In 2012, Coinbase consisted of two guys in a San Francisco apartment. Today, it’s a colossus that dominates the crypto retail business in the U.S. while also boasting a thriving exchange for professional traders.
Coinbase has also acquired or invested in dozens of other crypto firms and, thanks to one of those, now stores around 5% of all in the world. So it’s no wonder that, if you ask average people to name a crypto company, they’ll say Coinbase.
This dominance is why I titled my new book about Coinbase “.” Like Apple is to cell phones or Nike is to shoes, Coinbase is to cryptocurrency. The company’s story – full of drama and infighting – is a gripping startup yarn, but also shows how one firm can change an industry. It is thanks, in part, to Coinbase that bitcoin entered the mainstream, and why crypto is becoming such a force in the larger financial world.
Coinbase’s ascendance to the pinnacle of the crypto world is no coincidence. Since its modest beginnings, founder Brian Armstrong has focused relentlessly on two things: Making its products easy to use and staying on the right side of regulators. This ensured Coinbase became the first stop for millions of novice bitcoin buyers, while also avoiding the legal scrapes that sidelined competitors.
After being slow to add other cryptocurrencies – a situation that triggered a civil war between former top Coinbase executives Asiff Hirji and Balaji Srinivasan – the company now offers nearly two dozen coins. And when it adds a coin, its influence is such that it still generates a brief price pop known as the “Coinbase effect.” Meanwhile, Coinbase last month rolled out a crypto debit card in the U.S. that lets users earn with no fee when paying with a stablecoin – finally providing a practical reason to use one.
Coinbase still has formidable rivals, of course. It also has no shortage of haters. Right from the start, critics mocked Coinbase with taunts of “not your keys, not your coins” – a knock on Coinbase’s practice of holding its customers’ funds, which Bitcoin purists regard as a betrayal of Satoshi’s ideals. Today, certain crypto cliques mock the company as stodgy and corporate compared to more free-wheeling competitors like Kraken and Binance.
For Coinbase, all of this is just noise. The company is valued north of $12 billion and, backed by blue-chip investors, is poised to be the first crypto firm to go public – a process that could bring blockchain tokens to the public securities markets for the first time.