YouSaid · the spoken record

Brian Armstrong

lines on the record: 165
first: 2022-07-29
most recent: 2022-07-29
sittings or episodes: 1
sources: podcast

Every line below is reproduced as it was said and linked to the record it came from. Nothing here is summarised or generated. Directory · Search · Corrections

“The US, by some measures, kind of looks like it's maybe had a really good run and it's coming down a little bit. And China's kind of coming up. Who knows how that'll play out, by the way? Like the world is very complicated. That could switch. But I guess if the US dollar is going to be seeing more inflation in the future,”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“So, this is kind of a controversial idea, but I actually think yes. I do think Bitcoin could end up becoming a reserve currency of the world. So I've been reading Ray Dalio recently with his new book, The Changing World Order. And I thought it was a really well-researched book. He talks in there, he looks back at history, right? He looks at empires and going back to various Chinese empires, the Dutch and Ottomans and everybody. And how did they rise? And they were able to have the reserve currency as they rose and what produced that? Like it came from good education and innovation and better trade.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Going to be a bunch of them. It's just like the internet. What were the killer web companies? Uber and Wikipedia and Airbnb and Google and like so there's going to be some big winners, but there'll be thousands of this is basically the new, it's like what happened with the dot-com startups in the early 2000s. It's like a lot of the best entrepreneurs are building crypto startups now. So tons of venture money flowing into the space. A lot of smart young people.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, it does. I mean, remittance is like a huge thing. People sending money home to their families in other countries where the fees are super high. So, yeah, if we get blockchains to be more scalable and there's more global adoption, like I think we'll see remittance quarters move over to crypto a lot. There's also just the other thing that's driving a lot of crypto adoption is basically the creation of more and more third-party apps or dApps. They're sometimes called decentralized apps. So a lot of startups now in the early 2000s they called them.com startups, but now you don't need to say dot com because everybody's using the internet. And so now there's like hundreds or thousands of these crypto startups. But I think in the future, you won't need to call them crypto startups because they'll just be called startups because everyone's using the internet and crypto and whatever. So anyway, the use cases, the utility of crypto is getting better and better with all these third-party apps getting funded and created.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“So a few things. One is the blockchains have got to become way more scalable. It's kind of like we're all running dial-up modems and we need broadband. And so it's just like too expensive, too slow to do all these transactions. And I think if we just get L2s working and scalability, we'll see another order of magnitude kind of come out just from that. I think the second one would be more clear regulation. That would help a lot. I do talk to pension funds and various asset managers, sovereign wealth funds and stuff. And a lot of them tell me we've got 1% of our portfolio in crypto today, but we really would rather have like 20% in there. But what we're waiting for is more clear regulation coming out and saying that clear test that I was saying, these assets are commodities regulated by CFC. These are by SEC. These are by treasury, whatever. So that would be a big unlock.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“As of Q4 last year, we had 89 million verified accounts on Coinbase. But in any given quarter, only maybe 10 or a little more million of those are really active. And then if you look at globally, I think some of the estimates I've seen is maybe there's like 200 million people or something like that who have ever used or tried crypto. We're ways from a billion, but it's not like that far off. How”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. Well, it's probably very hard to be Laureate Coinbase and very fun because whenever you're in a new field that's growing fast, there isn't a lot of case law and just precedent set. So that's also an opportunity for you to go create that stuff. And that's what a lot of legal careers are made out of is like take a complex situation where you have to balance difficult things like how do we prevent bad activity but still enable an innovation? That's a hard question. And there's you can go draft legislation and circulate it to policymakers or come up with these policies and How do you operate a business in an environment where the law is just unclear? It's like try to do the right thing, but like, you know, strike the right balance. So yeah, a lot of our lawyers have to come up with that very creative stuff.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. And then the other thing, sometimes we will actually get court orders or subpoenas that are overly broad. We've seen, so they need to follow due process, right? And so we've seen some in the past that were like, well, we need you to freeze this huge number of accounts. And it's like, well, we'll actually have gone to court and pushed back on some of these and said, like, what is your probable cause? And has the threshold been met? And like we've won some of those cases on behalf of our customers. Yeah, it's actually really kind of unfortunate and frustrating as a large business, you spend a lot of resources basically interacting with inbound requests by all kinds of lawyers and people and requesting things. And some of them are silly and ridiculous and you have to push back and say no. And so it's kind of a tax on every company at a certain size, which ultimately gets passed on to the customer in higher fees. So you have to employ armies of lawyers.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so this is a complicated topic. If you really want to be sure that, this is why people want to store their own crypto, right? Like with self-custodial wallets, like with Coinbase Wallet embracing decentralization, they want to avoid that. Now, in the US, there is rule of law, right? So we have reasonable protections in place around search and seizure and things like that. Coinbase does, we publish transparency reports on this. We get subpoenas, court orders, things like that from various countries around the world. And there are situations where we have been ordered to freeze accounts, things like that. We have to follow the law. There's no way to put it. We're a regulated financial service business. And so”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Don't do this or don't do this. We're more than happy to do anything that's requested. We generally go get licenses and we've just tried to do the right thing in the absence of clarity because if it's not clear what the law says, then you should just basically do good things that you think may be required in the future to show good faith effort towards the right thing. And that's part of innovating in a regulated field, which is a whole topic in itself.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, education, advocacy. We're just trying to be like a helpful educational resource, essentially. And then if they give us feedback and like, hey,”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Like citizenship in this city Dow in Wyoming. I've never been there, but it's almost like a badge or attestation to get access to this location. There's like people doing tickets to events. They're called Po-O-Ops, like proof of attendance and things like that. So it'll be very interesting to see where NFTs go over time. It could get, and that's the danger. You don't want to try to define the regulation if you don't even know where this thing's going to go.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. You know, most NFTs you could think of as like artwork, although it's who knows where it's going to go. It could be. Well, you mentioned metal.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Want to have probably like a sandbox for innovation where if you're a startup and you're doing less Less than some amount of payment volume or customer funds you're storing. It's like just let those things get off the ground without a soul crushing amount of legal bills and uncertainty. So if the US can get there, that would be great. I think a bunch of other countries now are rushing around the world to sort of create that regulation that it does attract innovation. And so in the international bodies like IMF and G20 and stuff, they're starting to look at proposed regulation. I hope that Coinbase and a bunch of other cryptocurrencies can help in that conversation too. We have a whole policy effort. I think actually crypto policy efforts are like probably one of the biggest things in DC right now. So it moves slow at the speed of government, but yeah, and in the meantime, we're just trying to help more and more people use crypto because ultimately that's what in the democracies, that's what they care about. They'll do what the people of the country want.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Out there by some folks, which is hey, this is all most of this is like bad activity. We need to shut it down. So we're just going to pursue enforcement actions or something like that. Most people in DC don't feel that way anymore. And I think the people of the U.S. don't feel that way anymore because a lot of them are using this stuff. And their general view is there's a lot of upside potential here. We can all agree let's get rid of the fraud and the scams. We all want to get rid of that. So let's create a relatively simple test which says, you know, if it's like nobody controls more than 20% of it or some threshold, it probably is more like a commodity. If someone's raising money, they're selling this thing for a business, then it's probably a security. And then, you know, if it's more like a medium of exchange, it's a currency. And if it's none of those things, maybe it's artwork or whatever, a legal test like that would help clarify which regulator is regulating what. And then we also.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, okay. So, I mean, basically, I think the securities laws in the US need to be clarified about crypto is many different things. That's what people don't realize. Some crypto, like Bitcoin, Ethereum, and many others are probably more like commodities. They're not controlled by anyone personally. There's people who want to raise money for a company. That sounds more like a security. That should be regulated by the SEC. Commodities regulated by the CFTC. Then there's some cryptocurrencies which are more like currencies like stablecoins and central bank digital currencies. And those probably should be regulated by the Treasury or someone like that. And then there's another category of cryptocurrencies, which are none of those things. They're NFTs like artwork or their metaverse items or decentralized identity and voting. So I think that there's a very unhelpful point of view.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“A huge segment of people who don't even care about investing or whatever came into the space. And then basically that same conversation is happening, but delayed by a few years in India and Europe and in some Asian countries. And some countries have really embraced crypto and they're like trying to ahead of where the US is because they're trying to actually attract the best startups and entrepreneurs like Dubai and the UK and Australia and all kind of pushing good regulation. El Salvador actually, I guess, adopted it as like Bitcoin as a legal tender. There was another country, Central African Republic, I think, that is supposedly did that as well. But, you know, there's countries like China that are more autocratic that are saying, hey, this is a threat to our power. And like, we're going to try to really curtail it.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“50 60% of the people who I meet with are basically they're in the camp of crypto has a lot of potential we should regulate it to make sure the bad people don't do something bad with it but this is here to stay and it has a lot of upside we should basically create thoughtful regulation and celebrate it and actually encourage this innovation to happen in the u.s that's a huge change from just three years ago where it was probably 30 of people saying that now it's like 60 it's like almost double it's getting harder to find like true crypto skeptics in dc i'd say that you know maybe only like 20 or 30 percent of people are like willing to say something negative like they actually think it's net negative it's like it's really hard to defend that position at this point because almost like one in five americans have used or tried crypto at this point so you're you're kind of condemning 20 of your fellow citizens if you say that at this point um you know especially with nfts and all these things like”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so just I'll give you a US specific example, although we operate in many countries. So when I go to DC now, I would say”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Oh man, there's so many because we're live in maybe 100 countries or more at this point. So the conversations are all over the map. I'm trying to think what broad strokes I could paint for you. So I'd say one trend that's positive is that basically regulators around the world are more and more over the last five years, I would say, it's more and more common to find a regulator today asking, how can we preserve the innovation potential of this technology while keeping the bad actors out than it was five years ago where they were saying this is all bad activity? How do we prevent it? And so maybe this is.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Your messages could be intercepted and all this stuff. And now the whole internet has basically moved to HTTPS with a little lock icon in your browser, which is better. And financial information is the most important information to keep private, right? So there's times where, like, let's say you're running a charity or something and you want to have total auditability, transparency for the whole world, who donated, and where did the money go? That's great. You want it to be public. But if it's like your personal money or something like that, you don't want to be broadcasting that to the whole world. And in some ways, that's what blockchains are doing pseudonymously because, but it is a public ledger. And so if you can know who owns each address, you can basically de-anonymize it. People should fight for privacy and freedoms of all kind, but privacy of money is a good thing. So I would like to see more of that in the future.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“You're buying it on Coinbase, you can basically have a view key. The transactions are not anonymous while you're buying it, and we can see where it goes afterwards and do our whole standard program. If it gets a few hops away down the road, I mean, people could eventually turn on privacy-preserving aspects. So these are tough judgment calls, but at least in terms of our interaction with the customer and everything, we feel comfortable about that. I think there's a broader point here, which is that I actually think privacy coins are a good thing for the world and they should be allowed. And we've made this judgment call to operate in a regulated and safe and compliant way. But just taking my Coinbase hat off for a minute, I think the world would be a better place if there were more privacy coins because it's kind of like the internet when it first came online. Like there was no HTTPS. Everything was HTTP and there was, you know, so people were afraid to put their credit cards on the internet.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“That's a great question. So, the answer is maybe. Here's the reason why. So, because we're regulated financial service business, we have various licenses to do that. We are regulated by various regulators. Part of those licenses requires us to have a quote reasonable program to monitor for suspicious activity, an AML program, anti-money laundering, right? And so Makes it harder to have a reasonable program around that that's defensible. Now, there are privacy-preserving coins like Zcash, which have something called a view key. And a view key is basically another key which allows you to de-anonymize the transactions in specific situations where you want that. So for instance, we do support Zcash, and one of the ways we got comfortable with that is that”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“And are they, yeah, and are they selling it inappropriately? Or are they pumping it on like YouTube and Twitter and making promises about, hey, the value of this thing may be higher in the future? And all those are just big, big no-nos that we would, you know, we just don't want to go there. So our whole thing is we want to enable innovation in this space, but not allow anybody to curtail the advancement of this industry by like doing some kind of fraudulent thing or get rich quick thing.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Well, you can see a few things. I hate to use the word scam because a lot of these are judgment calls. A court mayor or a jury may land either way, but things that would be red flags to look at would be, is a bunch of the asset owned by an insider or insiders with short vesting periods. Does the background of the founders may have criminal records or if they've perpetrated other frauds in the past, right? There's a difference between something which is just a MeToo product that's doesn't have anything interesting about it and something that's an actual fraud or outright scam. A lot of this data, what's cool about it is that it's now available on chain. You can look at the tokenomics behind it and see who owns it. Tokomics.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, so I think we'll actually probably add user ratings and reviews, and we'll be very cautious about these are real people. There's a bunch of stuff we have to do from that already. So I think wisdom of the crowds is good in terms of getting feedback on items. But we also, we're going to do our own review, which I mentioned earlier, right? Which is like, okay, it meets this minimum bar to be listed on our site. So, I think both are important”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Need to list every asset on a centralized exchange. I think DEXs are really good for the long tail. And then it becomes an even, it's even more clear to people. Like, this is not some endorsement by Coinbase of, like, this asset's good and this one's bad. My belief is there's going to be millions of these assets over time. And so I hope it doesn't make news every time we add one in the future, basically.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“A way that somebody could manipulate it without the customer's permission. We look at some compliance pieces to it as well, like the actors behind it and kind of criminal history or anything like that. But if we believe it meets our listing standards, basically this test of legality and everything for customer protection, then we want to list it because we want the market to at that point decide. And it's kind of like Amazon or something like that where a product might have three stars or it might have five stars. But if it starts to get one star consistently, like it's probably a fraudulent or it's defective or something like maybe Amazon will remove it. But otherwise, you want to let the market decide what these things are. So that's generally how we do it. And by the way, more and more of these assets, I think especially like low market cap assets are going to be traded on DEXs through Coinbase. It's not that we”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“We acquired a broker dealer license from the SEC. We're trying to work with them to get that operational, and hopefully someday we can trade real crypto securities. But today, that's not possible in the U.S. at least. Then we look at sort of the cybersecurity of the crypto asset. Do we think there's some flaw in the smart contract?”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, well, so we're trying to get away from this idea of being listed on Coinbase as being seen as an endorsement or something. Because I actually think it's very important that we are not considered judge and jury about imagine it was the early days of the internet and you were like, what's a good web page and what's a bad web page? Like you would have been totally wrong. Or anytime big tech companies try to make these review boards of like, you know, Apple famously gets in trouble for this a lot with their App Store review process, right? And so something that you think like a committee of people somewhere thinks look silly may turn out to be the next big thing, right? And so it's very difficult. So what do we do? I mean, we basically have a test of legality, right? We check, do we believe this is a security? If so, it can't be listed on Coinbase. And there's a very rigorous process we go through for that, just currently the way the laws are in the US. You can't do that.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Over 100, but it depends what jurisdiction you're in, and are you an institution versus retail? There's so many different categories now for 100.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“By the way, yeah, yeah So, anyway, we want to encourage more and more of it to move decentralized over time, but I don't, the centralized things aren't going away for like a long time. It's a decade from now, there's going to be some big institution or pension fund or central bank that's like, all right, we got to hold crypto. Let's set up the account in a centralized way. So that's fine. Both are important.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“So, look, there's a bunch of high frequency traders that use the centralized products and even just regular retail people. They don't want to pay the gas fees and stuff. And they're trying to, it actually, back of the envelope calculated this out at one point and just like it would be completely infeasible for like high frequency traders to put everything on chain at this point that's been Both are important. I think more and more is going to move decentralized over time, which is great. And we're based.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“And so basically, it just shows a little bit of the evolution of Coinbase and the blockchains themselves. Like in the early days, these networks were not scalable. And so there were no L2 solutions, for instance. And so we had to do sort of these hacks, like moving the crypto off-chain if you were moving between your own accounts and stuff like that. Otherwise, the minor fees would have just eaten us alive as a company, right? Yeah. But now that the blockchains are starting to scale, there's a whole bunch more work that needs to be done on that. And we're getting L2 solutions. So I think more and more of the transactions are going on chain, whether it's L2, L1. And we shouldn't be like. Ideally, we shouldn't be doing that many transactions off chain, just internal Coinbase ledger or something. That's not really in the spirit of crypto.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Our centralized products and decentralized products, right? The centralized products we are storing that crypto for you. And so if you're moving from one of your accounts to another account, like ETH one account to ETH2 account or from my ETH Coinbase centralized account to your ETH central account. So we can do that transaction off-chain to make it faster. And it saves the customer fees and it just confirms instantly. But it's not truly using the decentralized blockchain, right? So you can also send any Bitcoin address or Ethereum address, for instance, and that is putting the transaction on chain. Now our decentralized products like Coinbase Wallet, the self-custodial wallet, every transaction is happening on chain with that.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“So usually when people are using those terms layer one, layer two. So they're one would be the blockchain, layer one blockchain itself like a Bitcoin or Ethereum or something, not like a centralized service like Coinbase or even our decentralized self-custodial wallet Yeah, I wouldn't consider us to be like a layer one. These are the decentralized protocols that we're integrating, but we are, Coinbase itself is not those.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah, that's sort of the point we're all using the same protocol, so there's low switching costs, which keeps all the companies accountable, right? If you want to access the Visa network, there's only one company in the world you can go through to do that, like Visa. But if you want to access the Bitcoin network, there's dozens or hundreds of companies out there who can do that. So it's arguably, you could argue it's worse for us as a company, but I think it's better for it's what makes Bitcoin interesting and cryptocurrency interesting is that nobody controls it. There is low switching cost for customers. It's better for customers. And that means that all the companies in the space are going to be held to a high standard because the minute you lose someone's trust, they're just going to move their Bitcoin to some other service. And that's good for the world.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Like a traditional financial service firm would probably say, well, we should be storing, let's keep more of the custody with us because that's how we prove to the world that we're valuable or whatever. I don't really believe that. Like, I think that actually, we kind of want to encourage our users to move to self-custody over time for those who are ready and willing. And that technology needs to mature. I'm not trying to force anybody to do it. It doesn't want to do it. But to me, that's the future of how we get billions of people using crypto.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“But it provides a. There is, so even if you lose your phone, then there is a recovery mechanism because you can get the one key from Coinbase, the one from your backup provider, and recover a new one back on your phone.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Right. So a simple example would be let's say you had a two of three key signature and one key might be sort of Coinbase, but that's not a quorum. So we couldn't unilaterally move your funds. But another key is on your device, on your phone, let's say. So, in a normal situation, you have a key on your phone. We have one. And so two out of three now, it can all get signed very quickly for day-to-day use. But let's say you lose your phone or something. Now there has to be a third key, and that's where you could store it in a backup somewhere, like in Google Drive or iCloud. You could trust a third party that's not Coinbase to also have that one key, and they can't do anything unilaterally with that one key. So that's a simple example. You can get way more complicated.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“It's basically saying you're going to store the keys on your own device. And so even if Coinbase gets some court order to seize it, we actually can't, like from an architecture point of view, we can't do it. Or if Coinbase gets hacked or something, we can't lose your funds. Now, the thing is you have to take the responsibility because we're not taking it. So the individual person could get hacked, right? And there's a whole bunch of really cool research happening to make self-custodial wallets more resilient to accidental loss, hacks, and just user error. Like, you know, I don't know how much you've looked at various cryptography things, but there's basically you can have multiple multi-sig, multiple signatures from different keys on different devices where you need like two of the three or three of the five. There's a whole technology called multi-party computation or threshold signing signatures, which is really cool.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Yeah. So it's confusing. So a custodial wallet means you're trusting Coinbase to store your crypto, the private keys themselves. And for some people and institutions and everything, just meeting them where they are today, that's nice because it's simpler. They're not afraid of losing their crypto if they make some accidental mistake. So, you know, a custodial crypto products are important to help get a bunch of people into the ecosystem. I'm very supportive of self-custodial wallets and I think in some ways they are the future because more and more people are going to want to store their own crypto, not trust a third-party institution to do it. And in some ways that is much more authentic to the ethos of crypto. So Coinbase will help you convert the fiat into crypto in a frankly that's a more centralized thing. But once you have crypto, you can then go into the self-custodial world, store it yourself to get into the technical details just for a second.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“I don't think Coinbase is fully centralized. We have many different products, and the way that I think about it is that our exchange or our brokerage is a centralized, regulated financial service business. And it's actually important for the crypto ecosystem to have that because you want to allow a lot of the fiat money in the world to flow into the crypto economy. So we're very proud of that. And I think we've helped a lot of that money flow in. Now, once people have money in crypto, they can choose to hold it in a variety of ways and they can choose to hold it in a self-custodial wallet, which is more decentralized. They can choose to use decentralized exchanges, which we love. And Uniswap is not really, I don't think of them as like a direct competitor to us. We basically have integrated Uniswap into a number of our products. We love DeFi, Decentralized Exchanges, the whole thing. So Coinbase Wallet, which is a self-custodial wallet, is more decentralized, and it allows people to”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Or a company you can go to to like, hey, shut this thing down. Even if everybody who's working on Uniswap today stopped, the Uniswap smart contract would continue to operate on the Ethereum blockchain. Similarly for a borrowing lending marketplace, somebody in India wants to borrow from somebody in the US or whatever, very difficult to do that in the traditional financial world. But in a smart contract that's decentralized, you can enable anybody to access it. So it's really kind of this great democratizing force that is creating a new financial system that is more fair and more free. Yeah, and in some ways it is. It's a clever way that's not enabling people to do that in a novel way.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Really important in terms of this. You asked about regulation, right? So think about if you wanted to make a global borrowing and lending marketplace or a global exchange, you would have to go to all 200 countries in the world, sometimes like maybe 50 states in the US and get lending licenses or an operating exchange or whatever. They're not going to, that's just an incredible amount of work and you can't even do business in many of these countries because you have to bribe somebody or it's corrupt or whatever. And so, but with DeFi, with decentralized finance, people have published, you know, like Uniswap is a decentralized exchange. Everybody in the world, no matter what country you're in, what jurisdiction, can interface with that decentralized exchange because, and there's no central company operating it. It's a smart contract on the Ethereum blockchain, which is globally decentralized. So there's no throat to choke. There's no one person.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“They say, hey, it's a temporary measure. We need to break the peg. Temporary was like the famous words that he used. And they go print. And so the bad thing about that, of course, is that it sort of erodes people's wealth if they can only hold their assets in cash, which basically poor people tend to do that. If you're wealthy, you can hold stocks or like real estate and things like that. But it's really a tax on the poorest people in society inflation. So anyway, crypto in a way is a little bit of like a return to the gold standard in this digital era, right? Bitcoin, there's guaranteed scarcity of it, it's deflationary. There's never going to be more than 21 million Bitcoin. And so that's a really important principle. I also think not just Bitcoin, but like cryptocurrency generally.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Today, the world, like the traditional financial system, is basically every country of the world for the most part has their own currency. And so there's a group of people or institutions in each of those countries that's controlling that economic policy or that money supply. And it can be manipulated, right? So it's not like many of these currencies are not linked to the gold standard. The US kind of famously came off that in the 1970s, for instance. If you read Ray Dalio and all this stuff, like he talks about, there's thousands of fiat currencies that have been in existence over time. And basically all of them eventually get disconnected from backing of like hard commodities. And then they get over inflated and printed. And so in times of stress, with Nixon, I guess it was like in the US, it was the Vietnam War or something like that. It kind of drove government spending. And so under times of stress,”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Okay, so I was basically living in Houston, Texas after college where I went to school. And I had never studied abroad. I kind of like, I don't know, I felt like I needed some adventure or something in my life. And I was like, I was running this other startup that I was trying at the time, a tutoring company. And I could work from anywhere. So my plan was, you know what? I'm just going to go do like a month in every city around South America. almost like to force myself out of my comfort zone because I had never traveled by myself to a foreign country or whatever and where I didn't really speak the language. And anyway, I landed in Buenos Aires thinking I'd go all around South America where I had never been there. But I basically once I was set up in Buenos Aires with an apartment and a cell phone and stuff, then I was like, I don't want to do that all again next month. So I just stayed there for most of the time and took some day trips. But yeah, it was kind of a formative experience in that regard.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“New inventions there. So, yeah, I basically feel like crypto is this secret hiding in plain sight that can create economic freedom for people all over the world in a more fair and free and global economy.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source
“Good financial infrastructure into all these countries around the world that don't have it. Basically, good economic freedom principles like property rights and things like that into these countries all over the world. As long as you had a smartphone and now crypto got invented, everybody could have economic freedom. And crypto is kind of really well suited for economic freedom because if you want property rights, crypto is, if you can remember a 12-word phrase or have an app on your phone, you can store as much wealth as you want. And it can't be taken away from you. You can even, you know, there's like refugees who need to flee and they want to take their wealth with them and they can't do it often in the traditional financial system. And so crypto lets them do that, right? Crypto is inherently global, so it allows free trade and cross-border payments. It makes it easy to accept payments from people globally. It provides a stable currency to everyone, not only with Bitcoin, which is kind of like this new reserve currency, but also with stablecoins, right, which are new.”
2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source