Coinbase

Coinbase is a company that specializes in digital currency – aka cryptocurrency – exchange. Although the company’s headquarters are based in California, United States, Coinbase has more than 43 million verified users from all around the world.

It’s worth noting, however, that according to the co-founder and CEO Brian Armstrong himself, Coinbase doesn’t exactly have a traditional headquarter like it used to. We’ll touch more on that later when we get to the timeline.

History

Coinbase was founded in 2012 by Brian Armstrong and Fred Ehrsam. Armstrong was previously an engineer at Airbnb while Ehrsam was a trader at Goldman Sachs.In the same year, the company launched services to buy and sell bitcoins through bank transfers. It also raised $5 million from Fred Wilson (Union Square Ventures) in a Series A funding round. 

In 2013, Silicon Valley venture capital firm Andreessen Horowitz invested in Coinbase in a Series B funding round. After the investment, Bitcoin developer Gavin Andresen joined the company in an advisory role.

In 2014, the company partnered with numerous companies including Stripe, Paypal, Braintree, Overstock, Dell, and Expedia to incorporate bitcoin payments for their products or services. Coinbase’s user base had grown to one million.

In 2015, the company launched a US-based bitcoin exchange for professional traders called Coinbase Exchange and also obtained a $75 million investment from investment firm Draper Fisher Jurvetson.

In 2018, Coinbase’s valuation soared to $8 billion after it obtained a $300 million funding round led by Tiger Global Management. Y Combinator Continuity, Wellington Management, Andreessen Horowitz, and Polychain also participated.

In 2019, a potential cyber attack was blocked by the company’s security team. No cryptocurrency was stolen. In the same year, the company also generated around $543 million in revenues, up from $529 million generated from the previous year. 

In 2020, Coinbase announced that it will be offering a Visa debit card program as well as an IPO by the end of the year or early 2021. 

How does it work?

Coinbase has different functions and services to offer for two main categories of their clients – individuals and companies.

Individuals

If you’re not representing a company but only yourself, you can use Coinbase for the following.

  • Buying and selling crypto
  • Earning crypto by learning about it
  • Using Coinbase Wallet. It allows you to send and receive crypto, secure your storage, and have all different types of crypto in one place.
  • Get a Coinbase Card. It’s a Visa Debit card with your Coinbase balance. It works the exact same way as a regular card – you can pay with a contactless, PIN, withdraw cash from any ATM, use it worldwide, and connect it to your Coinbase Wallet. Naturally, tracking transactions and balance history is an option as well.

Business

  • Now, if you happen to be a business, here’s what you can expect from Coinbase.
  • The prime brokerage platform with tools. The tools include stress-tested cold storage, multiple execution options, API solutions to programmatically manage your assets.
  • Asset custodian.
  • Coinbase Commerce. To accept crypto from anyone without any fees, sell crypto for cash or USD coin, use it globally without middlemen.

Revenue

With a Coinbase IPO set in the near future, the company has seen strong revenue growth in the past few years. In 2019, the company generated $543 million in revenues and had even forecasted to generated twice as much revenue by the end of 2020.

Competition

Due to the surge of crypto investing in recent years, it presented an opportunity for companies to develop crypto management platforms of their own similar to Coinbase. Some of these companies include Kraken, Binance, Bitfinex, eToro, and CEX.IO.

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