This book chronicles the entrepreneurial journey of cryptocurrency exchange Coinbase, set against the backdrop of Bitcoin's turbulent waves.
Why This Book Stands Out
The King of Cryptocurrency (referred to hereafter as King) serves as an exceptional guide for understanding Bitcoin's volatile history. Cross-referencing its narrative with real-world price charts adds depth—more on this later.
Comparisons inevitably arise with The Infinite Machine (Ethereum hereafter), another journalistic work employing novelistic techniques. However, King deserves priority reading for three reasons:
- Foundational Focus: Bitcoin sparked the revolution.
- Narrative Cohesion: While Ethereum sprawls across global characters/locations, King orbits consistently around founder Brian Armstrong, enhancing readability.
- Technical Clarity: King demystifies complex concepts (e.g., mining mechanics) more effectively—a subjective but notable advantage.
Coinbase Milestones (Part 1)
Let’s map Coinbase’s trajectory alongside Bitcoin’s price movements (chart adjusted to 2016 for clarity).
Key Events:
- 2008: Bitcoin’s whitepaper emerges.
- May 22, 2010: Bitcoin Pizza Day—first recorded BTC transaction.
- November 2012: Coinbase launches, offering centralized custody (storing users’ private keys)—heresy to Bitcoin purists ("Old Grudge").
- May 2013: Secures $5M Series A funding after grueling efforts.
- Mid-2013: Hacked ($250K loss); secrecy preserves reputation.
- Late 2013: $25M Series B amid Bitcoin’s price surge—VCs now court Coinbase.
- February 2014: Mt. Gox collapses. Coinbase dodges fallout, but Bitcoin plunges long-term.
Early 2015: $75M Series C fuels global expansion despite depressed BTC prices.
- Management crises: Employee burnout, PR blunders (e.g., alienating SVB), near-layoffs—saved by year-end Bitcoin recovery.
Early 2016: "Blocksize Wars" erupt:
- Big-blockers (Armstrong’s camp) vs. small-blockers (prioritizing individual users over institutions)—"New Vendetta."
- Conflict cools as rising prices shift focus to hodling.
Bitcoin: Coinbase’s Double-Edged Sword
Here lies the crux: Coinbase’s fate hinges entirely on Bitcoin.
Triumphs:
- Inspiration, funding, revenue (transaction fees).
Downfalls:
- Hacks, ideological clashes, conservative strategy (only four cryptocurrencies traded until 2018), losing ground to Binance’s diverse offerings.
Ideological Tension:
A "different strokes" dynamic prevails. Centralized (Coinbase) and decentralized (self-custody) approaches coexist—healthy if Bitcoin’s appeal endures.
To be continued...
FAQs
1. Why did Coinbase face backlash from Bitcoin purists?
By managing private keys, Coinbase contradicted Bitcoin’s decentralized ethos, earning long-term criticism.
2. How did Mt. Gox’s collapse impact Coinbase?
Though Coinbase avoided direct damage, Bitcoin’s prolonged price slump strained operations.
3. What stalled Coinbase’s growth post-2016?
Limited cryptocurrency offerings (vs. competitors like Binance) and reliance on Bitcoin’s volatility created vulnerabilities.
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