No industry better epitomizes elite tech opinion as blockchain. Ignored for years in its infancy, the industry received intense interest from investors, engineers and the public five years ago, generating some of the most deeply devout evangelists that have emanated from startups since the advent of the World Wide Web and the dot-com boom. Then, it all burned down, but a few companies made it through the flames, among them Coinbase.
Coinbase today is still valued at a 2018 price of $8 billion, and is expected to go public in the coming months. Despite major controversies around its mission-focused policy and diversity, the company continues to lead the pack of consumer-oriented blockchain and crypto companies.
That makes its origin story and rise all the more enticing. Jeff John Roberts, a staff writer at Fortune, has put together precisely that narrative in his new book “Kings of Crypto”, published by Harvard Business School Press. It’s the story of Coinbase, Brian Armstrong and the dream of a crypto economy. Given all the recent discussions and controversies swirling the company and Bitcoin’s recent record-beating price increase, provides a deeper, more analytical perspective on a complicated subject.
I sat down with Roberts last month to talk more about the company, the crypto industry at large and what’s next as we head into 2021.
This interview has been edited and condensed for clarity.
I think the most interesting story right now is that there is this tension because Wall Street and Silicon Valley don’t like each other.
TechCrunch: How did you get into this project and decide to write the book?
Jeff John Roberts: There’s a lot of crypto books out there, some of them not very good, but I think there’s kind of a first-generation series of books on the subject. Nate Popper’s “Digital Gold” is very good, and then the Wall Street Journal guys with “Age of Cryptocurrency“ is a really good explainer, so I was looking for a new way to tell the story. Focusing on a company is just sort of a narrative mechanism, since companies can be a good way to tell the story of a broader industry.
I used Coinbase as a vehicle because a lot of the early stuff in crypto is hard to understand. I think it’s still true, but crypto can’t decide if it wants to be a subculture or sort of a mainstream technology and a lot of the early writings on it celebrated the quirky angles. So I tried to tell it as more of a general interest, “Hatching Twitter”-style business story and fortunately there’s a lot of gossip and things in there to recount.
How did you get interested in crypto originally?
My own interest came about when I was at GigaOm. Back in 2013, there was a meeting in New York City in Union Square, an event called Satoshi Square every Monday at the little corner of the park. I went down to check it out, and what it emerged to be was a bunch of crypto anarchists selling bitcoin. Some of the other people there though were Wall Street traders in $5,000 suits, which left an indelible image for me. It was really funny watching that collision of cultures, with the mix of greed and counterculture.
So it was during Bitcoin’s first splash into something close to the mainstream that I covered, and then that kind of dried up and went away, as it does, and then it came roaring back in 2015, 2016 and I covered the bubble. And now there’s again been an uptick in interest. So my timing for the book wasn’t good in the sense of the pandemic (I got cheated out of my canapé launch parties) but my timing was good in that a lot of the prices are soaring today.
You’ve seen a lot in the crypto industry over the years, what’s the most interesting storyline today?
I think the most interesting story right now is that there is this tension because Wall Street and Silicon Valley don’t like each other, but for crypto, they need each other, and it’s been interesting watching them kind of dance and find a way to kind of bridge the two worlds.
Bitcoin is forever promising it’s going to change our financial world, but realistically it hasn’t, but I think in the coming decade, blockchain really is going to start doing some needed stuff and so that kind of convergence of Wall Street and the Valley [is inevitable].
Then there are also the big corporates coming in. Obviously Facebook with Libra, but Square and PayPal and I’m sure that Apple’s going to get in this game soon because they’re good at privacy, they’ve got all the wallets and they presumably pay a shit ton in transaction fees, so I think that’s the coming story and what’s interesting to me. And then Coinbase sort of sits right kind of at the center of all that, so they’re a good vehicle to tell that story.
You chose Coinbase as one of the focus companies for the book. Why them?
I mean, there’s a lot of recent cultural stuff we can talk about, but it was interesting to me because going back to what we talked about earlier: Do you want to be a rebel in a subculture or do you want to actually make a difference?
I think Coinbase was the first and the best at the latter, and Brian Armstrong, who even among many Valley CEOs is a weird dude, he saw early the need to make this mainstream. That tension goes on to this day in the crypto world — and also within Coinbase — between the purest sort of libertarian vision of holding your own wallet versus the practicality. I think Coinbase is very astute in seeing that’s where things are going and building it out that way, building sort of the crypto version of online banking.
So I think that they’re always telling you, “We’re the white knight of crypto” and so on, and then of course Andreessen Horowitz and Fred Wilson had a big role in shepherding it that way, but it was the right call and they’ve largely executed, which I think is really interesting.
What was it like building Coinbase early on? Were there some fun stories from that time?