Aside from that I haven't looked at the company financials or anything, but I'd be surprised if they died in 6 months, they had plenty of runway last I heard. I also don't see how being an intern there would be a black mark on your resume unless you're some web3 zealot who can't stop talking about how Bitcoin is going to replace the dollar in interviews or something (granted that might be a positive trait if you're interviewing for jobs in web3 related companies). If you're there as an intern or junior employee and the company goes under, no one's going to be blaming you. I imagine you'll have plenty of job prospects and transferable skills from the experience in such a scenario.
So best case scenario it's your dream job, worst case scenario you have a well-known and (from an outsider's perspective) technically competent company on your resume as a junior employee. But given the inherent volatility in the sector it would be naive to expect stability from the position. So if you do go ahead with the internship and get hired there, I'd keep your resume up to date and entertain the occasional interview.
https://s27.q4cdn.com/397450999/files/doc_financials/2022/q1...
If you look at page 10, for Q1 2022, retail revenue was close to $1b, while institutional revenue was only about $50m, and hasn't been really growing (declining in fact). This likely means that when the hard time comes and people don't have disposable income anymore, Coinbase will also suffer when the tides of retail investors go out.
I'm beginning see Coinbase and Robinhood in the similar category of companies in pay day loans and casinos - they might do really well as a company but a lot of it is quite unhealthy profit generation from the least informed and struggling sector of the population.
If they do go bankrupt in the next 6 months it will be because they are doing something shady and it blows up. I don't think they are, but they are in a very shady industry so they might be.
Why is a company which is in an industry which is full of scams and bs your dream company? May as well join Philip Morris? The other consideration is long-term, because either a) crypto blows up or b) margins will erode significantly. But those are 5-10 years out.
Ahh. hold on, let's use that fact:
Let's say another 50% or more reduction in share price is 'bad' for you, the options market says the chance of that happening by the end of the year (well Jan 2023) is 10% ish, if I am reading it right. So the market thinks they will likely survive for about your internship anyway.
The probability of 10% is surprisingly about the same going forward another year to Jan 2024. So I think you are OK. If someone disagrees, go make some money, the market is ready to hand you cash.
This is quite a crude way, but it puts some probabilities on it, otherwise it is just my opinion something like "yes crypto is dead they'll go bust" which is just not based on anything.
Reference: https://www.barchart.com/stocks/quotes/COIN/volatility-greek...
Where "Delta" is approximately the probability of the option being exercised.
Now if you really want to make money, bet with your friends on things that sound unlikely but are likely, based on the deltas of options.
The concepts are fine and everyone is a consenting adult in theory, but the reality is that those industries just hurt people and concentrate wealth among people who are willing to cause harm. We're not interested in working with people who are suckers at best and mercenaries at worst.
Plus, many mainstream companies have been sued for all kinds of terrible stuff, sometimes even criminal.
Judging others’ morals is a slippery slope.
If you think crypto is a massive scam and immoral, why would you want to hire people from there?
A lot of folks around here hate on Amazon, but would happily hire Devs that worked there, in fact many will pay a premium to do so.
Oo when its amazon abusing employees, thats ok, and we rush to hire their ex-employees, but if the employer was in crypto thats not OK and we ostracize these workers? seems pretty hypocritical if you ask me.
That's going to be true of everyone else's morality. Even your own is not 100% consistent. You can't let perfect be the enemy of good.
The difference between crypto and Amazon (as I said elsewhere) is that Amazon has ostensibly a good product: they sell people things. Their business is abusive of workers, but most people don't really know that. "We" (the people on HN) know about it because we're very-online people, but it's not common knowledge. So I'm willing to believe that someone is well-intentioned, takes a job at Amazon without knowing how abusive they are, and has good values in the end.
I believe that many crypto employees are good, moral people, but they don't really understand how the industry works. That's fine -- I don't want to hire them because they don't understand the space, which tells me they aren't very smart. I'm hiring very few people, and I want to hire ones that understand systems very well (if I can!), including social and financial systems.
The people who know it's a Ponzi scheme and still work there are the ones I would call immoral and refuse to hire on moral grounds.
What are these "the same things" that crypto/gambling companies do that others also do to keep themselves afloat?
> Plus, many mainstream companies have been sued for all kinds of terrible stuff, sometimes even criminal.
How is what a company does without employees knowledge relevant to that employee? Are you saying that crypto/gambling companies are dealing in crypto/gambling behind their employees backs?
> Judging others’ morals is a slippery slope.
WTF does this mean? We shouldn't judge anybody for anything ever?
Not judging them is a damn sight more slippery. All it took for German society to go straight to hell was to not judge their madman’s claims about minority groups.
Far better to refuse the business of the corrupt, than to ignore it and participate in it.
Why? Most smart developers know that crypto companies are capitalizing on Ponzi schemes. If they don't know that, then they don't know their own industry very well.
We're never going to need 100+ developers, and there are plenty of people to hire that have never been involved with a scammy industry.
> Is your employer “for profit”? Chances are they’ll do all the same things any other company will do to keep the boat afloat.
Yes, and we're profitable. I own 30% of the company and make technical hiring decisions. We will not forego our morals to hire additional developers. We don't need 10,000 (or even 100) developers, so it will be easy to find as many as we need.
> Plus, many mainstream companies have been sued for all kinds of terrible stuff, sometimes even criminal.
There's a difference between Boeing (a company with deeply unethical leaders, but a perfectly legitimate product) and Binance (a company with a deeply unethical service).
I can believe a software developer at Boeing didn't know what was happening or was just doing what they were told to preserve their career. I can't believe the same for people in crypto (or repeat offenders, like Facebook).
> Judging others’ morals is a slippery slope.
Boycott is one of the only tools I have to preserve my own morals, to try to prevent others from doing what I consider to be evil, and to stay sane. I can't enforce my morals, but I can exercise the "invisible hand" of my market power and refuse to advance the careers of people who don't care about harming users.
This is partly a personal decision -- I don't want to work with people I think are unscrupulous -- and partly a business decision. If those developers were so disrespectful of their users' wellbeing at their previous employers, why wouldn't they be at mine? Can I trust them to do all the tedious things that developers have to do for security? Can I trust them not to sell our clients' data?
i tend to give people the benefit of the doubt, i guess that is not universal.
If I ran a bigger company with more money and more time to vet candidates, I would soften a lot of my filters and try to be more like you. As it is, I need to sort through dozens or hundreds of candidates without it becoming my full-time job, which means some of my filters are going to result in some false negatives (people I won't consider, but should have considered). Unfortunately it's a tradeoff I have to make.
I still won't ever hire someone who worked at Facebook, though...
Porn: No. Not because I disapprove of porn as a concept, but because the larger porn companies are extremely exploitative and don't try very hard to purge themselves of illegal content.
Oil: No.
Tobacco: No.
Alcohol: Yes. Alcohol is regulated enough that I don't think alcohol companies are really able to exploit people too much. It's also just something humans (and many other mammals) consume naturally, even before civilization. It might bother some people, but it doesn't bother me.
Weed: Yes, as long as the company isn't mislabeling products or making false health claims.
Uber: Yes. They did break laws, but the laws they broke were government-mandated monopolies on taxis. In my city at least, Uber made their users more safe, not less. Taxis were scary and I have multiple female friends who were attacked by taxi drivers with no way to identify them afterward.
Traders: Not sure what this means. Like day traders?
Anti-virus companies: No.
Firearms: No.
Companies using cheap Chinese labor: Yes. This is all companies and all people in tech. I would avoid it if I could, but I can't. Every electronic device I have used in the last 10 years has probably been made with unethical labor.
I am no fan of cryptowhatever, but how are you any better?
Our software automates the tedious parts of what analysts do, so our customers can take down their unfilled job openings and make their analysts happier.
It's not saving the world or even making the world a better place, but it's a software business that does what software is supposed to do: automate work that humans can't or won't do.
All software eliminates jobs. If a computer does something that used to take humans thousands of hours, jobs disappear.
The question is whether those were jobs people wanted or needed.
In our case, the answer is no. Our clients are extremely traditional and would prefer to throw more people at these problems rather than adopt software. The only reason they're talking to us now is because people are quitting these jobs and they can't find anyone to hire to do them.
We've never eliminated a job, but even if we did, these are Ivy League accountants, often from wealthy backgrounds. They're all going to be fine. One of them just quit our client's company without a job lined up, just because she hated the Excel work so much.
Why exactly is Coinbase your 'dream company'? If they are basically a brokerage that deals with a particular asset type, then what about Coinbase differentiates them from e-trade, Charles Schwab, Robinhood or any other brokerage?
Working at a brokerage was not my idea of a dream when I was looking for an internship many years ago. I'm curious to know why it's your dream.
This is something I dont understand. If cryptos are falling like they are, it surely is bc people are selling and selling at cheaper prices. Isn't that transaction volume that coinbase and similares charge for?
Do your internship and get the "dream company" thing out of your system. Try to get offers from other companies. Re-evaluate when your internship is up. If they have gotten burn under control, consider accepting an offer.
Look at the cashflow statement to understand it.
https://www.sec.gov/ix?doc=/Archives/edgar/data/1679788/0001...
It's always worth going to the source. Look at the line cash from operating activities. This was the first qtr for a couple years they've run negative. It was 800 odd mill, which includes custodial funds of 700 something mill.
Also, it's worth understanding the difference between a forbes "contributor" and an actual forbes article. It's pretty different. The contributor articles are basically blog posts by randoms.
Why not go directly to the document published directly on Coinbase's investor website that I mentioned in my first comment? https://s27.q4cdn.com/397450999/files/doc_financials/2022/q1...
(Hint: page 11, "Total expenses" has been north of $1.5b for the last two quarters)
Ok, in your link..."expenses" on page 11 doesn't include revenue.... so no, that's not burn. You want to add the money coming in to the money going out to calculate burn.
Look at pages 20 onwards. Same data they send the SEC. You have revenue and expenses in an income statement. But, many of the expenses are non-cash. And many balance sheet changes (like receivables, inventory etc) affect cash but not the income statement. So, if you want to understand the burn rate the easiest place to go is the cashflow statement. That's page 22. Look about 2/3 way down and you'll see "net cash (used in) provided by operating activities".
It's worth investing a few hours to understand basic accounting if you want to understand the basics of companies. Lots of info at your fingertips if you can be bothered. You'll even be able to see where random forbes contributors go wrong.
The burn rate is the amount of cash the company is spending per month. It does get murky post revenue, but is generally understood to be the rate at which a company is spending - I understand it might be confusing to someone who hasn't been in the trenches of startups and investing so I'll give you a pass on that. Close to $600 million a month going out the door is stupid high compared to what they actually do. The executive leadership agrees with me and is cutting high costs.
An accounting class, it's worth it. Burn is practically synonymous with operating cashflow (at least when negative..) and is always inclusive of revenue, never inclusive of non-cash charges (like options/equity comp).
Pointing out operating expenses as though it's burn suggests a lack of accounting basics. What's next? Google is burning $70 bill pa? Plus, loads of people on HN have either been involved in startups, or investing, or both. It's pretty silly to assume they haven't.
First of all, Coinbase was a gullible company, but nowadays you can buy and sell virtual currency on other applications.
Secondly, Coinbase does not consider interest income as a business model, and most of Coinbase's revenue comes from trading commissions. They seem to think that they can make do with only sales from transaction fees. However, I think this is a big risk.
Fidelity has applied for approval of the bitcoin ETF. If this Bitcoin ETF is approved in the near future, Coinbase's business model will be torn to shreds. Fidelity allows you to trade ETFs with "zero commission" whereas Coinbase charges a transaction fee.
In addition, the virtual currency boom will subside with the recent crash in the price of bitcoin. When that happens, sales from virtual currency trading commissions will also slow.
Therefore, Coinbase should suffer in the future, and I believe that if a bitcoin ETF is approved in the future, it will be in a very difficult situation.
I do not know if the company will go bankrupt within 6 months, but I think you should work with a full understanding of the above risks.
In terms of immediate risks, FTX is eating Coinbase's lunch in terms of market share and efficiency (they're doing more volume with under 10% the headcount), and if/when Tether blows up, Coinbase's USDC is next in line.
Many people have 'dream companies' that turn out to be 'nightmares'. Don't put all your choices in only one company. There are others that are better than Coinbase that are not in the public eye.
The problem with Coinbase is that their stock is tied and correlated to the price of Bitcoin.
> So many people keep saying they will go bankrupt in 6 months
Does that mean that they are right? I certainly don't think so.
Last year, many people said lots of funny things, like 'Do you think BTC is worth $500k? If so buy Coinbase.' [0], 'This isn't even close to what will be the all time high' [1], 'Doge to $1 by September 2021' [2] and after replying to tell everyone to wait for it to crash then you have 'What if the current bull market goes to $200k, and then the bear market retreats to $100k?' [3].
Fast forward 1 year, what do you think they will be saying now?
In fact, we will all find out why Coinbase didn't shut down in December. Coinbase isn't just an exchange.
[0] https://news.ycombinator.com/item?id=26262243
[1] https://news.ycombinator.com/item?id=25776080
- Whether major governments will strangle the life out of crypto with effective regulation due to public sentiment turning against it
- Whether the volatile crypto market will reverse its current longer-term trends
- Whether crypto will become so unfashionable that the current user base stops paying companies like Coinbase (or run out of money to do so)
- How much of a squeeze the coming recession is going to put on risky companies
In other words, it's impossible to predict.
My advice would be to have a diverse skill set and be ready to work on things that don't involve crypto/DeFi if that's where the market goes.
But if it does, I say go for it. Experience is experience and if you like the field, it'll be easy to transfer.
(In fact I was an intern just like you, back in 2006!)
Google might go down and may have to cut employee benefits and compensation soon. Amazon has been eating their ad revenue at a staggering rate.
Do not accept stock or crypto as compensation, only cold hard cash.
If that happens, you will be tainted. Probably, because it was your first job out of school, it won't be permanent. You can just tell your next employers that you were too naive to pick up on it.
The other risk is that you'll pick up a whole range of skills that are effectively worthless in the job market in a few years. Or not. I have no way of knowing.
All in all, then, I don't see why you'd want Coinbase on your resume, when you could have something that's an unequivocal plus.