Coinbase launched its crypto payment gateway platform, which is named as Coinbase commerce, in February 2018. In this article, we will discuss how things work with Coinbase Commerce and some of its features and will compare see how it competes with Bitpay, which is already established and a major player in bitcoin payment gateway niche. So keep reading on.
Introduction to Coinbase Commerce: Coinbase commerce is very similar to like a PayPal checkout button option for merchant services so that merchants can have their customers pay on the way out with Ethereum, Bitcoin, Bitcoin cash and even Lite coin; and you don't have to log in with Coinbase like you used to. Coinbase had an option for merchant services before this, but there you had to log in with Coinbase to check out which made it cumbersome; just like logging in with PayPal you still have to know your email and password, and sometimes you can't get a PayPal account, or you can't get a Coinbase account for many reasons. A lot of people get denied when they sign up for Coinbase, or they don't live in a place that allows them to use Coinbase. So, for a merchants to accept cryptocurrencies with Coinbase before may not have made as much sense, but now it makes a lot of sense because you don't have to have a Coinbase account - you just have to have cryptocurrencies. They use four crypto coins, and Ethereum is the first, and then they have Bitcoin and Bitcoin cash and even Litecoin as an option at checkout.
Coinbase Commerce: How it works?
Let’s imagine, you are at Walmart, and you just had picked a couple of things, added it to your cart and told them where you want them to ship it, like how we do it usually. And when at checkout, you could see that they have options like Visa, MasterCard, Discover, etc. and also they have Coinbase commerce. Now, Walmart doesn't have this yet for that matter, but you know this is where we're going in the near future, right? So, when you go to checkout, you can hit Coinbase commerce, and it'll give you options of what cryptocurrency you want to use. If you want to use Bitcoin, Bitcoin cash or Litecoin or whatever, you just click on it, and it'll pop up, and it'll display the address and the QR code of the address and show you this is how much of that cryptocurrency has to be sent to that address within the 15 minutes volatility window. Why is that? Because of the swing in the price of cryptocurrencies, when you go to checkout, they usually give you a certain span of time within which you have to confirm the transaction.
However, when you come to think about it, that Bitcoin blockchain is a little backed up, and wondering how is that going to work, I’m still not very sure honestly. Coinbase hasn't really said too much about this publicly yet. But the main benefit is you can use any wallet, so you can click on Bitcoin or Litecoin or whatever and it'll just open that up. You can do copy-paste the address, or you can also open a QR code address where you whip out your phone, and you scan it, and you send the coin. That's a little similar to getting out your Visa card from your wallet and almost as cumbersome as logging in with PayPal but a little less, you still have to do a step.
Now, there is Metamask, which is an Ethereum plugin, they only use Ethereum, and this wallet is a browser-based plug-in wallet. It is a decentralized wallet interface for the Ethereum blockchain, so you don't have to have your funds on Coinbase where you don't get access to your private keys, but you can use Jaxx, or you can use Metamask or something like that. But if you are using Metamask at checkout, you can check Coinbase commerce, click Ethereum and then make sure you hit that Metamask button and from there it will open your Metamask wallet in your browser. It will pre-populate the Ethereum address, and it will autofill the amount of Ethereum that you have to send and all you have to do is click confirm, and that's it, you're done. It's one in done click scenario, and it's the first time in cryptocurrency history this is possible for all merchant services to adapt easily. And it's pretty exciting, considering that Bitpay, which is the primary contender of Coinbase in bitcoin payment gateway business, and which has been around for a very long time, but it just added Bitcoin cash very recently with no signs of ever integrating Ethereum payment option. Coinbase has all of this plus the ability to use a Litecoin, which is the people's choice of cryptocurrency to use when buying small things like coffee or doughnuts, so it's really cool to see that Coinbase has that option. And the cool thing with the Metamask wallet is if you want to top up your Metamask wallet for purchasing things online with this Coinbase commerce checkout option, you can top it up with more Ethereum that you have in your other Ethereum wallet. So if you have ETH somewhere else, you can just send it right over to your Metamask wallet and top up your wallet, so that you can have funds just sitting there for your one and done checkout whenever needed. You can also use ShapeShift, and you could turn that Bitcoin or Bitcoin cash into Ethereum and send it over to your Metamask wallet, and they even have Coinbase integration. So you can buy Ethereum with cash via your Visa card or your bank account through Coinbase and top up your meta mask wallet.
Coinbase or Bitpay?
As you can see, there's a bunch of different options when it comes to topping up wallets and checking out, our options as customers and the options as merchants are just getting more and more when it comes to accepting cryptocurrencies. Bitpay has probably more than 100,000 users as merchants on their platform Coinbase on the other hand, only has about 50,000. But like I said, Bitpay only has Bitcoin and Bitcoin Cash (they took their sweet time integrating Bitcoin cash just in very recent time), and they have no hopes of adding Ethereum and Litecoin, not in the near future at the very least. All of these, including Litecoin, are already integrated into Coinbase commerce. So, I am really excited to see Bitpay finally having some competition in the Bitcoin payment gateway and point-of-sale systems area, because we, as customers and merchants, would definitely like to see more competition. In the end, if you want something simple and trustworthy, remember that BlockchainAPI was designed from the ground up to be the most easy-to-use Bitcoin payment system possible. No need to register an account, deal with external pages, or set up complicated API clients.