Coinbase (NASDAQ: COIN), the largest digital currency exchange service in the world, issued a statement on February 19 that the company had purchased start-up company Neutrino. The move is expected to help Coinbase maintain its status as the most valuable crypto company on the planet.
Coinbase had already established itself as the largest digital currency exchange company, acting as a broker for such currencies at Bitcoin Core (BTC), Bitcoin Cash (BCHABC), Litecoin, and Ethereum, as well as brokering in 32 different fiat currencies from across the globe. They have become the storage center for transactions conducted in over 190 countries worldwide.
Thus, it was not surprising to see that the San Francisco based company would opt to add Neutrino to their growing operation. This gives Coinbase the blockchain intelligence networks that would help to provide greater security and efficiency within their transaction process.
Neutrino is a company with eight staff members that was based in Italy but will now be moving to the Coinbase offices in London. They will still be servicing their current clients but will be fully integrated into the Coinbase business as well.
How this deal benefits Coinbase
The number one concern of companies dealing with digital currencies has been security. The reports of theft, as well as ransomware attacks, have grown exponentially over the last few years, requiring companies to take a more proactive approach to protecting transactions and user accounts to prevent breaches or theft.
The acquisition of Neutrino gives Coinbase a highly developed blockchain intelligence system that will be able to analyze data across all public blockchains. This will allow the company to be able to analyze and track all cryptocurrency transactions across a large number of networks.
This blockchain intelligence creates a series of encrypted codes that help to prevent hackers from being able to gain access into transactions, either when they occur or where they are stored. However, this is not the only benefit of turning to this form of technology.
Because of his ability to track and analyze transactions across multiple blockchain networks, Coinbase would have an invaluable service that could assist law enforcement officials in tracking those who have attempted to breach or who have stolen currency from member’s accounts.
The Neutrino program is able to track funds collected by those using ransomware to force users to pay to regain access to their files. Coinbase will now be able to spot the wallets used by these criminals where funds are being consolidated or cashed out. These wallets can then be blacklisted by all exchanges and the wallets can be frozen when an attempt to exchange is made.
In the statement released by Coinbase, the company acknowledged that this blockchain technology will help to create a much safer environment for the sale and acquisition of digital currencies. As the company puts it, it should help in “legitimizing” the cryptocurrency market to those who are skeptical of its security.
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.