In the summer of 2012, two young entrepreneurs — Brian Armstrong, a 29-year-old former Airbnb engineer, and Fred Ehrsam, a 24-year-old former Goldman Sachs trader — founded a startup with an audacious goal: to make buying Bitcoin as easy as buying anything else online. They called it Coinbase.
At the time, buying Bitcoin was extraordinarily difficult. You had to find an exchange (most were sketchy), navigate complicated deposit methods (often involving international wire transfers), manage your own wallet (with terrifying security responsibilities), and hope you didn’t lose everything to a hack. Most potential Bitcoin buyers gave up before they ever completed a purchase. Armstrong and Ehrsam believed this was the biggest obstacle to Bitcoin adoption, and they wanted to fix it.
Coinbase’s innovation was simple but powerful: connect a U.S. bank account, buy bitcoins with a few clicks, and let Coinbase handle the custody. No more managing private keys. No more worrying about hackers. No more wire transfers to sketchy foreign exchanges. Coinbase would be regulated, compliant, and insured. It would be the Bitcoin equivalent of PayPal or Venmo.
The company got into Y Combinator in 2012 and raised venture capital from top Silicon Valley firms. Early on, many VCs refused to invest in anything Bitcoin-related. Others took a chance. One early investor later called Coinbase “the best investment of my career” — by 2021, when Coinbase went public, it was valued at $100 billion.
Coinbase’s importance to Bitcoin’s history cannot be overstated. Before Coinbase, Bitcoin was mostly a hobby for technologists, speculators, and people in the drug trade. After Coinbase, it became accessible to ordinary people. A retail investor who had never heard of blockchain could download the Coinbase app, connect a bank account, and buy $50 worth of Bitcoin in minutes. This radically expanded Bitcoin’s user base and was crucial to its 2017 and 2021 bull runs. Coinbase didn’t invent Bitcoin — but it made Bitcoin mainstream.
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