Coinbase’s plan to dominate the cryptocurrency industry
Coinbase, the company that is best known for its cryptocurrency exchange business, has slowly but steadily been ramping up its reach in the industry. Based on data made available after the New York State Attorney General launched an inquiry into the exchange and its methods of business, the company has been making significant progress in improving its infrastructure.
In a public reply to the Attorney General, Coinbase stated that it has improved its surge transactional capacity by over 1000 percent relative to the third quarter of 2017. Furthermore, the company aims to double that figure within the ‘coming months’. The company also claimed to have 99.99 percent uptime in April 2018, a significant improvement over the constant downtime faced by users of the platform in late 2017.
Building trust through compliance. https://t.co/WgK0LjWTnu
— Coinbase (@coinbase) May 2, 2018
The company’s thirst for growth extends beyond retail cryptocurrency investors though. Coinbase is reportedly looking to rival the rumored Goldman Sachs’ bitcoin trading desk, which will mark the investment company’s foray into the cryptocurrency segment. If true, this will be the first attempt by the digital currency exchange to appeal to institutional investors.
Coinbase’s strategy to dominate the cryptocurrency industry is actually not too different from the one adopted by Google in its early days. With Emilie Choi spearheading the company’s Mergers and Acquisitions department, it is clear that Coinbase is looking to acquire as much developer talent and rival businesses as possible.
The two recent acquisitions of Cipher Browser and Memo.AI both reflect this strategy as their respective engineering teams were immediately brought on board to work on Coinbase subsidiaries. Cipher Browser’s ongoing development was also merged with Coinbase Toshi to boost the company’s own Ethereum decentralized app viewer.
The cryptocurrency exchange also bought out Earn.com, a blockchain-based email marketing service. The move came hot on the heels of the Cipher and Memo.AI acquisitions and was likely a consequence of the company making over $1 billion in revenue from its digital currency exchange operations alone.
“More people are starting to realize that this is foundational and you have the best and brightest in crypto running to build applications,” Coinbase COO Asif Hirji told CNBC about the exchanges’ recent streak of acquisitions.
In fact, Coinbase has repeatedly alluded to the fact that it is aiming to become the de facto cryptocurrency and blockchain company, akin to Google’s grip over the web search and advertising ecosystem.
“I think our view is that this [cryptocurrency] is similar to the beginning of the internet,” Coinbase VP Dan Romero told Business Insider in an interview. “So we’re trying to build a Google-like company for the cryptocurrency space.”
Not everyone in the cryptocurrency ecosystem is thrilled by Coinbase flexing its muscle in picking the best developers and companies in the industry though. Many believe that the company’s continued aggression in the space will lead to the extinction of most of its competition, resulting in a monopoly.
Considering that Coinbase was the go-to choice for millions of first-time cryptocurrency investors during the 2017 bull run though, it is unlikely that the company will be going away anytime soon.