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I will be honest with you. I’m still not sure if cryptocurrencies like Bitcoin are useful or not. But they’re a big business and they’re having their most critical moment so far.
Coinbase, which helps people buy and sell cryptocurrencies, went public on Wednesday for the first time. Coinbase is like a bank, but not a bank, and it was built to exchange money that exists only in the form of lines of computer code. And on Thursday, the non-monetary bank was valued at more than $ 85 billion – close to General Motors.
My colleague Erin Griffith told me that Coinbase’s stock market launch both validated cryptocurrencies and showed how far they had to go in order to gain the foresight of financial system improvement. Global. Investing in cryptocurrencies is not just for true believers either. That is (relatively) mainstream, like investing in stocks or gold, both a success and not exactly what the fixed cryptocurrency in mind.
Shira: Let’s start with the basics. What is Coinbase? And how does it make money?
Erin: It is a cryptocurrency exchange, a place for people and companies to buy, sell and trade various cryptocurrencies including Bitcoin. Coinbase handles the entire process, similar to how Robinhood or Schwab handles everyone’s stock transactions. And then Coinbase keeps your cryptocurrency in a digital wallet so you don’t need to think about the technical complexity of storing and using cryptocurrencies.
Coinbase makes money primarily by charging transaction fees, just like banks. Unlike many startups of similar size and size, Coinbase is profitable.
Let’s put the case as to why Coinbase is so important to people who don’t live and use Bitcoin.
Coinbase is a clear signal that cryptocurrency is becoming a huge business and an important investment asset – albeit risky and volatile. And Coinbase is a way for those who may be curious about cryptocurrencies, but cannot take the risk of buying them in person, enter the market.
Coinbase listing its shares on a US stock exchange is a huge moment of validation for cryptocurrencies, even if you don’t believe in the big idea behind them.
What’s the big idea?
The early vision of cryptocurrencies was the ideal, perhaps even anarchic, idea of everyone being their own sovereign bank. Believers have envisioned cryptocurrencies as the future of money without the need for centralized regulators like banks and the basis of a better, fairer global financial system. .
That hasn’t really happened yet, at least not yet. The prices of currencies fluctuate to the point where it is impractical to use them to buy a cup of coffee or almost anything. Instead, cryptocurrencies are now primarily a means of speculation and financial transactions.
Let’s say the cryptocurrency never meets that ideal, but remains something people buy in the hope it will increase in price – just like classic cars. Will it be a victory or a failure?
That’s a great question. There is no doubt that Coinbase’s success so far has been a win for those who have been a crypto advocate for years. Cryptocurrencies are a bit like the cannabis industry. Some see it just as a business opportunity, and others see it as part of its mission to legalize cannabis and improve the world.
If the principle behind cryptocurrencies is to create a new global financial system, then crypto believers see Coinbase as its first building block.
Before we go …
Even concrete needs computer chips: My colleague Don Clark has written about the lesser-noticed business corners affected by a shortage of computer chips globally, including a company that sells temperature sensors placed in a concrete pour. at construction sites. “Hell on earth now,” another computer chip buyer told Don.
A glimpse of the terrifying corners of the Internet: Bloomberg News wrote about the 23-year-old software programmer who helps keep fringe sites like 8kun active when most internet service providers stay away from them.
Jeff Bezos’ final words as CEO (I think?): The Amazon CEO’s annual letter to shareholders is widely read in Silicon Valley and beyond. During his last time as CEO, Bezos was behind the company’s contributions to customers, other businesses and employees – even as he said that Amazon needed to do more to be “Home Recruiting the Earth’s Best and the Safest Workplace on Earth ”.
I introduced Rico to the Brazilian hedgehog in the first issue of On Tech. Rico recently celebrated his fifth birthday with a “cake” of favorites including fruit and peanut butter cream tarts.
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