Coinbase, Inc. is a company that provides digital currency wallets. Coinbase provides a platform that allows users to transact in bitcoins, along with a global digital asset exchange and merchant solutions.
Additionally, it provides a platform for customers, merchants, and cryptocurrency exchanges to buy, sell, and store Bitcoin, Ethereum, and litecoin.
The company also runs the Global Digital Asset Exchange (GDAX), a cryptocurrency trading platform for Bitcoin, Ethereum, and Litecoin. It also contains an application programming interface (API) for creating Bitcoin addresses and wallets.
What is Coinbase?
Coinbase is a cryptocurrency exchange platform where users may purchase and sell bitcoins. The company’s services extend beyond trading clients can store assets, obtain a Coinbase credit card, learn about cryptos, and accept crypto payments through their e-commerce store.
Coinbase’s business model revolves around cryptocurrency trading fees. A custody service and revenue from startup investments round out the revenue streams, along with credit card transaction fees for course promotion.
The company, headquartered in San Francisco and founded in 2012, is now the first widely adopted bitcoin startup. Coinbase plans to list on the stock exchange in 2021.
How Does Coinbase Work?
Coinbase Login is a digital currency trading platform that offers consumers to trade a variety of digital currencies. Moreover, the Coinbase Pro and Prime platforms enable a greater level of customization for consumers and institutions. The Coinbase API allows traders to access real-time market data and create automated trading bots.
Consumers can sign up for the Coinbase Wallet (also known as a crypto wallet) along with the Coinbase trading platform (alternatively referred to as an exchange wallet). Coinbase Wallet is available on Android and iOS as a separate app.
How Does Coinbase Make Money?
The business model of Coinbase has evolved significantly since its inception. The company was originally primarily dependent on trading fees but now generates revenue from several additional sources.
Coinbase makes money in many ways today, including trading fees, maker and taker fees, interchange fees, interest on cash, sales of software tools, and interest on personal loans.
Coinbase’s primary source of revenue comes from the fees it charges to purchase and sell cryptocurrency. Coinbase’s commission system is tiered, which means its fees differ based on location and volume of transactions.
Coinbase’s cryptocurrency classes help customers learn more about new cryptocurrencies.
The user will earn a payout in the currency of the course once the course has been completed. Users must watch many videos and respond to questions after each video to complete a course.
It was acquired by Coinbase for $120 million in 2018 when Earn.com was acquired by Coinbase. The founders of Earn.com founded the company as a means to connect busy professionals with small fees.
Coinbase Ventures was formed in 2018 as a specialized investment team. The fund invests in blockchain and cryptocurrencies companies at an early stage.
The Venture unit may sell shares in the companies they invest in for a profit (if they don’t acquire them) even if their primary objective isn’t profit.
What is the Funding and Valuation of Coinbase?
Crunchbase reports that Coinbase has raised $547.3 million in nine rounds of funding. Coinbase raised $300 million in a series E financing round valued the business at $8 billion.
The company is expected to list directly on the public markets. Experts believe Coinbase’s valuation will soar to over $100 billion on its first day of trading.
The company is backed by Andreessen Horowitz, Y Combinator, Wellington Management, Tiger Global Management, and Ribbit Capital.
What is the Revenue of Coinbase?
According to Coinbase, the company made $1.28 billion in revenue for 2020, up more than 100% from the previous year ($533 million in 2019).
A first-time profit was realized by the corporation as well. Coinbase Login earned approximately $322 million in 2020 after expenses (the business lost $30 million in 2019).
Success Story of Coinbase
Brain Armstrong (CEO) and Fred Ehrsam created Coinbase in 2012. Armstrong formerly worked at Airbnb as a software engineer.
The company reportedly processed $500 million in payments annually in 192 countries, with each network charging a transaction fee.
There were only a few dedicated financial specialists who were using bitcoin (and the blockchain concept). A cryptocurrency discussion group introduced Armstrong to Ben Reeves, a developer who built Blockchain.info, which tracks bitcoin transactions. They discussed many options before settling on one: PayPal for bitcoin.
Shortly after that, they were accepted to propose their idea at Y Combinator, the world’s most prestigious startup accelerator program. A quarrel between Reeves and his co-pilot resulted in separation, just as Reeves took off for San Francisco.