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My shower thought the other day: How much money would Coinbase have, if instead of building the company they had just bought Bitcoin back in 2012 with their se

My shower thought the other day: How much money would Coinbase have, if instead of building the company they had just bought Bitcoin back in 2012 with their seed money? I think it had dropped to about $7.50 around then.

qixxiq 6y ago
Would bitcoin be where it is today without Coinbase? Not to say it's impossible, but their work and approach definitely helped bring Bitcoin to the masses.
- jonplackett 6y ago
  Yeah true. My point is more that I find it a bit sad that 'just buying bitcoin' rather than doing work paid better than basically any work anyone has done since 2012, even building insanely successful startups.
- meowster 6y ago
  Same reason why the 10,000 BTC pizza was necessary. If no one ever bought anything with Bitcoin, Bitcoin would remain worthless.
  - mlthoughts2018 6y ago
    This is still a highly debated thesis. Just using BTC to store value away from a volatile fiat currency and eventually exchange for a different, more stable currency, is another candidate for the underlying valuation model, no widespread medium of exchange beyond currency trading needed. If you live in Venezuela, converting to BTC even if you cannot buy anything with it but perhaps Columbian or Brazilian currency at a slight loss, is a hugely valuable capability, with significant advantages over both traditional fiat currency exchanges and custodial stores of value like gold. What is the total global demand for cryptocurrency for this use case? Certainly not anywhere close to the total market cap of first world fiat currencies, but also probably still much higher than today’s total market cap of BTC. This stands in contrast to smart contract and d-app marketplace currency like ETH, which has a completely different hypothetical valuation model.
  - imtringued 6y ago
    Permanent deflation usually ends in hyperinflation. At some point the thing that your magic internet money represents disappears all at once.
bravoetch 6y ago
There were people and companies that bought massive amounts of bitcoin. Winklevoss twins weren't even early and they own 1% of all bitcoin.
saalweachter 6y ago
About $2.6 billion. Which means selling shovels is still roughly 30x better than buying shovels.
travisjungroth 6y ago
I was with a group of Coinbase employees that did the math on this in about 2018. Even then, Coinbase was a bit ahead.
- jonplackett 6y ago
  Which has gone up in value faster since 2018?
  - travisjungroth 6y ago
    Coinbase. Bitcoin tripled and I think Coinbase is up much more.

qixxiq 6y ago

Would bitcoin be where it is today without Coinbase? Not to say it's impossible, but their work and approach definitely helped bring Bitcoin to the masses.

jonplackett 6y ago
Yeah true. My point is more that I find it a bit sad that 'just buying bitcoin' rather than doing work paid better than basically any work anyone has done since 2012, even building insanely successful startups.
meowster 6y ago
Same reason why the 10,000 BTC pizza was necessary. If no one ever bought anything with Bitcoin, Bitcoin would remain worthless.
- mlthoughts2018 6y ago
  This is still a highly debated thesis. Just using BTC to store value away from a volatile fiat currency and eventually exchange for a different, more stable currency, is another candidate for the underlying valuation model, no widespread medium of exchange beyond currency trading needed. If you live in Venezuela, converting to BTC even if you cannot buy anything with it but perhaps Columbian or Brazilian currency at a slight loss, is a hugely valuable capability, with significant advantages over both traditional fiat currency exchanges and custodial stores of value like gold. What is the total global demand for cryptocurrency for this use case? Certainly not anywhere close to the total market cap of first world fiat currencies, but also probably still much higher than today’s total market cap of BTC. This stands in contrast to smart contract and d-app marketplace currency like ETH, which has a completely different hypothetical valuation model.
- imtringued 6y ago
  Permanent deflation usually ends in hyperinflation. At some point the thing that your magic internet money represents disappears all at once.

bravoetch 6y ago

There were people and companies that bought massive amounts of bitcoin. Winklevoss twins weren't even early and they own 1% of all bitcoin.

saalweachter 6y ago

About $2.6 billion. Which means selling shovels is still roughly 30x better than buying shovels.

travisjungroth 6y ago

I was with a group of Coinbase employees that did the math on this in about 2018. Even then, Coinbase was a bit ahead.

jonplackett 6y ago
Which has gone up in value faster since 2018?
- travisjungroth 6y ago
  Coinbase. Bitcoin tripled and I think Coinbase is up much more.