actual non-web based clients? Have I been underestimating them all along?

I still see people around me who use the blockchain wallet. It's definitely more popular than I hoped it would be-- it's nearly on the level of Coinbase that people use as wallet while in reality it's not a wallet at all.

On the other hand, no matter how much we dislike the blockchain wallet and their attitude as business, newbies at least use a legitimate wallet instead of the countless crappy wallets you see pop up when you search for crypto or Bitcoin wallet.

The thing here is that I don't see it become popular with how Roger and Bitmain are such a large shareholder, that they will prevent blockchain from adding too many coins, so people will still prefer Binance more.

[LeGaulois]

P.S. Largest wallet, really? I knew it was big but surely not bigger than the ones who use actual non-web based clients? Have I been underestimating them all along?

I still see people around me who use the blockchain wallet. It's definitely more popular than I hoped it would be-- it's nearly on the level of Coinbase that people use as wallet while in reality it's not a wallet at all.

On the other hand, no matter how much we dislike the blockchain wallet and their attitude as business, newbies at least use a legitimate wallet instead of the countless crappy wallets you see pop up when you search for crypto or Bitcoin wallet.

The thing here is that I don't see it become popular with how Roger and Bitmain are such a large shareholder, that they will prevent blockchain from adding too many coins, so people will still prefer Binance more.

Actually, blockchain.com wallets are more popular than Coinbase
The statistics are public for blockchain.com and there are over 40 million wallets while Coinbase has 30 million (with 8mln the past 12 months). So if Coinbase keeps improving it may surpass blockchain.com but yet it's currently not the largest web-hosted wallet

[gentlemand]

Actually, blockchain.com wallets are more popular than Coinbase
The statistics are public for blockchain.com and there are over 40 million wallets while Coinbase has 30 million (with 8mln the past 12 months). So if Coinbase keeps improving it may surpass blockchain.com but yet it's currently not the largest web-hosted wallet

Blockchain wallets are throwaway. I'm sure certain people have gotten through tens or hundreds especially when they were single address.

The Coinbase figure depends on whether that's all verified accounts which they've always seemed to be weirdly coy about.

[timerland]

The exchange has few pairs, with these few pairs will not attract many customers, they could have worked harder so that they could offer services that other exchanges cannot yet offer, for example:

Yeah, the new exchange just seems like another attempt to capitalize off their existing userbase and attempt to profit more. There are a lot of places restricted, with half the US states not being allowed to use the platform, and with nothing new, I doubt the exchange will go anywhere, except profiting off their current userbase.

Am guessing the airdrop they had going for a couple of months was more of a marketing strategy to get more people hooked to its current and future services...

I'm not sure if it was related to this event specifically, but with how stupidly greedy people are here, giving away $20 worth of shitcoins is an easy way to turn a lot of non paying users into potentially paying users.

They conveniently made it so that you have to do KYC in order to claim the shitcoins. They said it was to prevent people from claiming the airdrop twice, which to a lower level might be true, but the main reason is to build up a fully verified user base that has done the KYC part and can buy crypto without problems and thus generate revenue. Smart business move.

Pretty smart from Coinbase. Definitely worth the 20 dollars per customer they are paying - having a verified customer on your platform who might be interested in spending more money is worth a lot more than the 20 dollar airdrop.

Actually, blockchain.com wallets are more popular than Coinbase
The statistics are public for blockchain.com and there are over 40 million wallets while Coinbase has 30 million (with 8mln the past 12 months). So if Coinbase keeps improving it may surpass blockchain.com but yet it's currently not the largest web-hosted wallet

Blockchain wallets are throwaway. I'm sure certain people have gotten through tens or hundreds especially when they were single address.

The Coinbase figure depends on whether that's all verified accounts which they've always seemed to be weirdly coy about.

A more accurate measure would be comparing the verified accounts on both sides. I'd only count users who've fully completed their KYC on each side, and if possible, I would single out any users from blockchain.info that have verified their account just for the 20 dollar airdrop, and then compare statistics. 50 Mil to 40 Mil users isn't a very accurate consensus.

[malevolent]

At least they are very upfront which countries are supported under the 'Availability' link. Not a huge fan of bc.i due to frequently misleading or wrong stuff on their blockexplorer, or security issues, or changing wallet encryption schemes making key recoveries from old wallets take more time, but there's nothing wrong with competition, the lack of which is why Coinbase could get away with providing a low quality of service.

The Coinbase figure depends on whether that's all verified accounts which they've always seemed to be weirdly coy about.

If they had information worth bragging about they would have shared it, so it's fair to assume most of their users are inactive/came for free money from various promotions.

[bryant.coleman]

I'd be surprised if the wallet itself ever went KYC ish but you never know.

LOL... That would be like the D Day moment in the world of cryptocurrency. Imagine Blockchain.com freezing all of their tens of millions of wallets without any warning and informing the users that they need to undergo KYC first to regain access to those coins. It will open a can of worms, and most probably it will trigger a huge number of lawsuits against these guys in multiple jurisdictions. I am not sure whether this is a probable scenario or not (because the wallets can be accessed outside their platform as well).

Considering the increasingly hostile stance taken by the governments around the world towards cryptocurrency, I am forced to think about this scenario. My initial conclusion is that it is not possible for Blockchain.com to freeze the funds. Because the wallet itself is decentralized and only the user has access to private keys and passwords.