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Coinbase cuts staff by a further 20%

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Re: Coinbase cuts staff by a further 20%

#221

Post by jasode »

SilverBirch wrote: post #87

Coinbase is a weird company, because it's got such an obvious comparable: CME Group. CME Group has about 3500 employees, did 1.2bn in revenue last quarter with 680m net income. Then you have coinbase now trimmming to about the same number 3500, 590m revenue and a net income loss of 550m. That's right, as far as I can see, Coinbase loses $1 for every $1 of revenue. Firstly, I don't see how Coinbase needs as many peopl…

>Coinbase is a weird company, because it's got such an obvious comparable: CME Group. CME Group has about 3500 employees, [...] Firstly, I don't see how Coinbase needs as many people as CME.

Coinbase isn't a direct comparable to CME because CME only does the exchange function.

Coinbase combines several different types of financial institutions in the crypto space:

+ exchange : order matching engine of buy & sell -- analogous to NYSE/NASDAQ/CME

+ broker : custodian of customers' margin accounts -- like Schwab, Vanguard, Fidelity, etc

+ bank : digital wallet and loans with customers' crypto as collateral -- like JP Morgan, Bank of America

+ ecommerce payments : analogous to PayPal/VISA/MC

Even though CME deals with trading corn commodities, it is not a bank for people to use corn as collateral. Therefore a corn farmer can't go to the CME and get a loan and pay it back when he sells his crop harvest.

Regardless of all the various financial areas they're in, Coinbase got overstaffed (like many other tech companies overhired) and so they're making aggressive cuts.

Re: Coinbase cuts staff by a further 20%

#222

Post by lottin »

tom_walters wrote: post #186

I think any company exploring ways to improve the financial system should be given plenty of space to do so, but I think the fundamental issue facing Coinbase, and all other crypto-based firms is: when will we see mainstream adoption of crypto as something other than asset speculation? Or, is speculation the only use-case for crypto? Sure we've had example use-cases for crypto as a value store and exchange medium, bu…

As far as I can see, the business model of cryptocurrency exchanges revolves around the speculation use-case, since they profit from matching buyers and sellers of cryptocurrencies. If cryptocurrencies worked as advertised (i.e. as a peer-to-peer payments system), I don't think there would be much use for exchanges.

Re: Coinbase cuts staff by a further 20%

#224

Post by danrocks »

TekMol wrote: post #184

It is strange, that so far Coinbase has not took any steps towards supporting the Lightning Network. If the Coinbase app supported it, that would allow all of the Coinbase users to do real decentralized micropayments. Any theories, why they don't do that?

Because the vast majority of crypto users only see it as a speculative vehicle and do not care about decentralized payments, I would guess.

Re: Coinbase cuts staff by a further 20%

#225

Post by nextstep »

TekMol wrote: post #184

It is strange, that so far Coinbase has not took any steps towards supporting the Lightning Network. If the Coinbase app supported it, that would allow all of the Coinbase users to do real decentralized micropayments. Any theories, why they don't do that?

Because the lightning network is garbage?

Re: Coinbase cuts staff by a further 20%

#226

Post by luckylion »

988747 wrote: post #77
Lalabadie wrote: post #56

Earlier quoted context omitted.

I think we're past believing that our top .1% is bringing value that's worth billions of times more than the rest of the population. They're all hoarding wealth and offloading risk on others, it's just that in comparison, the crypto-rich are not (yet?) a social class with an army of lobbyists on its payroll.

> I think we're past believing that our top .1% is bringing value that's worth billions of times more than the rest of the population. Fortunately, we do not have to rely on our beliefs here, we have an objective measure, which we call "money". If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because pe…

> If someone starts a company in their garage, and a decade later that company is worth few billions of dollars then that's the value this person brought to society - because people willingly paid them those billions of dollars for their product/service.

What was the value FTX or Theranos brought to society?

Re: Coinbase cuts staff by a further 20%

#227

Post by cm2187 »

SilverBirch wrote: post #87

Coinbase is a weird company, because it's got such an obvious comparable: CME Group. CME Group has about 3500 employees, did 1.2bn in revenue last quarter with 680m net income. Then you have coinbase now trimmming to about the same number 3500, 590m revenue and a net income loss of 550m. That's right, as far as I can see, Coinbase loses $1 for every $1 of revenue. Firstly, I don't see how Coinbase needs as many peopl…

Do you mean CME as the Chicago Mercantile Exchange? That's an exchange that deals with 10s of thousands of securities and derivatives, coinbase only deals with a handful of coins. On the other hand coinbase is also broker, which operates not just in the US but in dozens of countries, with KYC on every customer, lots of different regulators, etc. Not that much comparable I would think.

Re: Coinbase cuts staff by a further 20%

#228

Post by TekMol »

danrocks wrote: post #224
TekMol wrote: post #184

It is strange, that so far Coinbase has not took any steps towards supporting the Lightning Network. If the Coinbase app supported it, that would allow all of the Coinbase users to do real decentralized micropayments. Any theories, why they don't do that?

Because the vast majority of crypto users only see it as a speculative vehicle and do not care about decentralized payments, I would guess.

But giving the tens of millions of Coinbase users a way to do cheap and fast microtransactions could change that.

"Oh, you also have a lightning app? Cool, I'll send you the money this way."

Re: Coinbase cuts staff by a further 20%

#229

Post by VLM »

finolex1 wrote: post #171
pifm_guy wrote: post #93

Earlier quoted context omitted.

Coinbase has 4700 employees!?! Like a team of 5 software engineers, and a customer support team of 10, and 1 boss ought to cover it...

If you can build a coinbase equivalent with 16 people, the real question to ask is why hasn't anybody yet.

I could open a "full service" gas station with dudes to fill the tank and wipe the windshield and upsell services. It varies by state, but nobody put full service gas stations out of business where I live. The market wiped them out; just can't run full service, doesn't mean the workers didn't sweat enough or the market wasn't competitive enough. People won't pay what it costs to run, so they don't run that anymore. Wash your own windshield and pump your own gas.

The other problem is its a form of sophistry to react to "the absolute numbers are awful" with a prayer to the efficient market hypothesis like "why hasn't a more successful competitor arisen". That deflects from the original question in a sophistry manner, not answers it. Sure, I'm a believer too, but can't answer a technical question with a prayer. The original question stands unanswered, why are the absolute numbers so utterly awful?

Note I'm a happy customer, it would be nice for them not to go out of business, but with those numbers...

Re: Coinbase cuts staff by a further 20%

#230

Post by TekMol »

nextstep wrote: post #225
TekMol wrote: post #184

It is strange, that so far Coinbase has not took any steps towards supporting the Lightning Network. If the Coinbase app supported it, that would allow all of the Coinbase users to do real decentralized micropayments. Any theories, why they don't do that?

Because the lightning network is garbage?

The protocol itself? Why do you think so?
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