Coinbase Finance or Technology Company: CEO Talks Crypto Exchange’s Path

Coinbase CEO Attempts to Answer If Coinbase is a Finance Company or a Tech Company

Coinbase co-founder and CEO Brian Armstrong is trying to decide if his company is a finance or tech company. In a recent blog post, Armstrong explained how he sent an email to employees asking for their opinions on the matter.

“At our last all hands meeting,” explains Armstrong, “an employee raised a great question: are we a tech company or a finance company? This question deserves a thoughtful answer, so I decided to lay it out here.”

Coinbase is one of the biggest cryptocurrency exchange companies in the world. Founded in 2012, the San Francisco-based company grew to earn $1 billion in revenue in 2017. Today, they offer trading in bitcoin, Litecoin, Ethereum, Bitcoin Cash, and Ethereum Classic on multiple exchange platforms. Coinbase also offers a growing number of products catered to institutions, including crypto custody services, Coinbase Pro, Coinbase Prime, and Coinbase Wallet.

But the question remains: is Coinbase a finance company? Or is it a tech company?

Part of the problem is that cryptocurrency lies at the intersection of tech and finance. Cryptocurrency companies, by nature, aren’t strictly finance or tech companies.

“Many of you have noticed that we share aspects of both,” explained Armstrong in his email to employees.

“On the tech side, we have an engineering and product-led culture, tech company perks (free meals, kombucha on tap, etc), and we hire from many of the best tech companies. At the same time, we share aspects of financial services. We have robust compliance and legal teams, we interact frequently with governments and regulators, and we’re opening offices in the world’s financial centers (New York and London).”

Coinbase is “A Tech Company First”, But is Also “Neither” a Tech nor Finance Company

Later in the email, Armstrong reveals that if Coinbase was forced to label itself, then it would call itself a tech company first:

“…if we were forced to label ourselves as one of the two, we would be a tech company first.”

The reason, according to Armstrong, is that technology drives innovation and growth in the world today. Finance companies, meanwhile, aren’t associated with that same innovation. They implement the products and services created by tech companies – they’re not necessarily breaking new boundaries.

Nevertheless, Armstrong insists that Coinbase is “neither one”. Coinbase, like cryptocurrency, doesn’t fit into traditional economic definitions:

“But ultimately, we are neither one. We are something different and new: a crypto company.”

Armstrong feels that if Coinbase labeled itself as a tech company or a finance company, then it would be limiting itself. By labeling itself as a crypto company, Coinbase has an opportunity to define the growing industry – similar to how Google defined the term “internet company”.

“We’re not satisfied with the limitations of either technology or finance industries.”

Nevertheless, Armstrong insists that Coinbase is dedicated to hiring the best talent from tech and finance – or any other industry “where the smartest people on earth are to be found.”

Ultimately, Coinbase is one of the most influential corporations in the crypto space. The San Francisco-based crypto giant is one of the crypto industry’s biggest names. They’re breaking the limits of traditional finance and tech companies and creating their own niche as a crypto company.

Google was one of the first to define itself as an “internet company”. Now, Coinbase appears to be doing the same for another big and new industry: it’s a crypto company.

Brian also shared a number of threaded tweets about his thoughts on blockchain, Cryptocurrency and Coinbase as a company:

https://twitter.com/brian_armstrong/status/1033050236963323904

The internet now has a native currency, and since the internet is global, the world now has a global currency. If you have an internet connection you can participate in the global economy. You're no longer constrained to local market.

— Brian Armstrong (@brian_armstrong) August 24, 2018

With Satoshi Nakamoto’s white paper, Bitcoin ushered in a new way to prove that you own something–using a blockchain–and created the first digital objects that can’t be copied.

— Brian Armstrong (@brian_armstrong) August 24, 2018

When you download music or read a news article, the publishers don’t lose their copy, and when you send an email, the sender and recipient both now have a copy.

— Brian Armstrong (@brian_armstrong) August 24, 2018

The magic of bitcoin is that when you send one, you can’t keep it too. That obviously changes what it means to own things on the internet (“my bitcoins” feels really different than “my iTunes songs”).

— Brian Armstrong (@brian_armstrong) August 24, 2018

It also gives us a peek into the other ways that ownership of things like your online identity or content is going to transform over the next few years.

— Brian Armstrong (@brian_armstrong) August 24, 2018

This is driving a lot of smart engineers to focus on this opportunity–because it can fundamentally change the way we interact with many of the online services we use today.

— Brian Armstrong (@brian_armstrong) August 24, 2018

https://twitter.com/brian_armstrong/status/1033052014123483136

2/ an important part of how we reach that goal is help more people get into cryptocurrency

— Brian Armstrong (@brian_armstrong) August 24, 2018

3/ Building payment rails for people to get in and out of cryptocurrency from their local currency is a massive undertaking, but one we see as critical in order to get to the open financial system

— Brian Armstrong (@brian_armstrong) August 24, 2018

4/ There are a number of companies building great decentralized apps, crypto-to-crypto exchanges, etc (btw Coinbase is building products here too https://t.co/8TjjDuoBJx) all of these are accelerated if people can get their local currencies more easily into crypto

— Brian Armstrong (@brian_armstrong) August 24, 2018

5/ once you can convert between local currency and crypto, the full opportunity of the decentralization web is open to you

— Brian Armstrong (@brian_armstrong) August 24, 2018

6/ That first step can be the hardest to accomplish from a technical, compliance and legal point of view.

— Brian Armstrong (@brian_armstrong) August 24, 2018

https://twitter.com/brian_armstrong/status/1033105429092622337