How Coinbase Grew Into The King Midas Of Crypto Doing $1B In Revenue
To sustain the cryptocraze, Coinbase will need
to foster real applications of cryptoassets —
and not just speculation.
Coinbase is the most popular consumer-facing cryptoasset exchange
in the United States. Operating since 2011, the company allows users
to buy, sell, and store cryptoassets, like bitcoin and ethereum.
The company already has significant visibility with consumers in
a sector that was once exclusively the province of cryptocurrency
enthusiasts. In mid-December, the company’s mobile app reached the
top spot on Apple’s App Store.
Coinbase has soared in popularity and turned itself into the on-ramp
for mainstream crypto investors by positioning itself as a safe harbor
among cryptoasset exchanges. The company has never been hacked,
unlike many of its competitors. Coinbase has also maniacally pursued
compliance with existing regulations and law enforcement, putting it
on the right side of the law — another huge asset in a sector that is still
in desperate need of regulatory guidance.
This has helped Coinbase secure $217M in equity financing from some
of the biggest-name VCs, and vaulted the company into the unicorn
However, while Coinbase is best known for its cryptoasset exchange,
it has bigger aspirations than helping people buy and sell crypto. The
company’s stated goal echoes cryptoasset enthusiasts’ ultimate
vision: to create a new, “open financial system.”
For the time being, though, Coinbase looks a lot like a traditional
financial services player. Coinbase makes money by charging fees for
its brokerage and exchange. It also custodians user funds, like a bank,
and decides which cryptoassets to list, like the NASDAQ or NYSE.
Coinbase thus finds itself caught between worlds: it’s the most
well-funded blockchain company in the United States, but it’s a
centralized company, not a decentralized ledger. The company once
advertised cryptoassets as the “future of money,” but n