Is Coinbase selling out for acceptance? It certainly feels that way. And they’ve just added four new altcoins to the list… Subsquid (SQD), Celestia (TIA), XYO (XYO) and Bittensor (TAO). This decision is a major victory for the accessibility for all New Yorkers! Through a libertarian lens, it appears very much like a Faustian bargain. Have we really opened up more choices or waded deeper into the swamp of regulatory capture?

Compliance: A Chains or Key?

Coinbase’s acceptance of New York’s draconian BitLicense has been framed as an example of responsible corporate actors. If we’re really being honest, it’s about market share. They are already playing ball with regulators to get a toe hold in the lucrative New York market. Isn't that what every corporation does? Exactly. And that's the problem. Crypto was supposed to be different. It being outside the system bubble was exactly the point. We're not talking about a mom-and-pop lemonade stand here, we're talking about a revolutionary technology being domesticated.

Think of it like this: the internet was revolutionary because it was open and permissionless. Now picture if every website had to get approval from a government agency before launching. Otherwise, would we enjoy the same degree of creativity and innovation, or have such robust freedom of expression? Of course not. Likewise, requiring such full adherence from crypto companies before they’ve been granted permission to engage moves us onto a dangerous slope. It's a slow creep towards a future where every transaction is tracked, every wallet is known, and every individual's financial activity is subject to government scrutiny. Is that the future we want?

Decentralization: Real or Just a Word?

Just because these altcoins have been added through Coinbase, a centralized exchange, they’re not suddenly decentralized. In fact, it arguably does the opposite. It funnels activity through a single point of control, making it easier for regulators to monitor and potentially shut down. Are these altcoins really getting a fair shake, or is Coinbase just using them for their own purposes? The whole point of decentralization is that no one company can dictate what happens on the network. When you have a centralized giant of an exchange like Coinbase acting as gatekeeper, that promise sounds really hollow.

This isn't about hating Coinbase. After all, they’re a business, and businesses will never stop trying to maximize profits. The issue is the underlying premise: that regulatory compliance is always a net positive. It's not. And compliance comes with a price – the price of freedom, the price of innovation, and the price of decentralization.

Altcoins: Innovation or Speculation?

Let's be blunt: many altcoins are little more than speculative bubbles. And though you all know I’m not opposed to a little speculative risk, I’m suspicious of exchanges hawking them as the new panacea. Are these four altcoins really revolutionary projects? Or are they just the flavor of the month that Coinbase is hyping to increase their margin on trading fees?

  • Subsquid (SQD): Data indexing for Web3. Potentially useful, but hardly revolutionary.
  • Celestia (TIA): Modular blockchain network. Interesting concept, but still unproven.
  • XYO (XYO): Location data network. Raises serious privacy concerns.
  • Bittensor (TAO): Decentralized machine learning. Ambitious, but highly complex and potentially vulnerable to abuse.

The average retail investor just doesn’t have the technical skills to adequately assess these projects. They’re putting all their chips on Coinbase’s approval, which is a completely self-interested play. This lack of transparency creates a ripe environment for bad actors to manipulate the market. Unsuspecting investors are left holding the bag when the bubble inevitably bursts. Remember the ICO craze of 2017? We may be on our way to doing the same thing.

As they say, the road to hell is paved with good intentions. Coinbase’s ill-fated foray into the NY altcoin market would be yet another deeply unfortunate move down that road. While increased access and liquidity sound appealing, we need to ask ourselves: what are we sacrificing in the process? Are we really prepared to barter our libertarian values for a mirage of advancement? I, for one, am not.