Bitcoin service company Coinbase has announced the launch of Instant Exchange, a feature that promises to eradicate exchange rate fluctuations from digital currency transactions.
Despite bringing some really decent day trade opportunities, Bitcoin’s price volatility is still considered as one of the major barriers to it’s mainstream adoption. Bitcoin holders usually suffer a great deal when they try to keep the price units for too long.
One day a Bitcoin might value around $250, the another it may go as low as to $150. This is the only reason why third party payment processing companies like BitPay, GoCoin, etc. are booming, for they eliminate the risk of volatility from routine Bitcoin transactions by instantly converting them into cash at the checkout. With its new service, Coinbase also does something similar.
Instant Exchange Explained
Coinbase Instant Exchange feature is categorized into two parts: Instant Exchange Send and Instant Exchange Receive. The Send feature enables users to send Bitcoin by paying local currency. According to the available demo, the feature promises to instantly convert the selected Bitcoin amount to other fiat options, and send it further down to the recipient.
The Receive feature is just a reflection of its counterpart. In it, a receiver gets to receive and sell Bitcoin in the blink an eye. As per the available information, users holding a USD, EUR, and GBP wallets are enabled to use the Instant Exchange service. There has been no discussion of Coinbase adding more local currencies to this feature.
Coinbase has indeed added another milestone to its services with the launch of the said feature. However, the company never tried to communicate about the ledger on which it will be making such instant transaction. A Bitcoin blockchain is certainly out of the view, for it takes a minimum of 10 minutes to confirm a transaction. It is therefore quite obvious that Coinbase is using some sort of internal ledger — like a bank — that supports speedy transaction but only inside a local environment. Users operating outside the Coinbase therefore won’t be able to fruit the benefits of their new service.