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Crypto Comics – What is Coinbase

I tried to explain what Coinbase is in comic strips.

TL;DR

I explained what Coinbase does mean and how Coinbase reflects the idea in the crypto space.

Some Takeaway

Coinbase is a cryptocurrency online trading platform that becomes a crypto banking company. They provide crypto services particularly on security to help users to secure their crypto assets. However, Coinbase has another meaning that many people are less likely to know. It is the first transaction in the block and it is also called the coinbase transaction.

Coinbase Transaction

The blockchain is a public record of transactions that happened between two parties. However, not all transactions are the same. There is one transaction that particularly records rewards to miners. This type of transaction is called coinbase transaction. 

How Coinbase Transaction Works

This type of transaction starts with a blank transaction since there has never been a spending transaction prior to this transaction. This single blank input is called the Coinbase. When the new block has been created, the reward will be generated for miners. However, such rewards in the coinbase transactions cannot be spent until they reach special thresholds such as 100 confirmations in the Bitcoin blockchain.

Why 100

The idea is that in order to protect the blockchain from the fork, miners will have to receive a certain number of confirmations before spending the reward. It is called coinbase maturity. If there is no maturity period, miners can create as many coins as they want to and spend as quickly as they can before others catch up through the validation process. Such miners can create another blockchain by themselves without further confirmation from others. 

Coinbase Company

The company is named Coinbase mainly because they want to have a symbolic idea that they are the first one-of-a-kind crypto company (which they are) and lead the crypto industry (which they are not).

In conclusion

Coinbase has another deeper meaning in crypto. I hope you now know that.

Check out my another article Crypto Comics – What is HODL

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