Brian Armstrong

Co-founder and CEO of Coinbase

THIS CHAT HAPPENED ON July 26, 2017

Discussion

Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
Hello - I’m Brian Armstrong, co-founder and CEO of Coinbase. Coinbase strives to be the easiest and most trusted place for everyone to buy, sell and store digital currency through our three products: Coinbase.com, GDAX and Toshi. Before founding Coinbase, I worked as a Software Engineer at Airbnb and founded UniversityTutory.com. I’m excited to be here, and happy to answer all your questions about building an open financial system for the world, digital currency growth, our culture, founding a company, investments and the future of blockchain technology - anything really. EDIT: Thanks for the questions everyone. Enjoyed the lively discussion and look forward to creating an open financial system with you all. Signing off for now! You can follow me on Twitter and Medium for more updates. https://twitter.com/brian_armstrong https://medium.com/@barmstrong
Andreas Klinger@andreasklinger · Tech at Product Hunt 💃
I am a layman on the whole topic. But what's the talk about Bitcoin Cash / forking bitcoin / etc a) Could you dumb this down for me? b) I am a coinbase customer, which effects would this have on me? c) Would you recommend me moving my bitcoins off coinbase? (i assume i know the answer for that one ;) )
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@andreasklinger Thanks for the question! a) not sure i can :) it is getting crazy complicated! TL;DR people have various different ideas about how bitcoin should scale, so we'll most likely see a split with a few different versions of bitcoin. b) our goal at Coinbase is to make digital currency trusted and easy to use. So if you don't understand the hard fork, and are keeping your coins on Coinbase, you are essentially trusting us to make the right call about future forks. We'll do our best to offer what people want! On the other hand, if you are technically savvy and want to be sure you have access to any forked coin right at the time of the fork, we can't guarantee this - so you'll need to withdraw your coins and manage this on your own. There is quite a bit of technical complexity around the forks, especially right as they are happening. So we can't guarantee access to everything people want right then it happens. I think we'll be able to provide what most people want over time though - so if you're ok trusting us to make those calls then feel free to keep your coins with Coinbase. In general, Coinbase is not the best product for more tech savvy people who want 100% control over all aspects of their coins. Our goal is to make digital currency simpler, and help digital currency reach a much larger market of people, and this can sometimes be in conflict with complete control. c) If you want full control of any potential coins right away, at a fork. Then yes! If you want to not worry about it, and trust us to make a call for you, then no.
Nick Abouzeid@nickabouzeid · Words at Product Hunt ✌️
Hi Brian! Do you feel that yesterday's SEC announcement classifying the DAO token as a security was the correct regulatory move for the industry? Are there any regulations you wish would be implemented?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@nickabouzeid In general I think the more regulatory clarity the better. It does not surprise me that the SEC came out with clarification here. I think they will continue to make it more clear over time, which will be good for the industry. We came out with a legal framework a while back which I think gives a good suggestion about how tokens could be evaluated, to determine if they are securities: https://blog.coinbase.com/2016-1... It seems unlikely to me that all tokens will be considered securities. I think there will be a test, and it will be possible for projects to create tokens that do not quality as securities, but this is just my guess. Thanks!
Nick Abouzeid@nickabouzeid · Words at Product Hunt ✌️
Very helpful! As a follow up, for tokens that aren't/won't be classified as securities, are there any steps that a regulatory agency should take to protect token purchasers? Even if the token isn't designated as a security, there are certain risks with purchasing "credits" on any platform before it's live and operational. Appreciate your time! 🙏
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@nickabouzeid This question might be above my pay grade. In the U.S. (and many other countries) there are consumer protection laws that will come into play. But tokens are an inherently global phenomenon, so I'm not sure how that will play out. A lot of open questions here! In general, technology changes faster than the law - so the law is always playing catch up a bit. But that is ok, and has been happening forever (as far as I'm aware). So in that sense, this is simply business as usual. I like what AngelList has done with their token platform, by only offering it to accredited investors in the U.S. This feels like a step in the right direction to me (at least for U.S. law).
Udara Jay@ujzeee · Founder @ alcamy.org
When will selling coins be available in Canada again?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@ujzeee I don't know! Let me check.
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@ujzeee Heard back from the team. No plans to enable selling in Canada in the near future unfortunately. Cananda, Australia and Singapore are buy only on cards for now. At least buy works!
Udara Jay@ujzeee · Founder @ alcamy.org
@brian_armstrong Gotcha! By far the cleanest coin buy/sell UI & process I've seen so 🤞for sooner than later!
Sina Habibian@sinahabibian
Hey Brian! Couple of questions – 1) What are products / solutions that you think are uniquely enabled by cryptocurrencies? (In the same way that Wikipedia was enabled by the internet, and was not possible beforehand) 2) What do you see as the future of DAOs?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@sinahabibian 1) The areas where digital currency really shines are cross border transactions, real time transactions, and micro transactions. So I think you'll see early use cases there. If you look at the industry broadly right now, the major use cases are: a) investment - this is still probably 80% of usage b) crowdfunding - this has taken off in a big way c) cross border b2b payments - at least 3 venture backed companies making decent revenue off this that I'm aware of, using digital currency These are all 100% legal use cases btw, which is important to realize. The other place it shines is bringing financial services to places where people don't have access to any financial services at all (because digital currency works anywhere there is internet and a smartphone). This is what we're working on with http://www.toshi.org/ . 2.5B people today have a cell phone, but don't have access to a bank account or credit card. Digital currency can help lift them out of poverty, and I don't think any other technology has succeeded here yet (except perhaps in individual countries, like MPESA in Kenya). 2) I think they will essentially follow the gartner hype cycle There is something really cool there, but I think it is a bit overhyped right now and feels very researchy to me. So it probably needs a bit of a correction, then will start to deliver really awesome wins over the coming years. Smart contracts in general, I'm bullish on long term, even if seem very early right now (like toys). I think digital currency as a basic payment network could deliver value to a lot of people by itself, before smart contracts really get going, but it's tough to say for sure.
Tim Cameron@tim_cameron · Product Manager, MEA @ TransferWise
@sinahabibian @brian_armstrong How are cross-border payments enhanced by cryptocurrency if these payments require fiat at both ends?
Matthew Hui@matthui · Founder @ Senzu.io
What is the next coin you will add to Coinbase? :)
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@matthui we aren't disclosing this, since this can have a big impact on the price of those assets. It also conflicts with our trading policy! That being said I can share how we generally think about which assets to add next. We have a point based system that looks at a number of factors including customer interest, trading volume, compliance risk, security audits, the team behind the coin, how much work it would be engineering wise for us to add, and a few other factors. We use this to rank order which assets we will add next. Our ultimate goal is to add as many assets as our customers are interested in trading, while preserving the trust and compliance of the platform. Hope this helps!
Matthew Hui@matthui · Founder @ Senzu.io
@brian_armstrong That makes sense. Thanks!
Bruno Leveque@bruno42 · Co-founder, PrestaShop
Hi Brian! When do you plan to release a final/stable version of Toshi?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@bruno42 I don't believe in "final" versions of software, since they continually evolving/improving :) But we hope to have Toshi on mainnet in the coming months, which will be a pretty stable build. Thanks for the interest in it! I've been using it every day, and have a public profile on there if people want to chat. Android is a bit more stable than iOS right now, but they are both getting close.
Shlomo Klahr@_sklahr_ · Intern @ Digital Currency Group
What do you see as the key risks we face as an industry/community, and what steps can we take to overcome them?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@_sklahr_ you're asking the right questions! i think about this a lot Key risks: 1. Digital currency doesn't go mainstream I think a lot about this. Sometimes the industry feels like a bunch of nerds arguing at the kids table, and the rest of the world has no idea what we're talking about (nor should they care). Hard forks, etc mostly fall into this category. Only 10-20 million people own digital currency today - this is basically zero compared the population of the world. The biggest risk is that we don't make something a billion people want (and can understand + get value from). What steps can we take to overcome this? 1. Make digital currency easier to use Digital currency is still way too complicated to use. Our goal with Coinbase is to go even farther on this spectrum. It should be as easy to use as Gmail, a smart phone, or ideally the telephone. 2. Be trusted and compliant This means secure (people not losing money). But is also means working within existing legal structures. I think about YouTube vs Bittorrent. Both had a lot of copyrighted material on there in the early days. But YouTube made at least a good faith effort to clean it up (even if they didn't get it perfect), whereas Bittorrent fought the authorities. YouTube went mainstream and Bittorrent remained in the shadows. I would say YouTube had a bigger impact on the world. 3. Shift digital currency from speculative investment, to delivering real value for people as a payment network The initial use case for digital currency has been speculative investment, which is fine as a bootstrapping mechanism for the network (it is a great single player mode http://cdixon.org/2010/06/12/des...). But we'll never reach a billion people until we can shift it into being a payment network. If bitcoin isn't going to scale to become that, then we need a digital currency that can. Right now, ethereum I think has the best shot at doing this, but it could still go either way. This is what we're doing with Toshi http://www.toshi.org/ We're shifting digital currency into being useful as a payment network, and making it dramatically easier for people to build digital currency applications to get real value (a loan, a job, a way to invest, financial freedom, etc). We're targeting the developing world first, because this is where people have the biggest pain point around financial services. 2.5B people have a cell phone, but don't have access to any bank account or credit card. The Gates Foundation and many others have shown how providing financial services to people through mobile devices can help spark economic growth, and lift people out of poverty. This is what we're going to do with Toshi, and it will create a mass market use case for digital currency. 4. Have multiple competing coins The last thing I can think of to ensure digital currency succeeds is to have multiple of them. Bitcoin could have been the dominant crypto currency, and solved 95% of all use cases, but we've seen it stumble in the past few years. What's essential is that there is competitive forces in a free market providing choice to consumers. This will ensure digital currency succeeds, even if any one coin struggles, because it will create a check and balance on any one coin (or developer group behind it) from bad behavior.
Shlomo Klahr@_sklahr_ · Intern @ Digital Currency Group
In 2015, you said: "Many will find this crazy, but I think bitcoin could surpass the dollar as reserve currency within 10-15 years." Do you still stand by this statement, and do you think that bitcoin will ever attain the stability required for utility as a reserve?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@_sklahr_ Yes, I stand by it. Although I'd modify it by saying I'm less sure about it being bitcoin. But I think some digital currency could replace the dollar as a reserve currency in that time frame. Thx!
Jordan Odinsky@jordanodinsky · Helper of Startups @ OurCrowd
Hey, Brian! Thanks for doing this AMA! Two questions: 1. How do you see blockchain technology and crypto investing scaling to the point of general public adoption? Ie. What's the path of scalability from where we are today to the point where my grandmother starts asking about crypto investments? 2. How do envision corporations will respond to blockchain technology? At what point will we see them roll out their own blockchain tech?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@jordanodinsky Thanks! 1. talked about here https://www.producthunt.com/live... 2. Lots of them already are. My impression is that just about every fortune 500 company CIO is discussing blockchain actively right now. I think much of the blockchain work that is happening is more hype than reality. Digital currency (the open blockchain) will likely be responsible for 90% of the innovation, similar to the open internet created far more innovation than intranets or private networks.
Will Christman@whitericewill · Building Chat Circles
Hey Brian :) You started coinbase back when Bitcoins were $4. How did you first hear about Bitcoin/crypto and what was the turning point that made you decide to go all in on it?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@whitericewill I first heard about it on HackerNews. It was a link to the Satoshi white paper. This was in December 2010. I remember reading it and thinking it was the most important thing I had read in 5 years. I had a lot of self doubt about starting a digital currency company though (my friends didn't get it when I told them about it). The turning point was when YCombinator offered me $150k to quit my job at Airbnb and work on my idea. This is what gave me the confidence to try it.
Marius Chawa@mariuschawa · UX Designer @ Hewlett Packard Enterprise
Where do you see the future of cryptocurrency in 3-5years, in respect to affordability, daily usage, and just acceptance perspective?
Shlomo Klahr@_sklahr_ · Intern @ Digital Currency Group
@mariuschawa Adding on to this - are there specific use cases you do / don't see blockchain tech revolutionizing in the long term?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@mariuschawa Digital currency adoption has been growing about 3-5x per year. So if 10-20M people have digital currency today, i'll make up a random estimate and say 270M-2.5B people will have or use digital currency in 3-5 years. Broad enough range? :) More seriously, I think the big shift will be from digital currency being used as an investment, to it being used as a payment network. The latter requires a network effect, so it will take a little while to get going, but it is already happening and will only accelerate now that there is a critical mass of people using it. See https://medium.com/@barmstrong/w... for more.
Joshua Voydik@joshvoydik · Founder, Mindful Makers
Hi Brian – thanks for doing this AMA. I've been a Coinbase user since early 2014, and have loved watching the company grow. During a recent trip to Cuba, I simply opened my Coinbase iOS app to see how my accounts were doing. I was unable to login. Upon returning home, I received an email telling me my account had been deactivated and that I'd have to speak with the Treasury Department to receive my funds. I had done zero business while in Cuba. I'm wondering why my account had to be deactivated simply for trying to check the app? It's disconcerting. I understand that it's not Coinbase's fault, but is this standard operating procedure – instant deactivation? Are there no other options? Thank you, and hope to hear from you.
Brian Schuster@schusterdev
Hi Brian, Thank you for doing the AMA. Over the last year there have been a large number of complaints about Coinbase's platform due to a lack of customer service. What does Coinbase plan on doing to improve the overall customer experience?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@schusterdev Agreed - this has been frustrating to see. The explanation is simple (we went through one of the fastest periods of growth ever seen in business), but this does not help the many customers who experienced frustration. I've posted about our plans here: https://blog.coinbase.com/improv... And it is the top company focus for Q3: https://blog.coinbase.com/in-q3-... I have all 175 employees in the company focused on scaling right now, so we can solve customer pain. Thank you for bearing with us!
Kevin Mulcrone@kaybesee · Software Engineer, Live Music Fan
Hey Brian -- Do you have any advice for young engineers who are interested in joining Coinbase's team? Does Coinbase hire junior engineers or offer internship programs?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@kaybesee Thanks! We do hire junior engineers, although we are in need of more senior ones now. To get your foot in the door, the best way I know is to take the online coding challenge we have linked in the bottom left on this page: https://www.coinbase.com/careers If you score well there, it will get our attention and someone will reach out. Or (and this is applicable to any job) do something awesome - something remarkable - and send it to us. This will get our attention, and it shows passion/commitment. This could be an open source project, a but bounty submission, a song, whatever - be creative. One candidate submitted a cover letter in the theme of Satoshi's original bitcoin paper - it included citations, and a consensus mechanism for employees and managers working together. Yes, we have a number of interns as well every 6 months. Thanks :)
Arieh Levi@arieh313 · Research @ CB Insights
Hey Brian, thanks for doing this. Two somewhat broader questions: What are some use-cases where centralization is not just a good idea, but necessary? Do you think it's possible to separate blockchain technology from some of the more anarchist/ libertarian streams which gave rise to it? Is decentralized planning and governance a utopian fantasy? How relevant are such ideas to the current crypto landscape? Thanks again!
Ethan Buntario@ebuntario · Founder of Ruang Linkup
Why did you choose cryptocurrency rather than just handle regular currency?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@ebuntario cryptocurrency is a fundamental breakthrough It has the potential to unlock more... 1. innovation 2. equality of opportunity 3. economic freedom in the world vs regular/fiat/government backed currency. Hope it helps!
Emily Hodgins@ems_hodge · Operations @ Product Hunt
Hi Brian thanks for joining us today. What's the best advice you've ever received and how did this impact you?
Brian Armstrong@brian_armstrong · Co-founder and CEO, Coinbase
@ems_hodge I have read lots of books on personal development, psychology, entrepreneurship, self help, public speaking etc and had a number of mentors. The first thing that comes to mind is a quote that stuck with me: "the greatest risk is not taking one". You can see some of the books that impacted me here: https://medium.com/@barmstrong/1... Thx!
Praveen Gangodu@pragangodu · The Blockchain Guy @ RR Data Corp
Hi Brian, Good work with Coinbase.. /What are your thoughts on ICOs? There are really promising startups broadcasting the "blockchain" buzz-word and signing up to ICO. But only some are legitimately pushing it through a product release. Do you think ICOs need to be regulated? /Which is the best city to incorporate a blockchain startup and why [I am founding one currently to speed up AML/KYC process while users signup]?
Pravil@pravilz
What is your take on the digital currency adoption and government regulations in countries like India?