Everything we just learned about Coinbase in your S-1 file

5. Here is the letter from CEO founder Brian Armstrong:

Economic freedom

Coinbase is a company with an ambitious vision: to create more economic freedom for each person and company. Everyone deserves to have access to financial services that can help empower them to create a better life for them and their families, but today we are a long way from that vision.

The current financial system is fraught with high rates, delays, unequal access and barriers to innovation. In many countries, citizens do not have access to solid money, a functioning credit system or even basic property rights. If the world economy operated according to a common set of standards, which could not be manipulated by any company or country, the world would be a more just and free place, and human progress would accelerate.

When I first read the white paper on Bitcoin in 2010, I realized that this advancement in computer science may be the key to revealing this vision of the future. Each payment can be as fast, cheap and global as sending an email. Cryptocurrency can provide the basic principles of economic freedom for anyone: property rights, solid money, free trade and the ability to work as and where they want. Economic freedom is a necessary, if not sufficient, condition for human progress. Societies with greater economic freedom have higher life expectancy and GDP growth, less war and corruption, better treatment of the environment and higher income for the poorest 10% of society. Greater economic freedom is related to the type of society that we all aspire to create. Our job at Coinbase is to help make that future a reality.

Cryptoeconomics

What started with Bitcoin spawned an entire industry with countless different blockchains and tokens. We now have stablecoins, privacy coins, security tokens, reward tokens, governance tokens and smart contracts. We are seeing the digitization of all types of value in a new economy that we call cryptoeconomics.

Commerce and speculation were the first major use cases to take off in cryptocurrency, just as people rushed to buy domain names in the early days of the Internet. But now we are seeing cryptocurrency evolve into something much more important. People are using cryptocurrency to win, spend, save, bet, borrow, borrow, vote and carry out many other types of economic activity. Companies are being financed, getting initial customers and eventually going public, all on the blockchain. Cryptoeconomics is just beginning. It is not intended to replace the traditional economy, but rather a complement, just as email was for paper mail. Cryptoeconomics offers a more global, free and fair alternative to traditional economies that is native to the Internet.

A secure, reliable and easy to use platform

Coinbase is building the infrastructure to power cryptoeconomics, helping to bring the benefits of this new technology to the world. Today, you can think of our products as a safe and easy-to-use platform to buy, sell, store, save, spend and use cryptocurrency. But for many of our customers, they simply think of us as their primary financial account in crypto-economics. Coinbase is building a portfolio of different products and services that connect to this primary financial account, and we are allowing third party products and services to be connected as well. We seek to make all of our products and services the most reliable and easy to use in the industry.

Trust is critical when it comes to storing money. From the early days, we decided to focus on compliance, proactively reaching regulators to be an educational resource and seeking licenses before they were even needed. We invested heavily in cyber security, built new key storage mechanisms, and obtained a cyber crime insurance policy. We even developed ways for customers to safely store their own cryptocurrency so that they would not need to trust us. Most importantly, we build a culture that doesn’t use shortcuts or try to make money fast.

Ease of use is our other main area of ​​focus. Cryptocurrency is still very difficult to use for the average person. Just as people can access the internet without understanding how TCP / IP works or turn on a light switch without understanding how electricity works, they need to be able to use cryptocurrency without understanding the underlying complexity. We achieve this by continually finding ways to simplify our products and pushing for new industry standards that improve usability.

Trust and ease of use will be as relevant in ten years as they are today, and our work here will never end. We can’t always move faster or offer the lowest prices, but if we fulfill our goal of being the most reliable and easy to use, customers will continue to choose our products and services now and in the future.

Building for the long term

It is the beginning of this industry, and Coinbase has always had a long-term vision. We are fully focused on providing the best encryption experience to our customers. Today, we are investing in growth because we believe that scale is essential to reach the potential of our business model.

You can expect volatility in our finances, given the price cycles of the cryptocurrency industry. This does not bother us, because we always take a long-term perspective on adopting cryptography. We can make a profit when revenues are high and we can lose money when revenues are low, but our goal is to operate the company at breakeven, smoothing over time, for now. We are looking for long-term investors who believe in our mission and persevere in price cycles.

Our goal is to build a portfolio of products and services with efficient capital allocation and demonstrate repeatable innovation. We’ve done this before, taking profits from our first products and services and reinvesting them in new products and services that we believe help to accelerate our vision of the future. We will continue to make investments in new products and services when we see a sufficient likelihood of gaining market leadership. Some of these investments will pay off, others will not. We will measure our products and services and the effectiveness of our investments analytically and close products and services that do not provide the expected return. We will learn from our successes and mistakes and use those learnings to inform our decision making in the future. We hope that this outlook will make us more profitable in the long run, as we see the full scale of this industry unfold.

Thanks,

Brian Armstrong
CEO, Coinbase