During this 2017 interview, Coinbase CEO Brian Armstrong showed incredible foresight on the following topics:
The ICO bubble they were in was out of control, and Brian anticipated SEC involvement and a crypto correction
Coinbase was operating in a highly regulated space (crypto to fiat conversion), which helped them stand out as a trusted exchange because users could not be anonymous
Bitcoin’s market cap made it much less prone to manipulation than other cryptocurrencies
Ethereum’s advantage as a scalable transactional currency over Bitcoin, because of the price associated with trading BTC
“… I do think the ICO craze is exactly that. It’s a craze, it’s a bubble, and it’s a little out of control right now. I would not be surprised in the next 6-12 months if there is some enforcement action by the SEC, some of these (ICOs) get slapped pretty hard, and there is a bit of a correction in the industry.” – Brian Armstrong in Nov. 2017
“In any two month period, we have some auditor on site from some regulator coming to check us out. So, one of the requirements of that is that we do know our customer, and so people are not anonymous on Coinbase.” – Brian Armstrong in Nov. 2017
Taking the necessary security steps to operate in a heavily regulated environment (crypto to fiat exchange) likely led to Coinbase developing a level of trust with its users, which was a crucial differentiator in the early days of crypto going mainstream
They currently have over 1 million reviews at 4.7 stars on Apple’s App Store
Armstrong also mentioned the crypto to crypto exchange industry being a more unregulated, speculative area “… where the ICOs live.”
“… Bitcoin is so big now, you know, it’s well over a $100 billion-dollar market cap, so there is fewer and fewer people who can try and move the whole market…” – Brian Armstrong in Nov. 2017
At the time, Bitcoin had a ~$150B market cap and around 10% of the early mined Bitcoin was locked up
the benefit of the blockchain is that you could see if those early Bitcoins move – which would set off warnings of potential manipulation
“I think Bitcoin was my first true love… but it did break my heart a little bit.” – Brian Armstrong in Nov. 2017
Brian’s hope for Bitcoin was that it would spearhead the world’s first open financial system, where all payments were fast, cheap, and instant
However, Bitcoin ended up not scaling to that level due to the high cost of transactions
which has turned Bitcoin into a “digital gold” rather than a usable currency
According to Brian, Ethereum’s roadmap at the time was better than Bitcoin’s, and there were already twice as many Ethereum transactions as Bitcoin transactions
Recently, that gap has widened:
According to Hedgeweek, in Q3 2020 Ethereum transactions outpaced Bitcoin by 3.5x
And the end of the interview, Jason asked Brian to make a friendly wager on the price of one Bitcoin 10 years from the day (2017 to 2027). Brian set a price of $100,000 and Jason took the under. Bitcoin is currently trading over $62,000.
