Without thinking that such a decision would need to be announced, Coinbase has recently started asking their users to verify personal details before proceeding with new transactions. In turn, this has angered quite a large number of users and it has also made some question the integrity of Bitcoin wallets and whether they are still trustworthy.
According to recent reports, it seems like Coinbase has asked a large number of people to submit their full name and date of birth, but also address in an effort to verify their identity and check the legality of the transaction. This practice has made many users wonder what the details are needed for and whether other Bitcoin wallet providers will start doing the same thing in the near future.
Is a Bitcoin transaction really anonymous anymore in the case that the Bitcoin wallet knows who the owner of a certain address is? By imposing such a restriction, chances are that Coinbase is trying to respect all of the shady laws that can be connected with Bitcoin, which have been approved in the last couple of weeks. However, this process is also expected to have a great impact on the customer pool of the wallet provider as many will probably walk out and start looking for Bitcoin storing services other than the one offered by Coinbase.
Their decision to ask people for personal information can also be considered a threat by those who are just starting out with Bitcoin now. Economic analysts who have been asked for their opinion have stated that, even if Coinbase decides to impose this restriction to Bitcoin addresses that seem suspicious, the company will still lose quite a large percentage of their users. However, it is also important to keep an eye on the fact that the company has had some issues in the past where purchases have been reversed. There’s also the well-known issue of users not being allowed to make transactions with providers that are considered ‘shady’ by the company. While Coinbase remains one of the greatest wallet providers at this moment in time, it is important for them to acknowledge that not granting users the anonymity they desire and not allowing them to send payments to whomever they please will contribute to the demise of the service.
In the case that Coinbase will fall, other wallet providers will probably rise, but the fact that one of the biggest online wallet companies has decided to ask certain users for their private information makes us wonder whether other wallet providers will do the same thing, thus destroying the anonymity that Bitcoin strives to provide.
Based on everything that has been outlined so far, what do you think about Coinbase asking users for private information? Is this ethical in the Bitcoin market? Should users have bigger demands from online wallets and be forced to work hard to avoid any impediments like these in the future? Let us know your thoughts in the comment section below.