“I won’t deny that I have been in coffee shops,”Brian Armstrong said onstage at Vanity Fair’s New Establishment Summit, responding to a question about the early days deals he struck at various cafes. In conversation with William D. Cohan, the Coinbase cofounder and CEO discussed the trajectory of his company, from its birth in coffee shops to his hopes for its future, and where Coinbase falls in the schema of tech unicorns.
“Crypto is creating a new economy, and it’s replacing and disrupting a whole bunch of areas of financial services,” he said, adding, “I don’t want people to get caught up in the hype.” Ideally, he said, the market will stabilize as speculation decreases: “I think over the next decade, crypto is going to become a greater percentage of the GDP…the real pace of the technology is actually much more linear” than the bubble environment that’s cropped up around cryptocurrencies.
That technology is what Armstrong has focused on while steering Coinbase, he said, and is part of how the company has remained profitable. “We were profitable in 2018 and in 2017” as well as this year, he said. Coinbase has generated nearly $2 billion of transaction-fee revenue since its launch back in 2012, and has generated more operating profit than V.C. money raised—unusual for a so-called unicorn company. “Most of these profits were plowing back into the business to create new products,” Armstrong said. “I sort of think of us as the anti-unicorn unicorn…I want Coinbase to be a company of repeatable innovation.” On whether Coinbase’s valuation of $8 billion nevertheless puts it in the unicorn category, Armstrong demurred: “I leave that up to investors…I just like to build products with technology.”
That, Armstrong said, will be his focus going forward as he attempts to make crypto a widely accepted and utilized resource. Coinbase, of course, is part of the consortium of companies involved in the Facebook-backed Libra, which has been criticized by lawmakers for its potential to jeopardize user privacy and flout regulatory rules. “I don’t really know why the reaction was so negative,” Armstrong said. “I’d really like to see the U.S. embrace this area of innovation.” Echoing Mark Zuckerberg and Sheryl Sandberg’s comments, he noted, “There are a lot of people who are unbanked in the world, who are underbanked,” whom crypto could help. “My hope is the U.S. embraces this kind of innovation, even if it comes from a company like Facebook that they’re not necessarily very happy with.”
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