Coinbase is an online brokerage for buying and selling bitcoin and other crypto-currencies. It claimed a valuation of $1.6 billion when it raised $100 million from venture capitalists in 2017.
Coinbase is a high profile company with a low key online and print presence. It is also among Silicon Valley’s fastest-growing young firms. By far it has been the most high achieving performing product of the cryptocurrency industry. The wildfire success story is not too recent, it is a six year old startup. It is well sustained and has remained glitch and irresponsibility free since its inception.
New startups use heavy handed public relation tools and advertising to mark their presence into the general public. Little visibility goes a long way. However, Coinbase – a digital currency startup disagrees. Visitors find themselves standing next to an unmarked office somewhere in the midst of San Fransciso, in a tall high rise tower.
When searched online, Coinbase results show its offices at a different location. This is a diversion tactic to keep away disgruntled crypto-currency investors. Also thieves who are trying to get access to crypto-assets and other malefactors.
Unlike startups like Airbnb (a room rental portal) and Uber (a ride hailing network), Coinbase seeked government acceptance and proper licensing before its launch. Coinbase was an attempt of it’s founder – Mr Armstrong of Rice University in Houston, to help people move currencies around the world. After his attendance at the Y-combinator, with his co-founder Fred Ehrsam, previously from Goldman Sachs and several precautionary measures, Coinbase emerged. It reportedly now has a valuation of around $8 billion with a user base of more than 20 million users. Today, it caters professionals, other brokers and retail or nubile investors too.
in the words of John Oliver, a comedian Crypto-currencies are “everything you don’t understand about money combined with everything you don’t understand about computers” Such opacity has presented an opportunity for Coinbase, which has both an easy-to-use mobile app and a law-abiding reputation.
The founder also founded GiveCrypto.org, a charity based crypto enterprise to encourage people who have made fortunes in crypto-currency to be altruistic. He pledged $1 million of his own money as opening balance.
The success of Coinbase greatly depends on the success of the most dominating crypto currencies such as Bitcoin and Ethereum. The startup has remained hush on the subject of how the falls in the prices of Bitcoin and ethereum and short term market failures, affect the brokerage itself. ‘Since bitcoin’s peak in December, Coinbase has fallen from America’s most-downloaded finance app to the 29th-most popular. Coinbase has begun to diversify its risk in an attempt to insulate from the price volatility and market shocks. The diversification has allowed it to acquire new crypto startups and make them a part of its group of crypto services.
Planing to go public next year, Coinbase has to defeat three major reapers in its highway to the greatest success story. These include namely:
- Regulation: China, India, Japan and South Korea have all imposed rules that make trading crypto-currencies difficult, costly or illegal.
- Competition: Robinhood, an online brokerage that has won customers by selling shares without charging a commission, now offers crypto-currencies. Tumbling transaction fees is the only source of profits for exchanges, may make the market fairly cheaper and the profits lower and lower with each entry.
- Security: Crypto firms are not only a target of hackers and insider trading but also armed robbers. The primary reason why Coinbase keeps its address low key. The firm also partakes in security revisions and comprehensive checks and balances.
Although all Crypto related businesses face these dark clouds of gloom and terror, the bigger ones are the ones actually most vulnerable to their slapstick. And yet, Coinbase has remained intact and been able to keep up with market standards. So,
Cryptocurrency is NOT all scams and scums.