Garry's Channel: Coinbase CEO Brian Armstrong on cryptocurrency and the future of decentralization

This is gonna be a fun conversation.

Should be good.

Today, we're in Los Angeles, California, and we'll be sitting down with Brian Armstrong, founder and CEO of Coinbase. Well, Brian, thanks for hanging out, man. Yeah. Thanks for having me. Where do you even start? I mean, obviously, we're on the other side of an incredible IPO. Congratulations, man. Thank you.

I don't know how to thank you enough. Like, I don't know. Just even being able to meet you and be a part of, like, what what you created is Yeah. You know, unbelievable.

You know, it's mutual. You helped me out a ton in the early days. I don't know if people know that, but you were kinda like my first CEO coach. You made a big investment at the time in in Coinbase before it was really obvious, and it was just me kind of showing you a bunch of numbers on a screen, and what do you think about this and this? And you were giving me advice every week, and I'd come back.

And I remember at a certain point, you saw some some numbers from some growth experiment Yeah. You were like, you should show that to investors. I mean, it makes me wanna invest. So it might make them want to invest. Then kind of a light bulb went off in my head. Was like, would Gary invest? Know? So Yeah.

Totally. Anyway, you took a big big bet on me as well. And you were always just so optimistic about everybody's startups when they were super young and early.

That's that's my biggest memory of you actually from Y Combinator is like, you were championing everybody when they had these beta barely functional products and you were like their first customer and you had their t shirt and like a bit of motivation like an early customer who actually believes in the product can can go a long ways in the early days. So thank you as well. Dude, I appreciate that.

I mean, that's my that's what gets me up in the morning is.

believing before people believe and then helping people believe themselves. But then what you do after that is you just go and make everyone else believe after that. How crazy is that? It can be kind of a self fulfilling prophecy, actually. Like,.

just having somebody else believe in you can make you believe in yourself. And, yeah, there's a lot to that. Like a lot of good ideas probably just die on the vine because, you know, people belittle them or they make fun of them or they assume it'll never work. And so having someone actually believe in your ideas is nontrivial.

The interesting and hard thing though is to, like, believe something that is that can be true. How did you know, like, that early? About crypto and Bitcoin? Yeah. About crypto and I mean, it sounds like there were things from places you worked at before that sort of started to inform.

Mhmm. That. Yeah. That's true. I mean, you never really know for sure. Right? I remember having moments of self doubt where I was like, maybe I'm crazy, you know, because nobody else seems to really get this if I explain it to them.

I I hear some people, you know, they make business ideas today where they're they're sort of doing like almost like a consultant type analysis or a financial analysis and like, this is the TAM and here's the competitor set and so I believe I and for me, it wasn't like that at all. I was I basically just read the white paper and I was like, that's cool. The Bitcoin white paper.

And, I kinda couldn't couldn't get it out of my head and so, it wasn't like I had some really sophisticated analysis of the market potential. There was no market for it. It was basically just I I think this seems like a good idea. It seems like it's interesting to me, and so maybe it'll be interesting to other people. And I was trying to think about all the ways that it could die. You know?

Would it be regulated out of existence? Would there be some kind of cybersecurity flaw? And, like, the more I talked to people about it, couldn't find any obvious reason that that would happen. So I didn't know for sure that it would work, I felt like there was a high enough chance that it was worth making a go of it.

And and you're right, my prior work experience definitely did give me a little bit of an insight into that. Working on fraud prevention at Airbnb, I'd seen how difficult it was to move money around all these countries, both collecting money from customers and then also paying it out to the people who were listing their homes on the site.

And it was like every single country of the world had their own little proprietary system with like a couple of entrenched, you know, oligopoly companies that were charging like, you know, opaque fees. And it just felt like this thing is never gonna get rid of all the bureaucracy and like actually be innovated unless there's a new system. I was thinking about it in terms of the internet. Right?

Like, it wouldn't make sense for each country to have their own proprietary internet and you pay a fee when you wanna load a webpage from another country or something. It's like, let's all just run the world on one standard. It felt so beautiful and elegant to me.

So those were some things which gave me a little bit of a hint that maybe it would work, and I knew enough computer science and enough economics that not that I was an expert in any of it, but I was like after I read the paper a few times, I was like, this might work.

I guess the crazy thing that I remember, and I went into my email and dug up like the first mention of your name in my inbox, and it was actually Jason Tan.

at SIFF Science. Yeah. And the line that really jumped out at me was that you were at Airbnb debugging with Jason at 2AM. Mhmm. And Yeah. I, you know, I think that was the moment where I was like, YC needs to fund Brian. Mhmm. It's like, anyone who loves the craft so much that, you know, at 2AM, you know, you're on, like, brain is engaged in something that is, you know, useful towards a goal.

I mean, that that really resonated with me as a founder because those were the times when I did my absolute best work. You wake up and it's like, woah, I wrote that all that code or I figured out this crazy thing. Right.

Yeah. I mean, I've noticed that actually a lot of founders have weird sleep schedules. It's not that they're all like night owls. Some of them are super early too and they but they it doesn't mean like if you have a normal sleep schedule, you're not a good founder, but I think anybody could probably be a founder.

But I have noticed that there's some people, you know, they're working during the day and there's like so many emails and meetings and you're distracted. So they need like a period of time whether it's super early or super late where there's nothing else scheduled and you can kinda just dig in. Yeah.

Jason Tan, I remember at that time, CifScience was this great start up, YC start up that was doing fraud prevention with machine learning. And at at Airbnb, I was trying to prevent some of the fraud that was happening. And so I had looked at a couple of different solutions and what would it take to build our own. I was like, these guys seem like they have a good product. And it was like, alright.

Let's hook it up. Let's let's debug it. And so I was kinda coding the whole thing and, like, talking with them and going through their API docs. And it was just a convenient time to get work done, like, late at night because, you know, there were so many things happening during the day.

But, yeah, there there definitely were times in my life where I got so deep in the code and I just I wanted to get it working and it was fun. There's other times where you're deep get deep in the code and like nothing is working and it's so incredibly frustrating and two hours later you're like, oh, was like one character was different and it's like so, you know.

So it's it was a labor of love and I love building stuff like that and so, yeah, I definitely got super into it. Yeah. I mean, I love that story just because a lot of people who are watching, like, they look at what you've created and they're like, all desire is so mimetic, especially in terms of creating companies and becoming a founder.

But I feel like that that's, like, the common thread is being a builder, being very focused on you know, it's not the technology on its own. It's not the problem on its own, and it's probably not the sleep schedule, but something about, like, all of that entering a flow state and then having this outcome.

Yeah. Other people have written more eloquently about this than me, but there is something about this desire or this ability to like look at the world and say, okay, this is how things are, but they could be different. And not to just dismiss the idea out of hand because it's so ridiculous.

So there's a weird, it's almost like be able to suspend disbelief for a minute and be like, okay, maybe this could work. That's one kind of characteristic. Then I I think that builder characteristic is super important too. People who are you know, PG wrote a lot about this and everything, right?

Remarkably determined and resilient people that are just like, you know, setback after setback, and they're just like, I'm gonna keep going. Because startups are certainly are certainly like that. So I think the builder piece is interesting too. Like, the ability to code helps.

I don't think it's necessarily a % required, but the reason it helps is that, you know, when you're on a shoestring budget and you've only raised a tiny amount of money, and you maybe only have one or two or three people, you could in theory hire a firm to build your app. Right? But almost, you almost never get the first version of the product right.

And so if you're kinda overpaying, so to speak, like there's some high priced firm to build the app, and then you get the first version wrong, which everybody does, and then you get the second version wrong, which almost everybody does, Then you're on the third version, you're like, you're out of money and you're dead.

And so, I guess it was almost like a way to save money if I just coded it myself. And I remember for instance, like, you know, I wasn't very good at design, for instance.

But I kind of scraped together things as best I could either using like Twitter Bootstrap or there were even like some some people, some friends at YC who like, I remember one of the people like created my logo for me or whatever as a favor. So it was kind of beg, borrow, and steal and try to get something out.

And then if you get iterate, iterate, iterate, you got product market fit, then you can start to bring in enough people to get better and better stuff happening. But in the early days, there were just so few people who would even come join my thing that like had to make something happen with whatever I had.

One thing I remember about your version of Coinbase in 2012 was it was the perfect idiomatic.

expression of bootstrap Yeah. I guess. Yeah. It's like, you know, it looked like Twitter, actually.

So Yeah. It wasn't, by any means, the most beautiful site, but it was functional, and it had something about it that looked it wasn't sketchy. It wasn't gonna it wasn't gonna win any awards, but it wasn't like a huge detractor of the design either, so. But that seemed like a very important thing from the beginning,.

making sort of a clean, well lit place to actually buy this stuff and interact with it. It was interesting to see, like, a lot of people were had the idea of I wanna do something with Bitcoin, but for you to pick, like, something so specific as a problem set, you know, that that wasn't and to actually have built it and, like, started sending.

Bitcoin around with it. Yeah. Well, I mean, that was my so, like, many people, I downloaded the Bitcoin client, which was desktop software, and it had a command line interface. Right? And I started syncing my note on my my MacBook. Like, that was the first version of it that I tried. And I knew that just that wasn't gonna scale to be a large number of people who would wanna do that.

You know, for one thing, it took a while to sync to the blockchain. Right? It reminded me also kind of of, like, email servers or Git servers because, you know, you could run your own email server, but nobody wants to. They want they wanna run Gmail or something in the cloud. It works on your phone and your if you lose your phone, your email's not gone or whatever. And same thing with Git.

Git is hard to use, but GitHub made it easier. So those were sort of my analogies, and I had this thought like someone's gonna make the hosted wallet in the cloud thing for crypto. I was sort of trying to talk myself out of that actually because I was like, that's a really big responsibility. That's gonna be a big company that does that. You're gonna be storing people's money.

You're gonna have to have regulation. And so my early prototypes were like I actually with a friend, made this this Bitcoin wallet that ran on an Android phone and tried to just make it easier to use. And we got a version of it out, but I realized really, like, the day we launched it, I realized it was built wrong because it required it was trying to run the full Bitcoin node on the phone.

And so, even if you were on WiFi, it still took, like, hours to sync. I was like, alright. Someone's gonna make the cloud version of this. I couldn't help myself. I just started tinkering with stuff and.

put it out there. So That's an interesting idea thought pattern that seems to come up a lot. Like, someone's going to do x Mhmm. And so I'd rather be that. Yeah.

I think there's a lot of truth to that. You just you notice there's, some big issue in the world or or some, you know, schlep you had to go through, I think people call it. Right? Sometimes you're like, man, that was such a pain. Someone's gonna have to do this. And then weeks go by and you're like, maybe I should do it. I just solved it for myself. Maybe others need the same thing solved.

I wanted to ask you about, you know, crypto and Bitcoin in particular attracted.

you know, you you had to be a part of a fringe to accept it that early. Mhmm. But then even within that fringe, there were ideas that were not useful or turned out to be wrong. Mhmm. You know, one of which I think was being totally anonymous or pseudonymous at all times. And you had to sort of make you you made a different decision for yourself very early.

Curious because that's like to create a fringe within a fringe that became Coinbase.

Yeah. I mean, there was there were a lot of cypherpunks kind of at those early Bitcoin meetups that I went to, and of course, Satoshi was anonymous. And so I think some people were of the opinion, we're all gonna do a % anonymous here. And I I don't have any issue with that. I think actually the future is probably pseudo anonymity or kind of like on Reddit, you have a username.

You can declare bankruptcy and create a new one. Your reputation goes away too, but I I think that's probably gonna be the future. But for starting a company, it's kind of different than what an individual might want. Right?

And I I knew that if this company was gonna ask people to put in their credit card or their bank account or distort their crypto, then it wouldn't be okay for me to be anonymous. Right? I also just kinda went through the thought exercise, which was, okay. If this thing is small, it can probably fly under the radar and no one's gonna care. But if I don't wanna build a small thing.

I wanna build a thing that, like, helps the whole world use crypto so we can create more economic freedom and all this. So if this gets to millions of people, there's no way I can be anonymous.

Like, I, you know, I I knew enough from reading kind of about the history of PayPal and working at Airbnb, doing this money movement stuff, that there's regulation involved, and, like, I was not willing to sort of be on the run and never come back to The United States or something like that. I was like, I have friends here. I have family here.

I wanna be I need to do this, like, above board from day one if I'm gonna do it. And so I felt like I wanted to create all of these credibility indicators actually about the company, even when it was very tiny. Design is a little thing, you know, how support works. I even remember having on the about page I had like press at and like sales at and like random email addresses.

I was like the only person in the company. So I was trying to create and like, yeah, news articles and putting my actual name of who's who created it and putting it on my LinkedIn and so they can go read about my background. And I'm not trying to hide here. I'm not trying to be anonymous.

Get getting into iCombinator or getting certain investors, like, were all little credibility indicators that started to accumulate to help us, I think, break through some of the noise.

You sort of used a way of thinking that was, if we get there, we're gonna need to have this. Mhmm. Right? And so you had to sort of presuppose you could get to millions of users and then work backwards from there. Totally. That I think is actually relatively rare for a lot of people. Like, they sort of don't focus on the outcome. They sort of and and believe that they can get to the outcome.

They focus on looking like a startup,.

and that's sort of like just the beginning part of it. And it's like Yeah. That, you know, that's putting the cart before the horse in a lot of ways. Yeah. Well, there's probably a way to take that too far, which is like, if you're so worried about having this beautiful product and everything's perfect and that you never launch in the first place, right?

So startups do kinda have to fake it till you make it. You can't be too precious about it. But yeah, if there's an opportunity to create some kind of legitimacy along the way, certainly take it, I think.

I mean, even going earlier, you know, technology and software and computers have treated both of us incredibly well. What was your, like, first computer and first interaction with just,.

you know, tech, period? Well, I feel very lucky on that front because I I grew up in a home where my mother actually worked at IBM. She would take me to work at sometimes, and I got to see computers, and we got some of, like, the early IBM three eighty six and four eighty Sweet. Four eighty six PCs in the home. This was kinda growing up in the Bay Area in California.

And so that was pre Internet, but, you know, I learned how to use, like, DOS and play little games on the computer and things like that at a pretty young age. And I think it wasn't until the Internet happened, and I remember we first got dial up Internet and then DSL and everything, that I really started to get excited about it, and I started to try to learn how to make HTML and web pages.

I remember reading this book on like, how to learn Java in twenty one days, and I was probably like in eighth grade or something, and I completely didn't understand any of it. And I, like, completely failed, you know, to understand it. But I then I got HTML, and I was like, alright. HTML is simpler. I can learn that first.

That happened exactly. I mean, that book Yeah. And then HTML in that order, actually. Really? Yeah. Totally. That's so funny. And Barnes and Noble.

Like, was like, go to maybe we ran an entry there. It wouldn't Where was this in California? His was in San Jose, California. Seed right down the street in Fremont. Yeah. I mean, there was something very special happening right there in the world at that time. And I remember.

yeah. Actually, the very first job I had in high school, there at the library, there was like somebody put a piece of paper on the wall saying they wanted, like, an intern to help develop their website. And so there was this guy's garage in San Jose, kind of cliche startup thing, and that was my first job in high school. I was, you know, making a little bit of money trying to build his website.

And it was a remarkable moment in time historically, looking back, that I we were in that primordial soup, and, you know, I meet people now who they grew up and they had never even seen a computer.

They saw maybe I saw a photo of one in, like, a magazine or something, and then they knew they wanted to be in computers and they applied to college, and they got in and they start they got a computer science degree having never even seen a computer in real life, which was it's kind of amazing. But I guess, yeah, I feel very lucky to have had early access to it.

It's the bicycle for the mind, as they say. Yeah. Yeah. And there was something about it, like, frankly, I was a very shy, kinda awkward kid. I was not good with people. And so, I just I liked being on a computer by myself and reading books, and it felt kind of exciting to use it.

And as I remember the first time in high school I had a little bit of a glimmer of like, I didn't really know what I wanted to do with my life. You know, was I was learning all kinds of things. I was like taking some music lessons and I was studying his doing all this stuff in high school, whatever. And, I remember making this website in high school. It was actually a friend of mine.

He and I were trying to like resell computer hardware or something. We had like a PayPal account and we made a simple website. And, I remember I went to sleep one night. I woke up in the morning and like the little hit counter was like, 500 people had visited That's wild. We were sleeping. And I was like, that's the coolest thing ever because it was almost like a superpower.

Like, I was asleep, but something I created was helping serve the world in 500 people even That's incredible. Which I could never do one on one. And so, that gave me this such a kind of like a rush and I remember.

going into college and thinking, I think I kinda wanna do something in like business and computers or something. I mean, the crazy thing now is, well, you know, even thinking about this video is gonna be interesting because there might be hundreds of thousands of people who watch it. Then can you have, like, visualize right now being in a stadium with, 200,000.

people or something like that? It's Yeah. You know, it's kind of insane. It's like the printing press of our day to give to give distribution. You know, the Internet.

changed all of our lives in terms of that, just connecting people and having such an impact on anything you do and create. And then now, I mean, it's actually the Internet is eating money. Mhmm. And you have created one of the, like, you know, one of the keystones of that. And so I don't know. Where do we go from there?

How crazy is that that we live we get to live in this time when money went from this, you know, rolocke thing in a database someplace to something that is actually distributed and Yeah. You know, sort of everywhere and not owned by a single entity.

Yeah. I mean, I think people underappreciate that, just how powerful that could be to kind of take what the Internet did for information, sort of democratizing it. Anybody could publish and, do that for money. Because, you know, before the Internet, it's like there was all these gatekeepers. Publishing information was expensive.

It's like you needed to convince some studio executive to be on your radio your TV show or get us a gig at a radio station that broadcast to a thousand miles or a newspaper was, you know, these incredibly powerful institutions. And so suddenly anybody could do that. And so people think money pretty much works today. And in some ways it does. I can swipe my credit card or whatever and buy a coffee.

But in other ways, it's we're stuck in the area era of radio, television, and newspaper. And if we just make it so seamless where anybody around the world can participate in this global economy and payments are instant and they're global and they're and they're cheap and they're fast, like, I think just so much is gonna be unlocked from that.

And you can see little glimmers of it, like in China for instance, they have WeChat. Right? And WeChat payments are really seamless. You can do micro payments. They're instant. They're pretty much free. And we see all these little business models just flourishing on WeChat. And that's just one country.

It's a large country, but it's one country. So what what would happen if we can connect everybody in in the globe onto a payment system like that? I mean, you're talking about, like, orders of magnitude, think, of potential kinda unlocked.

I mean, feels like we are in they're, like, sort of, in my mind, three different revolutions happening. If we had time traveled back to 2012 when we first worked together and set and you told me, like, hey. Bitcoin is be gonna be worth, you know, $5,060,000 dollars. I mean, who knows where it is when people are actually watching this? You know? It might be millions by then. Who knows? Right?

I guess I just wouldn't believe you. Yeah. But that seems like the first revolution. And then the second one is, you know, you could argue DeFi. Mhmm. So and then the third, I mean, you've talked about this. It's probably just decentralized all organizations, social media, and maybe government. I mean, there's sort of all three of these things all happening simultaneously.

Yeah. I think people still haven't fully appreciated, yeah, the the different phases of crypto. They're still thinking about it. Most people in the world, if they've heard of crypto, are still thinking about Bitcoin as kind of like gold, digital gold. Okay?

So it's some kind of like an investment you can make in some scarce thing, and that's really like phase one was like crypto as this new investment category.

And then now we're seeing with DeFi, like the second phase, crypto as a new financial system, and all these pieces getting reinvented there with like lending and insurance and, stuff like that, exchanges, all being recreated in a decentralized way.

And then the third phase is probably crypto as this new Internet application platform, which could be creating new identity systems, new like, social media could get reinvented there. Like you were saying, governance, whether that's startups being recreated with, like, their cap tables or even governments in some voting, like, in all kinds of ways could be reinvented.

I mean, research, like, with Research Hub. Yeah. I mean, that's a good example where it's a startup that is creating a token to try to bring together a community. And it's like, what if, you know, the early people listing their homes on Airbnb could have gotten a percentage of ownership in the company or the early drivers on Uber. Right?

I think there's a lot of companies today, like the standard model most Silicon Valley companies do is like, they issue an option pool, like 10% or something. And like, they give those to the employees and then they reissue the option pool as more employees come in.

There's probably gonna be, I think, companies in the future where they issue an option pool for employees and then an option pool for the customer base because both are helping build this new thing.

And you'll both basically, you know, the board will re up both of them whenever they run out, but you'll end up with these new companies that are both owned by the customers and the employees and the investors. And so it'll be kind of enabling new things like that. Yeah. I mean, Research Hub, for instance, is fascinating.

I mean, I I think you wrote the one of the blog posts that posited what what Research Hub could be. Yeah. And I was just I've helping that project get off the ground Yeah. In kind of my free time, which is fun. It's helping me understand better, like, what is a crypto startup of the future really gonna be like. I think about that and think about.

what research organizations do and, you know, and these are some of the biggest, most important, most prestigious institutions out there. And then here's basically a decentralized autonomous organization that is a website that also has a coin. But then what's more important than just the coin is how people interact,.

you know, how things get funded and what gets funded, and how does that actually push forward human knowledge? It kinda like financial services we talked about was kinda mired in this bureaucracy and, like, legacy systems, and I think scientific research is kind of very similar in that regard.

And it's very archaic the way that, you know, a paper paper gets submitted to a journal, and, like, a journal takes a year to review it, and you have some random three people you don't even know who peer review it, and maybe it gets accepted to this journal. And by the way, you have to pay the journal to submit your paper, and they charge the people reading it, and it's basically just a PDF.

And, you know, why isn't active you know, scientific research happening more like open source software at that speed? We saw a glimpse of that happening during COVID where people just started, because of the urgency, they started putting out their research on social media and you'd get peer reviews the next day on Twitter or Medium or whatever. So I think that's the future.

This whole this whole idea of like getting a current the currency of academia is kind of citations. And, I think it should actually be driven by something like ResearchCoin that's like, if you're creating breakthrough innovation or you're just helping curate or answer questions or many ways that you could contribute to research, you should be accumulating a piece of ownership in something for that.

Like, the people who are making these breakthrough innovations like CRISPR or whatever, it's like they should should be billionaires in the way that startup founders are. So there's this big gap between like academic research and then once in a while a breakthrough idea will like leap over into being commercialized.

And a lot of a lot of wealth generation happens in startups when things are commercialized. Like frankly, Coinbase is an example of that. I read a research paper written by non was, Yoshio Nakamoto. I thought, this is a great idea. I could probably help commercialize this.

And a lot of the wealth got generated over here, but the people writing the research papers aren't generating the wealth, and so their fake currency is these citations. And there's no reason that needs to be the case. Like, why isn't a lot of research just published with some kind of a license?

It's like, hey, if you wanna commercialize this, give us 1% of the revenue for the first ten years or, you know, and it's basically, there should be just a button that's like, license this. Yeah.

You know, whereas today, you have to go to these tech transfer offices at universities, and there's like this tons of lawyers and bespoke processes, and it's like, let anybody just start doing the research and let anybody license it who wants to go commercialize it. Like, there needs to be a well oiled.

path between those two worlds, I think. I I I guess that I'm just struck by how different a decentralized autonomous organization run by software designed by, like, a deist creator. You know?

Like, someone who, thinks about the needs of all the stakeholders and people involved and then, like, writes code that then can sort of put peep put, like, the right situation in place where, like, magic can happen. Like, in in Research Hub's case, what we hope is that Research Hub helps create, like, a whole wave of innovation and, pushes forward human knowledge. And I I think it'll do it.

You know? I think that we will have, like, a generation of Einsteins, you know, maybe in 10, maybe 20, you know? So but idea like, probably sometime during our lifetimes Mhmm. You know, that that can can and will happen maybe less and less in the auspices of a university Mhmm. And maybe more and more in something totally decentralized like this.

Totally. Yeah. I mean, I think about YouTube. Right? It's like YouTube started off and people would put like cat videos or like copyrighted material or whatever. And was like kind of not taken seriously. But now YouTube is so big. It's like it's honest it's better to have like, you know, a hundred thousand subscribers on YouTube than it is to have your own TV show on NBC or something.

Like, I don't I don't watch NBC, I watch YouTube all the time. Right? So I think similarly, when you make these new systems, like, could be a Dow or Research Hub or whatever, you know, a lot of the early participants, they're a little quirky. They're a little weird. They're on the fringes. Right?

They're probably not gonna be in Research Hub's case, like some tenured professor with like thirty years. They might be a grad student who's like kinda new in their career, who decides they wanna take a bet on it. And by the way, a lot of the most active users on Research Hub are kind of like grad students and PhDs that are earlier in their career.

So we're getting kind of stuff that's not being talked about sometimes in mainstream academia. I don't know. I mean, DAOs are an interesting thing. So the governance component makes sense for for a DAO, you can kinda have, like, money go in and proposals go into the DAO, people can say, alright. I vote yes on this one, and the money should go here and there.

But I was when I was creating know, helping create Research Hub, was thinking, like, what is the like, how is the how is the actual product gonna get built? Right? Because the DAO is a kind of more esoteric concept, high level. And so we have Research Hub, a corporation, which is it's actually called Research Hub Technologies, is the corporation, and it is a technology vendor to the DAO.

So the DAO can have a vote and, like, decide to allocate money to this vendor, which is a c corporation, which actually, you know, builds the website and the app and, like, pays the AWS bills and stuff. But it is a technology vendor to the thing which is the real company, to speak, is the DAO.

And so I don't claim to have this all fully figured out, but I'm I'm experimenting more in this area because I do think DAOs are gonna be really important in the future. And a lot of the just like, you know, all this case law had to get figured out around like a Delaware C Corp in that jurisdiction. The new the new jurisdiction is online. Right?

And I think DAOs are kind of like the Delaware C Corp of the cloud, which is where a lot of, like, the future is being built. So the Dow is almost like the real thing in my mind, and a Delaware C Corp just happens to be like a technology vendor that's providing services to it. Yeah. It reminds me of the time Yuri Milner came to speak at YC Mhmm.

And of course people asked him, why did you invest in Facebook? Mhmm. And he said that, all of the world is reforming into a global brain. Yeah. That's kinda what the internet is. Yeah.

And then when you when you think about a DAO, that is actually, I mean, I guess it's a synapse or axi, I mean, it's sort of like a a protocol for different cells in, you know, this global brain Yeah. To work together that's not like centralized command and control.

Mhmm. Yeah. I mean, people talk about like, you know, in science fiction, there's like these hive minds and stuff like that.

And, I mean, I think the Internet is kind of turning human human race into kind of more of a hive mind because just think I like look at like the number of WhatsApp or signal groups that I'm in and like the number of links that get sent every day and compared to three years ago or even a year ago, and it's like, it's kind of increasing, increasing, so that the information sharing amongst all these people in little groups or in large groups is, it's just going up and up, and so it is almost like we're creating a hybrid brain of some kind.

Reading like some biologists and stuff, they talk about how human beings are like 90%, you know, chimpanzee and 10% ant or honeybee type colony mind. Interesting. We do have kind of a hive mind aspect to us. Like, you ever see, like, a bunch of people at a party dancing, like, all in unison or we people do, like, yoga where they're all moving in in unison and even It's very natural.

Like in our bodies, we can Right. You know, viscerally feel that experience. Right. It's like we even in companies, they do rituals like that sometimes where everybody will do like a stand up meeting and we're like a little bit like an ant colony or honey honey bee nest or whatever, but we're also different. Yeah.

I mean, what do you think about this? When I think about decentralization, you know, it does stand sort of against tyranny in a lot of ways. Mhmm. You know, when you think about tyranny, think about command and control, and then there are just, you know, the worst things in perhaps human history come from like hubris or like too, you know, too much control. Mhmm.

And then, you know, one of the salient artifacts of a decentralized autonomous org is that you can fork it. Yeah. And, like, if if, like, the creator of the DAO no longer serves the the wishes of the stakeholders, it's actually a lot easier. Like, there are way fewer moats, and then that might actually be really good for humanity. Yeah.

Totally. I mean, Balaji Srinivasan has this great talk on this, I think it's called Silicon Valley's Greatest Exit, but it's about the concept of voice versus exit. But yeah, if you can fork code or you can fork a DAO, that's very powerful.

And, you know, I think about this for Coinbase too, because in some ways, we're building this very centralized command and control top down thing in a decentralized world. And so, know, I think there's some checks and balances against that, which is good. For instance, you know, we're we're using the open crypto protocols.

So if people decide they're unhappy with Coinbase someday, they can take all their crypto off Coinbase and put it somewhere else. There is a kind of freedom for people to leave, which creates a great sense of accountability. We're also kind of making it easy for people to store their own crypto. I actually think self custody of crypto is gonna be a big deal in the future.

Like, we got it is already today, but it's gonna be even bigger in the future. And we we got started with people custodying crypto on Coinbase. There's still majority of people who come to us and institutional customers. They don't wanna store their own crypto. It's too scary. But with things like Coinbase Wallet, we're making it easier and easier.

There's like over a million people using it now that are like storing their own crypto and that's even more decentralized, which I really like. So we're gonna keep investing in that and, you know, I'm thinking about that too.

It's like, how do you create a company that stands the test of time and I'm I'm not planning to go anywhere, but someday if I pass away or whatever, it's like, how do you make sure that company has good values and makes good decisions? And so these are all really hard problems, which I don't feel like have all the answers to but yeah. I think you have a new initiative.

Is is it called Coinbase ten ten percent? Yeah. Yeah. So Coinbase ten percent.

which is taking 10 of your time and Resources. Yeah. Yeah. And then resources and actually working on totally new things perhaps like self custody that at the moment seem maybe far off,.

but now is really pretty core to what the product will be and is. Yeah. That's a great I'm glad you brought you brought that up. So yeah. Actually, Coinbase Wallet, our self custody wallet, and, Coinbase Commerce and other things we've created have come out of that 10% bucket. And when we were smaller as a company, a lot of those were really just coming from me.

It's like, I got excited about something and I was like, let's make a team to go do it. But what I realized is that as we got bigger, it can actually be dangerous if I'm like the gatekeeper, the bottleneck to creating these new kinds of applications.

And so actually even been instances where people inside Coinbase, like entrepreneurial people, we have a lot of entrepreneurial employees, they've come and pitched me and been like, hey, think we should build this or I think we should build that. And I've either said, I don't think it's a good idea or we don't have time right now, whatever. They've left and those have become huge companies. Yeah.

Totally. And so, I think it's we're at a size now where it's we actually modeled it a little bit like after Y Combinator and things like that where, you know, I don't wanna have like a committee where you have to have 10 people say yes. Like, that's basically the opposite of innovation. Yeah. There's a lot of a lot of innovative stuff that's kinda contrarian.

So You need 10 believers. Should be 10 people who just go in and like, this is gonna be it. Yeah.

Yeah. So anyway, that's what we're doing with the 10% thing is like we're hosting our own little internal thing where if you're like one, two or three employees or whatever and you you think this is a cool thing you wanna spend your time on, you can pitch it to us. You know, if we there's a couple options. Right? We're open to any option.

Like, if if you wanna stay at Coinbase, have your Coinbase salary and equity, then you can keep that and we'll but we'll own it. It's a Coinbase product. If you want to leave and work on it, you know, Coinbase base Ventures will invest, other invest Initialize can invest, anybody. Totally. I'd love to. Yeah. And there's even maybe hybrid versions of that too, like who knows?

I'm I'm open to various ideas. So I'm trying to make sure we're a company that has innovation happening all the time now and it's not stifled by us being too big or too bureaucratic or like me having to think something is a good idea because at this point, I'm pretty sure I'll miss out on like the next big thing. There's so many cool things happening in crypto.

I mean, that's awesome. You know, I think that a lot of people who would be in your shoes and are in your shoes are like, I've made it. And then instead, what I'm hearing is like, this is actually a place to create the next thing.

What goes through my head is like, you know, I think that there's a strong chance that the things that a billion people use in the future, they'll all be, you know, crypto native. Mhmm. They might be DAOs. Mhmm.

And then the Coinbase to me sounds like one of the best like, if you don't have an idea already and are a great, you know, builder, Coinbase is actually the place to go because that's gonna point you in the people networks, the capital networks, and then give you the, like, culture and know how to actually build the future that both of us want.

Yeah. I mean, I hope that's the case. I I wanted to be an entrepreneur and I I had a tutoring company I'd started. It didn't really work and so I I shut it down basically and sold it. Well, I sold it. I didn't shut it down. But then I joined Airbnb. And so Airbnb was like on a it was doing well.

It was growing, and I I learned a lot, and I met interesting people. And that really helped me when I when I did have the right next idea, I went and did Coinbase, and that really helped me.

And so I've tried to create Coinbase in a similar way, which is that I think anybody who they want to create a company at some point, or they just wanna be a part of building something great inside Coinbase, like, we wanna welcome all those people. And I would check out coinbase. com/careers.

It's a great place to build not only like a career in crypto, but to learn the entrepreneurial skill set and you could either get it funded internally or leave and do it and like, we're totally happy either way.

There's this video that I'll probably overlay on here that I'm like very obsessed with that like is my my visual for sort of what you just said. Mhmm. So it starts with someone opening a bell pepper and taking one seed and putting it in the ground Mhmm.

And then you see like this time lapse of like a new plant sort of just grow out of the ground and like, you know, blossom, and then it bears more bell peppers. Yeah. And then and then the cycle repeats. Yeah. And I'm like, this is, you know, sort of the thing that, you know, you've done and like can sort of keep doing, actually.

Totally. I mean, yeah.

When I when I look back on like, what was the thing I'm most grateful for in my life, it's probably a couple of people, you know, like you being one of them who kind of, when I was kinda didn't have anything, any credit to my name or whatever, but I just had this goal or dream and it was like, somebody took a bet on me and that actually enabled me to do what I wanted and they saw the potential before I maybe even saw it myself.

So, I think that's what we wanted to kinda try to recreate is like, how can we do that for a whole bunch more people? And, especially once, you know, a lot like a lot of employees at Coinbase have recently gotten some liquidity and, you know, how do you put capital to good use? It's like, my my belief about the world is that prosperity comes from innovation.

And, like, innovation basically comes from there being more freedom in the world to go try new things with science and technology. And so, if we have had some success here, like, how do we pay that forward? How do we show people like, this is something anybody can do. Right?

If they're determined enough or they wanna go, you know, do some variation of it, it doesn't have to be nothing's exactly how I did it. Everyone's gonna have their own path, but like, go try it. Probably the first one won't work. I mean, I tried creating probably 10 different startups in my life.

Coinbase was by far the one that worked the best, but like eight of the nine other ones failed and one of them was like a rounded to like basically zero, but it didn't completely fail. So it's like try something, try anything. It almost certainly won't work, but you'll learn something, try something else. It almost certainly won't work, try it again.

And it, you know, go go get a job somewhere and learn for a while and do it on nights and weekends or like whatever you need to do. And if people keep doing that and actually believe it's possible and have like some role models, then I think a lot of more startups will get created.

The the crazy thing when I sit down and think about it is like, when I first wrote, you know, one of the first checks for your seed round, I I didn't really know, that that was probably one of the first maybe five or six seed checks that I'd ever written. That's awesome. I actually didn't know that. I thought you were like some like super experienced angel No, no, definitely not.

I mean, I had paid my credit card off maybe like the year before. Yeah. I had to sell some secondary to Ashton Kutcher's just so that I had money to like pay for my wedding. Yeah. And then I got hired at Y Combinator and literally I had never done it before.

And then obviously nine years later, I am only super emboldened by this experience because not only can likes, you know, any great builder build something that touches a billion people, but I mean you can just keep doing it actually, like we can actually keep Yeah. Making more and more of it happen and it's the most growth mindset thing that exists on the planet actually.

Totally. I mean that's that's like the really crazy thing is in some ways, okay, we've just had this really great outcome with the direct listing and everything but it's not the end, it's actually like we're we're like 1% of the way into this thing because now that know, I think a lot of people misinterpret this actually.

There's like there's a lot of negativity out there sometimes about like, oh, billionaires and like it's greedy and what are well, there's once you like have a place to live and food and stuff, like there's not that many things you can spend money on. And so how are you gonna allocate that capital?

Well, hopefully, you're gonna allocate it towards helping build more things, which will create more jobs and more economic growth. Like, most of the people that I know that have gotten some amount of liquidity, whether from Coinbase or other things in life, they're actually like, they're not buying Lamborghinis or anything like that.

They're actually like trying to think about how they can pay it forward, whether that's philanthropy or starting new businesses. Like both are really good ways to help the world. Man, I don't know where else we can end. I mean, this is like, you know, I hope this is the first of many times, honestly. I mean,.

every time we get to hang, I learn so much. And then honestly, seeing how you're just continuing to grow your Coinbase. This is like 1%. It's like the progress bar, and this is 1%. If this is 1%, like, good God. What, you know, what will happen in the next ten years? I mean, it would be fantastic.

Well, hopefully, it's it's all like fun. It's just fun to build stuff. And so I'm sure not everything that I try will go well and like I hope if I have some certain amount of money put away that I just don't need to worry about like, you know, my kids going to college or whatever, then I can take big risks with the rest of it and we'll see what happens. I think it's just it was fun.

We'll try a lot of stuff, and hopefully, we can all, with be on Team Human, help things get better. Yeah. I like that. Brian, thanks, man. Thanks for hanging out. Thanks, Gary. Appreciate it.