Investing in Coinbase
By Jeremy G. Philips
Recent commentary about digital currencies has mostly focused on their extraordinary price volatility, rather than emerging use cases.
Digital currencies are in the early stages of performing powerful tasks — irrespective of the inevitable hype cycles, the merits of any particular flavor, or various misadventures along the way. To date, they have mostly been used for speculation or as a store of value. Increasingly, they are also exhibiting early potential to power new forms of autonomous, distributed, networks.
As with most new technologies, it will take time for these use cases to fully emerge, and they likely won’t conform to original conceptions. Early experiences have naturally been somewhat uneven.
The potential opportunity is enormous, notwithstanding inevitable further bumps and forks in the road. The advent of the blockchain and associated digital currencies has the potential to unlock new business models which bypass traditional financial intermediaries, and appropriately align incentives for participants. This is a borderless global phenomenon. The toothpaste is now out of the tube. Decentralized networks and digital currencies — while far from a panacea for every business problem — are not going away.
Coinbase has long been at the center of this growing ecosystem and is best placed to provide a safe, secure, environment to transact. This function is particularly valuable in a market that is still developing and has associated risks and growing pains.
That’s why we participated in the current financing of Coinbase, alongside our friends at IVP, who led the round, and others.
We have known Brian Armstrong and the Coinbase team for several years and have been impressed by their clearly articulated strategy to create an “open financial system for the world”, against which they have been tirelessly executing for the past five years. They have released a suite of products to implement their plan: Coinbase has helped consumerize digital currencies; GDAX has become a leading marketplace for institutions to trade; and Toshi is in the early days of enabling consumers to utilize tokens in the real.
We are excited to be part of this ambitious journey.
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