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The article doesn't take sides but I will. They're better off without Balaji Srinivasan. His startup Earn.com was a pivot of an earlier startup 21.co which was

The article doesn't take sides but I will. They're better off without Balaji Srinivasan. His startup Earn.com was a pivot of an earlier startup 21.co which was transparently stupid. Earn.com was also bad and didn't deserve an exit. I suspect shenanigans orchestrated by Andreesen Horowitz there. Coinbase's expansion into regulatory gray areas threatens their main competitive advantage as the safest and most stable large regulated crypto business. If they keep chasing that sweet ICO scam money instead of focusing on compliance and institutional investment it will destroy them in the end.

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throwawaycb29 7y ago
Surprised you're saying that. Coinbase Earn has become a very valuable customer acquisition channel for Coinbase, and seems to have already paid for itself. Some references: - Stellar anounced a 1B XLM deal with Coinbase Earn, worth >$120M, which is more than the reported acquisition price of $100M [1] - The founders of Zcash, Stellar, Brave, and 0x have all given positive reviews of Earn [2] - Coinbase Earn appears to be getting a lot of organic positive attention on Reddit [3] and Twitter [4] - It appears that Coinbase Earn has dramatically improved MakerDao adoption, with a huge surge in new CDPs created [5] - The COO of Coinbase stated that the company and the board seem to think of Earn as a very valuable acquisition [6] Emilie Choi: With the Earn acquisition, I think we can very confidently say and I think the board and the management team would agree with us 100 percent is that the Earn acquisition more than paid for itself multifold in the course of this year. We’re going to continue to see massive amounts of value from it. Even if Coinbase Earn had only been used for the Stellar campaign, that in itself was worth more than $100M, as acknowledged by independent reporters [5]: Frank Chaparro: You guys as part of the stellar airdrop which was something like one hundred and twenty five million dollars going, my understanding of the strategy was let’s drop this on on two different customer sets. One that is super hyper engaged and one with the folks that maybe haven’t engaged in the platform for a while, the sort of A-B test like how those sort of influences can change behavior. I don’t know if that’s exactly precise but I’d like to know what the strategy was and how it played out? And by Stellar itself [6]: Stellar: As an educational incentive, we’ve committed 1 billion XLM to Earn, 100% of which will go to users. We’ll start by rolling out to qualifying users in the US, and we will keep you posted as we expand this to more areas. Here are citations. [1] https://www.stellar.org/blog/stellar-coinbase-earn/ https://www.stellar.org/blog/stellar-coinbase-earn/ [2] https://twitter.com/coinbase/status/1129432654653222913 https://twitter.com/coinbase/status/1129432654653222913 [3] https://www.reddit.com/r/ethereum/comments/bz0xva/coinbase_earn_dai_while_learning_about_the/ https://www.reddit.com/r/ethereum/comments/bz0xva/coinbase_e... [4] https://twitter.com/search?q=%22coinbase%20earn%22&src=typd https://twitter.com/search?q=%22coinbase%20earn%22&src=typd [5] https://twitter.com/RyanSAdams/status/1155842008071770112 https://twitter.com/RyanSAdams/status/1155842008071770112 [6] https://www.theblockcrypto.com/2019/05/29/emilie-choi-coinbase/ https://www.theblockcrypto.com/2019/05/29/emilie-choi-coinba...
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wslh 7y ago
> If they keep chasing that sweet ICO scam money instead of focusing on compliance and institutional investment it will destroy them in the end. On the other hand, the size of their business shrinks (relative to the crypto market and Binance in particular) once you depend on regulators and the regulation landscape is unclear. You can argue that financial institutions should follow the Coinbase way to be complain but if in the future there is a huge crypto market (with less scams), financial institutions will find a way to connect to the crazy crypto world. This is an hypothesis based on what some VCs are doing: using crypto hedge funds as a vehicle to invest in crypto projects.
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the_watcher 7y ago
> His startup Earn.com was a pivot of an earlier startup 21.co which was transparently stupid. Earn.com was also bad and didn't deserve an exit. Would you mind elaborating? Genuinely asking, I can't find much about this from Googling, most of the coverage is around the acquisition.
- otoburb 7y ago
  Might be regional differences in Google results. Quick googling from North America yields the following results about 21.co's initial bitcoin chip design & mining operations[1], and then the pivot to Earn.com "social network tokens"[2][3]; also in Balaji Srinivasan's own words[4]. [1] https://techcrunch.com/2015/05/18/what-is-21-co-really-doing-an-excerpt-from-digital-gold/ https://techcrunch.com/2015/05/18/what-is-21-co-really-doing... [2] https://techcrunch.com/2017/09/20/21-co-announces-a-token-system-to-get-people-to-join-its-paid-messaging-network/ https://techcrunch.com/2017/09/20/21-co-announces-a-token-sy... [3] https://www.coindesk.com/meet-earn-com-21-rebrands-social-network-shift-away-bitcoin https://www.coindesk.com/meet-earn-com-21-rebrands-social-ne... [4] https://medium.com/@balajis/the-turnaround-2d145589d814 https://medium.com/@balajis/the-turnaround-2d145589d814
  - the_watcher 7y ago
    I found articles about _what_ the companies were, but didn't see much on why they were so bad that they don't deserve an exit and that their badness is enough to declare that Coinbase is better without the founder. Plenty of companies fail, but do something interesting enough to justify an acquisition solely focused on ensuring the founder works for you.
    - throwawaydi02 7y ago
      21 spent years talking about their secret revolutionary new mining chips, which ended up being a lot worse than the chips made by smaller scrappier companies. They raised over 100 million dollars, and probably lost most of it mining unprofitably. There's nothing wrong with a failed startup, but this was a poor copy of miners and mining chip producers with much less funding and in some cases bootstrapped to profitability. The only thing that set 21 apart was an amazing ability to razzle-dazzle VCs. After failing to mine Bitcoin profitably themselves, 21 came out of stealth mode with a staggeringly stupid product: mining chips for toasters. The idea was that you would buy a toaster (or lightbulb or something) with one of 21's mining chips and it would waste energy while mining miniscule amounts of Bitcoin. This was ridiculous on its face, since the amount of Bitcoin that could be mined on these chips was far less than you could simply buy for the cost of the electricity (not to mention the chip itself). Also, this amount was too small to even be transferred, given Bitcoin's transaction fees! I'm not exaggerating, this product was never, and could never be viable. Still Balaji was able to razzle-dazzle the tech press into trumpeting it as some sort of innovation. Once this failed, they re-branded as Earn.com and started making a grab-bag of Bitcoin hackathon projects, such as paying you Bitcoins for reading spam, or answering quizzes. This was always an extremely uninspiring and ultimately non-viable product, but at least it wasn't complete vaporware. Then Coinbase, a very successful and competent company, threw away $100 million to help 21's VCs recoup their failed investment. The only explanation that seems rational is that Balaji had some very compromising footage of Brian Armstrong at the a16z holiday party. I'm not sure about his past career (some biotech thing), but Balaji's legacy in crypto is to waste enormous amounts of money on blatantly ridiculous boondoggles. It's unfortunate that Coinbase wasted so much time and money perpetuating this.

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throwawaycb29 7y ago

Surprised you're saying that. Coinbase Earn has become a very valuable customer acquisition channel for Coinbase, and seems to have already paid for itself. Some references: - Stellar anounced a 1B XLM deal with Coinbase Earn, worth >$120M, which is more than the reported acquisition price of $100M [1] - The founders of Zcash, Stellar, Brave, and 0x have all given positive reviews of Earn [2] - Coinbase Earn appears to be getting a lot of organic positive attention on Reddit [3] and Twitter [4] - It appears that Coinbase Earn has dramatically improved MakerDao adoption, with a huge surge in new CDPs created [5] - The COO of Coinbase stated that the company and the board seem to think of Earn as a very valuable acquisition [6] Emilie Choi: With the Earn acquisition, I think we can very confidently say and I think the board and the management team would agree with us 100 percent is that the Earn acquisition more than paid for itself multifold in the course of this year. We’re going to continue to see massive amounts of value from it. Even if Coinbase Earn had only been used for the Stellar campaign, that in itself was worth more than $100M, as acknowledged by independent reporters [5]: Frank Chaparro: You guys as part of the stellar airdrop which was something like one hundred and twenty five million dollars going, my understanding of the strategy was let’s drop this on on two different customer sets. One that is super hyper engaged and one with the folks that maybe haven’t engaged in the platform for a while, the sort of A-B test like how those sort of influences can change behavior. I don’t know if that’s exactly precise but I’d like to know what the strategy was and how it played out? And by Stellar itself [6]: Stellar: As an educational incentive, we’ve committed 1 billion XLM to Earn, 100% of which will go to users. We’ll start by rolling out to qualifying users in the US, and we will keep you posted as we expand this to more areas. Here are citations. [1] https://www.stellar.org/blog/stellar-coinbase-earn/ https://www.stellar.org/blog/stellar-coinbase-earn/ [2] https://twitter.com/coinbase/status/1129432654653222913 https://twitter.com/coinbase/status/1129432654653222913 [3] https://www.reddit.com/r/ethereum/comments/bz0xva/coinbase_earn_dai_while_learning_about_the/ https://www.reddit.com/r/ethereum/comments/bz0xva/coinbase_e... [4] https://twitter.com/search?q=%22coinbase%20earn%22&src=typd https://twitter.com/search?q=%22coinbase%20earn%22&src=typd [5] https://twitter.com/RyanSAdams/status/1155842008071770112 https://twitter.com/RyanSAdams/status/1155842008071770112 [6] https://www.theblockcrypto.com/2019/05/29/emilie-choi-coinbase/ https://www.theblockcrypto.com/2019/05/29/emilie-choi-coinba...

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wslh 7y ago

> If they keep chasing that sweet ICO scam money instead of focusing on compliance and institutional investment it will destroy them in the end. On the other hand, the size of their business shrinks (relative to the crypto market and Binance in particular) once you depend on regulators and the regulation landscape is unclear. You can argue that financial institutions should follow the Coinbase way to be complain but if in the future there is a huge crypto market (with less scams), financial institutions will find a way to connect to the crazy crypto world. This is an hypothesis based on what some VCs are doing: using crypto hedge funds as a vehicle to invest in crypto projects.

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the_watcher 7y ago

> His startup Earn.com was a pivot of an earlier startup 21.co which was transparently stupid. Earn.com was also bad and didn't deserve an exit. Would you mind elaborating? Genuinely asking, I can't find much about this from Googling, most of the coverage is around the acquisition.

otoburb 7y ago
Might be regional differences in Google results. Quick googling from North America yields the following results about 21.co's initial bitcoin chip design & mining operations[1], and then the pivot to Earn.com "social network tokens"[2][3]; also in Balaji Srinivasan's own words[4]. [1] https://techcrunch.com/2015/05/18/what-is-21-co-really-doing-an-excerpt-from-digital-gold/ https://techcrunch.com/2015/05/18/what-is-21-co-really-doing... [2] https://techcrunch.com/2017/09/20/21-co-announces-a-token-system-to-get-people-to-join-its-paid-messaging-network/ https://techcrunch.com/2017/09/20/21-co-announces-a-token-sy... [3] https://www.coindesk.com/meet-earn-com-21-rebrands-social-network-shift-away-bitcoin https://www.coindesk.com/meet-earn-com-21-rebrands-social-ne... [4] https://medium.com/@balajis/the-turnaround-2d145589d814 https://medium.com/@balajis/the-turnaround-2d145589d814
- the_watcher 7y ago
  I found articles about _what_ the companies were, but didn't see much on why they were so bad that they don't deserve an exit and that their badness is enough to declare that Coinbase is better without the founder. Plenty of companies fail, but do something interesting enough to justify an acquisition solely focused on ensuring the founder works for you.
  - throwawaydi02 7y ago
    21 spent years talking about their secret revolutionary new mining chips, which ended up being a lot worse than the chips made by smaller scrappier companies. They raised over 100 million dollars, and probably lost most of it mining unprofitably. There's nothing wrong with a failed startup, but this was a poor copy of miners and mining chip producers with much less funding and in some cases bootstrapped to profitability. The only thing that set 21 apart was an amazing ability to razzle-dazzle VCs. After failing to mine Bitcoin profitably themselves, 21 came out of stealth mode with a staggeringly stupid product: mining chips for toasters. The idea was that you would buy a toaster (or lightbulb or something) with one of 21's mining chips and it would waste energy while mining miniscule amounts of Bitcoin. This was ridiculous on its face, since the amount of Bitcoin that could be mined on these chips was far less than you could simply buy for the cost of the electricity (not to mention the chip itself). Also, this amount was too small to even be transferred, given Bitcoin's transaction fees! I'm not exaggerating, this product was never, and could never be viable. Still Balaji was able to razzle-dazzle the tech press into trumpeting it as some sort of innovation. Once this failed, they re-branded as Earn.com and started making a grab-bag of Bitcoin hackathon projects, such as paying you Bitcoins for reading spam, or answering quizzes. This was always an extremely uninspiring and ultimately non-viable product, but at least it wasn't complete vaporware. Then Coinbase, a very successful and competent company, threw away $100 million to help 21's VCs recoup their failed investment. The only explanation that seems rational is that Balaji had some very compromising footage of Brian Armstrong at the a16z holiday party. I'm not sure about his past career (some biotech thing), but Balaji's legacy in crypto is to waste enormous amounts of money on blatantly ridiculous boondoggles. It's unfortunate that Coinbase wasted so much time and money perpetuating this.