The cryptocurrency sector has produced many multi-billion dollar companies over the past nine years. Most notably, Coinbase, Binance, Bitmain, Bitfinex, UPbit, Bithumb, and Canaan have evolved into billion dollar juggernauts, competing against major conglomerates in regions like the US, South Korea, and Japan. San Francisco-based Coinbase now has over 20 million users, nearly as many as asset management giant Fidelity Investments and twice as much as Charles Schwab. Coinbase reportedly values itself as an $8 billion company and is even exploring the possiblity of applying for a more-traditional banking license. Scalability is a Real IssueFor many years, especially since 2017, scalability has been the main issue for blockchain developers and users. When the price and transaction volume of bitcoin peaked in late 2017, users could not send bitcoin transactions without attaching $10+ fees. Decentralized application developers struggled to deploy applications due to the high cost of gas, which is necessary to process information on the Ethereum blockchain network. But, scalability is also an issue for centralized platforms and businesses. Although companies like Coinbase and South Korea’s Bithumb have infinite flexibility in processing information and trades, they struggle in scaling their customer support operations, offline activities, amongst other processes. For instance, in May, Coinbase revealed that it had established a New York office to target institutional investors and Wall Street clients to operate as a brokerage for large-scale retail traders. UPbit and Bithumb of South Korea have similar operations in Seoul, as they operate offline offices to process person-to-person trades in the over-the-counter market. Coinbase is targeting institutional investors. Olaf Carlson-Wee, the first employee at Coinbase who created a cryptocurrency hedge fund Polychain Capital in 2017, stated that the success of Coinbase could be primarily attributed to its track record. Throughout its six-year history, Coinbase has never experienced a single security breach or a hacking attack, unlike Bitfinex, Bithumb, and other major cryptocurrency exchanges that suffered from multi-million dollar hacking attacks.”Not being compromised is one of the big reasons that Coinbase is what it is today,” said Olaf Carlson-Wee. As of December 2017, Bithumb stored more than $6 billion on behalf of its customers in its wallets and vaults. Coinbase stores far more funds than Bithumb, as its operations, expand internationally. Earlier this month, Coinbase general manager Adam White disclosed that the company manages more than $20 billion.”We have leveraged our experience safely storing more than $20 billion of cryptocurrency to create Coinbase Custody, the most secure crypto storage solution available,” said White, adding “Coinbase already offers the deepest pool of liquidity to the largest number of participants in the cryptocurrency space.”A significant portion of the budget of cryptocurrency exchanges like Bitfinex, Coinbase, and Bithumb is spent on improving security measures and maintaining an infrastructure that is not vulnerable to security breaches. Additionally, companies have to aggressively expand their customer support team to handle support tickets and errors that may occur in depositing or withdrawing funds. Dan Romero, an executive at Coinbase, stated that the customer support team of Coinbase has grown by more than 150 percent since February. Cryptocurrency Problem SolvingStill, despite the infrastructure and talents Coinbase and other exchanges have, unexpected errors occur and due to the volatility of the cryptocurrency market, investors often get anxious and impatient with unforeseen situations. According to the WSJ, more than 1,530 complaints have been filed by Coinbase investors with the Consumer Financial Protection Bureau (CFPB), well surpassing the number of complaints filed by the users of American Express and PayPal combined. To compete against traditional financial institutions, cryptocurrency businesses have to scale at an unprecedented rate and continuously improve its infrastructure to deal with emerging technologies. Featured image from Shutterstock