Coinbase CEO Brian Armstrong On His Company's Beginnings: Satoshi's Whitepaper, Sleeping In Office, Salary In Bitcoin
Leading cryptocurrency exchange Coinbase Global Inc (NASDAQ:COIN) held its highly anticipated IPO earlier this week, when shares opened for trading at $381. CEO and Co-Founder Brian Armstrong took to Twitter Inc (NYSE:TWTR) to share insight into creating the company.
Creation of Coinbase: Armstrong started the process when he read the Satoshi Nakamoto whitepaper on Bitcoin while home for Thanksgiving 11 years ago.
“As I read it, I realized that crypto had the power to unlock a future where economic freedom was a reality for everyone,” Armstrong said, calling it, “One of the biggest meta problems of our time.”
Armstrong said he then "started coding an early prototype of Coinbase on nights and weekends and began attending early bitcoin meetups around the Bay Area.”
The Coinbase app was first called Bitbank until Armstrong learned that the word bank carries a legal definition. Without bank in the name, Coinbase still had the mission to increase economic freedom in the world.
Coinbase Early Days: Armstrong was accepted at Y Combinator and got the courage to quit his job at Airbnb Inc (NASDAQ: ABNB).
“It’s hard to overstate how bad of an idea everyone thought Coinbase was,” Armstrong said. Even Armstrong’s friends in the technology sector thought Coinbase was a scam, leading to self-doubt for Armstrong.
In the Twitter thread, Armstrong thanks the team at Y Combinator for giving him a chance and believing in him.
“Their $150k first check helped me believe in myself and gave me the courage to quit my job and really try building a company,” he said.
Armstrong also recalled the process of selecting a co-founder. Armstrong chose Fred Ehrsam after meeting with over 50 people in a process similar to dating.
In the company's early years, “We had early employees working in the laundry room, in the bathroom and the hallways. Some even camped out on the roof,” said Armstrong.
Many of the first employees, including Armstrong opted to be paid a portion of their salary in Bitcoin.
Coinbase Growth: Armstrong said a couple years in, he knew that for Coinbase to achieve its goals the company had to look beyond the U.S. Coinbase spent months in the UK and EU to secure a banking relationship.
Growth of ICOs in 2017 and 2018 helped boost the brand of Coinbase, but also caused problems due to increased demand.
“This was a tough period for the company and our employees,” Armstrong said. “We weren’t meeting our customers’ expectations when it came to site reliability or customer support.”
The demand led to some employees sleeping in the office and working 100 hours a week, much like they did in the company's earliest years.
Coinbase Today: The crypto economy has grown since Coinbase was founded.
“There’s a saying that the best way to predict the future is to create it,” Armstrong said.
The CEO says Coinbase has only accomplished a small fraction of what its goals are as a company. Greater economic freedom for society could lead to higher GDP growth and life expectancy, Armstrong said.
“Crypto can provide the basics of economic freedom to anyone: property rights, sound money, free trade, and the ability to work how and where they want.”
COIN Price Action: Shares of Coinbase are up 4.49% to $336.69 on Friday afternoon.
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