How Coinbase is building a crypto empire for users’ crypto lifecycles

Recently, Coinbase acquired task-platform Earn.com. Coinbase is an online platform for users and merchants to buy, sell, and accept cryptocurrencies. For these activities Coinbase has three different products:
  • gdax exchange: buying and selling of cryptocurrencies for institutional and professional investors
  • Coinbase.com: buying and selling of cryptocurrencies for „mainstream“ users
  • Coinbase Commerce: merchants payment systems for accepting cryptocurrency payments

Earn.com is a task-platform where users earn bitcoin for completing tasks. The tasks are offered by blockchain startups doing an ICO and involve things like signing up for newsletters or joining telegram groups. Those blockchain startups are very often in an early phase and Earn.com serves as a marketing tool for them.

Some argue that the acquisition was an acqui-hire for Earn founder and CEO Balaji Srinivasan. And Balaji Srinivasan, who has an impressive track record (among other things as partner at Andreessen Horowitz) is now indeed Coinbase’s CTO.

Whereas acqui-hiring Balaji Srinivasan might be the acquisition’s real intention, looking at the acquisition in the context of Coinbase’s other acquisitions and their self-imposed company description shows another perspective, namely that Coinbase is building a “crypto empire“ serving a user’s whole „crypto lifecycle“.

Building a crypto empire with Earn.com, Cipher Browser, Coinbase.com, and gdax

Coinbase was founded in 2012 and since then they have made the following five acquisitions:

  1. Kippt, a bookmarking tool
  2. Blockr.io, a blockchain explorer
  3. memo.ai, a Slack-based wiki
  4. Earn.com, task-platform
  5. Cipher Browser, a dapp Browser
Overview of Coinbase’s acquisitions
Acquisition date Acquired Organization Description Source
13.04.2018  Cipher Browser  Cipher Browser is the world’s first full-featured mobile dapp browser and wallet for the Ethereum blockchain. Cipher allows you to interact with dapps powered by Ethereum on your mobile device and makes it easy for you to securely store, send and receive Ether and ERC20 tokens. (Source: Website)  Source
13.04.2018  Earn.com Earn Bitcoin Earn bitcoin by replying to emails and completing tasks. Keep the money, or donate it to charity. (Source: Website) Source
13.04.2018  memo.ai  The wiki that’s always up-to-date Memo is a super-powered app for your team’s knowledge (Source: Website) Source
13.04.2018  Blockr.io Blockchain explorer Source
13.04.2018 Kippt  Kippt is a bookmarking service founded in 2011 which has helped hundreds of thousands of people store and share knowledge, ideas and inspiration from around the web. Since 2014 we have moved work on other projects and decided to keep Kippt running for people still using it. You can read more from our blog post. As time has gone by, our energy towards maintaining Kippt has gone down and the cost of running the service has gone up. With a heavy heart we have decided to end the journey of Kippt for now and shut the service down. (Source: Website) Source

“Coinbase is the easiest and most trusted place to buy, sell, and manage your digital currency.“Whereas memo and probably Kippt were an aqui-hire, the acquisitions of Cipher, Blockr, and Earn can be seen as an extension of Coinbase’s self-imposed company description (from their Website)

researchly_coinbase_earn_com_acquisition
About Coinbase (Source: Coinbase’s Website)

With Coinbase.com they target average investors who want to invest in established cryptos (established in terms of age and market cap).

With gdax they target more experienced traders, again for established cryptos.

Blockr.io, the blockchain explorer, is integrated into those services as a feature to help users track their transactions.

Finally, Earn.com and Cipher Browser are positioned at the beginning and end of a user’s crypto lifecycle.

With Earn.com users are on-boared and hooked into the crypto world through small steps, without risk and most importantly for free. While completing tasks on Earn.com people might learn a thing or two about crypto projects and simultaneously receive money that they can use to invest further; firstly via Coinbase and later on gdax. Moreover, they can buy additional cryptos through Coinbase.com or gdax.

Finally, after purchasing cryptos people browse dapps with the Cipher Browser and find applications where they can spend their cryptos.

Coinbase’s future as a potential gatekeeper

Considering in this context the allegations by Wikileaks that Coinbase has shut down their Coinbase Commerce account, triggers the question of Coinbase’s future position as a gatekeeper. Coinbase.com, Earn.com, and Cipher Browser are all known projects and especially Coinbase.com is for many the first entry into the crypto world. Moreover, rumors about cryptos being listed on Coinbase have lead to them increasing — often rapidly — in price.

Thus, it will be interesting to see how powerful Coinbase will get and how centralized the crypto world, in general, will be (comparing to how much is controlled by GAFA). For instance, what if Coinbase tries to start regulating which dapps people see in the Cipher Browser? This would definitely go against the idea of a decentralized Internet and it will be interesting to see what will happen if Coinbase amounts as much power as Apple or Google have with their app stores.

Finally, Coinbase’s past acquisitions beg the question of future ones. Continuing with the lifecycle argument crypto inheritance management solutions such as DigiPulse are the first that come to mind.

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Notes

This post first appeared on http://researchly.leobosankic.com/

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