In the final episode of the week on the "20 minutes VC," host Harry Stebbings interviews Brian Armstrong, the founder and CEO of Coinbase, a leading cryptocurrency exchange platform. Armstrong shares his journey from software engineering at Airbnb to embracing the potential of Bitcoin after reading Satoshi Nakamoto's research paper, despite initial skepticism from peers. He emphasizes the importance of Y Combinator's support in boosting his confidence to start Coinbase. The conversation delves into the technical and cultural differences between Bitcoin and Ethereum, highlighting Ethereum's scalability, Turing-complete language, and the distinct ethos of its team. Armstrong also discusses the rise of ICOs (Initial Coin Offerings), their potential to disrupt traditional venture capital funding, and the challenges of scaling and governance in the cryptocurrency space. He envisions a future where Coinbase offers a range of products to support an open financial system, transforming economic participation globally.
We are back on the 20 minutes VC with our final episode this week with me, Harry Stebbings and I really want to hear your thoughts on future guests you'd like to see on the show. So to send those to me, simply add me on Snap at htebings with two B's. It'd be awesome to see you there.
This quote is Harry Stebbings introducing the podcast episode and inviting listeners to suggest future guests via his Snapchat.
Brian is the founder and CEO at Coinbase, the startup that provides the world's most popular way to buy and sell bitcoin, Ethereum and litecoin.
Harry Stebbings introduces Brian Armstrong, highlighting his role at Coinbase and the company's significance in the cryptocurrency market.
Was a software engineer at Airbnb and before that founded his own startup, universitytutor.com.
Harry Stebbings provides a brief background on Brian Armstrong's career before Coinbase, mentioning his previous entrepreneurial effort and position at Airbnb.
WePay helps online platforms increase revenue through integrated payments processing, constant contact, equid and GoFundMe use WePay.
Harry Stebbings talks about WePay's services and how it benefits online platforms, emphasizing its integrated payment solutions.
Pipedrive is the sales CRM and pipeline management software to use, with the primary view being the pipeline, a clear visual interface that prompts you to take action, remain organized, and stay in control of a complex sales process.
Harry Stebbings discusses the utility of Pipedrive for sales professionals and dealmakers, praising its visual interface and customizability.
I saw on Hacker News one day the bitcoin research paper had come out. This was the Satoshi Nakamoto research paper, and I just happened to read it while I was home for Christmas with my family.
Brian Armstrong describes his first encounter with the Bitcoin research paper, which sparked his interest in the cryptocurrency.
The thing that actually gave me the confidence to go start a company was actually applying to y combinator.
Brian Armstrong credits Y Combinator's investment as the pivotal moment that gave him the confidence to pursue his startup in the cryptocurrency space.
There's really three things to know about ethereum versus bitcoin. The first is there's a difference in scalability, so ethereum is more scalable.
Brian Armstrong outlines one of the key differences between Ethereum and Bitcoin, focusing on Ethereum's scalability.
The second is that it has a Turing complete language behind it, and I can explain what that means. Essentially, you can write more complex software.
He highlights the technical capabilities of Ethereum's programming language, which allows for the creation of complex software.
The third thing is that there's a different team behind it.
Brian Armstrong points out that the teams behind Bitcoin and Ethereum are different, affecting their development and focus areas.
"I want there to be a global system for money, an open financial system, if you will, sort of like a native currency of the Internet."
This quote highlights Brian Armstrong's vision for digital currency to serve as a universal monetary system, paralleling the global nature of the Internet.
"Ethereum has a full programming language that can be published to the blockchain."
The quote emphasizes Ethereum's advanced capabilities, which enable developers to create a variety of applications and smart contracts.
"You're going to build a body of knowledge around it and the professionalism will develop around it."
Brian Armstrong suggests that the development of smart contracts will mature through cumulative experience and expertise, akin to traditional legal professions.
"The bitcoin group, I would say they had a lot of people join early on that were kind of more ideologically motivated... the Ethereum community I would describe as more like technologists."
Brian Armstrong contrasts the ideological motivations of early Bitcoin adopters with the technologically driven culture of the Ethereum community.
"People are using the term ICO to mean an initial coin offering, and what that means is essentially creating a token on top of the Ethereum blockchain and selling it to try and raise money for your startup or project."
Brian Armstrong defines ICOs as a fundraising method for projects or startups using the Ethereum blockchain, highlighting the need for careful consideration of the term due to its legal implications.
"I think the long term trend for icos is very positive... I think in the short term we'll probably see a correction on it."
This quote reflects Brian Armstrong's optimism for the future of ICOs, tempered by the expectation of market corrections as the technology and regulatory environment matures.
"A lot of these people are... people who've recently become millionaires by investing in digital currency. So they have some degree of sophistication, and they're certainly not poor."
Brian Armstrong discusses the nature of ICO investors, suggesting that their experience with digital currency gains may afford them a certain level of sophistication, potentially impacting the regulatory landscape.
"Like I've been shocked just to see you might have 17,000 people all over the world in 1 minute will invest 30 or $50 million into one of these icos."
This quote highlights the speaker's surprise at the rapid and large-scale funding that ICOs can attract from a global investor base, which is a departure from the traditional, more localized approach to venture funding.
"I do think that is pretty disruptive for venture capital."
Brian Armstrong expresses his view that the rise of blockchain technology and the model of ICOs have the potential to significantly alter the traditional venture capital industry.
"I'm not sure that necessarily needs to be the case."
Brian Armstrong questions the current model of venture capital where money and advice are bundled together, suggesting that these could be provided separately in the future.
"So I'm going to raise money from people who are my early fans, but I also want to bring in a team of advisors or board members to help me surround myself with people who fill in the skill sets that I don't have."
This quote outlines a potential future fundraising model where entrepreneurs raise funds from their early supporters and separately engage with advisors or board members for their expertise, rather than relying solely on venture capitalists for both capital and advice.
"Actually, the biggest challenge in scaling digital currencies right now is not a technical one. I think it's a political one or a governance one."
Brian Armstrong identifies governance issues as the primary obstacle to scaling Bitcoin, rather than technical limitations, indicating that the community's inability to reach consensus is a significant barrier.
"So I can give you a simple example. A lot of times people say, well, let's double the block size in bitcoin."
This quote provides a straightforward technical solution for scaling Bitcoin, which is to increase the block size, but acknowledges that it is not a permanent fix due to other implications for the network.
"I think there's nothing preventing digital currency from getting to visa level."
Brian Armstrong expresses optimism about the potential for digital currencies to scale to levels that meet or exceed traditional payment processors like Visa.
"Well, there's a few ideas come to mind. I mean, one book that I've really enjoyed has been. Is called. Surely you're joking, Mr. Feynman."
Brian Armstrong shares a personal book recommendation that he has found enjoyable and impactful.
"Which is better to be in a great marriage than to be single, but it's better to be single than to be in a bad marriage."
This quote relays advice given to single founders, drawing a parallel between business partnerships and marriages, emphasizing the importance of a compatible partnership.
"I'm not sure if he would consider me to be a mentee, but the first person that comes to mind is Paul Graham." "I talk with him every month and I've had a couple different executive coaches that have had a really big impact on my life."
The above quotes highlight the importance of mentorship in Brian's life, with Paul Graham being an indirect mentor through his writings, and Fred Wilson being a direct mentor through regular conversations. Executive coaches are also mentioned as significant influencers.
"Actually, Dan Romero put out a medium post just in the last few weeks with a bunch of digital currency reading." "There's another newsletter called Week in Ethereum which just summarizes what happened every week."
Brian recommends Dan Romero's Medium post and the 'Week in Ethereum' newsletter as valuable resources for staying informed about digital currency and blockchain technology.
"They always used to say, raise the bar with every hire." "Just creating a very mission driven company, reinforcing that at all hands meetings, communicating it through different channels, whether that was in writing or verbally."
Brian emphasizes the importance of a rigorous hiring process and the impact of a mission-driven culture, both of which he adopted from his experience at Airbnb and applied at Coinbase.
"Coinbase, our mission is to create an open financial system for the world." "That's what we're doing with Toshi, which is really kind of like a browser for the Ethereum network."
These quotes summarize Coinbase's mission and strategy, with a focus on creating user-friendly access to digital currencies and building the infrastructure for an open financial system.
"Yeah, thank you so much for having me. And your questions were excellent." "A phenomenal guest, and I'm so grateful to Brian for giving up the time today to appear on the show."
Brian appreciates the opportunity to be on the show, and Harry expresses his gratitude for Brian's participation and the support of others who made the episode possible. Harry also takes the opportunity to promote services that are beneficial to platform users and sales professionals.