YouSaid · the spoken record

Brian Armstrong

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165
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2022-07-29
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2022-07-29
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  1. “No silver bullet, there's a bunch of lead bullets, right? So it's like, you know, one thing we do is we just have good test suites, right? So you're testing every piece of code that goes out. That's like just common good best practice, but it's particularly important in financial services. Another thing we do is we hire third party firms to try to audit this stuff and break in. Another one we do is we have a bug bounty program. So we basically pay White Hat hackers to find this stuff before the black hats do. We've paid out lots of good bug bounties. So try all the above. And occasionally you don't get it right and you lose some money and then you fix it and you keep going.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Yeah. And it's kind of like a giant bug bounty out there because if you get it wrong, there's people who are going to arbitrage that. And we've had people sort of pen test our systems and really creative ways where like they'll just fire like programmatically with APIs, they'll fire off like a million different quotes and look for one of them that's out of bounds and then take that money right there. And, you know. We get people doing all kinds of crazy stuff”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “But basically, let's say we wanted to just keep it math simple. We want to charge a 1% fee. So if you're buying $100 of Bitcoin and we'll charge you $101, we've presented you the amount of Bitcoin you're going to get for the $100. Now let's say 10 seconds later you hit accept. We go to fill the order. So it's going to be some error bound around that 1% fee, right? And if we think we're actually losing money on the trade, I think we'll often reject it.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “Yeah, so there's a lot of people like traders who get super into this and like high frequency traders and arbitrage and all kinds of interesting topics. Flashboys was like an interesting book on this whole thing. You want access to information the fastest, sometimes even putting your thing in the data center right next to the thing. We don't allow that colo stuff because we want it to be a more democratized.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “Yeah, that's true. It's giving you a quote, right? There's a whole concept of slippage and by the time the quote is executed, if the price has moved too much, we may reject it. And there's various things like that. But what's the simple version I can give you? So we'll basically check the order book, give you a quote. It's good for some period of time or for some amount of slippage. And then what's happening is we're initiating a debit to your payment method, whether that's a credit card or a bank account or you're storing dollars or euros or something on our platform. There's various payment methods. So we're basically debiting that. And then we're crediting you the crypto. And we're taking a fee for it too. So that's fundamentally what's happening underneath.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Yeah, okay. So you've gotten a lot. You know, when you press the button on your keyboard, like an electrical signal goes up the wire on your keyboard.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “You store the private keys, essentially, and we've invented a lot of cool technology about how to do that securely that helps me sleep at night as one of the largest crypto custodians out there. So those are some of the pieces that had to come together to get that early simple buy-sell experience to work. And yeah, I mean, Coinbase actually has a lot of different products now. So we have like an institutional product. We have Coinbase Commerce, which is like merchant payments, like Stripe for Crypto. We've got a self-custodial wallet, which we can talk about. There's all kinds of cool applications people are building with Web3, and they can access it through that. We just launched an NFT product. I can go on down the list. So we're sort of like a portfolio of crypto products now. We're big enough where we can do multiple things. But yeah, the core thing we got started with, and still the majority of our revenue today is people just want to come in and buy and sell some crypto. And we help them do that and make it simple and easy to use.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “And a brokerage is kind of simpler than that, even. You don't have to look at the whole order book and everything, but you just go in there and you say, I want to buy $100 of Bitcoin or whatever cryptocurrency. You get a quote, and if you like it, you can hit accept. And the core things that we do to make all that kind of just work, make it seamless. It sounds simple on the surface, is we have to do payment integrations in a variety of places around the world to make it easy for people to get fiat currency into this ecosystem. We have to work on cybersecurity a lot. There's lots of hackers out there trying to break into our systems and steal crypto or to put stolen credit cards and bank accounts and things like that into these systems. We have to integrate with the blockchains themselves, right? Which are periodically getting updated and having various airdrops and all kinds of things. So we're integrated with lots of different blockchains. And then we have to store the crypto that people buy securely as well. So crypto is kind of like storing.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Okay, so basically in any given market, there's some people who want to buy, some people who want to sell, and you keep an order book of all those prices. And then if someone's willing to buy for more than the lowest price someone's willing to sell, then.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “Coinbase is a cryptocurrency exchange, brokerage, custodian. Basically, we're the primary financial account for people in the crypto economy, how they buy crypto, how they store it, how they use it increasingly in different ways. We can talk about that. So yeah, we want to be the way that a billion people hopefully access the open financial system globally.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “Yeah, that'd be a cool series of interviews. Get the stuff that's like tech that was invented 40, 50 years ago, but still is being used widely. I mean, Emacs is an example of that.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “I feel like the amount of Java out there just running industrial systems has got to be enormous. And then, of course, in the banking industry finance, it's like even older stuff, cobalt and whatnot.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “Yeah, it's a scripting language more so, although, of course, Facebook built a huge stack on top of it and valuable company. I still love Ruby to this day. Ruby is probably my favorite language. Python's great, too, but I just love. The idea behind Ruby that it's like, let's make it easier for the human, harder for the computer and make it a joy to be expressive and all these things. So I was never the best computer scientist, but I was a good hacker. I could rapidly prototype products and using languages like Ruby. Do a lot of computer science programs still use Lisp and Scheme and things like that?”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “Confused about what was actually happening that I later learned a bit of PHP, and PHP was like more fun for me because it was like, oh, just print out what you want. It didn't have all this complexity around it. So then I got more into PHP, started building some simple websites. I think learned some HTML. So I think that was my introduction to programming, at least the very beginning part.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “The first memory I have of programming was probably in middle school, and I remember it was recess and they had this time period where you could read books and the other kids were like reading comic books and stuff. And for some reason, I had gotten into this idea that I wanted to get into computers and I was playing with computers at home. And so I got this book, I think, from the library. It was called like How to Learn Java in 30 Days. So I was reading this book at the recess and I didn't understand anything. And I remember I went home and I tried to get this thing working. And if you've ever written a Java program, the first lines are like public static void main string args or whatever. And it's just like it's so foreign and it's so difficult to get started. And so I was kind of frustrated. I was like, I don't understand anything that's happening in this book. The first thing I wrote was probably just like a hello world app in Java. But it was so, I felt like I was so.”

    2022-07-29 · Lex Fridman Podcast · #307 – Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation · IDENTIFIED FROM THE TRANSCRIPT · source