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What about this Internet thing?

Do you-- Do you know anything about that?

Sure.

Wha-- what the hell is that exactly?

Well, it's-- it's become a place

where people are publishing information,

-Right. -so everybody can have their own

home page, companies are there.

The latest information, it's wild what's going on.

You can send electronic mail to people.

Uh, it is the big new thing.

Yeah, but, you know, uh, it's easy to criticize

something you don't fully understand,

which is my position here.

Let's make that set, guys, pictures up.

We like that position.

Okay, guys, check your cellphones.

Make sure everybody's set on vibrate, please.

No open walkies on set.

Okay. Let's do last looks, please. Thank you.

Okay, let's get everybody in place

let's get ready to lock up the doors.

-Thank you. -Okay, cool.

Lock it up, gang. Here we go.

From the top. Reading from the dolly prompter.

Settle in, please. Let's roll sound and roll cameras.

Rolling.

All right. Here we go, guys.

That's four cameras. On your mark.

And action.

I'm Brian Armstrong, co-founder and CEO of Coinbase.

When Coinbase first got started,

we were a simple place for people to buy and sell Bitcoin.

The largest US cryptocurrency exchange

is about to be a publicly traded company

after years of scepticism from Wall Street about Bitcoin.

Coinbase is a company

to create more economic freedom for every--

Try that one again.

Get ready to go again.

Coinbase really helped to take cryptocurrency

from an internet hobby for coders

to a mainstream investment today.

I imagined a world where anybody with a smartphone

could have access to sound money and financial services,

where every payment could be as fast,

cheap and global as sending an email.

We're helping make this happen

by building the open financial system for the world.

That sounded like a question.

-For the world? -Still rolling.

-For the world! -Action.

By building the open financial system for the world.

We're cut.

We're flying.

I grew up in San Jose, California.

The early days of the dot-com boom

was happening in Silicon Valley.

Pretty cool ride, Bri.

The spacecraft has landed.

It was kind of a nerdy household.

Right there with the camera. Hi.

What is your name and how are you related to me?

I'm Dave Armstrong and I'm your dad.

My dad was an environmental engineer.

Okay, and you.

If you don't know now, it's too late.

My mom worked at IBM.

She was one of the early women computer programmers.

-Ow! -I was really shy as a kid,

and I felt like I have these good ideas,

but people don't listen to me.

Hello, everyone.

This is Brian's room.

My molecule poster and my iguana.

He was very interested in computers,

so we shopped around and tried to find a deal on a used one,

and we finally got him one

that was a pretty good working computer,

but it had a German keyboard.

And so we said, uh,

"Here's your computer, Brian.

Uh, it's up to you to figure out how to use it."

In high school, I built this website.

I remember, I went to sleep and I woke up in the morning

and I checked the stats

and, like, a thousand people looked at it

while I was sleeping.

It's like making a copy of myself,

talking to these thousand people all over the world.

That was, like, the coolest feeling ever.

And when I went to college,

my roommate and I were trying to think

about how to make some extra cash.

And I realized if we were to tutor high school students,

yeah, we could make great money.

We decided, let's make a web app.

It was called University Tutor.

I thought getting customers would be the hard part,

but the movement of the money was actually the hardest part.

Somebody from our bank called us one day

and they're like, "What are you guys doing?

Why is this money moving in these certain patterns?"

And, you know, um, "Are you aggregating customer funds?"

And I'm like, "I don't know what that means."

And it felt like I was actually being treated like a criminal.

I was disappointed, I couldn't ever get it to break out

and be a real success.

So, after I graduated college,

I ended up selling it.

I felt like, what do I want to do with my life?

I wanted to put myself out of my comfort zone.

So, I decided to move to Buenos Aires for a year.

"Where are you going to live?" "Well, I don't know.

There's this or something."

"I'll go see if they have a room there."

And I mean, it's just sort of really loose,

freer than I would have been.

One of the things I did notice living in Argentina

is that they have this really amazing culture

and people there are really proud,

but they also have this history

of really deep distrust of the government.

I got to see what an economy and a culture looked like

that had gone through, um, hyperinflation

and didn't have a well-run monetary system.

I remember these menus I saw at a restaurant.

Prices would update due to inflation frequently enough

that they had to put new stickers on top

instead of printing new menus.

One of the things that stuck with me was that

they didn't believe that the future could be better.

I remember feeling kind of frustrated about that.

It felt like, "Yeah, this is just kind of wrong."

Around Christmas time, 2010,

I came back to California and I was just home with my family

and I happened to come across the Bitcoin Whitepaper.

I think it was Christmas dinner, and we were saying,

"Come on down, we got dinner hot on the table."

And he was saying, "Just wait, just wait."

It was describing

something kind of like the Internet that was global

and decentralized that no company or country owned.

But instead of for moving information around

like the Internet, it was for moving value around.

I thought, "Oh my gosh, this could have

an enormous impact on the world."

I remember my mother at some point was like,

you know, "Come down and spend time with the family."

And I was like, "I'm reading this really important thing."

I don't know. He didn't come down and talk about it, though.

No, no, no. Because we wouldn't have understood it, if he did.

After Christmas, I got back on the plane.

I started flying back to Buenos Aires.

And I remember having this sinking feeling in my stomach.

"Oh, my gosh. Why am I leaving? I'm going the wrong direction."

The Bitcoin Whitepaper

was a major technological breakthrough.

It actually solved the number of major

computer science challenges,

and it allowed a new thing to exist in the world

that people found valuable.

Each time we figured out how to do a new thing on the Internet,

we fundamentally disrupted a major industry.

Email disrupted the postal office,

the World Wide Web disrupted all of media and advertising.

SSL allowed us to do commerce over the Internet.

One way to conceive of Bitcoin

is it's the technology that allows us

to move money over the Internet.

We've had lots of digital monies for a long time,

but they were regulated by banks

and other big large institutions like a national government.

Bitcoin is a cryptocurrency that takes a very different view

where it's decentralized

and not in the control of a central state.

Anyone can access and earn and receive, store and send bitcoin

without asking anyone for permission,

no matter where they are in the world.

All they need is internet access.

Bitcoin is providing a form of economic freedom

to everybody on Earth that we never had before.

Bitcoin is giving the power to the people

and making it more of an even playing field.

Doesn't matter their background or race or ethnicity.

Poor kids, black kids, Spanish kids, whoever,

you can participate and not have to be from Wall Street.

Modern money, as we know it

more or less started in the Depression, in the 1930s.

And yet it feels to us that the way money is now

is the way money has always been,

and that any other way to do money is ridiculous.

Money becomes money

when a lot of people believe that it is money, right?

Like if I make up Goldstein Bucks

and only I think it's money, it's not money.

But if 100 people think it's money,

then it's, like, kind of money for those hundred people.

If we all buy and sell stuff with it,

it's like money a little bit for us.

If a million people think it's money,

like, it's pretty money-ish now.

If 100 million people think it's money,

it is definitely money.

Bitcoin today still feels to many people like an uncertain,

slightly crazy, outside of the mainstream idea.

Back up ten years ago,

people would've thought you absolutely insane.

I came back from Argentina

and eventually, took a job at Airbnb,

but I kind of just couldn't stop thinking about Bitcoin.

I just had this very visceral sense

that the economy is becoming more global,

but many of the countries around the world

don't have stable financial systems, and it's deeply unfair.

lI really believed in the potential of Bitcoin

to create empowerment for people,

but it needs to be dramatically easier to use

and trusted and safe.

Using Bitcoin at that time was pretty difficult.

If you wanted to buy some, you had to send a wire

to one of the only Bitcoin exchanges

at that time called Mt. Gox, which was in Japan.

Frankly, it was not the most trustworthy place.

Authorities in Tokyo arrested

the former head of the Japan-based

Mt. Gox for allegedly falsifying financial records.

Several hundred million dollars were unaccounted for.

Also, by the way, if you actually acquire any bitcoin

and your hard drive crashed, your bitcoin would be gone.

So, I felt like the solution is a hosted Bitcoin wallet.

In the evenings and weekends,

I started tinkering with this prototype.

The big idea was make Bitcoin easier to use.

Just the concept of cryptocurrency, what's that--

And how are you going to make a living off of it?

I'm not sure we still understand that.

-Yeah.

The analogies that I had in my mind

were services like Gmail.

If you lost your phone or your computer,

your email wasn't all gone, it was in the cloud

and people were doing security and backups for you.

I remember I was talking to somebody,

"Yeah, I'm thinking about launching

a hosted Bitcoin wallet."

And this guy was like, "Oh, my gosh, that's a terrible idea."

I thought, maybe I'm crazy. You know, I was like,

"I think this is kind of cool and interesting,

but like, nobody else seems to think so."

Let me apply to Y Combinator and see what they say.

Y Combinator is a startup incubator,

meaning it funds a whole bunch of startups at once

and then tries to help them get rolling.

The minute I got accepted into Y Combinator,

I decided I was quitting my job at Airbnb

and starting this new company.

How is he going to survive? Does he have health care?

What's going to happen here?

Does he have enough to eat?

So, unfortunately, very few startups succeed.

We tend to think of the ones that do.

Google or PayPal,

these kind of iconic public companies.

This is why we created HUD Log.

Statistically, the chance of a startup going public

is less than a percent for sure.

I can't wait to tell you more.

Going public is for founders

what winning an Academy Award is for an actor.

All right, I need to pick some name for this thing.

I'd happen to be reading the Wikipedia entry

for the Bitcoin protocol, and I saw the word Coinbase in there.

Coinbase is okay.

I didn't love the name, but I'll change it later.

Coinbase is a hosted Bitcoin platform.

You can access your money from any device.

You don't have to worry about security and backups.

We'd love to have you bring it...

We'd love to have you help us

bring it to the rest of them. I need to...

For three months, you go through this Y Combinator boot camp

and then you go pitch at Demo Day

in front of all these investors.

Coinbase is doing for Bitcoin

what iTunes did to the MP3.

Brian's idea was not a hot deal

with investors after Demo Day.

This was not the one that every investor

in the Valley was talking about

and felt like they had to have a piece of.

It was really depressing.

After I graduated from Y Combinator,

there was a lot of things that I couldn't figure out how to do,

and I needed to find a co-founder.

I kind of grew up on the Internet,

played way too many video games.

My parents thought that was a total waste of time.

Fred was, certainly in high school,

into that in a pretty serious way.

To the point where, in my opinion,

he was kind of losing sleep

and we needed to tell him to kind of go to bed.

One time to try to get me to stop playing,

my mom shut off the circuit breaker for the whole house.

Needless to say, she was unsuccessful.

After college, I went to work at Goldman Sachs

as a foreign exchange trader.

I thought it was the closest I would get

to playing a video game for a real reputable job.

Goldman is an elite institution,

and the job that he got was well into the 1%.

When I got there, I learned

that this video game wasn't that much fun unfortunately.

I'd found Bitcoin on a blog one night and became obsessed.

It got to the point where I was trading Bitcoin

in the bathroom at work.

One day I see this post saying,

"I've created this demo app

that makes it really easy to use crypto

and I'm looking for somebody to work on it with."

Here I am thinking,

"Yeah, it kind of seems like cryptocurrency is small

and crazy and feels like a toy right now, but, um...

that seems like something I would really

want to spend my time working on."

My cell phone rings and it's Fred.

And Fred says,

"Dad, I think I'm going to go join this startup."

And I said, "Okay."

He decided to turn his back on lifetime financial security,

sell all his stuff,

go out to the West Coast for a highly risky venture.

The office was a glorified apartment.

It looked like a bachelor pad.

-I think I-- -It was an old building.

And as a matter of fact,

about a year or two after they were in there,

a piece of the building fell over-- fell off

and hit somebody in the head.

-I was-- It was serious, I-- -Inside the building?

Outside the building. I mean, it was an old, old building.

We spent all of our waking hours together.

Six to seven days a week.

Constantly thinking about what can we do to make this better.

It became clear that Fred had insane work ethic

and we had very complementary skill sets.

I didn't know for sure if it would work out,

but there was something special happening.

At some level, it almost didn't even feel like work

just because I think we were having so much fun

while we were doing it.

We both did a bunch of coding and engineering,

worked on the product,

and then we both did a lot of customer support late at night.

It was getting to a place where, like,

our whole day was answering support tickets

and we realized we need to start hiring.

Hmm, I re-- I mean, I remember

I came into their office

and, uh I thought I had a good chat with them.

I remember thinking, "This guy

is really high-potential."

I reached out to him and asked

if you would be willing to consider joining Coinbase.

I am just like,

"Unfortunately, I am kind of,

uh, busy with this thing,

but, you know, best of luck with your journey."

I was in Washington state working as a lumberjack,

but I was paying very close attention to what was happening

in the cryptocurrency landscape.

And I wanted to see this in the world.

So, I just emailed Jobs@Coinbase and said, "I'll do anything."

I knew I didn't have any concrete skills other than

I knew a lot about Bitcoin and I was ready to work hard.

The team felt like a family.

What's special about a startup, right,

is that everybody is sort of like "sick" with you

and share a vision for the future.

We felt at the time like

we're doing something incredible,

but people would sign up for the product

and they would never come back and use it.

So, business wasn't growing and we were on the verge

of running out of money and we did not have product market fit.

One of the key attributes of entrepreneurs is

being too stupid to know they're going to fail.

There's really very few startups

that make any sense at-- at the point of startup.

Otherwise that firm would already exist.

I called up some people who had signed up to use the app

and I was like, "What do you think?"

And they would say, "Well, I like the product,

but I don't really have any bitcoin,

so I didn't have anything to use it for."

So that kind of made me think, "Well,

if there was a button to buy bitcoin in the app,

so you had some, would you use that?"

And they were like, "Maybe, yeah."

We posted online that the feature was live.

We went to bed, the next day, bunch of people used it.

And the day after even more people used it.

And the day after even more.

It goes from pushing a boulder up a hill every day

to the boulders rolling downhill

and you're chasing it as fast as you can.

We were being inundated with customer support inquiries.

The website was periodically going offline.

We had all kinds of hackers trying to break into the site.

From 8:00 p.m. until 2:00 a.m. was Brian's uninterrupted moment

to actually build the website.

We developed this system where, interrupt me if it is a--

if it is some kind of emergency,

but we had to define emergency.

I would run up to him with a Post-it note

and I would write "red alert"

and hold it up for him while he was still working.

I think it was, like, the number of digits of money

we would lose if this wasn't fixed in the next hour.

Our bank was, like, calling us every day.

"We're probably gonna turn off your bank account

if you don't get some more money in your account."

And at that moment, we rushed out to raise the Series-A.

The Series-A is where a venture capital firm

will place a bold bet on the company, saying,

"Hey, we think this has a chance of being

a billion-dollar-plus company."

So, in late 2012, I got an email from Paul Graham.

It said, "Hey, Fred, we're ready to do the Series-A in Coinbase.

Can I introduce you to Brian and Fred?"

We were so burned out and sleep deprived,

we didn't really have a slide deck or anything.

And we basically said, "Here's our revenue graph.

We're using our working capital to fund this

and we're going to run out of money

in the next two weeks. Do you want to invest?"

In the super early days,

Crypto company founders were either scam artists

or they were almost like religious zealots.

I meet Brian and he explains to me,

"I'm a former security engineer at Airbnb.

I know how to secure crypto assets,

we'll comply with the regulations."

And he just seemed pragmatic.

All right. We're, uh, uncapping the champagne.

-We're just getting ready. -What are we celebrating?

We're celebrating, uh,

the fact that earlier this morning

we, uh, checked our bank account and it happened to have

five million more dollars in it than it did last night.

That is accurate.

-It didn't go. -What?

We briefly took a adjournment

from the monitors in the office to go up to the roof

and celebrate.

-You want some? -Yeah.

Kind of popped it and we kind of drank it,

mostly just spilled a lot of champagne everywhere.

-Cheers. -Cheers, boys.

But I remember it was maybe two minutes

and then it was like, "All right, we got shit to do now."

Today we're talking about Bitcoin

and we're talking to the founder and CEO of Coinbase.

Coinbase's Brian Armstrong.

Co-founder of Coinbase, Fred Ehrsam.

I'm really excited tonight to, um, share with you

a little bit about Coinbase.

Okay, what is Bitcoin?

What is Bitcoin?

A digital currency

without the need for a central bank.

-What is a Bitcoin? -Yes.

Same thing email has done for communication,

-Bitcoin is doing for money. -It's quicker.

It works everywhere in the world.

You don't buy bitcoin.

No, you can. There are currency traders online.

Yeah, one bitcoin is worth $3.

We literally have our parents try the product.

Does it look like a normal wallet?

It's on your phone.

So, instead of carrying it in your back pocket--

Yeah, let's see what's in your wallet.

It's kind of--

I'm told that the, uh, protocol was developed

by a anonymous programmer, Satoshi Nakamoto.

You don't think it was Al Gore, do you?

Bitcoin's big day.

The, uh, cryptocurrency's hit

the $1,000 value mark.

It was pretty remarkable.

The traffic on the site would grow tenfold

in a matter of a month or two.

We felt like all hands on deck just to keep everything running

and we had to scale really fast, we hired a ton of people.

We almost 3Xed in headcount.

You know, it's the launch of the first

US-based Bitcoin exchange.

I think we're now the largest exchange in the US by volume.

-High five. Nice. -Thank you.

And it's like nothing that I've ever experienced.

You feel like you're at the centre of the universe,

you know?

The price of bitcoin went through $11,000.

I could care less what bitcoin trades for,

how it trades, why it trades,

who trades it. If you're stupid to buy,

you'll pay the price for it one day.

Crypto is out there and it's not going away.

But the question is, can we take

the same technology behind Bitcoin

and can we use it for more than just money?

That's basically what Ethereum is.

When Ethereum first came out,

Fred came to me and he was like, "This actually is a big deal."

We should go beyond just being a Bitcoin company.

We have to add Ethereum.

Initially I was a little sceptical,

but I-- the more I looked into it,

the more I felt like he was right.

Our mission at Coinbase

is to create an open

financial system for the world.

Billions of people have smartphones,

but they don't have a bank account.

So, the cost of opening a bank account is zero.

Soon the world is only going to buy

and sell products using bitcoins.

Bitcoin has no unique value at all.

It doesn't produce anything. You can stare at it all day

and no little bitcoins come out or anything like that.

It's a delusion.

I fundamentally believe it is being used

primarily for illegal activities.

This is Silk Road.

It's an eBay for drugs that use Bitcoin

as the means of exchange.

One of the biggest Bitcoin exchanges called Mt. Gox,

based in Tokyo, went bust.

Calls into question the future of Bitcoin.

Mt. Gox got hacked and, like, Bitcoin crashed

and the media went away and things cooled off.

The numbers are pretty eye-watering

in terms of the scale of the drop that we are seeing.

Price of crypto have been trending down.

Our revenue is flat to down.

A lot of our competitors decided to pivot to do something else.

We were getting to a place where we felt like,

if this doesn't turn around soon,

we're going to have to do a lay-off.

Did anyone read that article about Bitcoin I sent you?

At the end of 2017, we started

to see another crypto rally.

Bitcoins are booming.

Bitcoin broke another record.

We are going through this period of growth

that is almost never seen.

This started as two people in an apartment

and now we're discussing global expansion.

-The Wild West. -It is.

-It really is, you're like-- -Yeah.

You're like a cowboy in the Wild West.

-Well, thanks, Brian. -Thanks, Fred.

Brian's a very sort of calm, reserved,

strategic, long-term thinker.

And Fred's-- kind of was like-- want to mix it up, you know,

constantly mixing it up.

And of course, that combo is what made things work.

But there was a lot of tension in the relationship.

The closest parallel

to having co-founders is a marital relationship.

You're spending a huge amount of time together.

Your economic futures are conjoined.

Uh, you have visions about where you're going,

where those visions, you're always going to be working.

They're never going to be perfectly aligned.

Brian and I met in August of 2013, and what he told me was,

"I'm looking for a coach

to take care of the co-founder relationship."

Fred and I had our first difficult conversation.

"Would you be willing to meet with us?"

I think co-founder relationships are

just like any other relationship.

They're all complicated

and you have to keep investing in them,

like going to the gym.

It's not like you just do it once and you're done.

Brian started sharing with me a bit about what was going on,

a conversation between them,

and a couple minutes into the session,

I looked at Fred and I said, "You don't want to be here."

And his response was, "No fucking way."

Pejoratively, I viewed it as armchair therapy.

This is for weak people.

I don't want my brain reprogrammed this way.

What Brian and Fred needed to work out

is at the end of the day,

one of you is CEO and one of you's not.

And that's a difficult situation for the non-CEO co-founder.

Fred always wanted to run the company

and it was never going to happen.

Brian was and is the CEO at Coinbase.

I think he's done a great job in that role,

but ultimately, I think that was a limiting factor for me.

So, over time, I got really excited about,

um, I'm removing that glass ceiling for myself

and starting something where,

uh, the sky was the limit personally.

Fred, he's kind of a natural leader

and he wasn't going to be the CEO of Coinbase.

I didn't want to step down as CEO,

and I was really sad to lose him

because Fred and I are kind of like brothers.

Brian's one of my closest friends in the world.

Of course, it's emotional,

but, um, I look back on that

and-- and think we handled it pretty well.

I do feel emotions.

I don't express them the same way as other people.

You know, I probably have Asperger's,

like, somewhere on the spectrum.

When I left Coinbase, I took some time off.

I thought it was really important

to explore all the different potential ideas

I could try and-- and venture into next.

On to Bitcoin now. The cryptocurrency kicked off

the New Year by tumbling.

It's down 50% from the record

set just about a month ago.

Bitcoin is going to collapse

because Bitcoin itself has no value.

It's gonna come caving in,

it's-- it's almost a guarantee.

Let me actually do the hard Q&A first.

Okay, that's fine.

I just want you to really nail this.

I want you to tell this audience

what the heck it's used for today.

Can you-- can you buy stuff?

Is it investment?

It seems quite volatile.

Please explain Bitcoin to us.

Well, that was a lot, so, uh,

I'll-- I'll try to start at the beginning.

Uh, cryptocurrency is just digital money

and that's the simplest way to understand it.

And people don't need to understand all the technology,

how it works underneath. They're buying crypto

because they wanna own a little piece of it

because they think it might go up in the future.

And really, there's just a ton of potential

about how it can evolve in the next ten years.

So, for that answer,

start with Bitcoin.

-Start pretty simply

-with Bitcoin. -Yeah.

Brian, these days when you talk about

cryptocurrencies to laymen,

how quickly do people's eyes glaze over?

It's kind of this mind-bending thing

when you first read about it, uh,

that takes people a little while to wrap their head around.

The short explanation I give to people,

I say, "This is digital money."

And instead of for moving information around

like the Internet, this is for moving value around.

So, what effect do the crypto scandals

have on what you're trying to do?

Whenever a new technology gets created,

it can be used for good or bad.

It's kind of the Wild West.

And so, um, that's been-- I feel like our role

is to be hopefully an adult in the room

and go proactively seek out, uh, regulators

and see how we can create, um, a more trusted environment.

So, you've been described as a Vulcan Swiss banker.

I haven't heard that one in a while.

I didn't quite know what that meant, uh, when I read it.

It's sort of inscrutable and,

you know, hard to get information out of.

But actually, I find you quite charming and open.

Is-- is this the-- the new Brian Armstrong?

Um...

Well, I was a software engineer, right?

I had never managed anybody.

And when you-- when you go make something and then suddenly it's

like, "Oh, shoot, I need to figure out how to be a CEO,"

right? I'm trying to find my voice as CEO.

But, you know,

I'm-- I'm hopefully becoming a little more comfortable

in my own skin and, um, I think- I think- we got along

-pretty well, Bill. -Yeah. Great to meet you.

And, uh, we'll carry on.

Part of me actually really doesn't like the idea

of being a public figure

because I feel like it's so risky.

People treat you weird, in weird ways

and, um, you know, you could slip up and say the wrong

thing and just be--

The angry mob will come after you.

I've been getting all this advice that's like,

"Well, crypto needs a face of the industry.

-Maybe you can be it." -Yeah!

And it's like, oh!

-The-- -It's-- I'm-- I'm like a relu

I'm, like, reluctantly trying it out,

we'll see how it goes.

To be a successful entrepreneur, it's very difficult

to not develop the skills of an extrovert.

They might be introverts, naturally,

but they figure out a way to be

very extroverted when it comes to their stakeholders.

They say, "The meek will inherit the earth."

They're not going to inherit the Nasdaq.

I remember seeing other CEOs

and I would always be so impressed.

I was like, "Man, they're so confident.

And that doesn't look anything like me."

While Fred was at the company,

a lot of the decisions were made.

Just Fred and I would get in a room,

hash out all the options,

choose the least bad one and move forward.

When he left, I was feeling a little overwhelmed

running the whole thing.

You can feel like

your identity is wrapped up in this thing,

and so if it fails, I've failed.

Now I'm questioning, it's like, "What does it even mean

for me to build something?

I'm not writing the code any more.

I haven't written a code in five years.

-Um-- -Do you enjoy it?

-Um-- -What do you love?

Forgetting everything that is today--

-Yeah. -that you-- that you've done

already in your life, what did you love doing?

I like just coming up with an idea for something

and-- and going and making it exist in the world.

We live in an extroverted world.

Most introverts feel like they don't fit in because of that.

Introverts now,

I think, are forming majority of tech leaders

in Silicon Valley

because, of course, most tech leaders are themselves

world class programmers.

And you don't become a world class programmer

unless you start young

and spend a fairly significant amount of time on the machine,

which means not interacting with other humans.

The elephant in the room is that you don't love to manage people,

and my prediction, therefore, is that you're not good at it.

Now I'd like you to go.

I want you to go Cro-Magnon,

whether you think you're Cro-Magnon or not.

-Wow. -Doesn't matter.

-Okay. -And the structure of "I blame"

-forces you to go Cro-Magnon. -Okay.

Matt, I-- I blame you for, um,

being so persistent on this

and not letting it un-- unfold naturally.

Every time we meet, we have to talk about

the same Goddamn issue.

And we've been over this a million times.

Just like, let me do my own thing.

Awesome. Who else can you blame?

Um, yeah, I blame myself, too,

for trying to hold onto this thing that I'm not great at

and, um, isn't bringing me-- it isn't raising my energy.

Are you willing to sort of see how these are crazy thoughts,

you blaming yourself and you blaming other people?

-Yeah. -That no one's a villain here.

-Yeah. -They're all just people that

are trying to do their best.

-Yeah. -Right on.

Awesome.

If I can share a thought with him,

like Brian, you're completely

fucking up your role as CEO,

and here's what I recommend you do.

And with almost any other person the-- their ego would go, "What?

How dare you say such a thing to me?

I am all powerful."

And with Brian, a big smile comes over on his face.

And the first thing he says is, "Thank you."

Because all he cares about is improving

and therefore feedback is the most precious gift

that he can receive.

Because of how fast we're growing,

the dynamics of trust within the company change really quickly.

Not too far before I joined,

it was like this level of assumed best

because we were, like, fewer than 150 people.

We all kind of know each other,

um, and pretty quickly we move far beyond that number

and there isn't the same sort of assumed trust between employees.

Yeah, I agree. At 150 people,

I can keep in my mind everything we're basically working on

and who everybody is and their name and what they do.

And past 150, it's like, that's even difficult to keep track of.

And occasionally, you'll pop into some meeting

to hear a status update,

and you're like, "That's happening

in the company I created?"

And, like, I can't believe it.

We're about 800 employees now

and we're learning how to operate at this larger scale.

You're never going to retain great talent

if you don't treat them with respect

and give them opportunities for growth.

And also top people, they don't want

to come work at companies

unless they have some mission or purpose

that's bigger than just making money.

Looking at the event object and just printing out

everything that it has...

It feels like I could be building the infrastructure

for the future of the financial industry.

Democratizing money is a huge deal.

So, as soon as I read the Bitcoin Whitepaper,

I was immediately like, "Yes, I have to do this."

I work on key storage, but it's all designed.

So, like, especially I can't take the key.

I mean, I like to think of myself

as, like, a blue-collar engineer.

I'm here less about, like, speculating on cryptos

and more because there's cool problems to work on.

A lot of the people in crypto

grew up during the 2008 financial crisis.

I grew up seeing my neighbourhoods

being decimated by foreclosures

and family members losing their houses and jobs.

So, I don't trust banks.

A bank is a testament to a belief system.

You trust that the bank will take care of your cash,

but you also trust

in the overall financial system that it represents.

And in so many towns and villages and cities,

the major buildings for a long time were banks and churches.

The idea of the bank was to be

the place that protected your money

and everything about the architecture

was intended to make you feel that your money was safe.

The banks made that impressive architecture in part

because that's the psychological game of, like,

making people feel like they can trust them.

And so, you know,

if you have the impressive columns and like,

"Oh, look, you know, this is like the Acropolis,

come on, like, this bank is totally going to last

2,000 years."

Let me just try to paint a picture of what

a bank would look like

if it were decentralized,

because a bank is a centralized thing.

They have your account balance,

their power over you and everyone

drives from their exclusive access

to those account balances.

But there's a different way

to organize those account balances

where each of, say, a thousand computers

has a copy of those account balances.

If they then agree on each change

because they see a digital signature

by the account owners,

they can move money from my account

and a majority of them agree

it will always be a consistent set of account balances.

So, it's a beautiful thing.

Part of the genius thing about Bitcoin is

you don't have to trust any one person.

There is no one person in charge.

Nobody runs Bitcoin.

Nobody is the boss of Bitcoin, right?

The code is what you're trusting.

So, it doesn't matter who Satoshi Nakamoto is,

it doesn't matter at all.

You don't have to trust Satoshi Nakamoto to use Bitcoin.

You just have to trust the code.

If you think about the history of financial scandals

recently, the London Whale trade, the mortgage crisis,

things like that,

all of those things at some level were examples of where

human-trusted parties are fallible

or-- or even potentially criminal.

But technology is technology.

It-- it isn't criminal. It has no motive.

It's not looking to make more money.

It just balances accounts.

That's why crypto ultimately is solving

a-- a thousand-year financial problem

and it will supply the trust that has been lacking.

Oh, my god. Donut Day.

We're here highlighting different features

and products to figure out ways

to actually use cryptocurrencies

to buy, like, day-to-day items such as donuts and burritos.

My personal favourites.

I'm so glad you guys are doing these dogfooding sessions.

The reason it's called a dogfooding event

is the idea that when you're trying to, like,

teach your dog new things, you give it treats.

You're basically incentivizing people

to try out this new product that we are going to launch tomorrow.

That's weird. I can't use my, um, USD coin as payment

to instantly buy.

-You have to do a conversion. -Yeah, conversion.

That's a fail.

Where's my-- Where's the consumer team?

Awaiting payments.

-Actually I sent-- Hmm. -So, it says pending?

Yeah, it should take a little bit of time,

this is from the consumer app.

This is one of the things I want to try to instrument this here

that's like end-to-end, what is our average time from a person,

like, pulling out their phone to seeing a green check box?

-Hi, Brian. -Hey, how's it going?

-I'm Marilyn. Just joined. -Good to meet you.

-Oh, nice. Which-- -Compliance.

Compliance? Welcome to the team.

-When Bitcoin came out it was-- -You got excited about it?

Oh, my God, this can change the world.

-Yeah. -And, uh, but, uh, yeah.

I-- I thought by now we would be mainstream.

-Yeah, well, this is-- -And, uh...

This is why I want to do stuff like this,

'cause for it to be mainstream,

we have to iron out all these little bugs.

All right, good stuff, guys.

I'll send in my feedback,

-but this is really good. -Thanks, Brian.

Yeah, cheers.

Even something as simple as the credit card,

when it was first created,

no one knew how to use it.

When you walk up to the store, do you give it with one hand?

Do you give it with two hands?

We had to learn how to do all of those things

and the same thing is true of crypto.

It doesn't feel native to a lot of people today.

In order to actually get to mainstream adoption,

we have to demystify this space.

All right, we're live on YouTube.

Hey, everyone. I'm here with Sam McIngvale.

We've had a lot of good questions from the community.

"What is the next level in, quote, 'trust'?

To become the most trusted is a low bar in digital currency."

I would push back a little bit on that

"Trust is a low bar in digital currency."

Having seen firsthand how much effort

goes into securing digital assets,

it's incredible. I mean, it is a level of investment

that, uh, is actually unparalleled

in any other asset class.

And then how do you build trust?

Trust, I mentioned this briefly earlier,

to me, it's track record.

Many banks have existed for well over a hundred years.

I mean, Wells Fargo's logo is people coming west,

you know, in the late 1800s.

Um, it's going to take some time for trust to really build.

Trust is like this reservoir.

You know, you can-- Every little action that you take,

you can put a little bit into the reservoir and bank it up.

And then, you know, if something--

You make a mistake, you can--

you might have to make a little withdrawal of that reservoir.

Um, so, I-- I'd like to think we're putting those in-- in

there so that if we ever do make a mistake, at some point,

we can come back and fix it and people will kind of give us

the benefit of the doubt.

People are mad.

Delete Coinbase is a movement that

just started recently after the acquisition

of Neutrino by Coinbase.

Neutrino is a, we'll say,

controversial blockchain analytics company.

Coinbase acquired Neutrino,

which was a group of people from Hacking Team,

which was an organization

that used to, like, work for dictators

to hunt down dissidents.

Hacking Team are responsible

for selling spyware to oppressive governments.

I have to talk to you about Hacking Team.

It's a really-- I know it's a tough one

-Yeah. -and you've taken a lot of,

I-- I think, well-deserved criticism for this one.

It's definitely a-- an area where we made a mistake.

We went on and did some diligence on the team,

but most of our diligence was around the technology itself.

What we failed to do was the diligence

that was kind of more around, um, our values

and our culture and-- and that kind of thing.

So, when we did make the acquisition,

we started to see a lot of noise online

about people saying, "Hey, do you know--

do you know who you just acquired?"

While we looked hard at the technology

and the security of the Neutrino products,

we did not properly evaluate everything

from the perspective of our mission

and our values of the crypto company.

We took some time to dig further into this

and together with the Neutrino team

have come to an agreement.

Those who previously worked at Hacking Team

will transition out of Coinbase.

If your due diligence fails on this,

how are people meant to trust you with the privacy

related to their purchase of bitcoin?

Yeah, there-- there's really no excuse I can give you.

So, all I can tell you is that we make mistakes as well.

And, um, a lot of building a company is like

trying to learn from the mistakes

and just get better over time.

If you don't have the ability to be beaned in the face

and then get up

and, you know, blood spewing everywhere,

get back to the plate and try and swing harder,

you know, you're not meant to be an entrepreneur.

All right, sorry I'm late.

It's easier to consume content

when it's in sort of a template, you know?

So, I was almost imagining

we could get this down to three slides.

I mean, I'm going to be nit-picky here,

but let's just kill all the text.

That'd be my default solution.

I think sometime next week you should see

a new version ship that'll be much more stable.

This is really cool, I'm glad that we're doing

such extensive user testing.

'Cause, like, if we're actually gonna get a hundred million

people or a billion people using this thing,

it's like-- it's got to be way simpler.

-Absolutely. -Yeah.

We're kind of caught in, I think, an inflection point

where we have to be eyes wide open about

what really is gonna resonate with people?

Well, and crypto is just not understood.

I think people tell themselves that's not for me.

A few things need to happen

for Bitcoin to become more mainstream.

We need to drive real world utility of Bitcoin because

um, today people are speculating on the eventual uses of it

and they're, like, this is going to be, you know,

the future of the entire Internet economy

or it's going to be useless.

And they-- they hav-- They oscillate

between irrational exuberance and despair.

Cryptocurrencies went on a wild ride today,

wiping out recent gains.

Bitcoin has now plummeted about 60%,

falling below $6,000,

and trading right around an eight-month low...

You have to understand.

Whenever crypto has, like, a cold moment,

you have to see my phone.

People are telling me their lives are over.

I'm like, "Guys, like, the key to crypto

is that every time we have a crash,

the ceiling raises a little more every time."

So, the first time Bitcoin crashes to a couple hundred

bucks, next time it crashes to a thousand.

Next time it crashes to five, next time it crashes to 20.

We've seen the volatility of Bitcoin decrease every year

for, like, the last five years

and it's now less volatile than some fiat currencies.

From my commerce experience,

this is how commerce kind of works, right?

It works in spikes.

If you have some users kind of coming

and then you do a big sell event and it spikes,

and then it settles in a next

-kind of higher baseline-- -Right.

and then it spikes again and it spikes again,

-Yeah. -Kind of like similar problem--

-It's like crypto. -Hopefully-- like crypto.

I'm trying to always hire people

who are better than me at each of their disciplines.

Our Chief Product Officer, Surojit, who just joined,

was at Google previously and then at Flipkart.

He helped both of those companies

grow to the next level.

When I joined Coinbase, people were like,

"Every few years we have this bull runs in crypto

and then everything breaks

because we just cannot estimate

how much demand will-- will come to our platform."

So, I thought, okay, let's create a project

to prepare for this bull run scenario

and we have to do it now when there is no bull run.

And what could be a good name for that project?

Pamplona is this city in Spain

where they have these bull runs every year

Project Pamplona.

The next bull run in crypto happens

and our systems start failing, the opposite happens.

You actually-- your baselines shifts downward.

That's a big risk for us.

There will be glitches

and you have to prepare for the glitches.

It's like how NASA, for example, sends that rover on Mars.

They will have, like, ways to fix those

failures or glitches remotely.

They have backup systems and so forth.

That's how we always think about it.

When I look back at early days of Google,

there was always this thinking

that we are building a company that comes once in a lifetime.

I see a similar ambition and possibilities

and I think that possibility exists not just for Coinbase,

for the entire crypto industry.

Of the 90% of people who have heard of cryptocurrency,

I'd say half have probably just heard it in passing

and know that it's some kind of new crazy

Internet money thing.

And then I think there is a small minority

who start to have a glimpse of the larger picture,

which is crypto will be the biggest force

in driving quality of life across the board.

Crypto has the highest likelihood of being helpful

in places where something is broken.

Governance, financial institutions, social bonds.

There are over two billion smartphones out there

and far fewer than that bank accounts.

And now with this technology,

you can effectively have a bank account on your phone.

And that may not be interesting to, you know,

an American or Western European,

but it's very interesting to someone living

under hyperinflation, like in Venezuela.

Their money is depreciating by about 50% a month.

The money is becoming worthless.

Fundamentally, we just wanna see if we can help people with this.

But one of ancillary goals or secondary goals

is can we actually spark crypto economies in the world?

Because that would probably bring more economic freedom.

Bitcoin is revolutionary human rights tool.

We're talking about this tremendous opportunity

for all these people to be their own bank.

They can actually control their own value,

their time and energy that they put into their wages.

They can custody into something that can't be taken from them.

Cryptocurrency is the first time you can have

electronic transaction that is censorship-resistant.

Violence sent a wave of anger...

In Belarus, we saw pro-democracy protests.

Police were detaining thousands of people.

We saw protesters cut off

from financial services in their country.

This non-profit was able to then raise

$3 million in Bitcoin

in order to support people

who'd lost their jobs in the Belarussian government

or elsewhere

because they were protesting for democracy.

What happened here has deeply unsettled Nigerians.

And in Nigeria, we saw protests against police violence

where people cut off from the banking system

were able to live and be supported because of Bitcoin,

despite the corruption in that country.

There's this balance between freedom

and state control and certainly,

uh, cryptocurrency in general and Bitcoin in particular

makes you think about that.

And I-- and I-- and I think the challenge to regulators

is the bar is moving pretty far pretty fast.

Because there's a lot of scepticism in government

about crypto in general.

Do you ever get that feeling that, you know what,

I just want to tell them how this actually works?

I want to educate them?

Um, well, it wouldn't surprise me if that happens

I-- 'cause I do think crypto is going to keep becoming

more and more relevant in the world.

It's actually funny, when I go to DC,

usually all the staffers

that are in the-- kind of the waiting room,

they all come up and they're like,

"Coinbase, like, I love Coinbase, I have the app."

And then I go meet with, like, the senator

or the congressman, and they're like, "Hmm,

what is this technology about?"

For the first time in his presidency,

President Trump publicly commented on crypto

and he doesn't like it.

Bitcoin, I-- I-- just seems like a scam.

Coinbase CEO Brian Armstrong

tweeted,

Crypto could be even more dangerous for consumers.

It helped terrorists and criminals

move money around the world.

Terrorism, financing a criminal activity of all kinds.

They present real risks through their use by the criminal

and terrorist organizations

trying to conceal their illicit activity.

I was a federal prosecutor for over a decade,

prosecuting organized crime

with the United States Department of Justice.

I felt a deep sense of doing what's right

and bringing people who have broken the law to justice.

The Mongols are in a fierce,

bloody feud with the Hells Angels.

I prosecuted a high profile murder

involving the Hells Angels and the Mongols

motorcycle gangs.

A case involving the Nuestra Familia prison gang.

I also prosecuted corrupt federal agents investigating

the Silk Road case.

Late 2012,

one of my bosses in the Justice Department

came to me and said,

"There's this new technology

that's being used criminally called Bitcoin.

We need to get to the bottom of this."

A new website sells illegal drugs to anyone

who is willing to pay.

Payment was in bitcoin.

I thought, "This sounds criminal."

And I started looking into it like, "What was Bitcoin?"

And that was when I had a really powerful aha-moment.

This is a technology like the Internet.

It's not inherently good or bad

and it's not a thing that can be prosecuted.

In fact, we were able to use crypto technology

to trace criminal activity.

The first time I met Brian, I actually remember it well.

The first impression

that some of us in the government had was that

people involved in crypto didn't believe in laws

or regulation at all.

Brian really stood in stark contrast to that.

The main transaction where we see funds

leaving the fraudster account,

this goes actually to a Coinbase customer.

Our job is to assist law enforcement

and other agencies around the world help catch bad guys.

The interesting thing about crypto is we can see everything.

If we were bank investigators,

it'd be like following every bill that has left a bank

and gone around the world.

We've got really good tools.

We've got a great relationship with law enforcement.

Our primary goal is we wanna be able to protect our customers.

My dad was an air force officer, we moved around a lot

and I was always kind of the new kid in class

and, um, I was bullied a little bit in school.

After I became bigger than most bullies,

then I was able to kind of help

some of the other kids that were being bullied.

It gave me some compassion for people

who have been victimized online.

It's our job to gain their trust

and know that we're doing the right thing

with this technology.

We are responsible for safeguarding

the financial well-being of, at this point,

30 million people around the world.

You can think about cybersecurity as chess.

You made a great opening move.

The attacker made their move, but what's next?

How far ahead are you thinking?

Getting security right

is foundationally critical for the future of cryptocurrency.

I think it's natural that it takes a while

for there to be infrastructure and an ecosystem of tools

built up around a foundation of new technology.

When electricity was invented,

it took a long time from the original spark

until we lived in an electrified world.

I think we're just going through a similar

arc of development with cryptocurrency.

The most important technologies in our lives today

are the ones that we don't see or think about.

We don't think about

the electrical system unless it's off.

We don't think about the very complicated system that we have

of bringing running water into our homes

unless something happens to it.

And crypto, I think, is headed in that direction

where yes, it will become embedded in essential

component of the infrastructure as essential

as water or plumbing, sewage,

electricity.

A shelter in place order

for some seven million people in the city by the bay.

They are expected to stay home, all in hopes, of course,

of stopping the spread of COVID-19.

Everybody is working as hard or harder than they have,

and in the face of this change,

feels less productive than they have.

This may be just me out of touch or something,

like, I mean, I don't have kids.

So, let's put that aside for a minute,

people with kids at home.

I mean, I feel like I'm just as productive at home

in-- in the last week, is...

What-- I mean--

But maybe I just-- I don't-- I just deal with stress well.

Like, I-- these things don't really faze me.

So, what's the deal? What am I missing here?

Someone was, like, literally in an alley today

because their partner needed their one living room

for the call and they don't have a bedroom.

I think it's also about the, like, emotional burden

that people have adjusting to, like,

what's going on in the world.

I mean, Brian, the way I would think about it,

if I can just be really candid is,

I suspect you have the single best setup

in the whole company, right?

Like, you're a single guy,

you have a high speed thing, you're well-prepared.

There's nobody in the room.

Like, I-- I-- I have a good setup. I'm good.

But, like, I think we need to think of ourselves

as in the vast minority and that everybody else is facing

a greater tax than we are.

Yeah, totally fair.

Once the COVID stuff is over,

some percentage of the company

is going to want to come back to the offices.

Other people seem to be more productive at home,

so we'll have to see what employees want to do

and where they feel most productive.

The virus is continuing to spread.

Growing fears the virus

could tip economies into recession.

6.6 million people filed for unemployment over the last week.

And the question now is

when are the jobs going to come back?

March of 2020,

much to my horror, I was watching the entire economy

shut down while Wall Street had the biggest rally in a decade.

The monetary response of the central banks

was to expand the money supply

and take the interest rates to zero.

The result of this was a quick

V-shaped recovery on Wall Street.

While we had a L-shaped recovery on Main Street.

You know, if you had a billion dollars invested in

Wall Street assets,

you were going to make 25% this year doing nothing.

And if you worked 25% harder on Main Street,

you were going to get nothing.

And it struck me that money was broken, right?

The economy was broken.

The problem that everybody faces,

every company, every individual,

is, "How do I store my money without having it dwindle away?"

So, what is this Bitcoin thing?

Went down that rabbit hole, I started researching

and I came to conclusion that Bitcoin represents

an instrument of economic empowerment.

It becomes a solution to billions of people's problems.

It becomes a solution to 100 million companies' problems,

and it becomes a solution

to every investor store of value dilemma.

Michael Saylor says Bitcoin is the safe bet

after moving his firm's cash to crypto.

His company, MicroStrategy,

has bought more than a billion dollars' worth.

What's critical for the human race is to keep upgrading

its technology,

and, uh, Bitcoin represents a material upgrade

to monetary technology.

Technology is the highest leverage way that I know

to have an impact on the world.

Other people, they'll tell me,

"You know, I really like mentoring kids

because they're going to have a much bigger impact

than some app." I get that.

But for my skill set or my mind, the way it works, I'm like,

"I want to go for scale."

We still have lots of hoops to jump through

with the FCC to make this work,

but everyone is working basically

from 8:00 a.m. 'til midnight daily.

Yeah, maybe we should just shut down the company for a week,

make everybody go take time off or something.

Whenever you're trying to go public,

it's always a lot of work.

Fall Fruits is our internal code name

for our process to go public.

We're having a lot of discussions

about all the mechanics of how it all works.

It's like drinking from the fire hose

and trying to not make any major mistakes.

So, my initial thought was like,

"Okay, maybe Coinbase should just go public

in a crypto native way and issue a crypto token

that is a security token, meaning it represents

a share in Coinbase," and list our token on our own exchange.

That's kind of where the future is going.

Someday it'll all go through a computer, Brian.

It's like-- it's on its way to-- to your utopia.

But it's not there yet.

Okay, I guess. Yeah.

So, now we're becoming a public company.

Do we wanna do a direct listing versus a traditional IPO?

I think the arguments for-- for direct listing better align

with the internal-external reputation we want to have.

You know, in-- in the direct listing, you're saying

we're going to let the market set the price.

We don't know what the price is.

Goldman doesn't know that-- these investors don't know.

Let's let the market set the price.

Anybody who wants to buy can buy. Um...

Direct listing feels more, quote-unquote, fair to me.

One of the things a lot of entrepreneurs

try to figure out is like, "Do I even want to be

a public company's CEO?"

Because there comes with its own set of challenges,

but I think it comes with a lot of positives.

It's a way to have big impact.

I have a very specific vision in mind

about what I want us to accomplish.

A lot of it comes to economic freedom.

That's what the mission of Coinbase is about.

It was a painful night in Minneapolis

and a day of difficult questions about the death of George Floyd.

According to new reports in a company town hall

an employee asked Brian Armstrong

a question about Black Lives Matter

and whether he supports that movement,

and he declined to answer that question.

And there was actually a small employee walkout as a result.

Part of the leadership EQ is knowing that there's certain

events that basically you have to say something.

There are people who are really affected by this

and they're reading into your actions.

I'm kind of like a believer

in Black Lives Matter, the movement, right?

But I don't-- I don't want employees to have an expectation

that a company should be a mouthpiece

for their own personal views.

So, it was our Q3 All Hands

where we're going over what's been going on.

And I think Brian was, like, pretty emotional

while presenting it, too.

When I look back on the walkout that happened,

I know a lot of you were disappointed in me as a leader

um, in terms of my lack of response in that moment or,

um, you know, just not leading in the way that you wanted.

And I get that and, um, you know

I'm not going to get everything perfect.

The mission is what we all came here to do,

it's kind of the thing that unites us.

You know, it wouldn't be fair to kind of jump into

another topic or another, um, cause in the world

that we didn't all come here to join.

I feel passionate that I want the workplace to be a refuge

from the division that's out there in the world.

Some feel like, um, you know, you have red and blue states.

There need to be red and blue companies

or something like that and I reject the extreme positions

on-- on either side there.

I feel like there's an opportunity to create a place

that's welcoming for all people.

Brian Armstrong wants his employees to know

that they are in the cryptocurrency business,

not the business of social activism.

Armstrong says Coinbase, quote, "Won't debate causes

or political candidates internally

and will not engage in things unrelated to their core

mission," offering about four to six months of severance

if they decide to quit because of that new policy.

So, when Brian made that statement, I was like,

"Oh, he's going to get crushed for this."

Brian Armstrong essentially said,

"You either shut up or get out."

That notion is actually anti-Bitcoin, right?

We talked about the democratization

of Bitcoin, right? It wasn't intended to create

a space where we censor people.

Brian Armstrong's memo basically said,

"We want to be mission-driven."

Clearly, the company is having an internal crisis.

People are still really connecting this back to BLM.

It has nothing to do with BLM specifically.

It's about an alignment in our culture

about where we're going to spend our time and energy.

What they are really caring about

and they want to know is that

does the exec team care about them as humans?

And we specifically expect this empathy from Brian.

I mean, hopefully we all do that with the--

with the people on our team doing--

just checking-- how are you doing, right?

That's what it means to, like, care about somebody.

There's a part of me, when I hear that,

I'm like, "That's not really what was happening here.

It's not just that."

People pin this on the spot about whether we were

going to make an external commitment

to this political movement.

Leadership is hard, and I think for Brian,

an innovator who wants to build, wants to focus,

but also, leaders have to create spaces

for people to talk about things

that happened outside of the company.

So, you have to have all of these considerations

that have nothing to do with the business,

but it's about the welfare of your workforce.

I do believe that people deserve to have their voice heard

and I would never make that decision that Brian did.

But my company, we're small shop.

When there's 15 people in a room

and few of us disagree, compared to 500, it's different.

But I understand why he did it

because there are too many variables,

like, in the world to-- to think

that you're going to be able to have

that kind of open dialogue in an office setting.

And things are going to be-- No, it's chaos, war.

It's going to be Twitter in your office.

When I was leaving, I do think I felt some

anger that his position is what made me want to leave.

But he did what he needed to shape his company

the way he saw best fit.

You said that companies shouldn't get involved

in these issues, can you explain?

You know, I think every company should really pick something big

that they want to try to solve in the world.

And for us, that's economic freedom.

And it's important to have everybody aligned

and rowing in the same direction, um,

to really go tackle something that big and ambitious.

I think if I were going to do it again today,

I probably would have acted sooner

and I would have made it even more clear.

Part of the reason it got to the place it did

was that I just-- I noticed that it was an issue,

but I kept trying to sweep it under the rug

because I didn't have the words to really

deal with it or the experience.

Really kind of unfortunate thing.

It was really stressful, uh, for everybody involved,

but it was actually the-- one of the most important things

we did to get clarity as a company,

to all be aligned in moving towards the mission again.

So, the cryptocurrency boosters argue

that crypto is the yellow brick road to a faster,

cheaper and safer financial system that works for everyone,

not just for the biggest banks.

There is no question that our financial system needs change,

but I'm not convinced that crypto is the solution.

Instead of leaving our financial system

at the whims of giant banks,

crypto puts the system at the whims of some shadowy,

faceless group of super coders.

Which doesn't sound better.

I'm meeting with as many people from the Treasury

and senators and executive branch that I can

to establish relationships and try to be helpful

as people try to wrap their head around crypto

and what this industry is going to be.

I'm just picking up, Katie, by the way, at the hotel.

Eventually, hopefully, this can turn into

a clear regulatory framework for the industry.

-Hey. -Although he was always wanting

to play by the rules and all the company

that abides by them, Brian himself

never had any interest in going to DC meetings.

I think that's one of the signs that Brian's really matured

into being a CEO, is he knows this is his responsibility.

Fred and I were co-founders.

He-- he was always the one who'd be, like, tromping around DC

and, like, doing all these-- you know, meet with DFS

and I could just focus on product every day.

Crypto is a brand new industry

and therefore, it is undefined.

We have to go educate the government about what crypto is

and what the advantages are.

With innovation,

we're always going to come against entrenched interests.

35 years ago, when I started practising

shoe leather politics,

I was working for National Semiconductor.

Maybe someday all watches will be made

like the Seiko Digital Alarm Chronograph.

Up until then, all watches were mechanical.

The old watch industry

passed a law

forbidding any watch in the United States

-that had a chip in it. -Same old story.

We had to repeal that. We repealed that law.

Being the CEO and founder

of the biggest company in the industry,

Brian has that responsibility.

I was nervous that maybe

he wouldn't put on a coat and tie.

In DC, it's about respect.

If you wear a turtleneck,

they're still going to talk to you,

but it's going to get them off focus.

They're going to be thinking about the turtleneck.

Let's keep them on focus and we can get right down to work.

We've all seen this movie before. Just like the Internet,

we believe that the crypto industry

is going to create millions of jobs

if we can get regulatory clarification.

One of the biggest hindrance on this space

has been lack of regulatory clarity.

The government has a number of problems

in providing clarity for crypto.

The American financial regulatory system

is insanely fragmented.

How's it going? Good.

The senator's just wrapping up his prior meetings.

You've got The OCC, you have the FDIC,

the Federal Reserve Board,

the Securities and Exchange Commission,

the Commodity Futures Trading Commission,

the Treasury Department, FinCEN. It's crazy.

And then there's also the state law issues.

And so, that multiplies your problems

by 53 states and territories who all have

to have some base of education

in order to figure out how to apply their laws.

And they are going to treat this thing

with respect to their specific policy concerns.

The next meeting, i-- is Pelosi's office.

Since we're in the Capital, I'm going to tell her,

"Hey, just have somebody walk us over at Schumer's office."

There might be some

anarchist type folks that are like,

"Why would you ever meet with the government?"

I love freedom and I want there to be

an open financial system for the world.

I also am a practical person and I realize

we live in a country that has laws

and I'm trying to navigate a path through that.

We have a lot of problems in our society

and the only way you're gonna fix them

is if you change things.

So, changes is a natural part of life.

And I think you have to write your rules

and enforce your rules

in a way that recognizes that change is going to happen.

We've got to embrace innovation.

We've got to let people try things.

Some things are going to fail

and some things are going to work.

But as long as we think that it can be done

in a way that's consistent with the rules in our marketplace,

we should let it go forward and let investors decide.

Love the idea that a whole new generation of people

is thinking about solutions to problems

that have really plagued us for a long time.

I couldn't really read him.

Is he just a very calm and thoughtful and kind man

or was he disinterested? I couldn't tell.

I think very much the former.

-Really? -Yeah.

Yeah. He's quite stoic.

Most of the politicians we've met are so extroverted

they're just-- they can't help

but, like, launch into all these stories.

He was just like, "Hmm, thank you for telling me."

And he wouldn't say anything else.

He said he had an engineering background,

-didn't he? So, maybe-- -Mm. A pattern.

-there's something to that. -Yeah.

I am here trying to build trust,

which says a lot to show up in person and then meet people

that can't really be replicated in any other way.

And hopefully when they meet me,

they realize I'm trying to do something good in the world.

Well, if there's a bill introduced,

then they'd have to go get educated on it.

Imagine that Electronic Commerce Act,

so what if there was

-a crypto commerce act? -Yeah.

I don't know, I'm just making this up.

But it's such a nebulous concept,

to get all the different parties to actually work together

is like pulling teeth.

I think the way to look at it is it's a game

and the government makes the rules

and they can keep changing the rules until they win.

And they have to win

because they have to collect taxes, fight wars.

There's no way we're going to live in some libertarian world

where there's no government thanks to cryptocurrency.

That's just nonsense.

Crypto is just like

any new technology, like the internet.

Are some bad people gonna try to use it? Yes.

But the vast majority of people in the world are good.

So, with appropriate controls and protections and regulations,

you can mitigate the risk.

But 99% of people in the world are good,

let's-- let's let them use the new technology.

That's what propels the world forward

and creates jobs

and improves human quality of life and everything.

I don't wear a suit too often for work.

But I'm going to DC.

When in Rome, I guess, wear the suit.

Seems to help.

If you let people keep the upsides of their success,

you get economic growth, which benefits everybody.

I think it has all these positive

downstream effects in society,

whether that's health metrics

like infant mortality or around education

or how well the environment is protected

or the income of the poorest people.

Apparently, it positively correlates

with, like, happiness and society and less war.

So, I think that's what cryptocurrency

can actually enable.

Ready to go.

We set a realistic bar for ourselves.

Anyone who we felt like, yeah, we had some synergy with,

that we counted as a huge win.

Hi, this is Brian Armstrong from Coinbase.

I got a note that, uh,

Senator Schumer wanted to connect real quick.

Because that meant we can go back to that person

and continue the conversation.

Hello, Senator Schumer.

Yes, thank you for saying that.

I really appreciate the time we had

and, uh, looking forward to staying in touch.

Yeah, that was great.

Thank you so much. Have a good day.

Bye.

All right.

He was real chatty, wasn't he? Yes.

Well, he's busy.

But he said he wants to keep-- keep in touch.

He wants to make sure I knew that his door was open, so...

Whenever you talk to him on the phone, he just about hangs up.

That's an efficient meeting.

I like-- I like efficient meetings.

A lot of these people we're meeting with,

they're very optimistic and they're going to get it done.

But it's-- I mean, it could take many, many years.

So, in the meantime, we just kind of keep building.

... going bananas over the weekend.

The cryptocurrency topping 61,000 for the first time ever.

What an exciting three days we've had

for the coin ecosystem.

I'm sure. I'm sure it has been

for all you Bitcoin followers and watchers.

Not long after we invested in Coinbase, Brian emailed me

and he said, "Fred doesn't own enough of this company.

I want to give him some of my stock.

He's brought enormous value to what we're doing,

and, you know, I just really feel like

he needs to own more and I'm going to

give him some of my stock.

Could you advise me how to do it?"

And, you know, ultimately it happened.

That never happens.

Like... Never does somebody come and say,

"My co-founder doesn't own enough.

I'm giving them more." Like, it's always the opposite.

"I can't believe how much I gave my co-founder.

They're not carrying their weight.

I want to get rid of them."

Fred demonstrated his value to Brian

and Brian matched it with generosity.

That's a big part of what binds them together.

Boom! Head shot.

Come on, there's lots of other people in the field.

-I didn't know there's-- -Shoot other people.

-Sure.

We went through building this company together,

which was incredibly challenging and formative experience.

And it was really critical to have a true friendship.

Your girlfriend posted a picture of a kitten

that needs fostering and now my girlfriend wants to adopt it.

How does this work?

The other way around.

-What do you mean? -Oth-- Turn it upside down.

There are a number of reasons why we work together

really well that also make for a really great friendship.

That's something that I really value and I think transcends

anything that happens in the business.

Switch.

They built something amazing together.

Fred remains on the board. He's Brian's biggest supporter.

I have a very fun job now on the board at Coinbase.

I just get to lob fruit and rotten vegetables at Brian

and occasionally pitch in my crazy crypto futuristic ideas

for the business.

I feel extremely privileged to have been able to build

something that has gotten as big as Coinbase has,

and I'm really excited about doing that all over again

with Paradigm, a crypto investment company

where we're helping entrepreneurs

build the next things

that are going to be world-changing.

So, that's, like, an $80 million trade.

You can see, like, it routes on, like, USDT .

I think eventually all of finance

will be built on top of this technology.

My sort of hope for Uniswap is for it to be this

fared, uh, piece of the financial infrastructure

that is powering this more equitable financial system.

The word cryptocurrency implies

that crypto is just about currency,

when actually crypto itself is about much more.

I feel like this is basically giving people

Goldman-Sachs-level trading tools

in an interface that anybody can use.

We're at the early stages of a digital financial renaissance,

and I think it's really exciting to see what this could mean.

Could we make finance more inclusive?

Could we make finance much more innovative?

There's definitely a perception

of crypto as anarchists.

When you actually learn about the community,

a lot of the people have very reasonable beliefs

and they usually kind of relate to

you know, wanting to make a better world.

As society and civilization become more complex,

more and more of the things that we do,

do depend on large groups of people's ability

to cooperate with each other.

The social layer of any technology

is something that's, uh, more important today

than it was 100 years ago.

Again, it's definitely going to be

even more important 50 years in the future.

If you actually step back

and look at where we are in literally, like, history,

this is a significant, significant moment.

If you actually want to do some shit

and you're not satisfied with the way things are currently,

crypto is offering this promise

to effect real change for so many people around the world.

All of us ultimately want to change the world.

We want to create value in the world, and we all feel

that this technology might be the fastest way

of achieving the vision that we have for the future.

It's history in the making at the Nasdaq.

Welcome, welcome, welcome.

We have an exciting morning here at the Nasdaq.

All right. Stand by. Secondary line.

Crypto trading platform, Coinbase

finally making its highly anticipated Wall Street debut.

All right. The auction will officially start at 10:10.

As it becomes the first major crypto business

to go public in the United States.

Eyeshadow, eyeliner and bells on, ready to go.

Today is certainly an important milestone for Coinbase,

but it's also an important milestone

for the crypto industry.

If you want to give it an early look,

um, and this is gonna- this'll change

because, like, a lot of stuff goes into the book

right around the time the auction starts,

but right now it's looking for $320.

-Hey, Benny. -I'm just touching base. Uh,

this is super preliminary, but it does feel like right

below three hundreds is the right zip code.

Yeah, it's-- I feel very-- I feel very comfortable.

So, there's Jay Heller that you're seeing right there.

So, he's actually on the phone right now with Goldman Sachs,

and he's really giving them very detailed information

where all the buyers and all the sellers are

to make sure that we come up with the right price

before we open up the stock for trading.

So, the auction will start

and the lights will turn on at 10:10

and things will change in the few seconds leading up to that.

But right now, the auction clears at $310

on 1.6 million shares.

All the buying that we're seeing

as retail right now that will change.

Institutions don't want to show their hands

early before the auction starts.

And the goal here is to-- is to open the stock at

at the right price and as stable price as possible.

Not open it quickly.

Most important trading event in-- in Coinbase's life.

You're going to get it right,

but I hope you, uh, all wore comfortable shoes

because this will take a while.

Sounds good. Thanks for the update.

So, I'm gonna go back to work.

You should treat everything that you hear on here as, uh--

as confidential.

All right. Coinbase, first update, demand's

been building all morning on the Nasdaq auction.

The auction will officially start...

I woke up with fucking jet fuel in my legs.

I went for a run this morning. It just went crushed.

You're a better man than me,

getting up that early on-- on today.

-Going for a run. -What did you do?

I-- I just woke up and came to check in on the--

the livestream. I-- I'm not that much of an early riser.

Hopefully, it all plays out according to plan.

-Yep. -All right.

Hold on. All right. Well, I guess I'll, uh--

-I'll see you on the Interwebs? -Yep.

-See you on the livestream. -All right, bye.

All righty. Bye.

All right, the Coinbase Nasdaq auction

is going to start in, uh, two minutes at 10:10...

There's no more fun day on the trading floor.

Everyone gives me a fist bump and says, "Game day, Benny."

And it is game day.

-All right. Here we go.

There's the opening bell.

They're doing this countdowns of, uh, 21 seconds,

symbolizing the 21 million bitcoin that can be mined.

Right now, we're coming up with what's called

an indicative price based off of the supply and the demand.

A million and a half shares of retail demand

came in in the last, uh-- in the last second

before the auction started.

And so, the, uh-- the first look in Coinbase

is $340 on three million shares.

Coinbase first look, $340 on three million.

That wa-- that was a bigger uptick in demand

than I would have expected.

-Wow. - I love Coinbase.

And Cramer's on CNBC,

that'll be some more upward pressure.

350 on four million. Tick-tick-tick.

Current look, 350 on 5.2 million.

-Hello. - I'm gonna work with you

on audio and video. Is there a way you

or somebody can tilt the camera down a little bit for me

for framing?

Yeah, let me try to-- let me try putting it down just a tiny bit.

It's the new world of TV.

-How's that looking? - Thank you, sir.

Five, four, three, two, one.

Good morning. Uh, thank you, everybody,

for joining us on Coinbase's big public listing day.

Brian, could you tell us how you came up

with the idea for Coinbase?

Yeah, sure. So, it was 2010,

and I was home for the holidays at my parents' house,

and I happened to read the Bitcoin Whitepaper

written by Satoshi Nakamoto.

-All right.

Still building here at Coinbase.

Plan is to open the stock in the next 30 minutes.

We learned a new piece of information

about 30 minutes out.

We were in this because we wanted crypto to work,

we wanted there to be more economic freedom in the world.

We are getting closer in Coinbase,

377 on eight million.

So, finish your lunch.

Goldman Sachs, when they are ready

to give us the green light to open up the stock,

they will verbally repeat the size of the order

as well as the indicative price.

People no longer need to be scared of it

like in the early days.

The-- There's gonna be a tremendous

amount of activity here after the open.

Five-minute warning, Coinbase,

Get your flow. And if you're sitting on the sidelines,

382 on 8.7 million,

Got stock to buy on balance there

within five minutes, standby for the open.

Don't go too far here 'cause I guarantee you,

um, we are getting close.

...truly is the new economy. It has hundreds and thousands

of companies being created in this space.

The stock will open within the next two minutes.

I got the two-minute warning. Two-minute warning.

How can we really leverage this opportunity to create more jobs,

more economic growth for people

in every country in the world that embraces this?

This is like the moment at the wedding.

Speak now or forever hold your peace.

All right. Here we go. All right. Hi, guys.

Hey, man.

All right. I see the stock, $381 on 8.83 million shares.

That is confirmed. That is what I say.

Open the stock.

Opening at 381. Standby.

All right! There's nothing cryptic about this!

The first public block of stock in the blockchain,

the Coinbase Genesis trade is 8.8 million shares at $381.

That's an of nearly

$3.5 billion,

the largest opening trade in Nasdaq history.

I think the second largest trade in exchange history.

-Let's go, Coinbase!

-We're opening at $381.

All right, ladies and gentlemen,

we officially opened up the stock

at $381 on 8.8 million shares.

It is a historic moment for cryptocurrency.

The IPO is really the start of the next phase

of adoption and the future of the digital economy.

Welcome to the Nasdaq family.

And I--I should mention, uh, we are live

and I can prove that we're live,

which is that, uh, Coinbase stock is now listed and trading.

Uh, so, uh, congratulations.

Oh, man, it's kind of--

it's kind of an overwhelming, uh, moment.

There's so many things happening, so many emotions.

And I mean-- Uh, the biggest thing I just want to say

is that this is a-- entirely a group effort.

Like, the-- the customers that helped us get here,

all the employees.

It's a really rare group of people

who saw this trend early,

made a bet on it, came together

and I think it helped us get to where we are today.

This is not the end. This is the beginning. We all have a lot...

If you think about the way the Internet changed

from, like, 95 to 2005,

I mean, from going-- from getting your AOL CD in

the-- in the-- in the post mail

to having an iPhone in your pocket,

I mean, that's what we're about to go through.

It's not a once-in-a-decade thing.

It's a once-in-the-history- of-the-human race thing.

I think that we'll see some of the promise, the early promise

of this industry really blossoming

into something that affects people's daily lives,

in-- in-- in what I hope is a positive way.

Cryptography has created

something very exciting to highlight its true power,

and now it's gifted us the opportunity

to do something, to make the world a better place,

and this is the time to do it.

How's it going?

Um, I'm doing all right.

I slept a little bit last night. Not much the night before.

On the day Coinbase went public,

I briefly stepped out to give my dad a call.

I feel like my conversations with my dad

are pretty consistent.

Yeah. Yeah, that's funny.

He definitely makes sure that I remain grounded

and I very much appreciate that about him.

We had been talking about this for so long. I knew this

was going to happen at some point.

It was a bit like dropping your child off

on the first day of college.

You know if things go right, there's a high probability

four years later they're going to graduate.

Okay. Love you.

When I talked to Fred, I had a-- several different

kind of feelings running through my body. Um--

Um--

I think the, um...

... one feeling that, um...

I got really close to was...

was, um...

wish-- wishing my dad could have seen it.

Um--

I was proud of Fred before Coinbase,

and I look forward to continuing to be proud of him.

Nobody knows for sure

how this technology revolution is going to turn out.

Yeah, I don't know that I understand it.

I really don't. But I do trust

-that Brian understands.

We're really proud of what he has done,

not so much as a company, which the company is amazing.

I mean, we kept watching it and saying--

you know, but it's just-- He's still

the kind, generous, thoughtful person

that we grew up with, too.

So, we're proud of him for both of those things.

I've never really been good

at celebrating things.

I just like building things. I'm always thinking like,

"All right, what's next? What's next? What's next?

On IPO day, I had a mix of emotions.

All right! There's nothing cryptic about this!

As everyone was focusing on the valuation

and the financial outcome,

I sent both Brian and Fred a text.

Largest opening trade in Nasdaq history...

And that text simply said, "While everybody's celebrating,

the thing that I'm most proud of

is that you two are still best friends."

- Let's go, Coinbase!

They're all clapping on the trading--

-the trading floor. -Holy shit.

You worked on the trading floor--

That-- I, like, literally sat right there.

There isn't a sliver of light between them

that people can pierce to say

those two aren't as close in reality as they appear to be.

And I think it is a fundamental part of the success of Coinbase

and for them individually.

A Jackalope is a fictional character, right?

What's a jackalope?

It's an antelope and a jackrabbit.

Why do you never see lizard eggs?

I assume they must lay eggs. Right?

I wonder what the frontiersmen thought

when they saw this. Think, like,

"Oh, this is really beautiful."

They're just, like, super on task. "Gotta build this down."

-This is super cool. -Wow.

It's machinery to sift the gold out.

It's probably, like, pretty advanced technology that, um...

Yup.

I wonder why they call it the Wall Street Mill.

They left Wall Street due to other opportunities,

-just like you.

I feel like we always fall into a natural rhythm

where on hikes you go out first.

It just feels more natural for some reason, I don't know why.

-Me walking first? -Yeah, yeah.

I feel like that's--

There's probably a deeper meaning in that thought.

Yeah.

Do you think you would've made a good frontiersman?

-Mm... Questionable.