Everything we just learned about Coinbase from their S-1 presentation


5. Here is the founder letter from CEO Brian Armstrong:

brian armstrong coinbase

Coinbase Founder and CEO Brian Armstrong attends Consensus 2019 at the Hilton Midtown on May 15, 2019 in New York City.

Steven Ferdman / Getty Images


Economic freedom

Coinbase is a company with an ambitious vision: to create more economic freedom for every person and company. Everyone deserves access to financial services that can help empower them to create a better life for themselves and their families, but today we are a long way from this vision.

Today’s financial system is plagued with high fees, delays, uneven access, and barriers to innovation. In many countries, citizens do not have access to solid money, a working credit system, or even basic property rights. If the world economy were based on a set of common rules, which no company or country could manipulate, the world would be a fairer and freer place and human progress would accelerate.

When I first read the Bitcoin whitepaper in 2010, I realized that this advancement in computing could be the key to unlocking this vision of the future. Each payment can be as fast, inexpensive and global as sending an email. Cryptocurrency could provide the basic principles of economic freedom to anyone: property rights, sound money, free trade, and the ability to work how and where they want. Economic freedom is a necessary, if not sufficient, condition for human progress. Societies with greater economic freedom have higher life expectancy and GDP growth, fewer wars and corruption, better treatment of the environment, and higher incomes for the poorest 10% of society. Greater economic freedom correlates with the kinds of societies we all aspire to create. Our job at Coinbase is to help make this future come true.

Cryptoeconomics

What started with Bitcoin has spawned an entire industry with countless different blockchains and tokens. Now we have stablecoins, privacy coins, security tokens, reward tokens, governance tokens, and smart contracts. We are seeing the digitization of all kinds of value in a new economy that we call cryptoeconomics.

Trading and speculation were the first major use cases to take off in cryptocurrencies, just like people were rushing to buy domain names in the early days of the internet. But now we are seeing cryptocurrency become something much more important. People are using cryptocurrencies to earn, spend, save, gamble, borrow, lend, vote, and do many other types of economic activity. Businesses are being funded, getting early clients, and will eventually go public, all on the blockchain. The crypto economy is just getting started. It is not intended to replace the traditional economy, but to complement it, just as email was for paper mail. Cryptoeconomics offers a more global, free and fair alternative to traditional economies that is native to the Internet.

A safe, reliable and easy-to-use platform

Coinbase is building the infrastructure to power the crypto economy, helping bring the benefits of this new technology to the world. Today, you could think of our products as a safe and easy-to-use platform to buy, sell, store, save, spend, and use cryptocurrencies. But for many of our clients, they simply think of us as their main financial account in the crypto economy. Coinbase is creating a portfolio of different products and services that connect to this main financial account, and we are allowing third-party products and services to be connected as well. We seek to make all of our products and services the most reliable and user-friendly in the industry.

Trust is essential when it comes to storing money. From the early days, we decided to focus on compliance, proactively reaching out to regulators to be an educational resource and seeking Licenses even before they were needed. We invested heavily in cybersecurity, built new key storage mechanisms, and obtained an insurance policy against cybercrime. We even developed ways for clients to safely safeguard their own cryptocurrency, so they didn’t need to trust us at all. Most importantly, we build a culture that doesn’t take shortcuts or try to make a quick buck.

Ease of use is our other main area of ​​interest. Cryptocurrency is still too difficult for the average person to use. In the same way that people can access the Internet without understanding how TCP / IP works, or turn on a light switch without understanding how electricity works, they need to be able to use cryptocurrency without understanding the underlying complexity. We accomplish this by continually finding ways to simplify our products and drive new industry standards that improve usability.

Trust and ease of use will be as relevant ten years from now as it is today, and our work here will never be finished. We may not always act the fastest or offer the lowest prices, but if we achieve our goal of being the most reliable and user-friendly, customers will continue to choose our products and services now and in the future.

Building for the long term

It’s the early days of this industry and Coinbase has always had a long-term vision. We are fully focused on providing the best crypto experience to our clients. Today, we are investing in growth because we believe that scale is critical to achieving the potential of our business model.

You can expect volatility in our finances, given the price cycles of the cryptocurrency industry. This does not faze us, because we have always had a long-term perspective on crypto adoption. We can make a profit when income is high and we can lose money when income is low, but our goal is to operate the business approximately break-even, smoothed over time, for the moment. We are looking for long-term investors who believe in our mission and will stick with it through price cycles.

Our goal is to build a portfolio of products and services with an efficient capital allocation and to demonstrate repeatable innovation. We have done this before, taking the profits from our first products and services and reinvesting them in new products and services that we believe help accelerate our vision of the future. We will continue to invest in new products and services when we see a sufficient probability of gaining market leadership. Some of these investments will pay off, some will not. We will measure our products and services and the effectiveness of our investments analytically, and we will close products and services that do not provide the expected returns. We will learn from our successes and mistakes, and we will use those learnings to inform our decision making in the future. We hope this outlook will make us more profitable in the long term as we see the full scale of this industry develop.

Thanks,

Brian armstrong
CEO, Coinbase

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