What's up, everyone? This is Anthony Pompeo. Know most of you know me as pump. You're listening to the pump podcast. Simply the best podcast out there. Now. Let's kick this thing off. Brian Armstrong is the founder and CEO of coinbase. The largest publicly-traded cryptocurrency company in this conversation. We discussed coinbase regulation the SEC Bitcoin, etherium smart contracts and ft's Dows company culture remote work and operating a publicly traded company. I really enjoyed this conversation with Brian and
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And the city has agreed to continue to accept the donations moving forward. Pretty, damn cool. Go check them out at City. Coins dotco or click on the link in the description to join the disk or all right. Let's get this episode Brian. I hope you guys enjoy this one. Anthony pom playing. Ah, no runs pomp Investments, all views of him and the guests on his podcast, our shoulder, their opinions and do not reflect the opinions of Pop Investments. You should not treat any opinion expressed by pomp or his guests as a specific inducement to make a particular investment, or follow a particular.
Energy, but only as an expression of his personal opinion. This podcast is for informational purposes, only. All right, guys, bang bang. I've got Brian here with me. Thank you so much for doing this, man.
Thanks for having me. This is
great. Absolute. Let's just start off with a reminder, to folks about coinbase, the business in terms of what your mission is as a business. And then what the products we it looks like
today. Yeah, sure are missing is to create more economic freedom in the world. And so, you know, I think coin, you know, crypto is probably the best technology out there to do that. Right now. I got really excited about economic freedom.
Long time ago. I read about it and it's kind of this composite metric that looks at all the countries of the world and it tries to look at things. Like how easy is it to start a business? Is the currency stable is there free trade? Is there corruption and bribery in the economy and stuff like that and our property rights in force, basically, and when I first read the Bitcoin white paper back in 2010, that was kind of one of the first thoughts that went through my head was. Wow. This might be this key to unlocking more economic freedom globally and going and creating better Financial infrastructure for the
World, so that's the mission of coinbase. And we have a whole bunch of products with different customer segments. So we have retail customers institutions, and developers on the retail side. We've got our app out there. That's has, you know, about 60 million verified users, and helping people buy and sell crypto, and then increasingly use it for more and more different things. And then on the institutional side, we've got about 9,000 institution signed up, who are increasingly coming into crypto storing more and more of their assets Within.
Which is great, because actually a lot of the money in the world, majority of the money in the world, is tied up in institutions, not in retail and then, lastly developers. So, we want to help this whole crypto economy in ecosystem grow. So we're building things like, coinbase Cloud, which is AWS for crypto. What kind of externalizing all the services that we've built internally, like how to integrate with these blockchains custody, and trade and everything, and make it so anybody can build their business on top of those. And then we're doing things, like coinbase asset Hub, trying to make it easier for people to create their
Their own tokens and get them listed on coinbase and maybe even eventually create dowels and raise money and just change the whole way that Capital formation happens with its all these crypto startups that are getting built. So, those are our three customer segments and that's our mission. Economic
freedom is a really interesting topic and most people. I think they talk about the assets. They talk about the technology, but they kind of lose the plot as to what the potential impact on a global stage can be. What is it about the economic freedom? That you think kind of caught your attention or really kind of Drew you to that subject?
Pacific idea that measurement.
Yeah. Well, you know, I had experienced this firsthand in a couple different ways. So one was that I had spent a year living in Buenos Aires Argentina. I just kind of went there after college. Try to figure out what I want to do with my life and sort of live abroad for a bit while. I was working on a different startup and one of the things I saw in that culture was just how broken the financial system was. It was really holding people back not only with inflation which was kind of eroding the wealth, especially of the poorest people in society, but it was also making it hard to
to like, you know, get a mortgage to buy a house. Like Pete businesses were all struggling to collect and send payments. It kind of created this atmosphere of Despair and resignation. I would say in the culture, like people just weren't optimistic, are wanting to try, try, cool things to go help people because they felt like it could all be gone. Tomorrow could all be taken away from me. So it was this, like, really Insidious problem in that society and other ways I saw it was, for instance. I was, I was an early employee at Airbnb. We were helping move money to people in the hundred.
Countries people renting out their homes and collecting payments from people who wanted to stay there. And I just sort of had a front-row seat into how how broken the Global Financial system was. It was this huge barrier to Innovation. It had high fees delays, you know. Oftentimes. It was kind of felt like a almost like corrupt or just opaque in terms of how it would work and it was like, it just never made sense to me growing up with the internet, where we had this global system, you know, you can send an email or WhatsApp message, it would drive instantly anywhere in the
World for free. Why weren't payments like that. It's like why was why was every single country creating its own proprietary system that could be corrupted or manipulated or just have, you know, incompatibilities. So that's why I got excited about it and I felt like economic freedom, was this huge unlock? Basically, it was almost like solving a meta problem because, you know, you could argue things like the Industrial Revolution. And some of these things that have happened. Historically just by giving people the ability to
You know, if you do something good for the world, you can capture some of the upside. That's a very simple but very powerful idea and arguably it's almost sufficient to get a huge amount of innovation and progress happening in society. So I'm very excited about, you know, how do you, how do you get better more progress happening in society? How do you better get more Technology, Innovation and property rights, and economic freedom are kind of a core Foundation of that. So, I felt like this might be one of those rare moments in history, where a small group of people could take this. Brilliant Technology, Innovation Bitcoin.
And with the proliferation of smart phones and the internet actually, inject, economic freedom and property rights. In Good Financial infrastructure into all these countries all over the world, really even just from one company doing that. And that's just I couldn't stop thinking about it for, you know, a year. And So eventually I was like, all right. I got to try creating some kind of a prototype and that led to the origin of going
based. You made a good bet because that seems to be what is occurring as as we're watching this, all play out here, I should say before we have a conversation with the public company and
And some of the regulatory stuff. I've got Equity exposure to coinbase. Obviously, you're a a shareholder in the business and nothing. Here is financial advice. But in terms of coinbase, you've built a business that is today worth tens of billions of dollars. And recently, took the company public any Lessons Learned From that process of going public, any things that have surprised you or downsides that maybe you didn't expect as well.
Yeah, you know, so actually I wasn't sure that I wanted to be a public company CEO when I first started coinbase because you know, I mean, I'm like a ninja
Near a product person by background. I felt I'd read all these stories about how. Once you take a company public. It's like there's kind of activist shareholders and you have to spend, you know, I talked to some public company CEOs actually. And when I was trying to figure all this out and they were some of them told me, they spent Thirty forty percent of their time just talking with public market investors. And to me, I felt like, you know, this might be something that just slows us down and how we going to create great products, but I realized over time that, you know, there's many different ways to go public and you can
Should create this in a way that's very beneficial to the company. So just to give you a couple examples that are like, very positive reasons why why to do it. And why part of why we did it, you know, one of them is that it's a huge legitimizing Force for not only your own company, but for the industry, so for instance, once we became a public company, a whole bunch of Fortune. 500 companies started, you know, being more comfortable working with us on especially on the institutional side of our business and on the developer side, but it's
I didn't realize it appreciate this till we went public, like the the level of legitimacy that it actually applies to the company. Now on top of that, it gives a whole bunch of liquidity to the early investors and employees. I think over a million. Sorry over a thousand millionaires were created at coinbase when we went public which was an incredible statistic. So that was just hugely, emotional and life-changing for so many people and it turned out to be for me as well. And then it gives us now that our stock has this kind of liquidity to it is
Giving us a liquid currency to go out and do more International expansion and things like that. It also, by the way, it's much easier to raise money as a public company, you know, we've recently raised like two billion dollars in debt and the whole thing took about one week. I actually didn't have to go to a single meeting for that. Although our CFO did a whole bunch of meeting. So my hat goes out my hats off to her. But yeah, there's some definite advantages of being a public company. I've so far. I've been really enjoying it. I'm planning to keep doing it for a long, long time. And I'll give a plug to the
the direct listing, we did a direct listing instead of a traditional IPO. I thought it was. I thought it was great. I think we got, we got better deal terms. We didn't feel this kind of pressure to underprice the stock for insiders. We wanted it to be a totally fair thing. We went out. So anybody on day one could retail institutions, you know, anybody could bid and buy it at any time and it was a fair market for everybody. I think the direct listing was a very positive thing. So I'd recommend that other
When you add in the economic benefits, the ability to a fundraising, you not happen to go to the meetings to raise capital. I could see why public companies is it's pretty enticing. But the elephant in the room now, is there seems to be a ton of regulatory pressure, both from actual regulators and also would all call more of kind of politicians or people who are elected officials. Maybe, let's just start with how you view regulation. Obviously, is a public company CEO, your regulated by a ton of different organizations. There's all these different rules.
Like, how do you view the regulation? And is there a thing as like good regulation? Bad regulation. Or how do you look at
this? Yeah. So this is a very interesting Dynamic that's happening recently. But honestly, it's been happening for the entire time. The coin basis were going around, nine nine years, or so. It's just kind of the intensity keeps dialing up every year because crypto keeps getting bigger and bigger. And so generally, I view this all as a very positive trend, you know, in the early days of coinbase. We made a conscious decision. We said, hey, we want to go out there and work proactively with regulators and
Locate them, get licenses, do whatever we need to do because we want this technology to go mainstream. I want their, I want there to be a billion. People accessing an open Financial system every day through the, through our products, and other other companies to get the benefit of this technology. And I knew that, you know, in most parts of the Free World, this was not going to be outlawed or something like that. At least I didn't think that was very likely, but it would be regulated. I felt like, you know, societies is not going to just allow this to proliferate completely unregulated. So over time, we went
and we got money, transmitter licenses and we started interfacing with all of the Federal Bank regulators. And actually today, coinbase interfaces interacts with 54 different Regulators just in the United States. And we're actually in, you know, about 30 or 40 countries globally. And so we're very much a global company. So we interface with similar counterparts in other places. So, where is this all going? I mean for a long time, the crypto industry I think has been asking for
Clarity from The Regulators out there and saying you know, this is all so new and now I don't blame the regulars, by the way, for not coming out with a ton of clarity quickly. It's such a brand new thing. It actually might have been a mistake to come out with it too quickly because there are examples. Historically, a probably of Regulation that's come out. It's like kind of overreacted or tried to find something too soon. And this space is evolving so quickly. So, you know, they kind of let it, they kind of let it percolate we sort of shoehorned the regulation into
Existing Frameworks that are out there, like, like money transmission, but now, with the Advent of all this stuff, their government is starting to get more pressure and say, hey, what are we going to do about this? And so, you're seeing this kind of dance that's happening. A little bit of healthy tension. I would call it between The Regulators now for coming out and saying, all right, y'all, we need to get this figured out, what's unfortunate. Sometimes they're kind of doing that through enforcement actions, which I don't think is necessarily fair. If they haven't kind of already just, you know, picked up the phone.
And said, hey, here's our opinion on this. Like we want to enforce a Level Playing Field across the industry. Everybody do this. I haven't seen that happen in some cases, which is a little frustrating. They're kind of going right to enforcement, which I think sort of sets up a negative tone. But regardless, it doesn't really matter. If it happens via enforcement or more internal dialogue and everything, like that will eventually get to a place where we start to create legal precedents more of this stuff becomes clearer. And the court may end up having to eventually decide on some of these things like which of these tokens are.
Cured. He's, you know, in the absence of clarity about that topic. I mean, we have we have the Howey test, right? But the Howey test was created back in 1946 in a world pre-internet, you know, previous like post right after World War II, right? So how could this, how we test apply to this brand new Financial system were creating basically every founder and investor and they're highly paid. Lawyers are all kind of trying to tease out like read the tea leaves about what this could possibly mean for their business. And it's created this kind of
Wide variety of interpretations and a completely ambiguous environment, which kind of stifles startups. And some of those startups have decided to go abroad to into to incorporate because of the lack of clarity in the u.s. So, now we're sitting here in this environment, where, you know, in the absence of that Clarity, coinbase went out and sort of we created things like the crypto rating Council. We created a very thorough digital asset listing process internally that looked at compliance and legal and security cybersecurity. And we were actually
Really pretty cautious about a lot of the assets, we added, you know, at the time that coinbase had maybe 50 assets or so. There was some of our competitors had hundreds of them writer. And now we have about a hundred assets, total that we've gotten comfortable with many of them, other ones, we've rejected. And so I would expect this whole environment is just over the next year, or so. It's going to be a series of enforcement actions. A series of behind closed door discussions legal precedent getting created. There will probably be broker-dealer licenses.
Or I said I should say operationalize, you know, coinbase went out and got it broker dealer license, a while back, but we haven't operationalized it. Because there aren't any security tokens that our customers want to actually trade. And so, maybe once we get that operational and then other crypto tokens will then go be pushed to register with the SEC. We actually want to make that easy as well. Through a product. We have called coin based asset Hub and just make it super simple for any asset issuer to come, you know, form a smart smart contract or however they want to do it. Create a
New new asset, register it with the SEC if they need to do that in the u.s. Do a reg s offering if they want to do it abroad. So we want to try to make all of this easier, more regulated. I think we're all pretty much aligned even the regulators and and the industry is just going to be a bunch of silly headlines and, you know, uncomfortable conversations as that all place out. So I want to
try to kind of summarize what I believe to be your all supposition. But if I misspeak correct me is basically look we
I was in the rules with think regulation is generally good but in some areas, we don't know what the rules are. And so we're trying our best but if we don't know what those rules are and then all of a sudden we get told, hey, don't do that. It's kind of hard to operate a business with uncertainty feels like that's one kind of talk track or Viewpoint. Another is hey, there's things that we think should be allowed to that feels like the regulator telling us they aren't allowed and we want to have a discussion and maybe there isn't a discussion at the level that you want to have it or you're not getting guidance that
I'm looking for excetera. And there's like this third world, which is basically like, hey, we do things as a publicly traded company in a regulated environment, the United States, but like look globally. And there's people doing all kinds of different things. And so there's like, a global competition going on. How much does the US want to over-regulate a regulate versus like wide open? Free markets and just let everyone go. Let the free market decide is that kind of a fair, characterization of like maybe like the three points around regulation and where you sit,
that's a really great articulation of it. Yeah. I do think that's a really important.
Remember as well, the last point you said which is that we are living in a globally, Global free market, right, you know, US citizens actually are going and using products that are created a broad increasingly because they're not able to get the stuff they want in the u.s. So that's a risk, you know, I think the US government, again, we're a global company. I talked to Pete, Regulators, all of the world, but one thing I noticed when I go to DC is that I think you know, 50% of the people. I talked to in DC roughly.
So they're still thinking of crypto as a risk. They think this is scary. This is dangerous there. They have all kinds of misconceptions in their head about the percentage of activity. That's for illicit activity, listed purposes and all this, which is actually much smaller than most of them realize that's probably about 1% or less. Whereas the US Dollar Cash is like three to four percent illicit activity, right? But in their mind, they think it's like 50% illicit activity. So that's probably half the people I meet in DC and the other half. Are they realized that this is actually
Opportunity. It's a hugely important new industry for the United States and every country around the world and that they exist in a competitive environment where the US needs to be attracting these entrepreneurs, getting these foundational companies built here and that frankly, you know, the American citizens, really want these products and services tens of millions of Americans. This is not a fringe thing anymore, you know, coinbase has 60 million verified users, you know, and we're just one company. So there's there's tens of millions of Americans who want to use these products and services. They're getting a
a benefit from it, that they're not getting from the traditional Financial system and ultimately, you know, the citizens, elect our government, and the government appoints regulators and everything like that. And so, I think that if they are too hard on crypto, basically, it's going to become politically infeasible. They're not going to have the will of the people behind that it's almost like prohibition or something like that. Historically, like you can't you can't go out and like try to criminalize something that, you know, 50 million Americans are doing, you're just going to turn them all into criminals, but they're not.
Going to stop doing it. And so I think that's the, maybe the one of the big things that hasn't been realized yet on in
DC. So, I think a lot of folks who are listening to this hear about regulation. They feel that there is some tension between the companies in the space and Regulators both in the United States and also internationally as well, various folks, whether it is the SEC, the cftc or some other organization. I want to use kind of the tan tangible example of the Lend product that you all had, you know, kind of ideated.
On you wanted to create and launch. There is this now, Infamous, Twitter thread that you put together and put out publicly kind of calling attention to the fact that you didn't think you were going to be able to launch it and maybe just walk us through kind of how this process works. And you know both I think from if you can what you think coinbase is kind of doing to move towards a solution, but also maybe from the regulator standpoint, are there things that you think like, yes, they're doing this and that's actually a good thing. It's a fair thing to be doing and if there's anything that they're doing that the
I think could be improved or
changed. Yeah. Sure. So, the Lend product was kind of an interesting example for us. By the way that the LED product is not really material to our Revenue at this point or anything like that. But it's, it's an interesting case because some of our, you know, competitors, great companies, in crypto, by the way, have had a product like that out in the market for a couple of years. We've seen demand from our own customers to have it. And so, we decided that we wanted to go out and put out a similar product. What was frustrating, is that we proactively went to the to the
CC ahead of time. We've been telling them about our development of this product, and we felt like we had by in there. But as it approached our launch date, we suddenly saw a much different stands from them and they came out and said we. Well you can't not only do we have concerns, do not launch this, and if you do will be suing you and they sent us a Wells notice, which is kind of like a preliminary document before you see somebody. So, the product never launched.
But I was kind of frustrated by that because I felt like well, the goal of the SEC is to protect consumers and then create a Level Playing Field. So, you know, number one. How are they protecting consumers? In this case? I think a lot of consumers demonstrable, you have wanted to earn higher yields on their, on their savings accounts and things like that. They're not really getting those products from the existing financial services. So that was one open question. And then the second one was, how are they creating a Level Playing Field? Because it seems like
Other companies are have been able to do this, but coinbase suddenly is not allowed to. I sometimes we're a more well-known company where a bigger company and so, we sort of get this scrutiny. That other startups don't have. By the way. I kind of understand that the SEC has just one organization. They don't have time to look at every startup but the kind of can look at the big ones. So we were stuck in this kind of uncomfortable position where the SEC would not. Tell us why they didn't. Why they thought it wasn't shouldn't be allowed. They were very closed lipped about that. I'm not sure why maybe they didn't want to tip.
Their hand in some kind of litigation or something but it just didn't feel collaborative or being upfront at all. And they, and they were creating this unlevel playing field in the process. So the end of the day we sort of talk to our lawyers about it and they felt like what's what is our case here? Like should we go, you know, we're being harmed, should we should we proactively sue the SEC? Should we just enter litigation with them and try to create some kind of a legal precedent, but we felt like there was a lot of deference given to Regulators in the court system. And we have frankly, note.
Are to be engaged in drawn-out litigation with any regulator, right? I consider that to be a very much a last resort. We always want to be proactive and collaborative or people. And so we decided not to launch the product. Essentially, we're going to wait and see what the SEC does in terms of the other products that are out there already in the market where it's not a Level Playing Field today. I think we want to also just focus our efforts on maybe even more important things happening in crypto, like the questions around which of these tokens are securities and how
Oh, is defy going to be used? There's you know, these are the things that I guess we really want to stand behind and sort of say, these are the benefits to the crypto community that we want to go. Make sure there's a good legal precedent for. But I, you know, I, when I went to DC, I reached out to the SEC. I tried to get a meeting with them. They told me that they weren't meeting with any crypto companies. I was kind of surprised by that because there are so many different Regulators out there. Every single one has been willing to meet with us and every other branch of government by the way and sec.
Really the only regulator that I was not able to get a meeting with as a new, the first crypto public company in the United States that they weren't willing to meet with me when I went to DC. So, there's something kind of strange going on there. I wish that we would basically all just be able to pick up the phone and talk about this stuff. It doesn't need to be in a combative stance and whenever I see something like that happening that I think is kind of inauthentic and, you know, I, I tend to talk about it publicly. I want to put this stuff out in The Ether so that the
World can know about it and they can make up their own mind about how these things should play out in government. So when I
asked kind of a couple of different perspectives from this specific situation is because I think it's a good tangible example where people can understand both your perspective and also The Regulators as a publicly-traded CEO, especially one that it just came into public markets. If you went and you talk to somebody in the Legacy Finance World, they would say, oh my God, that is nuts to do a public thread and talk about the SEC excetera. How do you think about risk reward in terms of having the
Patient and kind of pushing forward to what I think, you know, based from what I understand you've said publicly and also elsewhere is really trying to work towards a solution. Like how do you view that moving towards the solution and did you evaluate any sort of risk with kind of being more public maybe so than than other people would?
Yeah, so I mean look, there's no right answer here. Okay, so I'm not going to come out and say that it's the right thing to do is the wrong thing to do. A lot of this stuff comes down to kind of gut at the end of the day. And the way I thought about it was, you know,
First of all, Twitter Twitter is a funny thing because if I had gone on to CNBC or something like that and said, the same thing people would have probably thought like, oh, that was a healthy debate or dialogue. There's something about Twitter which, you know, people, it's a very much like a West Coast and East Coast thing, right? So on the East Coast, the reaction to my tweet, I'd say was more negative. People were like, wow, how can he do that? You know, he should be going through appropriate channels and you know Wall Street Journal or whatever and people on the west coast where like that.
Best thing I've seen, you know all year and they were like finally somebody is willing to just speak the truth about what's going on behind the scenes and put it out there in the open. Right? And so I think there's just a cultural difference that's happening. Look my I'm not naturally a combative person. I'm actually like kind of conflict avoidant, right? I, my default is to go build genuine relationships with people. Just try to work on stuff like even if we disagree. There's a there's a way to make it win win and just move forward, but if somebody is, you know, if they're not going to meet with us, too.
Even have a conversation, which by the way, I still my optimistic view is that we can change that. We still haven't gotten a meeting with the SEC for someone, you know, high up there against or to talk to me personally, but my hope is that that still on the table. And if I can't get that, then eventually, I'm just going to go out and talk about it publicly so that people can know about it. I think it's a form of accountability frankly and that's like the way that the this is trending in the future. It's going to be companies are less going to be going through traditional channels.
NBC, you know, Wall Street Journal mainstream media and York Times. They're going to be bypassing that and going direct to their Community via modern tools, you know, blogs podcasts like this one Twitter and you know, YouTube and all the modern tools that are out there. So it's just it's an interesting cultural moment where West Coast companies I think are starting to take a different view on this, then the east
coast. And when you look at it from the regulator perspective, it almost feels like one like you said there.
There's so much stuff going on. I definitely do not envy being a regulator right now in terms of trying to figure out. Not only, you know, what is in bounds are out of bounds, but also just like, what to go focus on first, I went to the exercise recently and said to myself, you know, if you're a regulator and you stack rank all the different things going on in this industry. Like what do you think you'll look at first? It's hard to just do that exercise alone. And so are there areas where you think that regulators and crypto competition? A lot of folks who run other companies or investors in the industry can kind of meet in the middle. Like
Like, what? Is that? Middle ground? Where you think you're like? Okay. This is the activities that we should go focus on that can actually push this forward, get two solutions on some of these issues. And ultimately I think find some balance between the kind of economic empowerment, The Innovation, the job creation, all the things that we know to be positive but also satisfy, whatever the, the concerns are of whether it's Regulators, politicians, Etc.
Yeah, so I totally agree. By the way, I have a lot of empathy for Regulators in this space because they have a very hard job. It's so new. It's changing so quickly.
You know, frankly, I would have a very hard time getting out there and sort of publishing clear, guidance on it. I think it's I think it's very difficult. But coinbase has been thinking about, you know, what we can do to help here. In fact, when I was in DC, one of the most common things people ask me was, can you help draft something you and your lawyers helped draft something, that would be proposal a proposal about how this industry could be regulated more efficiently, right? So that coinbase doesn't have to have 50 plus Regulators in just one country. And then and we don't have this kind of jump ball between the different federal agencies.
So actually we've been working on a draft proposal, a regulatory framework for the industry. We're going to be publishing that probably in the next two weeks or so. And it's meant to say not that we have all the answers, but it's a start to the conversation and I think it could make sense to have one agency, or basically, you know, a division within one of the existing agencies, be the single point of Regulation. A single federal regulator in the United States that can help this.
History. Get a little bit of clarity so that this industry can be built in the United States effectively in it and the u.s. Can kind of maintain its position as a financial Hub and a leader in technology with with appropriate regulation in place. So I think we basically all want to think the same thing. We want a healthy industry grow, but have some reasonable regulation that's thoughtful and I guess we want to try to be part of the solution here. Not. Not just engaging in, you know, antagonism. And so we're going to put out a proposal there and I hope people are willing to come. Talk to us about it.
One last thing. I want to talk about.
Ation and move on to some of the other aspects of the industry is in some weird way, heavy-handed regulation, or some stuffing out of innovation actually could be a Tailwind in a weird way to coinbase, right? If all of a sudden, coin basis and publicly traded company, sure, maybe you can't launch it one or two-year products, but for the most part, you almost get entrenched as an incumbent crypto company and startups really struggled to compete. Like that would actually be beneficial right? Coinbase. Probably worth more money in that situation. Talk a little bit just to
Out, like, almost in some way, wanting clear regulation and competition being healthy and really driving Innovation versus just you all going, which may be in the Legacy system. Actually. This is what the Encompass, do. They go in the advocate for a bunch of Regulation that stops call competition and really in trenches them.
You know, you're so right? And I'm glad you brought that up. I think it's actually kind of funny how the narrative get set. Sometimes, I think sometimes all Nuance is lost in these conversations and people sometimes, look at it there. Oh, the crypto, people don't want to be regulated.
And it's actually kind of a ridiculous statement because number one, we already are regulated. We have been for eight years. We have over fifty Regulators, we interact with in just one country, the United States, but moreover the point you made is exactly right, which is honestly regulation would be the best thing to ever happen to coinbase, because we're the largest company who can shoulder that, you know, we have huge balance sheet. We have tons of lawyers on staff. We are already have been leaning into regulation for many, many years, the people that would harm or
Priests it would harm our smaller crypto startups and it would honestly all yeah. Again, it would in trench these companies. It's like, you know, look at what happened is happening with like, kind of Google and Facebook, and all these things or, you know, the Dodd-Frank Act, or you can kind of go back and look at all these industries. They basically just enshrine the incumbents. They sometimes harm Innovation, which is bad. That's why I'm more against it, but it would almost be better for coin based in a weird way.
Yeah, it is. It's very weird. And I think, you know, you've obviously having a great appreciation for just
Like how complex this situation is and we're just talking about what I'll call kind of the, the incumbent businesses or the entrepreneurship run, these businesses. We're talking about Regulators, but it's a whole bunch of other people at the table as well. Everyone from the retail, to the institutional investors, and you can see how very quickly, many different interests, all, get intertwined. And people are just trying to figure it out. Let's move on and kind of talk about a couple of different areas across the industry. I basically just want to throw out a couple of what I consider like the corners of the industry or areas where it seems like there's a lot of intellectual and Financial.
So Capital, you know, moving in a trend and then you just elaborate in terms of what your thoughts are on that specific spot. And so, maybe we'll start from the biggest and kind of move down to some of the newest or Fringe Innovations first starting with Bitcoin, lightning Network. And a lot of what I think kind of you started out. And as you said in 2010, when you read that Bitcoin, white paper and economic freedom, how do you think about like the blue chip assets in the space and Bitcoin specifically and how that has evolved since you first came across that white paper.
Well, you know Bitcoin is kind of what got me super excited.
Cited about crypto in the first place and I still am excited about it. I hold a ton of crypto or sorry, a ton of Bitcoin, but I think that you know, it's going to it's going to be around forever as basically, you know, the gold or the money of this of this industry. I I'm seeing adoption an interest in Cross, a lot of different assets. I think that's generally a good thing. You know, coinbase is always tried to be agnostic about which one wins and which one doesn't like. We just want to basically serve our customers with whatever they want to do. So,
It's been actually, I always am a little frustrated, seeing some of the tribalism that happens online. And I always, you know, Twitter is kind of built for conflict and warfare and I don't think it actually represents what the majority of the industry feels which is probably a much more nuanced view, which I know you have as well. But yeah, I mean Bitcoins great. I've if it's been really cool by the way, seeing some of the lightning Network adoption just happening in El Salvador with like McDonald's and all these things. And so I think I think it's great. I think we should keep building that stuff.
Is it
fair to say in some way? And I've started to see this with folks have been around for a long time that Bitcoin early on was like incredibly intellectually exciting. And they really do have into it. It pulled them into this industry and there's almost this sense of like inevitability to it. Like you said, you know, because gonna be around forever and people who are Builders, they start to become intellectually interested in other things, as well as I mean, they lose interest in the original thing, but just like their aperture, almost expands. Is that, is that kind of a fair way to think about
How your journey in crypto is
happened. Yeah. Sure. I mean, Bitcoin was a huge breakthrough, both in computer science, but also kind of economics and all these things. But it spawned a whole industry and a lot of other Innovation that's sort of derivative of that work. And so I'm always kind of interested in what's on the frontier and what's getting the most adoption in different areas. So I think we're quickly going to end up. We I mean, we already are in this world where the crypto economy is built of a number of different assets and blockchains that.
Have different purposes, whether that's to be sort of gold or payments or Security Contracts or gaming or derivative, you know, so there's more and more things that are going to keep coming out. I think we'll my guess is that will eventually be in a world where there's maybe dozens of blockchains, but their lawyers millions or billions of tokens and you could imagine all kinds of things that people use those for, right? Every organization that comes out. Maybe even every individual
Or these entities and all this stuff. These are all this going to be so many tokens that it's like, kind of hard to even. Imagine where that
ends. Last question on bitcoin is lightning Network. You mentioned the adoption, especially El Salvador, obviously, and also corporations their coinbase and many other exchanges but coinbase. I looked before hasn't integrated with the lightning Network. Are there? Certain Milestones or things that you look at your like? Hey once there's a certain amount of adoption or nodes or capacity or something that then you guys would say. Hey, let's go.
Do that, or is it something you're just kind of monitoring? And it's, you know, day by day is when you make that
decision. Yeah, you know, so I was, I was actually asking the team about this earlier, looking at some of the adoption stats of, you know, you can sort of look at how many, how many Bitcoins are tied up in lightning channels, and you can look at sort of similar stats across other L2 Solutions, just to get a sort of a sense. But what I haven't actually been able to find is a good metric that just looks at, you know, how many transactions a day are happening on the different, L2 Solutions out there and I think
Generally, we want to be supporting all of them that are getting some reasonable threshold of a of Attraction, you know, but if there's one that's like really breaking out then that kind of helps us think about, from a ux point of view, which we're which ones to emphasize because I do think there's essentially some sort of cost or an overhead for the average person coming into crypto. Like, you know, we need to expand the circle of not just like super sophisticated early adopters to like what's the next level? And the next level. So that's how we need to get billions of
People into using crypto. And so there's a cost, the more sort of jargon and options that we throw at them in these interfaces. One of the teams that I spun up this year at coinbase was called the protocol team and their whole job is just scale blockchains. Okay, that's like kind of the the Mandate of that team and they're looking across all these different things lightning and the, the eat Solutions and whatnot in. Also, just scaling it from, you know, how many Taps do you have to do to like complete a payment, which
I still think has way too much friction. But the more we can get that kind of stuff working. I feel like it's going to be a huge unlock for the industry. You know, how do we get, like the next hundred million or billion people using crypto? We've got to get the throughput, the scalability increased. I think, I think it's just like going from 56k modems to broadband. It's going to be, it's going to be an order of magnitude increase in usage of crypto and therefore, probably the value in crypto as well.
Makes sense. In terms of kind of the next big area.
Area is what I'll just call Smart contract platforms and it feels like maybe three or four years ago. It was a theorem would kind of be the king there. Now. It seems like there's layer to some type of aetherium. There's a ton of other smart contract platforms that are popping up. Obviously, a ton of people talking about something like a Solana recently. How do you look at those smart contract platforms, the competition among that and then how coinbase can kind of play in that
space? Yeah. So I mean we're generally again, we're blocking I've agnostic. So we're trying to add as many as we can. That are
With you, no legal in the countries where we operate. But also they have had a certain level of sort of security, like cybersecurity, you know, there's certain times. We see smart contracts where the key is held by one person or something like that. And they could actually yank everyone's funds or sort of change people's balances. Those are the kinds of things that we tend to push back on and we say, all right. Hey, this may not be ready or if we are going to put it on our platform. We make a giant kind of, you know, user just
Disclosure around that, to make sure people really understand the risks, but I guess I'm glad that there's more and more blockchains being created. I think that we are going to see them sort of specialized overtime in there and what use cases emerge. I do think that you know, I talked with CZ at Finance about this a little bit where Finance Mart chain started to get a lot of traction and in the one hand I was like, well, this is great. We're seeing more and more adoption. I think it was actually a pretty clever solution in terms of how they got.
The fork of ethereum to scale with fewer nodes, there's always trade-offs around that but the concern I had over it was that, you know, it seems like 50% or more of the governance tokens in this case are controlled by one company by Nance. And it's even in the name buying a smart chain, right? Although I think he said they may want to rename it. So I do think it would be a bad thing. If the majority of this activity started to get created on blockchains, that were more centralized. I think that's actually pretty dangerous.
So I really hope that we get blockchains built that are decentralized but also scalable, and we can kind of Build, You Know, The Right Use the right tool, for the right job.
Yeah, when we think about things that are being built on top of the smart contract platforms, and if T's, obviously is a huge topic of conversation. We saw various platforms having, you know, billions of dollars in sales in a single month and it just feels like everywhere you turn whether it is inside the crypto industry or
Outside the crypto industry, where we're seeing, you know, individual athletes, musicians teams, Etc, everyone with IP trying to kind of figure out where they fit into this. How do you look at in FTS and has coinbase done anything there yet, or any plans to do anything and then of tea Market,
yeah, so I think entities are really an important Trend in crypto. And what school, by the way is that there's like a new important Trend happening crypto, every three to six months. It feels like so, it's like the pace of innovation just keeps picking up, which is really awesome. So, nft, specifically. I mean, look, I've never been somebody who had that. That
That desire to, like collect art, or I never like really collected anything like, in the way that people collected, baseball cards or whatever, but that's, I'm sort of, you know, not a representative sample. I think there's a huge portion of the population that really loves this stuff. And I think that it's just going to keep growing like, you know, we probably a little bit of a of a Nifty bubble right now, but I imagine just like everything crypto it'll kind of come down but then slowly grow from there. Like it's a very real Trend. The other thing that I'm excited about is not just our
Send them getting kind of better economics in more direct connections to their fans and the resale value and all that. But also the metaverse, right? There's so many interesting things happening with games and Virtual Worlds, where people I think are going to own more and more stuff in these Virtual Worlds and they want it to be something provably unique that they can actually take off the platform that they can sell if they need to, or transfer into another application. So anyway, long way of saying, I'm very excited about this.
Nothing, nothing that I can announce today. But coinbase is very excited about this space and we're looking at a couple of different opportunities. So it's a real Trend. I think it's going to be big for crypto
kind of tangentially related to. This is things like gaming or social tokens and things that feel like whether they are in FTS or entities are used within them. Etc. How do you look at some of that other stuff around the gaming and and the sort of tokens. Are we going to live in a world where you almost have to become crypto educated or crypto initiated in order to participate?
Stuff which seems like today, you've got to understand crypto to some degree to be able to participate. Or is it something more like the internet where people just show up? They use a platform that you don't know what protocols or underlying Technologies are as long as they can interface with it. It's good and their and their user.
Yeah. I mean, actually I think the more that we can get away from the underlying complexity, the better from a global adoption point of view. Yeah. I mean, look at the internet is a great example right in the early days of the internet, you had to dial up with these modems and understand IP addresses and
and it was very clunky. But the more that people were just like, you know, I don't care about the internet. I don't care about technology, but I just want to send photos to my family. And then now, there are billions of people are using WhatsApp and all these things, right? So I think the same trend is going to happen in crypto. There's going to be probably a billion people in the world using crypto eventually, but a lot of them will not know anything about how it works underneath. They just they realized that this is the best place to get my financial needs or my gaming. The games are better.
Like the identity system is better. It has more privacy, you know, hey, the value of my assets kind of go up every or time instead of being inflated away. Right? Like these are the things they're going to care about, and they don't need to know what, the underlying technology actually is,
makes sense. Dow's seem to be something that people now are really waking up to. It seems like every day. I'm learning about some new doubt, somebody's creating. How do you view those? Is there something that coinbase will do there or anything that you're personally interested in?
Yeah, I think towels are really important.
UND Innovation. And it's also going to be a really big Trend. I mean, it already is, but I think it's going to be huge in the future. And so we're seeing all this really cool governance experimentation happening now, which I think is, by the way, if you zoom out long-term, you know, people are always talking about like what's what's a better form of democracy, or how can we improve this? And I think, you know, long long term. This is kind of influenced by people like biology stern of Austin and whatnot. But we're seeing people move away from the country or the state that they live in as their primary.
A source of identity and governance, and they're starting to think about these online communities as another thing that they really truly identify with. And I think that's where we're going to see the most important experimentation with new forms of governance. So, doubts are really important for that how all communities and Society could have to governance. But also companies, and it's really cool to see people moving more money into these things. So, one of the things we want to do at coinbase actually is help people make Dao's more easily, right? I want it.
An Ideal World. Anybody should be able without understanding how to create smart contracts. What not come into a product, that's really simple. Publish a dow invite people to it. Funds get allocated. Maybe there's like standard templates of things that you might want to put in there like payroll or different voting systems and then you can actually go out and raise money. And, you know, Market it to people on coinbase and the rest of the crypto Community. This would be an incredible achievement I think because it'll just make
And happen faster in the world today the way that companies get formed where, you know, first of all, you have to kind of live in a city that has Angel Investors, which there aren't that many of them. So it's already sort of discriminatory by default. Then you have to interface with a bunch of lawyers which can be expensive. And then if you have to go through this kind of archaic process to eventually go public and coinbase went through, it. Right? Like I would much rather be in a world where any any startup anywhere in the world.
We can go through the formation docks, kind of like stripe Atlas or you know, the new Delaware c-corporation. It's much simpler. It's faster. You can raise money in a more, egalitarian Fairway and eventually even go public all on the blockchain. This is where I think we're going and that's going to be a huge unlock for for Innovation and dowser going to be. I think like the new Delaware seek or there's even some things about it that are, you know, not like the old system which is that, you know, I think you could have collaboration of people.
Who have never met each other? They don't even know who each other are. Right, that's a pretty powerful idea. But the wisdom of the crowds could kind of allocate funds more efficiently. So anyway, I'm very bullish on Dows. I think that when you make him like everything in crypto much, much easier to use and that's, that's generally where I think coinbase can add value. Like we're not the company who is going to put out the next big. Like we probably would have never invented Dao's, but what we can do, is make Dallas trusted and easier to use. That's kind of the value that we're typically able to bring to the ecosystem and then help get the next hundred.
Nor billion people, hopefully eventually to use these things because they are now simpler to use and trusted. One thing that really
strikes me in talking to you is you thought very deeply about some of the what most people would consider corners of this industry. If you weren't running coinbase and you are a Founder starting all over again. Is there like one area where you say? Hey like this is where I would go explore first or this would be like the idea that I think would be really interesting to pursue or is it all just hey, we're just going to do it at coinbase. And so you have really thought about that type of stuff.
Well, I mean, corn base is definitely a multi-product company. So luckily I feel very lucky actually have the ability to create new products from with inquiry-based and we do that with our 70/20/10, resource allocation. So, 70% of our resources, go to the core stuff. We're doing. It makes most of our Revenue 20% or on these adjacent bets, and then 10% our Venture bets. So, we actually built this really cool system. Internally. I'll answer the core of your question in a second, but they, you know, we basically have a system now internally where any employer group of employees can pitch panel of people internally.
Twice a year. And if you get one of the people on the panel, it's very important. It's by the way, it's one of the people doesn't have to be unanimous. Yes. You don't need to get a yes, from me, even then you can get your 10% project funded and we've done a number of those. Now, some of them you'll see launching in by the end of this year. But that's our way to kind of build startups within a bigger company and continue to be Innovative. Now, I'm fine with lots of different models, right? So people can stay in coinbase and build these and keep their
On base equity and compensation. They could also leave going based, by the way. I'm supportive of that to we have coinbase Ventures where we've invested in a number of employees who left or even external Founders. So anyway, back to your question about what would I create today in the crypto space? Maybe if I were to do another one, I mean the thing is there's so many cool opportunities. I think coming out in crypto. It's theirs. I think decentralized identity is really interesting. I think there's a bunch of virtual like somebody should go make an offer.
Achilles app with a virtual world where you can have n FTS and digital Goods, right? I think that there's a lot of interesting stuff happening with Dows. So, you know just going and staying on the Forefront of that. Like what's the next evolution of how these these Financial Primitives in these dowels are going to start to interact with each other. I think, you know, there's a lot of building blocks like even just like payroll, like getting payroll working in crypto, is a really big one. And if T's could be even easier for,
The average Creator to use. So there's so many opportunities. It's more about like what people are actually passionate about. I take the thing. If you're passionate about crypto, then, what else are you passionate about? If it's art and crypto, maybe like the intersection of that is nft is if its identity and crypto or governance and crypto, you can kind of find the intersection. And what's the thing that is most applicable to you as a Founder,
you mentioned coinbase Ventures and you all have done quite a bit of investing from what I've seen on various cap tables or deals that I've done. You guys have invested in a lot.
Great companies. Is there ever a concern that coinbase Ventures? It's almost like too good of an investor and the equity of those Holdings ends up growing to be to material for coinbase or shareholder Equity or anything like that. I can think of it almost like the Alibaba problem with with Yahoo. And how do you think through Ventures versus the core
business? So, let's see in some ways. Like, you know, it would be great, right? If these things I think that I think that portfolio of Investments we've made with Colombian,
Sure, it's going to be huge. It's going to be enormous. Now. I'd be a little bit sad. If it ends up, if we end up like, Yahoo. I'd much rather we end up like Google or something. Right? And so, actually, that's one of the big things that I talked to the team about internally is if you're, if, you know, we were kind of one of the early crypto companies and we got big, but that doesn't mean that we should be complacent or rest on our Laurels because, you know, Yahoo had like, over 90% market share. And Google, is this tiny startup. They could have bought it for, you know, probably tens of millions of dollars something.
And they completely got beat by them. So I'm always sort of like paranoid about, what is the next thing that we're that's getting big and crypto that we're going to miss out on, I think for us coinbase to be relevant. We have to continually reinvent ourselves. We have to continually disrupt ourselves. We need to have enough. We need to strike this balance between. Okay. Yes, there are interfacing with all these regulators and it sounds scary and we're going to clean up the industry, make more clarity and all that. But at the same time, let's try new things, you know, we can never sort of have risk aversion.
Version creep in to the company. And so we always say one of our one of our values that coinbase is about repeatable Innovation. That's part of why we do this 10% resource allocation, and we have people come in and pitch and you know, even if I don't think it's a good idea but somebody on the panel Champions it it'll get funded. This is all very deliberately designed for us to hopefully continue to be relevant and have a portfolio of products that okay, maybe some of them don't work, but others are just getting huge overtime. That's I think how we're going to become.
Very relevant and big company over many decades and hopefully, you know many generations not just like a flash in the pan that has a big meteoric rise and then becomes irrelevant
when you're hitting on here. A lot of is kind of the cultural element. So about a year ago, you put out a post, I can remember as you personally really company but there's a post put out about a coin basis, a mission driven company and there was a whole bunch of stuff addressing, you know, kind of social issues and how the company was going to handle that moving forward, but it also, I think reinforce just the
Iraq coinbase in general. Since that point, what have you learned? Are there. Positive negative. Takeaways, like how has that kind of evolved over time? Knowing that one, we've gone through an economic crisis, has been a Public Health crisis. There's been a shift to remote work. Like there's so much going on in the world. How has the culture evolved, and how do you think of it today? Yeah. So that was a very
important moment for me as a founder and just in our culture at coinbase. Because that's a great example of how, you know, a company can as it gets bigger, it can
Actually lose alignment. So all kinds of problems can happen in big companies, right? Like the benefit of big companies, you get more and more people, so you can accomplish more and more things multiple products. Hopefully, increase the pace pace of innovation, but the challenge is that sometimes you get misalignment, you get miscommunication, you know, you think that as a leader, you're being clear and setting us a Direction, but it turns out different people interpreted in different ways, whatnot. So, this is a little bit of what happened last year, which led to that, which led to me writing that post, which was that Ike recently was
Getting the sense internally that we were having division. We were not aligned about what we should actually be focused on. And it was in the middle of this kind of cultural Zeitgeist about all the social issues that were happening at that time, which were incredibly important things in the world, but the problem where I realized we were not aligned, was that there was a small but quite vocal group of people inside the company. This was not unique to coin Beds. By the way, every single CEO I talked to in Tech was really struggling with this same problem at the same.
At that time and probably still to this day and that increasingly vocal. But small group within the company was saying, hey, I actually think that our mission means something different. We should probably change our priorities and spend more of our time. Internally debating these issues but also taking action as a company to try to solve these issues, you know, the things that that time were around, you know, social justice and police brutality, all kinds of things. So, what I realized was that
This was this was going to be a big problem for us because I had failed as a leader to set a clear Direction and made it made the actual mission of the company. Clear and it was resulting in things like employees walking out which had never happened at coinbase over, particularly contentious issues, which I felt were kind of unrelated to what we're doing as a company. So that was a, that was a moment where I finally said, you know what, I've got to get people back aligns towards the right, the right Mission and that's going to be a bit of a painful process because I know not everybody agrees and that's part of being
A leader is you have to kind of be willing to make a decision sometimes even if you know, some people aren't going to like it. So I put out that mission focused blog posts. You know, what? I was at the All Hands kind of sharing it before the post was made externally. It was really tough. I was like almost crying actually while going through it because I knew people are going to be so frustrated but with it and upset, but ultimately we decided to make a exit package available to any employee who kind of wasn't on board with this new direction. That was my way of saying hey, you know, we didn't
Set clear expectations. If this is where you feel like we should be focusing our time. And so let's let's make it a win-win. Let's have everybody end up in a good place about 5% of the company. Ended up taking that exit package which, you know, ultimately, it was sad to lose colleagues, but It ultimately was it was a really good thing for coinbase because now the company feels much more aligned, we don't spend our days and the office sort of debating all of the problems of the world and getting into controversial stuff. If it's not related to our mission, which is creating more economic freedom.
When using crypto currency to do that. So, anyway, I would actually recommend it to any kind of founder out there, or company. That's, that's struggling with this. I don't want to claim that it's the right approach for every company, every founder and CEO has to kind of choose what kind of culture they want to create. But if, if it's not working for for you internally, I do it think, creating a mission focused company. That's much more specific about. There's one big problem that we're trying to solve and we're going to be focused on that. We're even going to be political about that, but we're not going to get engaged in everything else, because it just creates distraction and
Kind of anger division internally. I would totally recommend it as an
approach kind of tangentially related to. This is this idea of remote work and not having a headquarters under that. You guys also publicly stated. You are a remote only company or remote first company and you no longer have a dedicated headquarters, talk a little bit about how, you know, kind of being a mission-driven business but also thinking about how you work seems to have been kind of top of mind as well over the last 18 months or so.
Yeah.
So, being remote first for us is another important step that we did. So, remote first means it's not that a hundred percent of people are remote. We still have offices and people can go into those offices if they want. But everybody is required to operate. Even if they're in the office as if you know in a way that's welcoming to people who are in a remote environment. The reason that we did that was that basically I felt like during covid. We tried it. It worked really well. It, in fact, it on it unlocked a couple of really important benefits. It had a few drawbacks, but I thought
Thought that the benefits far. Outweigh the drawbacks. So, the benefits were that. Number one are hiring pipeline, got much better. And so, the pre going going, wrote. First. One of the biggest reasons people left coinbase or did not join cream-based, was due to location. It was commute commute issues or they didn't want to relocate to be within commuting distance of one of our offices. So, think about that. Like what percentage of people in the world where within commuting distance, one of our offices, it was probably less than one percent of the people in the world.
We literally hundred X the top of the funnel of potential candidates that we could hire from. Right. So that alone is just a huge thing to getting top talent in the right seats is kind of one of the core things that has made coinbase successful. And I think it will continue to be in the future. Put on top of that. There's a lot of important benefits to employees if in that environment, so if you want to spend more time with your kids if you want to travel parts of the year and live in different locations, you know, these are all incredible benefits that I think. Frankly any company who doesn't start to offer these in the tech space.
Tastes like, you know, manufacturing and Retail and stuff. You have to be in one location, but for companies that don't have to do it. I think they're eventually going to lose their best people to remote first companies because it's just such a huge employee part. Now, there are some drawbacks right to be totally fair. So one of the drawbacks is that it's not as fun. You don't feel this like social camaraderie, that happens as much when you get into an office. And there's kind of fun moments that happen and the lunch table and the water cooler and all that. And there's Serendipity. There's creativity, their Sparks of innovation. Sometimes that happen.
But the way that we solve that is that actually once a quarter, at least, once a quarter people at coinbase are still going to get together with somebody in person is especially once we get more of a covid stuff. Figured out whether that's your team or it's just a bunch of cross-functional people who all happen to live in that City where you're in or various things like that. So we're going to get people together at least once a quarter. And I think that's our way to mitigate the drawbacks of it. So the last part you mentioned was around coinbase and its headquarters in San Francisco. So yeah, we made a conscious effort actually to say
So we don't have a headquarters anymore. I think this that's actually pretty important in a remote first environment because if you do have one building where the CEO or the executive team is kind of going into that office every day. As I quote, quote headquarters, it sets the wrong tone from the top because basically anybody who wants to be close into the executive team or whatever is going to start to go into that office to. And so it starts to make like a de facto in office benefit. And so I wanted to kind of lead, by example, and not going to any eye.
I don't go into any one particular Point base office. If I happen to be in a city somewhere. I'll step in there and say hi to people. But as a general rule, I'm not going into any one location. We actually very quickly after covid, just naturally, without even trying this. Not a single one of our executive team was living in San Francisco. And so we said, you know what? And by the way, you know, San Francisco had its own challenges at that time. I mean, there was a bunch of policies. It, frankly. We didn't feel very welcomed in San Francisco at times like the government. There was just kind of a little bit hostile towards tech companies.
So there's a very weird cultural thing happening in San Francisco where you know, it has the heart of it is this amazing idea, which is people who are optimistic about the future and able to build it which is what attracted me to San Francisco and why I still love it. There's a very frustrating and challenging thing happening where there's a there's a negativity towards that within some of the the population there. And there's like kind of like very punitive taxes which make it like much more expensive sometimes like twenty thousand dollars a year more for us to hire an employee in San Francisco, and all these things, which make no sense.
So we felt like look if we're not wanted here. We're going to be a decentralized company. Anyway, let's move the head. Let's just say, we have no headquarters. It's more in line with us embracing decentralization as a crypto company anyway, and it's been working really well for us as well.
So the last question I have for you and I don't even know how you would evaluate this. But if you were thinking of starting coinbase today, would you do it as a centralized or as a decentralized type effort, right?
Assuming at some point. This is kind of come up, whether it's due to regulatory stuff, whether it's due to remote work or whatever. But how do you evaluate like centralization first decentralization around? Coinbase itself and maybe even like, could you decentralize the company in the future? How do you think about all that?
Yeah. That's a funny question if I was creating today, I mean, so I would definitely go remote. First, I would definitely, I think I would lean more into somewhat decentralization aspects in the sense that like
I could probably just put a lot of our documentation we have internally, I just make it all public and just do it out in the open. I think it's like, good marketing. It's good transparency. We might even be like higher pseudonymous people. You know, what? I do it as a Dau. So I think the doubt, the doubt tools need to still get a little bit. Refined in the sense that I think you should have a dowel is probably like the governing body of these organizations, but in local countries where you operate, you may actually still need a c-corp that's like controlled by the Dow. There's a company.
Research Hub which I'm helping get off the ground and it's it's creating an online community like GitHub for science. It's trying to help accelerate science and make it more like open source software. And with that structure, we actually did go and create a dow, and a c-corp. And it's been like a very interesting process for me to figure out what that the future of the corporation is going to look like in that world. And so I'm sort of beta testing it. They're trying to iron out a lot of the details but super frustrating is like, there's no well-paved road. So you have to spend more with the lawyers.
It's and they don't they can't give you any kind of clear, answer the like, well, no one's done it before so try this. It seems like a reasonable thing and we'll see how it goes. So I think my hope is that by learning from some of those experiments like with research Hub. We can then go and productize this at coinbase and make it easy for anybody to create that future type of entity in just like a, you know, simple interface. You don't have to spend tens of thousand dollars. Tens of thousands of dollars with lawyers, but I yeah, that's the direction I would head for sure. If I were to creating a company today.
It is absolutely fascinating, to think, about how quickly, all this is moved. Since you started coinbase to where we are today, you know, everything from nation states, adopting Bitcoin, to talking about, you know, tangible things around dowels and then FTS and all of that. And then obviously in the next, you know, five ten years, we pretty incredible, see, everything else that gets created. Where can we send people? If they're interested in working at coinbase? Following you on the internet or just kind of learning more about what you and the rest of the team are
doing? Yeah. Well core base is a great place to start a crypto career. If you're trying to learn more about crypto.
Do you want to eventually even want to start a company? I think we're good place for that. You can check out coinbase.com slash careers. You can follow us on on Twitter, obviously at coinbase or myself at Brian underscore Armstrong. So thanks for ya following us along and hopefully we can all keep building the crypto economy together.
Absolutely. We'll listen. Thank you so much for taking the time to do this. I know you got a million things going on. Hopefully, everyone enjoyed this and we'll have to do it again in the future.
Yeah. That was great. Thanks for the questions in the interview. Those cool.
