Coinbase CEO Reviews Past Decade of Crypto

On Thursday (January 2), Brian Armstrong, Co-Founder and CEO of Coinbase, shared his thoughts on progress in the crypto space over the past decade.

Armstrong's blog post was "inspired" by Fred Wilson's "What Happened In The 2010s" (which looked at the tech space in general) blog post, which was published on 31 December 2019.

Here were the main takeaways:

  • Bitcoin did not fail: Despite critics frequently attacking Bitcoin on the basis that it had no intrinsic value, Bitcoin not only survived, but became "the top performing asset of the decade."
  • Coinbase did not fail: Although various centralized crypto exchanges did get hacked, Coinbase did not; furthermore, it turned into "a cash flow positive company with 800 employees."
  • Infighting: The competition between the various coins/tokens and debates over protocol changes within each group/camp did cause a lot of infighting, but the competition among competing groups also "drove a lot of innovation."
  • Bubbles: The crypto industry underwent five bubbles, each of which was followed by a crash, but each time we ended up with a price higher than the previous low. 
  • Decentralized Apps (DApps): So far, DApps have not really taken off, but in 2019, the decentralized finance (DeFi) ecosystem started to "really grow."
  • ICOs: The ICO boom was a huge win for crowdfunding ("8 out of the top 10 largest crowdfunding projects of all time are crypto related"), but also managed to grab the attention of the U.S. Securities and Exchange Commission (SEC), which issued its first ICO-related enforcement action in February of last year.  
  • Exchanges/brokerages: The real money in the crypto space was mostly made by exchanges and brokerage.
  • Stablecoins: The popularity of stablecoins encouraged many players to want to develop and issue their own stablecoins; this included major banks such as J.P. Morgan Chase and world governments such as the People's Republic of China.
  • Institutions: By the end of the decade, there were signs (such as the growing interest in institutional-grade crypto custody solutions) that institutions were "starting to come on board."  
  • Regulation: Armstrong believes that although "exchanges with fiat rails and custodial wallets will likely be regulated similar to traditional financial system, the more decentralized aspects of cryptocurrency will likely require a totally new regulatory framework (ideally with much less regulation overall that will lead to increased innovation)."