Coinbase is the most popular crypto asset exchange for consumers in the United States. The firm, which has been in operation since 2012, lets customers to purchase, trade, and store crypto assets such as Bitcoin and Ethereum.
The startup already has tremendous consumer awareness in a market that was previously reserved for cryptoasset aficionados. After falling from the top spot in Apple’s App Store in 2017, the company’s mobile app regained it in May 2021.
Though the app’s reign at the top was brief, Coinbase has risen in popularity and become the on-ramp for mainstream crypto investors by portraying itself as a safe harbor among cryptoasset exchanges. Unlike many of its rivals, the firm has never been hacked.
Coinbase has also aggressively pursued compliance with current rules and law enforcement, placing it on the right side of the law – another enormous advantage in an industry in dire need of regulatory guidance.
This has enabled Coinbase to raise roughly $540 million in equity funding from some of the most prominent venture capital firms, propelling the business into the unicorn club.
In April 2021, the firm created history by becoming the world’s first crypto corporation to go public. Coinbase went public on Nasdaq, and its direct listing began at $350 per share, $100 more than its stated reference price. Its valuation peaked at more over $112 billion during its initial public offering, but it eventually settled at around $86 billion.
While Coinbase is best known for its crypto asset exchange, the company has wider goals than simply letting users buy and sell cryptocurrency. The declared purpose of the organization reflects the ultimate ambition of crypto asset enthusiasts: to build a new, “open financial system.”
Coinbase CEO Brian Armstrong stated that the company’s primary goal is “to increase economic freedom around the world.” Coinbase will carry out a three-pronged plan to position and promote crypto assets as an investment vehicle, a new financial system, and an app platform.
For the time being, Coinbase appears to be a regular financial services provider. The firm earns money by charging brokerage and exchange fees. It also acts as a custodian for user monies, similar to a bank, and determines which cryptoassets to offer.
Coinbase is therefore trapped between worlds: it is the most well-funded blockchain business in the US, yet it is a centralized company rather than a decentralized ledger. Previously promoting cryptoassets as the “future of money,” the firm now promotes itself as a method to “buy and sell digital currency.” Coinbase is, in many respects, a centralized on-ramp to a decentralized environment.
This raises the question of how Coinbase views the assets that its users can purchase and sell. Is it still interested in boosting crypto adoption in order to create a new financial system, or is it more concerned with fostering the speculation that supports its basic lines of business?
We evaluate Coinbase’s strategy, funding history, product offerings, business activities, threats, and future potential in this research. We
The History of Coinbase
Coinbase was launched in July 2011 by Brian Armstrong, a former Airbnb developer, and was initially backed by Y Combinator. Coinbase provided facilities to purchase, sell, and store bitcoin when co-founder Fred Ehrsam, a former Goldman Sachs trader, joined the business in 2012.
Coinbase now works in over 100 countries, and its 21 products are classified into three core areas of business:
Individuals can use Coinbase, Wallet, and USD Coin.
Prime, Commerce, and Business Exchange
Cloud, Connect, and WalletLink are available to developers.
What is Coinbase and how does it work?
Coinbase, the largest cryptocurrency exchange in the United States, is a San Francisco-based company that was founded in 2012.
It has survived a few Bitcoin booms to become the go-to destination for Americans eager to buy so-called digital gold and other blockchain assets. Coinbase, run by Brain Armstrong, a former Airbnb developer, is one of the most visible digital finance upstarts battling Wall Street.
Coinbase is an online platform that allows merchants, customers, and dealers to conduct digital currency transactions. It enables users to create their own bitcoin wallets and purchase and sell cryptocurrencies using their bank accounts. Furthermore, the company offers a variety of merchant payment processing systems and solutions to assist high-trafficked internet websites. In a sector formerly dominated by crypto asset aficionados, the firm already has a substantial client base.
By portraying itself as a safe haven for crypto asset exchanges, Coinbase has grown in popularity and become the on-ramp for mainstream cryptocurrency investors. It has never been hacked, in contrast to many of its competitors. Coinbase has also strictly followed current regulations and law enforcement, placing it on the right side of the law – another huge benefit in a market in desperate need of regulatory monitoring.
Founders and Team of Coinbase
Brian Armstrong and Fred Ehrsam created Coinbase in 2012.
Brian Armstrong is the Coinbase Co-Founder and CEO. Armstrong graduated from Rice University with a Bachelor’s and Master’s degree in Computer Science, Economics, and Computer Science, respectively. Armstrong formerly worked as an Enterprise Risk Management consultant at Deloitte & Touche, as the CEO and Founder of UniversityTutor.com, and as a Technical Product Manager at Airbnb.
Mr. Fred Ehrsam
Coinbase’s co-founder is Fred Ehrsam. Ehrsam graduated from Duke University with a Bachelor of Science in Computer Science and Economics. He was previously a Trader at Goldman Sachs before becoming a Coinbase Founder and member of the Board of Directors. Ehrsam is also a Paradigm Co-Founder.
Snap India Head Durgesh Kaushik was recently hired by the firm. The former Snapchat CEO has been named as Coinbase’s Senior Director of Market Expansion, beginning May 9, 2022. The corporation is eager to expand in nations such as India, which is one of the primary reasons for this hiring. Coinbase is also attempting to establish itself in a number of other markets, including Asia Pacific, Africa, Europe, the Middle East, and the Americas.
Coinbase has a sizable workforce, with around 3000 people.
Business Model of Coinbase
Coinbase’s business is based on the B2C and B2B models. The company’s key client groupings are:
Those who utilize the platform to purchase and sell digital assets using the wallet provided by Coinbase (B2C).
The merchants who utilize the Coinbase platform (B2B) to hold digital assets (transferred by consumers) as a form of payment from their customers come next.
Retail and institutional users utilize Coinbase’s network to purchase, sell, and trade cryptocurrencies such as Bitcoin and Ethereum. Customers may contact them via the Coinbase, Coinbase Pro, and Coinbase Wallet applications, as well as the company’s websites. As of the first quarter of 2021, Coinbase has around 56 million retail users.
Coinbase, as an online marketplace, allows customers to purchase and sell a variety of cryptocurrencies (around 20 distinct cryptocurrencies).
Bitcoin, Ether, Litecoin, and XRP are just a few examples.
Furthermore, Coinbase has the Coinbase Pro and Prime platforms, which let individuals and institutional clients to trade more sophisticatedly. Furthermore, traders may use the Coinbase API to get real-time market data and construct programmatic trading bots.
Coinbase clients can utilize the Coinbase Wallet, also known as the crypto wallet, in addition to the Coinbase trading platform, also known as the exchange wallet. The latter is more secure than the exchange wallet and is meant as a separate app for Android or iOS. Furthermore, the wallet feature allows users to easily swap products and services.
Along with the trading platform that Coinbase provides, the firm also provides a slew of additional goods for both companies and consumers.
Furthermore, Coinbase provides a broad choice of cryptocurrency courses, such as Dai and EOS. These coins are awarded by the site as prizes to participants who successfully finish the courses.
Coinbase also assists customers in obtaining an actual VISA debit card known as the Coinbase Card, with which they may spend their earned cryptocurrency and track their spending.
What are Coinbase’s Most Significant Inventions?
Coinbase is well known as a cryptocurrency asset exchange. However, in addition to trading crypto assets, the firm also serves as an investment vehicle, a decentralized financial system, and a crypto app development platform.
Individuals can use Coinbase’s products such as Coinbase, Wallet, and USD coins. It also provides commercial platforms like Coinbase Prime and Commerce, as well as developer services like Coinbase Cloud, Coinbase Connect, and WalletLInk. Among the company’s most significant products are
Custody of Coinbase
In November 2017, Coinbase debuted its Custody platform. The offering caters to institutional investors interested in crypto assets, such as hedge funds, asset managers, and pension funds.
For these big investors, the portal also offers storage and financial control options. Polkadot, Litecoin, and FTX Token are among the crypto assets supported by the site.
The Coinbase Wallet
Coinbase Wallet is a significant priority for the organization. It debuted in 2017 and is now one of the most popular Crypto applications on Google Play, with millions of users. Users may use the smartphone app to buy, store, and exchange crypto currencies and digital valuables. The Coinbase wallet also allows for crypto-asset lending.
One of the company’s most recent offerings is Coinbase Prime Prime. It will be available in September 2021, allowing institutional investors to exchange and store crypto assets on a massive scale. Because of its function, Coinbase Prime provides more advanced capabilities than the normal wallet, such as market evaluation and pre-trade help, among others.
Coinbase Commerce is a platform that allows businesses to accept cryptocurrency payments smoothly. With this technology, ecommerce enterprises may integrate cryptocurrency payments into their checkout process. The software is compatible with up to 12 eCommerce platforms, including big players such as Magento and Shopify.
Products for Coinbase Developers
The firm provides a number of cloud infrastructure systems, APIs, and other built solutions that assist developers in building crypto companies, integrating crypto assets, and connecting Coinbase consumers across platforms. Coinbase Commerce API, Coinbase Pro’s trading API, and others are examples of such products.