06.12.2021

Coinbase spoke about mass criticism of the idea of launching a cryptocurrency exchange

This week, a historic event for the cryptocurrency market took place: the largest US marketplace, Coinbase, went public, that is, it went through a direct listing procedure.

Now the shares of the crypto exchange are traded on the stock exchange under the ticker COIN, and the company itself has reached a capitalization of $ 87 billion. That being said, the success of Coinbase CEO Brian Armstrong hasn’t been all that apparent in the past. At the very beginning of the journey, many even called his initiative to create a cryptocurrency exchange “a bad idea.” Let’s talk about this in more detail.

Coinbase went public on Wednesday April 14th. The procedure was traditionally accompanied by the display of the Manhattan stock exchange logo and notification of its listing on the Nasdaq.

The shares of the company themselves under the ticker $ COIN are traded for two days. The asset value graph looks like this.

How Coinbase was created

In March 2012, Armstrong visited the Hacker News forum, where he explained his idea of ​​creating “PayPal for Cryptocurrency”. He spoke about the initiative to create a convenient service for sending and exchanging bitcoins – then only BTC – that could significantly expand the adoption of cryptocurrency.

But Armstrong had a problem. He successfully applied for funding from the Y Combinator venture capital fund, but he needed a co-founder. To do this, even before the creation of the exchange, he tried to find out on the forum if anyone would like to join him in his mission. Here’s a line from Brian that he used to find a colleague. The quote is from Decrypt.

I am taking an important step – because desperate times call for desperate measures. It’s going to be damn hard, but the bottom line is that we have a non-zero chance of really changing the world on a big scale.

Armstrong did not come to the forum empty-handed. He attached a screenshot of a prototype BitBank, a platform for “simple bitcoin payments.” He also attached a link to the first version of his development.

The responses to his post have been mixed. Some focused on finding a co-founder, others pointed out grammatical errors in his post altogether. Allegedly, Armstrong should first learn the language, and only then engage in startups. Not without explicit criticism. For example, here’s a response from a user named debacle.

I don’t think all this is well thought out. We still have a system that works great today.

That is, in this case, the critic was referring to the financial system, which is based on central banks and fiat money. In his opinion, there was no point in popularizing the cryptocurrency industry, because people would not need blockchain coins. Especially considering the massive distribution of conventional money.

The same user also pointed to the high volatility of Bitcoin as a key problem for the ecosystem participants. As such, he was curious about how Coinbase would make money from its service. Others did not understand how something else could be improved in BTC, because the system from Satoshi Nakamoto and so “worked perfectly.” Another criticism is that Armstrong’s service may be banned by the government.

Despite the skepticism that any startup typically faces, there has been positive feedback. Here is one of them.

I love all the messages that “the current market players will not win this war.” This is a HUGE advantage for you: everyone will underestimate you and your potential influence … until it’s too late. It’s not a win-win, but it has a good chance of becoming something very influential.

Armstrong himself shared his experience on Twitter.

Even after five years and many millions of dollars in profit, about half of all investor and employee types thought it was a bad idea.

Ultimately, BitBank evolved from a crypto payment platform to a cryptocurrency exchange now known as Coinbase. Well, from an eccentric, Armstrong went into the category of geniuses who made a huge bet on the growth of the crypto market. As you can see, his tenacity and confidence in his idea paid off in full – Coinbase became the first major crypto company, whose shares are traded on the American stock exchange.

We believe that Coinbase’s success will be just the beginning in the massive popularization of cryptocurrencies. Obviously, now investors will take blockchain assets more seriously, including considering them as a store of value. And this applies even to those who criticized coins before.

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