Uphold

What Is Uphold?

Uphold is a cloud-based financial service platform that enables individuals to securely move, convert, hold and transact in various assets. Uphold offers 27 fiat currencies, 58 cryptocurrencies, and four types of precious metals. 

Users can fund their accounts from credit/debit cards, bank accounts, or cryptocurrency networks. From one screen, users can send funds to other people and trade over 60 assets.

Users can also move funds from one form of value to another in one easy step. For example, users can go from DASH to XRP in one step. (On some other platforms this trade would involve two separate transactions and two separate fees.)

Today, third-party developers are able to develop additional software offerings based on the Uphold platform. This is made possible through Uphold Connect, the company’s application programming interface (API).

How Uphold Works

Uphold was founded in 2014 by Halsey Minor, an American entrepreneur who is best known for founding the media company CNET in the early 1990s. Uphold was originally named Bitreserve; after a rebranding, the company launched as Uphold in November 2014.

The stated goal of Uphold is to reduce the transaction costs involved in exchanging money, particularly in relation to cryptocurrencies. In the earliest years of cryptocurrencies — such as bitcoin — those wishing to hold and trade in the currency often faced a steep learning curve. Unlike traditional currencies whose infrastructure has developed slowly over centuries, cryptocurrency enthusiasts and entrepreneurs needed to develop their own infrastructure from scratch. 

At the same time, many of those involved in the cryptocurrency community share a desire to increase the transparency of these financial platforms. In the case of Uphold, the platform was inspired in part by the lack of financial transparency revealed by the 2007-2008 financial crisis. One practical example of this commitment is that Uphold publishes their reserve status in real-time, showing the individual asset and liability balances for its tier 1, tier 2, and tier 3 reserves. The company is audited quarterly to verify solvency.

The company has taken similar initiatives in regard to reducing transaction fees. Today, the company claims that it is less expensive on average than other household-name cryptocurrency platforms Indeed, the company has moved to commission-free pricing. The price that users see before they trade is the price they pay when they trade.

For cryptocurrencies, Uphold offers an all-inclusive, guaranteed price that includes a small spread of typically 50-100bps (0.5-1.0%). Depending on your individual trading behavior and volumes, the spread can be as low as 40bps (0.4%). The company also offers free debit and credit card deposits, and zero withdrawal fees (with the exception of standard network fees on cryptocurrency networks).

Uphold operates on a “fully reserved” basis, meaning that its obligations are fully backed by the assets it holds in reserve. By contrast, the standard practice among modern banks is the so-called “fractional reserve” model, in which banks often retain only a small percentage of the assets given to them by depositors. Those assets that are not retained by the bank are instead lent out to customers or invested in order to obtain a higher return.

In March 2018, Uphold added the cryptocurrency Ripple (XRP) to its platform, offering Uphold members zero transaction fees on the first 5 million XRP purchased. This move represented a bold entry into the XRP marketplace, as Coinbase — one of the world’s largest digital currency exchanges — did not support XRP at that time.

When users sign up for Uphold, they are asked to provide their legal name, date of birth, and phone number. In order to withdraw or send funds to other people, users must become verified users. To become a verified user, users need to provide their current residential address, a valid government photo identification, and a 'live selfie.'