He Turned One Email into a $100,000,200,074 Company

Have you heard of coinbase?

Here’s how an ex-airbnb engineer built a 100-billion-dollar marketplace. 

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Even in high school Brian Armstrong was trying to build businesses with his friends. Things like web design companies - but they had a new business idea every six months. He had the bug early.

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Right after graduating from Rice University in 2005, Armstrong tried to build a startup on his own, but then decided to go back to that 9-5 life to build his network.

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In December 2010 Armstrong first read about Bitcoin on hacker news. In July 2011, he built one of the first open-source Android apps for bitcoin as a side project. It got 15,000 installs in the first couple of weeks.

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Meanwhile, he was helping Airbnb build their fraud prevention systems. They were moving money between 190 countries, so he had a front row seat into global payment systems while spending nights and weekends building his prototype.

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At the time, buying and selling bitcoin was incredibly difficult, and because of the interest in his Bitcoin Android app, he knew he had an effective solution for the market if he could make it cloud based and user friendly. So, in March 2012 he applied to Y Combinator.

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Also, in March 2012 Armstrong used his BitBank prototype to send .05 BTC to investor Gary Tan. At the time, Bitcoin’s total market cap was 1 billion dollars. 

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And a few months later he began the YC startup incubator with his prototype, “Bitbank” which hadn’t been launched yet. On June 20th, 2012, the name was changed, and Coinbase was officially founded.

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After YC, Brian partnered up with a former Goldmach Sachs trader, and that’s when they officially launched the platform to buy, sell, and store bitcoin. It also had a wallet function for people to buy online using crypto just like any other currency. 

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Soon after, Gary Tan invested 300,000 dollars in Coinbase.Then in 2013, Coinbase raised 5 million dollars, the largest financing round yet for a bitcoin startup. Throughout 2014, they partnered with companies like Dell, PayPal and Expedia, and increased their customer base to one million users. 

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In 2015, they added a crypto exchange function. In 2018, Coinbase raised another 300 million dollars, exploding its valuation to 8 billion dollars. 

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In 2020, Coinbase generated over 1 billion dollars in revenue, which translated to 322 million in net profit. That’s the first time it made yearly profit since 2017.  And it generated $1.8 billion in revenue in Q1 of 2021 alone as crypto prices skyrocket. 

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Coinbase is currently one of the world’s most financially stable crypto trading systems with 200–400 million dollars coming in from institutional customers every week. They have 43 million users and 2.8 million people actively exchanging on the platform every month.

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Bitcoin’s market cap has gone from 1 billion dollars in 2012 to now 1 trillion dollars in May 2021.

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So Coinbase went public on April 14th, 2021, and its shares rose as high as 429 dollars, contributing to it’s now 100-billion-dollar valuation. And Gary Tan’s 300,000 check means his shares are now worth over 2.4 billion dollars. 

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Coinbase makes money by charging fees for its brokerage and exchange, and their mission is to create an open financial system for the world - they want to use crypto to bring economic freedom to people all around the globe.

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