Coinbase CEO Brian Armstrong on the Two Big Challenges Facing Crypto
06-03-2023
- url: https://open.spotify.com/show/1te7oSFyRVekxMBJUSethH?si=36bfc9b48f984a3b
- Coinbase business model
- diversify revenue streeams
- rely less on cyclical trading fees
- other streams include ecosystem around USD coin, custody fees, Coinbase card for merchant transaction
- provide more predictable business
- layer 2 solution called Base
- focussed on scalability and usability
- service 1 billion people
- reduce transaction costs on Ethereum to pennies
- will become more decentralized going forward
- diversify revenue streeams
- crypto regulatory trajectory
- clarity and certainty
- needs to be applied to centralised actors like custodians and exchanges but not decentralised actors
- AML, KYC, public disclosures, separation of corporate and retail funds
- want a fair interpretation of the rules, if diverging consensus then the courts must decide
- needs to be applied to centralised actors like custodians and exchanges but not decentralised actors
- crypto as securities
- howey test
- investment of money, common enterprise, expectation of profit
- be wary of poor tokenomics, influencers shilling tokens
- not all crypto are securities
- Bitcoin and Ethereum etc are crypto commodities
- howey test
- banks are debanking crypto companies
- smaller crypto companies are having difficulty getting banking partners
- liquidity risks, making loans against deposits
- smaller crypto companies are having difficulty getting banking partners
- clarity and certainty
- changing view of the crypto investment thesis
- uncorrelated asset class
- momentum asset, highly volatile and correlated to traditional risk assets
- stablecoins provide a different narrative
- inflation hedge
- contrast with the current high inflation environment and poor performance of Bitcoin
- the technology is still too early, and too small as a % of global asset classes to have desired macro effect
- uncorrelated asset class
- thoughts on slow adoption
- progress
- 1 in 5 households has used crypto
- gradual mindset shift from speculative usage to real-world usage
- NFTs, smart contracts, commerce, deposits and lending, staking
- main hurdles (drawing similarities between the growth of the internet)
- scalability
- usability
- awareness and education
- progress