Coinbase CEO Brian Armstrong – Siraj Raval Podcast

Watch the interview here

Key Takeaways 

  • Be cognizant of who you let live rent-free rent in your brain
  • Decentralization is not binary – it’s a spectrum
    • The left side of the spectrum (the most centralized) = one person or company controlling the entity
    • The right side of the spectrum (the most decentralized) = something like Bitcoin, no one owns it
  • On Libra, Facebook’s new cyrptocurrency:
    • It has its pros and cons, but – “I think it’s one of probably 6 or 7 really interesting projects coming out in crypto that people should follow”
  • Two quotes to ponder when building a company:
    • “You always have some sort of grand vision in your head and then the early steps look really humble. Usually it takes a couple of years, at least two years in my experience, for it to start to see signs of life and real success. By the five-year mark, it’s really working and by 10 years, you can see an impact on the world.”
    • “Anything that’s going to be able to change the world is going to take you at least 10 years”
  • During employee lunches, Brian will pay $20 to whichever employee gives him the best negative feedback
  • Economic zones should exist for startups to test ideas and run experiments, free of regulatory pressure

Books Mentioned

Intro

What is Bitcoin?

  • It’s a decentralized digital currency
    • Decentralized = there’s no company or country that controls it
    • Digital currency = an electronic version of money (currency that’s native to the internet)
  • “The internet is inherently global so it might as well have a global currency”

Brian’s Reaction to Donald Trump’s Recent Tweet Bashing Crypto

  • “I was excited, actually”
  • Here’s what usually happens with crypto/governments:
    • They laugh at crypto and think it’s just a toy
    • They get scared of crypto
    • They start to see the potential of crypto and slowly adopt it
  • “I think of it as a cool little milestone on the way to the world getting more interested and educated in crypto”

Twitter

  • Brian’s fairly active on Twitter – “I have a love/hate relationship with it”
    • One one hand it’s intellectually stimulating
    • On the other hand, there’s just so many angry people
      • For this reason, Brian never reads his Twitter replies 
      • “Twitter, sometimes, feels like more of a bullying platform”
  • At the end of the day – be cognizant of who you let live rent-free rent in your brain
    • “I think that’s one of those keys to happiness… You should never allow some random person to put something on the screen in front of you.”

What does Brian think of Libra?

  • Libra is Facebook’s new cryptocurrency
  • “I think it’s one of probably 6 or 7 really interesting projects coming out in crypto that people should follow”
  • The bull (pro) case
    • Facebook has 1-2 billion monthly active users they can introduce to cyrpto
      • Today, probably only 50 million people in the world own Bitcoin or cryptocurrency
    • Decentralization is not binary – it’s a spectrum
      • The left side of the spectrum (the most centralized) = one person or company controlling the entity
      • The right side of the spectrum (the most decentralized) = something like Bitcoin – no one owns it
      • Here’s what you need to know:
        • Libra is somewhere in the middle – it’s probably sufficiently decentralized
        • It’s NOT a Facebook coin – there’s ~25 companies that make up the consortium who own it and Facebook is one of them (Coinbase too)
  • The bear (con) case
    • It’s not going to be able to be a truly global cryptocurrency because it has a U.S. regulatory nexus to it
      • Due to certain rules in the U.S., you can’t send money to places like Iran and North Korean
    • Facebook’s brand is struggling, so people may not trust it 

GiveCrypto

  • Brian started GiveCrypto last year – it’s a charity sending small crypto payments into places like Venezuela using Coinbase Wallet
    • It’s essentially like a crypto UBI (universal basic income)
  • On building GiveCrypto:
    • “You always have some sort of grand vision in your head and then the early steps look really humble. Usually it takes a couple of years, at least two years in my experience, for it to start to see signs of life and real success. By the five-year mark, it’s really working and by 10 years, you can see an impact on the world.”
    • “Anything that’s going to be able to change the world is going to take you at least 10 years”
  • Brian hopes GiveCrypto is eventually a $50-$100 billion fund
    • “I want to make it the largest UBI experiment ever”
  • Here’s an interesting tidbit:
    • The size of the U.S. social security fund is ~$2 trillion
      • “This might sound crazy, but if you get a good fund together and then crypto goes up a thousand X, it could be the size of the U.S. Social Security fund at some point”

Coinbase’s 70/20/10 Resource Allocation Strategy

  • 70% of resources go to the core products which generate the revenue: Coinbase (the main consumer app) and Coinbase Pro (the platform where people trade)
  • 20% is allocated toward strategic bets like Coinbase Custody
    • ~200 institutions are currently signed up under Coinbase Custody equating to >$2 billion worth of assets under management
  • 10% is for venture bets like Coinbase Wallet and USD coin

How Brian Deals with Stress

  • Brian says he’s largely become desensitized to high-stress situations, but it wasn’t always like this
    • During the first few years of building Coinbase, Brian was always stressed and constantly pulling all-nighters
      • “I realized at a certain point that I was gonna burn out if I kept doing this and the only way this thing would work would be if I could keep at it for 10 or 20 years”
    • Reading How to Relax gave Bran some new perspective as well
  • He tries to exercise every day
    • Brian’s go-to is to run a mile every morning while listening to an audiobook 
      • “I tried getting a personal trainer, but I realized at a certain  point I didn’t want to talk to anybody. The best part of working out is being in my own head and listening to a podcast or audiobook.” 
  • Brian’s morning routine:
    • He goes on a run and then stretches
    • Next, he meditates for 10 minutes
    • Lastly, Brian writes in The Five Minute Journal
  • Brian also focuses on getting adequate sleep
    • He recently purchased an Oura Ring to track his sleep
      • Purchase a ring using the above link for a $40 discount

A Novel Way of Getting Good Feedback

  • Brian holds an employee lunch 1x a week, each time with a different Coinbase team
    • During the lunches, he’ll go around the table and ask for one thing each employee thinks is going well at the company and one thing they think could be going better
      • For the latter, Brian will say – “I want you to think of the thing you’re maybe a little scared to say and that might hurt my feelings if you say it”
      • Brian then gives $20 worth of crypto to the person who provides the best negative feedback
  • Related – In the past, Brian has openly shared his performance review with the whole company

The Future of AI

  • There’s been a long trend of tech improving automation and taking jobs, but the unemployment rate has never been dramatically effected
    • “In some ways AI is a big deal, but is it a bigger deal than something like the Industrial revolution? I’m not sure.”
  • “My guess is that humans and AI will somehow merge”
  • “I think the future’s going to be awesome one way or another. I’m sort of an optimist for no good reason other than that’s how I’m wired.”

Recommended Reading

Additional Notes

  • Brian recently read One from Many: VISA and the Rise of Chaotic Organization by Dee Hock
  • “With a lot of things in technology, you know it’s going to happen over the next 10 years, but whether it’s going to happen in the next 2 years is really hard to say”
  • Brian doesn’t believe decentralized social networks (like Steem) will take off anytime soon
    • Why? The scalability of the protocols and blockchains need to fixed to allow for high transaction throughput
  • “That’s one of the secrets that I think Coinbase is based on – this idea that with cryptocurrency and the smartphone revolution we can inject economic freedom into all these countries all over the world and get people to try harder and build really cool stuff”
  • Brian spent a year in Argentina traveling in 2009
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