Coinbase cuts staff by a further 20%
coinbase.com
coinbase.com
Firstly, I don't see how Coinbase needs as many people as CME. They're meant to be a disruptive start up they should be lean. Secondly, how the hell do they get those unit economics to work? It should be a trivial job, right. People pay you to trade, so how are they losing so much money!? Well, I guess hiring 4,500 people... I think the idea at this point that Coinbase can get their cost structure down to reasonable numbers making them profitable at lower revenue levels is challenging. It's very hard to put that genie back in the bottle.
You don’t really need the money, but you got it. What are you going to do with it to appease the investors? Well you gotta act like you are doing something with it, especially something that shows growth.
Hire more. Hire more because we imagine more. Keep imagining until imagining doesn’t work anymore. Then fire, and say sorry. Hopefully you sold enough equity at the ridiculous ipo price.
Sorry, but not sorry.
We're all just see how tech startups and other companies are getting slaughtered over market conditions and NOW need to cut costs, spend less, hire less and turn a profit rather than continued losses.
The era of "Lose money for decades just like Amazon did and so can we" is over.
Well, in a sense that's exactly what low interest rates were supposed to accomplish: get people in the economy to spend.
One manager I interviewed with explained that they wanted to become the "Amazon of Crypto" where any service related to crypto such as wallets, NFT's, etc are all on Coinbase. It was clear back then to me that Coinbase wanted to dethrone both Metamask as the wallet of choice and OpenSea as the NFT marketplace of choice. You hire a ton of people for these projects but end up letting them all go when they realized those projects weren't going to pan out.
Which is weird, because they're not especially difficult projects. OpenSea was built by like five people.
I've seen teams of 10-15 people that do absolutely nothing. Have 10 meetings about specs but space them out over a year, so that by the time the next meeting happens, everyone forgets the entire context of the project... so you have to cover everything again. By the end of year, its gone absolutely no where due to 2-3 layers of bureaucracy. Coinbase _can_ hire good talent... wonder if managing it is the/a problem.
I've worked at a company where at an individual level people were quite talented, moreso than competitors who did better than them .... but getting anything done required Y different meetings with X different teams, satisfying N different gatekeepers who just want to push their own product on you, avoid stepping on the toes of persons X,Y,Z, etc etc.
Company multiplied in size a few times over the course of a few years and had just no idea how to handle it.
This dude cost them millions, for no benefit whatsoever, by causing morale-crushing slowdowns on every project. It was crazy. Wouldn't be surprised if he's running the tech-side of that whole place by now, either. They seemed to love the guy.
Probably better to have a small team quickly ship a v1 and get everyone involved after.
* Well we need to integrate it with our engagement platform, meetings required with engagement to determine scope and requirements.
* Well we need it to also integrate with our productivity API, another set of meeeting to determine scope of integration.
* We need deep reporting capabilities, please get with the reporting team to determine requirements.
* Also this app will need to integrate into EXISTING_TOOL_A and EXISTING_TOOL_B. App cannot be built in React and must be built in Angular with OLD_SOFTWARE_PKG_1 and OLD_SOFTWARE_PKG_2 in order for it to successfully integrate with these old apps.
* Hey we just signed a contract with CLOUD_PROVIDER_Y, we know you were using IN_HOUSE_PROVIDER_1 for your infra but now please modify the entire app to work with CLOUD_PROVIDER_Y.
* Oh and it also needs to be backwards compatible with IN_HOUSE_PROVIDER_1 because it needs to run in parallel while we onboard CLOUD_PROVIDER_Y
You list a lot of perfectly valid "external" things that a Fortune500 company might add, but there's also internal things that it may need immediately that a startup won't.
(The backup policy being a particularly trenchant one, in my opinion. It's not an every day thing, but we've certainly seen several stories over the years on HN of startups basically going "whoops, we accidentally the data, sorry we're shut down now because this is unrecoverable for us".)
I think CMGI rolled up the remnants of Altavista.
https://twitter.com/danluu/status/1117859464793583616
Do you have any insight into why that happened?
Volumes have atrophied completely. It's not a cooling of retail interest vis-a-vis the stock market, but complete apathy and/or hatred.
See the volume data for OpenSea as an example.
It has significantly outperformed VC darlings like Peloton (-93%) and WeWork (-90%).
You can't tell me that WeWork stock wasn't working on the greater fool theory any more than Bitcoin's price works on finding more bagholders. It's all a grift, some worse than others.
It's absolutely not informative to compare their returns to various crypto.
That doesn’t change the fact that crypto is zero/negative sum.
Predicting tops/bottoms is a fools errand, however. If you thought Bitcoin was overpriced at $15,000 and see it rise to almost $70,000, only to see if fall, but not past the point where you initially thought it was overpriced -- well, hopefully you at least didn't bet on it being overpriced at $15k.
I remember thinking how crazy Tesla's price seemed to me in June/July 2020. It then proceeded to go up more than 4x that price over the next 1.5 years before falling, but TSLA is still trading ~30% higher than those June/July 2020 prices.
Meta crashed 73%. Tesla crashed 70%. Netflix crashed 72%.
Everyone knew it was always going to come down, but if I were to tell you in September 2021 that Meta was going to trade 70% down within a year, you wouldn't have believed me
I would have probably asked "who is Meta?" at which point you explain you are a time traveler, and Facebook was to change their name in the next few months, too. After my initial laughter, I suppose I'd believe your whole story, because you can't make this stuff up. Next thing you'll tell me, Zuckerberg has legally changed his name to "The Cooler Mark".
I have always said (w/comments to back it up) the $600 checks were going to cause huge issues sooner than later. I don't think its that prophetic or controversial (its basic econ) but at the time it seemed if you even suggested the idea that printing so much money was a bad idea you were seen as "hating poor people" or some other flavor of "against the common man."
Still. I can't say I would have believed you. Otherwise, I would have shorted the whole tech sector.
Then out of the blue, for no real reason, it went up again, hitting another new high.
Point is: markets are completely irrational and predicting what they're going to do or not going to do is a futile exercise.
Maybe not down 70%, but certainly down a lot due to iOS privacy changes, which are being taken up by other platforms and browsers as well.
A big chunk of the negative sentiment however can be attributed to those ridiculous metaverse demos that they've spunked $15b of cash on.
In real terms, Bitcoin and Ethereum didn't perform any worse than most major tech stocks, and outperformed many pandemic tech stocks (Zoom, Peloton).
I would argue that NFTs did more to spread the word that cryptocurrencies are a farce than they did to create "value" for those behind them.
Bootstrapped businesses have the best execution.
In 2019, no one was saying it would crash in 2022; they were saying it would crash in 2019 or just "it will crash eventually"
In 2020, they weren't saying it would crash in 2022, they were saying it would crash in 2020 or just "it will crash eventually"
In 2021, they weren't saying it would crash in 2022, they were saying it would crash in 2021 or just "it will crash eventually"
In 2022, they said it would crash in 2022 or just "it will crash eventually", and people who didn't realize it would actually happen in 2022 were in a bubble?
It turned out that 2022 was different, but the predictions weren't any different, which means they weren't actually meaningful predictions.
Didn't collapse the next month.
Didn't collapse the next month.
Finally collapses the one after. Was it still a POS garbage house? Probably.
"it will crash eventually" is more important, it results in people staying away/getting out of this market, for good. It's much more powerful than oh it's gonna crash on this or that date.
> > I think everyone was completely caught off-guard by the ferocity and pace of the crypto drawdown.
> If you were caught off-guard then you've been sitting in a massive bubble.
OP is saying people were caught off-guard by the specifics of the crash. That doesn't require being in a bubble, because there weren't any specific correct predictions that were distinguishable from the specific incorrect predictions.
Non-specific predictions may be useful, but they don't prevent you from being surprised by the specifics.
You know who didn't drink the koolaid? Cumberland/DRW and Jump.
For those who are in this market (as Coinbase is), they are useful in terms of planning and setting up a large reserve of rainy day funds - for less risky venture it may not be necessary, but for crypto it absolutely is. Unless plan B is to crash and burn which seems to be the MO for most crypto companies.
People started saying "yeah, there's a problem here" about the Irish property market in 2003 or so. Lots of people were saying "this will crash any day now". For years. Then between 2006 and 2010, prices halved, for broadly the reasons the doomsayers were saying (the global financial crisis was arguably a trigger, but doesn't explain the whole thing).
(Also, I would note that Bitcoin did crash in 2021, as well. And it's not like 2022 is likely to be the last crash, either).
HN has predicted 10 of the last two crypto crashes.
Plus there's also the "Lehman Brothers moment" provided by FTX. People are learning what "counterparty risk" is. If you're not daytrading, then suddenly it's worth considering moving your crypto off the exchange and assuming the custody risk yourself.
You have to believe. Especially if you claim to be a leader.
When has this ever been a thing? They raised tons of money in huge valuations and used it to hire a boatload of people. Tale as old as time.
Agree with the rest of your post though, it’s unclear what their endgame was/is to get into the black.
they have IPOed and insiders continue to exit as fast as possible
just scrapping the bottom of the barrel here :-), hoping that as this crypto-decade draws to a close, it was not a complete waste of time for all these people and a major distraction from more meaningful pursuits in digital technology. even if one does not participate, these pervasive hypes, whether crypto, AI don't leave anybody unaffected...
[0] https://www.theguardian.com/business/2022/jun/06/london-meta...
[1] https://www.ibtimes.com/australian-stock-exchanges-blockchai...
(Sorry if I just seem to want to point out a mistake - your first sentence just sounds so specific that it just got me interested in what you mean.)
Of course, being electronic is a later thing, as far as I know the NASDAQ was one of the first.
What we should all be asking ourselves is “am I on payroll at my current job to act as ballast?”
Huh, I would call that ~$2 lost for every $1 of revenue.
So yes, they lose $2 for every $1 earned.
Incorrect from a definition perspective:
spend = expenditure
loss = revenue - expenditure, where expenditure > revenue
If I spent $10 to make & market a fancy x-mas box, but only sold it for $5, I didn't lose $10. I lost $5 ($5 - $10 = -$5).
To get to a net income loss of $550 mil from a revenue of $590 mil:
Net income = Revenue - expenditure
-550 mil = 590 mil - expenditure
expenditure = 590 mil + 550 mil = 1.14 bil
The initial ratio from jsnell is correct: They spent $2 to bring in $1. They lost $1 to expenses to bring in $1.
Under this premise it is reasonable to hire up to build this framework if the investors are willing to foot the bill during the discovery phase. I am not saying this is prudent, just that it is a consistent story that they sold.
This is not unique to crypto: biotech startups are raising billions a pop in a Series B (not a joke) promising to use generative AI to find miracle drugs.
But that is crazy. It is not that hard to understand the collectibles business is emotion based. You tickle the soul of the customers just the right way so they want to own a hoard of your crap. Then you create an artificial scarcity to profit from, and a thin veneer of "but-it-is-not-a-waste-of-money-because-i-can-sell-it-later" feeling to make your customers not instantly regret the transaction.
I understand that an NFT might do some of it, but to replace all the physical collectibles? Are rich businessman going to parade around wearing NFTs on their wrists? Crazy. :D
I know several people (some of whom could even be considered businessmen) who do exactly that.
Coinbase isn't a direct comparable to CME because CME only does the exchange function.
Coinbase combines several different types of financial institutions in the crypto space:
+ exchange : order matching engine of buy & sell -- analogous to NYSE/NASDAQ/CME
+ broker : custodian of customers' margin accounts -- like Schwab, Vanguard, Fidelity, etc
+ bank : digital wallet and loans with customers' crypto as collateral -- like JP Morgan, Bank of America
+ ecommerce payments : analogous to PayPal/VISA/MC
Even though CME deals with trading corn commodities, it is not a bank for people to use corn as collateral. Therefore a corn farmer can't go to the CME and get a loan and pay it back when he sells his crop harvest.
Regardless of all the various financial areas they're in, Coinbase got overstaffed (like many other tech companies overhired) and so they're making aggressive cuts.
CME also has to build risk and margining technology since its customers are generally managing complex derivatives portfolios and CME has to understand what risk those portfolios have under all sorts of tail market events.
Yes, I understand that and I wasn't dismissing CME as a simple platform. I used to work across the street from the CME and saw the traders walking around in their yellow jackets every day. The "corn" was only one example to tie it to a bank services scenario.
>, and a minter of new derivative products like S&P futures
I think Coinbase recently offered something similar: https://www.google.com/search?q=Coinbase+launches+Derivative...
Somehow, the wordsmithing in my comment got misconstrued as being dismissive of CME as being too simple and praising Coinbase as being complex.
I was trying to convey that a farmer can't get a loan from the CME to finance his seeds/fertilizer/etc and use his corn crops as collateral. What is factually incorrect about that?
Coinbase and CME have obvious overlaps, but they also have massive financial functions where they don't. That's what the corn bank loan example was trying to highlight.
EDIT to reply: >The assertion is that Coinbase has more work to do and thus more need for headcount than CME. I dispute that.
Sorry for the misunderstanding! I never intended to convince people that Coinbase needs more employees than CME. I should have put a disclaimer in my original comment such as "Coinbase may only need 1/10th the number of CME employees but as fyi, Coinbase is not a direct comparable to CME..."
It's an interesting idea, but don't think you can segregate their exchange role from their authorship or standardization of financial instruments. Any exchange is either creating products to trade or licensing them. Any commodity exchange is naturally interested in setting contract standards related to delivery and quality.
They are an exchange, through and through. Everything else is a side project in support of that one role.
> Coinbase isn't a direct comparable to CME because CME only does the exchange function.
> Coinbase combines several different types of financial institutions in the crypto space:
> + exchange : order matching engine of buy & sell -- analogous to NYSE/NASDAQ/CME
> + broker : custodian of customers' margin accounts -- like Schwab, Vanguard, Fidelity, etc
> + bank : digital wallet and loans with customers' crypto as collateral -- like JP Morgan, Bank of America
> + ecommerce payments : analogous to PayPal/VISA/MC
> Even though CME deals with trading corn commodities, it is not a bank for people to use corn as collateral. Therefore a corn farmer can't go to the CME and get a loan and pay it back when he sells his crop harvest.
> Regardless of all the various financial areas they're in, Coinbase got overstaffed (like many other tech companies overhired) and so they're making aggressive cuts.
So maybe Coinbase should only keep profitable parts and cut/restructure/sell parts that aren't, instead of burning all their revenue in hope of capturing the market?
Take a look at the Coinbase Subreddit to see how many suckers are getting hacked, scammed, locked out for AML reasons on any given day and getting their lawyers to write legal threats to Coinbase. Responding to this all costs money and it's where the Binance model of avoiding AML responsibilities and hiring outside US is superior (until it isn't, when execs end up in a US prison).
Second, Coinbase has ambitions beyond just being an exchange and that's driven a lot of hires. It runs Coinbase Ventures, Coinbase Cloud, an NFT platform, develops tooling (e.g. Coinbase Wallet), and contributes to crypto protocols. A lot of the recent hiring was driven by these "other bets".
For one, they do much more than CME.
a company like Coinbase needs hundreds if not thousands of support staff like a retail bank would that scales with the total active customer base.
the total number of employees doesn’t tell you how many are in a support function.
The company has lots of cash on hand in excess of corporate debt, almost no short-term corporate debt, customer assets backing all customer deposits, and as far as I can tell from a quick read of the latest quarterly report, a clean balance sheet with no red flags.
If the crypto market recovers from the latest crash, which is what has happened after all previous crashes in the past, Coinbase stands to win big.
As the other comment said, we're somewhat in uncharted territory with higher interest rates, but I don't think it will insure a longer winter. It might just keep it from getting quite as high as the ATH for a while, but I think as the rate increases slow down (and especially once they start being cut again) it will start rebounding significantly.
Also if that past experience doesn't apply, then it probably doesn't apply for any other non-crypto company that was founded since 2012 (when Coinbase was founded as well). You expecting all of them to go belly up, just because they only existed in the era of low interest rates?
The types of people reaching out to me to explain crypto during the last boom makes me think the wells are running dry.
Armstrong and his top execs deserve a lot of credit for staying rational over the past few years, while execs at most other firms in the industry seemingly lost their minds and willingly threw themselves into the flames of all sorts of stupid risky schemes destined to burn violently into ash.
Because it feels like they're the only ones that stay legit while also seeming to take security quite seriously.
Everyone else is either a scammer or gets hacked, and I'm convinced at least half of the "hacks" are inside jobs.
Coinbase also is 10x less volume than Binance [2]
You have all of this, then the press who keep advertise them despite the poor metrics, something doesn't sound right
I think it's fair to say people made their choice and the choice is Binance
The narative can't be forced like with other industries, unless you get help from the press and push some FUD, hmm
Or with the help of the CIA with FTX as a poison aimed at Binance, hmm
[1] - https://www.justice.gov/usao-sdny/pr/three-charged-first-eve...
What's the problem with that?
For most places though it means they were throwing whoever they could find at the interviews.
It's customary for a lot of companies to have an interviewer which is above or _at_ the level that you are recruiting. Therefore someone with a year or two of experience is perfectly able to hire an intern or someone that will be hired at the same level as them.
Looking at Amazon for example, "Hire and Develop the Best" is one of the leadership principles, and you CANNOT be promoted if you don't conduct interviews.
Not, “just graduated web dev boot camp and have a fleeting interest in web3” junior.
Note also that I would draw a distinction between 1-2 years of total experience and, say, someone transitioning from academia to industry. Someone who was, say, a successful grad student likely also accumulated a fair amount of other life experience that a 22 year old is unlikely to have.
Last I was interviewed by a junior, I brought up a concept for which he had never heard of. Even after explaining it in great detail, he argued with me for half the interview trying to explain why such a system would never hold in practice. Needless to say, I did not get the position. Total waste of my time.
I interviewed at a place where 75% of the interviewers didn't show up.
The only dude who did, had started the day before...
I am a former employee of BladeLogic, and the founder of Puppet used to work there. In 2008, BladeLogic's largest customer hired me (Bank of America.)
BofA outsourced my job, so I needed somewhere to work, and I reached out to Puppet.
I had an interview schedule with four Puppet employees. 75% of them didn't show up. The one person who DID show up had started the day before my interview.
You can find me on LinkedIn, all the history is there.
My two prior startups were (essentially) in telecom and healthcare. Coming from these well established, highly regulated, somewhat legacy industries to "crypto"/NFTs/web3 was a very interesting experience, to say the least. Users/potential customers for our solution ranged from creators to marketplaces to collectors/investors. Several very general and broad observations:
1) The anonymous/pseudo anonymous nature of the space is bizarre. I would have multiple voice-only meetings with people using aliases and avatars for all communications. To this day I only know some people as "Mango Man" or whatever. Meeting people who could just burn down an entire identity and start fresh when things go sideways is an indicator of the nature of the space.
2) There is a general lack of "adults in the room". I would get on a call with the Founder/CEO of a marketplace or project that was valued (at least) in the > $100m range and hear and see things that were horrifying. My final breaking point was a call with the founder of a well known highly valued NFT marketplace who showed up (Tuesday morning, 10 AM) obviously high on some sort of stimulant. Within the first five minutes of the call they repeated their mantra of "I'm just trying to get made, paid, and laid" several times. They spent the remainder of the (very brief) call describing all kinds of things I'm pretty sure are illegal. On an introductory call.
3) The fraud and overall criminality is well beyond what is publicly known from FTX, Celsius, web3 is going great, etc. The most common reply regarding our solution was along the lines of "Why would we want this? We make our money on fraud". I was frequently reminded me of the scene in The Big Short when they talk to mortgage brokers and come away saying "Why are they confessing?" with the response being "They're not confessing, they're bragging".
4) Any semblance of professionalism and basic standards is generally non-existent. A HEAD OF LEGAL for a well known exchange (Superbowl commercial) would say and post things on LinkedIn that would get you terminated immediately in any other field. Daily.
5) The more technical startups/partners (infrastructure providers, etc) were generally the best to work with. However, the profiles of the founders and team were interesting - many of them had 1-2 years of junior experience at a FAANG (for better or worse).
6) VC in the space is even more wild than what has been reported in the media. I'll just leave this one at that.
7) Many people in the space seemed to just appear from nowhere. Like some of the technical founders with 1-2 years of junior experience and SBF who had a few years doing something at Jane Street I often times couldn't figure out where these people came from or why/how they were here. Of course this is common in tech (from Google to Facebook founders often "appear out of nowhere") but it was still extremely bizarre for SBF type characters to be dealing with hundreds of millions or billions of dollars of other people's money with either no reputation/background or a shady one.
8) In my 25 years of experience I've never dealt with a more generally unimpressive group of people. After nearly two years in the space, meeting hundreds of people, there are only a handful I want to maintain any sort of personal or professional relationship with.
With my background I knew I would experience some culture shock (for lack of a better term) entering a space that was still (after 14 years) the Wild West. What I experienced was (almost universally) so beyond the pale I finally ran away screaming. I spent more and more of my time and energy attempting to motivate myself and the team by focusing on our efforts to do good in the space but after all of this no amount of rationalizing could make up for the cesspool I was living in every day. Like the famous saying goes - "If you think you might be depressed, first make sure you're not just surrounded by assholes".
Basically, what I'm saying is, when I see the unbelievable-to-most FTX (and other) stories unfolding in the media all I can think is "Yep, sounds about right". When I see stories like this and people asking "What are all of these people doing?" I can firmly respond with either "I have no idea" or "Trying to manage this crazy world takes a lot of people". Thankfully I'm not in the space any longer but as shoes keep dropping left and right I don't think I could be surprised by anything anymore.
[0] - https://fnftf.io/
I can't blame them. It involves money and it's a new and risky and currently unregulated space. Things go sideways unexpectedly or the SEC changes their rules suddenly (see them possibly classifying a bunch of tokens as securities when they didn't before, with all the KYC and other regulations that requires) and you run the risk of having both users that went too deep into it (like exist for damn near everything, including Pokemon cards) trying to kill you and SEC trying to put you in jail.
I've done a little code assistance on a web3 project (mostly just helping a friend who's doing the actual coding, when they have questions) and I'm doing my best not to have my name associated with it, just in case, even though I think the project is trying to make positive changes and will be one of the 'good' ones eventually.
For the longest time I avoided any jobs involving money specifically because I didn't want to risk screwing something up and causing a lot of pain or lost money for people (reason why I avoided healthcare too). And yet now I've got professional experience working for a healthcare company and as a consultant for a major financial company, so I ended up down that path anyway.
The genesis story is early 2021 I was talking to my sister (who is a respected digital artist) and she asked me about "these NFT things". Being technical I was of course aware of them. She then followed up with "Yeah, my friends and I have tried them but all of our stuff just ends up stolen anyway". Needless to say I was intrigued.
My general thinking was - this stuff is here, people are buying into it for whatever reasons, and the more I look the more fraud and shady stuff there is. Broadly speaking I tend to have a "harm reduction" mindset - everything from safe injection sites to crypto. For some things it just seems like people can't help themselves so once the "cat is out of the bag" there's value and nobility in making inherently risky things at least somewhat safer. I know there are plenty of people here on HN and elsewhere with the mindset of "they're idiots, they deserve to lose everything" and/or a desire to just watch the entire thing burn. I (clearly) have a more measured and nuanced take.
That said, my experience ended up being less like "safe injection sites" and more like "this entire space IS the cartel and there are few (if any) people doing any good whatsoever". As I noted I can't recall anything positive or beneficial in my time dealing with it. The impact on my mental health and general feeling of spitting in the ocean finally drove me out.
Most employees at Kraken don't know what the CTO looks like. He never turns the camera on during meetings and as far as I'm aware hasn't showed up to the in person events. He wrote most of the legacy backend.
This was mostly a curiosity though. None of the other points apply to him. He was professional.
> 6) VC in the space is even more wild than what has been reported in the media. I'll just leave this one at that.
I know a guy who went to a crypto hackathon (which is a chance for devs and start ups to show off for VCs.). He said a disturbing number of VCs, mostly creepy old guys who got rich off crypto, showed up with obvious asian/eastern European prostitutes or sugar babies.
> This was mostly a curiosity though. None of the other points apply to him. He was professional.
Call me "old school" but the CTO of a company valued at > $10B that manages who-knows-how-much in terms of customer assets shouldn't be able to do this. Frankly, it's ridiculous - can you imagine the CTO of Bank of America being an avatar/unknown? Seriously. Where is an adult to say "turn your camera on, show up to stuff, use your real name, or you're out"?!?!
Regarding the "sugar babies" and what-not - yes. Just another data point that demonstrates how ridiculously shady and so far beyond acceptable behavior, practice, and standards the space is.
(They didn't offer me a position for a given reason that was also weird. Strange place.)
I haven’t been able to find a view that shows a downward trend since…
Trend should be -2X
Going to the 1D view it looks like it may be fixed, but the other views are showing bad numbers.
I've noticed Fidelity removes default graphs from dashboards or changes the time period during major market corrections. Articles urging people not to panic sell also start appearing. Here's what they emailed customers on March 5, 2020:
Historically, the economy and the stock market have bounced back and market gains made during economic expansions have far outpaced losses that occurred during recessions.
Considering what people do and the track record of buy-and-hold, this is a responsible move.
On the web app I see options for viewing performance over reasonable periods like 1d, 5d, 1w, 1y, all
"Therefore, I've made the difficult decision to reduce our operating expense(1) by about 25% Q/Q, which includes letting go of about 950 people
(..)
(1) Comprising Sales and Marketing Expenses, Technology and Development + General & Administrative Expenses, including stock-based compensation and excluding restructuring expenses and Other operating expenses"
(..)
In futher news, highly recommend Ben Thompson's recent interview with Brian Armstrong.
There it is. Rings incredibly hollow when the same line was trotted out just a few months ago with zero impact or meaning behind the statement, given it clearly didn't change anything.
Also, Coinbase sells unregistered securities.
"As the accountability rests with me, I will be taking a 25% cut on my $60 million bonus this year"
I doubt he’s getting anything close to that in 2023.
More than likely, any career CEO who would be brought in to replace him would likely continue staffing cuts, not reverse them.
(Other than the layoffs which are happening across the board at nearly all big tech)
BTC fell through a few of these whole number price floors on the way down, this is just the one that finally broke the momentum. If it is going to continue to fall then downward pressure will build up until it overwhelms these buy orders and it will crack down to the next floor. Kind of like the 40k to 30k fall, the 30k to 20k fall or the 20k to 16k fall.
I wonder if that resentment would have been the same toward the Internet in 1997. You know, that useless thing for hackers and scammers that only benefits crime and should be regulated like heck by governments for our safety.
But 97 was late for the internet. ARPANET dates back to the 1970s .. as a government project!
There was a great deal of value in the internet liberating people from monopolist telcos and their billing practices, as well as from borders, and there was nowhere near the same level of scamminess and crime. Why? Because there was no money changing hands.
My grandparents had an AOL account in 1997.
https://news.ycombinator.com/item?id=34333210
The universe has delivered with impeccable timing.
Even if there seems to be a trading volume, i’m skeptical of that trading. Maybe it’s just painting the tape?
What are those people achieving by trading the thing at about the same price? Are we churning believers? Why would the price be stable?
https://ycharts.com/indicators/bitcoin_transactions_per_day#....
https://hcburger.com/blog/powerlaw/index.html
https://twitter.com/DeFi_initiate/status/1576543256627724288...
Of course, being historically consistent is not mandatory. The models may break, especially now that we have higher interest rates.
2020
2019
2013-2016
2010
2009
2002
and 1986.
For a 52-year period, that's not too many years. Just a fifth.
If the Fed were genuinely targeting 2%, I'd expect half.
The geometric mean inflation rate of this period is 3.92%, almost double the stated target.
I used data from here: https://www.macrotrends.net/countries/USA/united-states/infl...
If the Coinbase app supported it, that would allow all of the Coinbase users to do real decentralized micropayments.
Any theories, why they don't do that?
"Oh, you also have a lightning app? Cool, I'll send you the money this way."
2. It requires a transaction to L1 to open/close a channel. If 1B+ people used it the Bitcoin network itself couldn't cope with that. At 7tps it can handle a max of 220M transactions per year.
3. You need enough liquidity in all channels to your destination to send a payment. This is fine for micro transactions but it can't handle $1k+ transactions well at all.
4. You have to re-balance channels or they stop working.
5. You need some sort of watchtower / guardian node to prevent the other person from being able to steal your funds.
ZK-Rollups completely obsolete the lightning network. If Bitcoin did a hard fork to make them possible every single person would migrate to them. Lightning is not a long term solution, it's mostly a meme to throw back at people who say Bitcoin doesn't scale.
You can't use it to make a payment to an unrelated person without opening a channel. So there's a "routing layer" where you find a channel in common, like trying to send a UUCP email. e.g. if you wanted to send to another coinbase user, you'd send over your channel to coinbase and they'd send it out again over their channel.
But then .. you could just both use a coinbase payment account?
If you want an exchange that keeps up with the ecosystem you should use someone else. Kraken qualifies: https://blog.kraken.com/post/13502/kraken-now-supports-insta...
What? They’ve been supporting segwit addresses for years
You only get the transaction size discount with “native” segwit transactions that are BECH32.
https://www.ledger.com/academy/difference-between-segwit-and...
https://blockstream.info/tx/62c16aeb80944ed8e6d4c896dbd88661...
LN is also unreliable to this day and i frequently get routing issues about 15% of the time using the most popular custodial LN wallets and sending to popular LN payment gateways. I'm guessing it would be even worse if i was transacting with small shops or self-hosted LN users. This would be a massive customer support burden.
I know he’s said this but it’s 100% bullshit since Kraken is able to list XMR just fine.
LN is definitely good for something where there's an in-person exchange of goods so at least potential abuse would leave someone at a physical location with surveillance footage, or where there is a subscription service that can be turned off if the payment turns out to be fraudulent. LN has a higher likelihood of assurance of funds delivery in a timely manner than a credit card -- but that there are entities developed that will insure traditional credit transactions.
read that again
you're not an individual to corporations, just an expendable
can only imagine the joy shareholders get out of "cutting expenses", they get richer and you peasants lose jobs
expenses are on income statements
carry on
You think executives should let a company go bust, rather than shedding staff when times aren't good?
Coincidence? I think not.
https://www.coindesk.com/markets/2023/01/09/jefferies-initia...
What I do know is that they have a lot of things working against them: - Money is not cheap anymoore - Their market is collapsing.
I don't see how a company makes it through. Even if they navigate the present environment and manage to finance the company through the new few years, they may do so in to an ultimately collapsing market.
There is no reason to assume that crypto trading will exist in any meaningful way in the next few years. (It may, sure. You may believe, yes. Are there any clear indicators that it will stabilize and grow? No there are not.)
This is actually working for them. https://www.coindesk.com/business/2022/11/02/coinbases-inter...
The sports trading card market is ~$7B - and plenty of people's entire life and income revolves around trading sports cards.
I am bullish on bootstrapped startup for next years.
Unemployment in the US is currently at its lowest level in 50 years. What economic downturn are they referring to?
High inflation necessitating high interest rates is not a healthy economy.
I guess all companies are making cuts before new fiscal year? Survive this month and maybe you're ok for time being?
That's when I sold.
But now I see #1 story on Coindesk "Shiba Inu-Themed BONK Tokens Are Yielding Nearly 1,000%"
So I guess we are not there yet
They're all hoarding wealth and offloading risk on others, it's just that in comparison, the crypto-rich are not (yet?) a social class with an army of lobbyists on its payroll.
Fortunately, we do not have to rely on our beliefs here, we have an objective measure, which we call "money".
If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because people willingly paid them those billions of dollars for their product/service.
Of course the whole logic breaks down with purely speculative financial assets such as crypto.
What? You don't think the two measures would converge? In either case, the one with more market power would use that to improve their side of the bargain? Who'd've thunk...
What was the value FTX or Theranos brought to society?
"Provides value" is loosely connected to "expected future value", but it's certainly not the same thing.
But back to your point: it is possible to simulate either or both of those things and have eager investors get in early, but that's why they (probably) get in for less money than if the company had done what it claimed. They took a risk, and taking a risk is one of the valuable contributions one can make to a company.
Most high net worth individuals keep their wealth in stocks and shares. This is not what hoarding means.
The comparison to crypto scams is absurd.
Inheritance makes providing value worth doing past the point of one's own comfort. Many people's work becomes most valuable in their latter years, and so we would want them to keep working and pass on wealth, as opposed to either stopping working or just splashing their money out on nonsense.
The principle of being able to own things and work to one's own good, and the good of those whom one choosing to transfer it to, is the fundamental basis on which we now exist in the most advanced societies the world has ever seen, and the most rapidly advancing societies. It's not perfect, but every authoritarian attempt to make things better by centralising power in the name of fairness has gone terribly.
Pump and dump schemes are just nothing like that.
The legitimacy of the social contract that respects private ownership depends on the prospect of a good life for those who work for it.
When people lose belief in that prospect, they have no reason to respect the rules of that social contract.
I agree that as individual liberty is eroded, and it's easier to just become yet another BS cog in a giant BS machine, with no incentives to make anything better, then you can descend into something authoritarian that promises a better way, such as our previous attempts at socialism, but the way out isn't to reinforce (or repeat) incorrect assumptions about money. It's to campaign for more liberty and fairness.
The reason bitcoin will never be the main currency is, that even in case case crypto will ever be technically/UX viable as a currency (is very, very, very far from it) nobody of the 99% that do not own bitcoin now will choose bitcoin as the main currency. They will choose some most likely government started crypto where they can exchange their current money 1:1 and not buy into some stupid old thing that gives them nothing.
So if crypto ever succeeds it is the death of bitcoin as the new system that converts from the old will win by a million miles
Clearly, I didn't think the middlemen provided 20% of value, but I was willing to cough up the cash to perform the overall transaction. If a cheaper money transfer option existed I'd never have used the middlemen, whom provided nothing of value to me for their 20% charge. Cheaper options do exist now...
There's a lot of hand waving, but if you trust paypal, which you probably should not, the cost of moving money internationally has dropped to about 5% and the cost of currency conversions has dropped to 4%. I would assume they double dip and converting USD in USA to swiss whatevers in Switzerland would cost about 9%. Then of course there are withdrawal fees and so forth stacked on top.
Anyway, lets say you can turn and burn bitcoin in "somewhat less than an hour" so simply divide total international daily transaction volume by twenty five or so and that seems a reasonable starting point for a store of value. If the price gets too high making it cost more to use BTC than paypal, then the BTC transaction volume would seem to drop until prices drop and people start using BTC again.
Obviously for various UI and enduser reasons I would not expect all international trade to flow over either BTC or paypal or the legacy banking system, but "enough" should be there to support the BTC price at some level.
I ordered equipment for a company from a European seller , and because I wasn't a VC backed technology startup, instead focused on physical goods- there was no army of people to help me set up an international bank for my company. So what I did was drop them some bitcoin. Just getting the wire approvals would've taken longer.
There's a lot of trash in the crypto world but also some valid projects.
There is no end date to government currency debasement.
While other assets are bound to provide long-term returns greater than inflation (for example, stocks and bonds [1]), cryptocurrency can not surpass inflation long-term, but it still does so while demand is growing. In addition, even after it reaches a stable demand (which I reckon will be in 5-10 years, with market saturation), it will be a means of diversification (like gold is currently).
It is silly to lump all crypto coins in a single bucket. BTC is very different than DOGE or SHIB. I guess your parent post was about BTC supply being limited.
But if we're looking at art, and you show me the original Starry night, a print, and then a picture of the kool-aid man busting through a wall, and ask me which 2 are most similar, I'm going to pick the starry nights
You actually said that - "Interesting you say that, because it's actually very similar to Doge". Especially when the context was about the value of crypto in relation to supply and demand. Given that you are familiar with SHIB being an ERC20, I am fairly certain you are aware of DOGE's supply being nothing like BTC. And yet you conflate the two. Just for FUD?
There are too many tokens with Elon Musk and Shiba Inu, and they are all interchangeable.
/s
I think we'd all like to imagine a world where company's are run like sea faring ships- the captain gets paid the most to be accountable for the whole operation, and when things go wrong must be the last one off the ship. To the point where any selfish behavior by the captain in an emergency can be criminal. (This is just an analogy, not saying the CEO should actually risk life and limb.)
But in reality they are run a lot more like Project Runway. The contestants pour their blood, sweat, and tears into their garments and over the course of the season, and eventually the best of them receives a spread in Vogue and something like a $500,000 contract and some other goodies. The real winner though is always Heidi, who collects her $20M fee regardless of who gets the show's nominal prizes and is awarded an Emmy for executive producing.
* People understandably put a very high value on their life continuing, and really don't want to trade it against other things.
* People vary a lot in how much value they put on their job continuing, and how much they are willing to trade off against it.
For example, many people would consider taking a 2x raise even if it increased their chances of losing their job in the next 3y from 5% to 50%, but you're not going to find many takers for a 50% chance of death in the next 3y no matter what you're offering.
You can have a culture where jobs are treated as sacrosanct as lives, who are nearly so. In a culture like that companies would be extremely cautious about hiring in a way that would make workers overall worse off, and startups with be much less practical. Europe is farther in this direction than the US, though not all the way to what I think you are proposing with your analogy.
"White collar crime" generally has vastly broader effects than what we normally think of when we talk about crime; it's just harder to see because the effects are not as immediate or obvious. Livelihoods destroyed by layoffs to juice the stock price; land, water, and air poisoned by pollutants released because paying the fine is cheaper than actually cleaning them up; people dying because they can no longer afford the insulin they need to live after the price was raised absurd amounts purely to increase profits...
Just because the CEOs aren't physically on a ship where everyone's lives depend on making good decisions in times of crisis doesn't mean they aren't responsible for incalculable pain, suffering, misery, and death.
If someone really over leveraged themselves so much, at some point you can’t blame their employer.
So he's heaping all of the blame on the terminated employees?
Or, is speculation the only use-case for crypto? Sure we've had example use-cases for crypto as a value store and exchange medium, but outside the bleeding-edge of technology, and away from the VC fever dream (let alone con-artist central), where does crypto fit into society?
There are major incumbent forces all the way up to government that are keen to control the rise of this technology so it's clearly not an easy task, but for the likes of Coinbase to survive I think we need to see real value in using the things you actually trade on their exchange. Unfortunately right now it seems that Coinbase is a company predicated on the assumption that “crypto is going to become the main way to exchange value at some point in the future”.
Companies powered by hype and VC speculation invariably collapse as markets move on, so if I were investing in them I'd be really keen to have them allocate the majority of their resources at pushing crypto adoption into non-investment-based use-cases, which is to say, banks having large crypto teams is much less important than average people actively using crypto for goods and services (if that's to be the dominant use-case for crypto.)
Crypto has never had a real answer to that question. The opportunities of crypto are things like you owning your money instead of the bank, fast transaction speeds and anonymity - nobody but a tiny percentage of people give a crap about any of this. Certainly not enough to supplant the most prevalent piece of infrastructure in modern society, the fiat.
Operating costs reduced by 25%, but it's actually roughly a 20% reduction in workforce (950 employees out of ~4700)
Like a team of 5 software engineers, and a customer support team of 10, and 1 boss ought to cover it...
Can't wait for the next round of crypto hype, excited to see mew use cases along with new scams.
They don't need datacenters, quill pens and paper accounting could handle that 200 years ago with about 3 hours work per day.
Generally supermarket cashiers can do somewhat less than 30 transactions per hour, so I think its justified they should be able to do all the accounting manually in three hours.
The numbers do look a bit odd.
The other problem is its a form of sophistry to react to "the absolute numbers are awful" with a prayer to the efficient market hypothesis like "why hasn't a more successful competitor arisen". That deflects from the original question in a sophistry manner, not answers it. Sure, I'm a believer too, but can't answer a technical question with a prayer. The original question stands unanswered, why are the absolute numbers so utterly awful?
Note I'm a happy customer, it would be nice for them not to go out of business, but with those numbers...
There is nothing ethically superior about any financial manipulation. @sama just raised a multi-billion round on OpenAI. “Open” “AI”. Loopt sold to Greenpoint with thumbs on the scales from both pg and Conway, which is why he’s in a position to do that.
Parsing the details about how wealthy people with the right parents extract wealth is an exercise in parsing minutia.
The chosen get richer. The militant guardians of freedom fight for Drepper’s ideology (he works for Goldman Sachs).
And I’m pretty comfortable with all this: it’s the same as it always was.
Most crypto is a fucking scam. But it’s the same amount of cynical and worse connected than YC.
we just do things differnetly here
upper crust of socialm mediaz
I hope, some years down the line, you take the broader life lesson that anyone promising you money for nothing does not have your best interests at heart.
On another note, one thing about Coinbase that struck me, was that on the app/website it doesn't actually show you how much money you put in / what the return on your investment is (I used a spreadsheet to track my own investment "success").
I suspect Coinbase does not do this deliberately - as many, many people who invest in Crypto lose money and it doesn't want to highlight this point too much.
Likewise, you could withdraw your bitcoin to your own wallet for free. The fee comes when you change from one type of currency to another.
I think the reason they don’t show return on investment is because Coinbase presents itself as an exchange, not an investment platform. The purpose is to facilitate the exchange of currency from one kind to another. They’re not positioning themselves as trying to help you build up retirement nest egg.
I am not positive about the future of crypto though. And I said before it's also telling that I had to use a spreadsheet to look at how much I put in, fees, money lost etc. On Coinbase. Again I suspect it's because a lot of people are losing money and the owners want that information hidden.