I am pretty fascinated by the Coinbase IPO and watched it closely today. I did not trade it or buy or sell it. I just watched. The market is really something else today. AirBnB and Coinbase are $100 billion companies. They are suddenly 1/7th the size of Tesla or roughly 1/15th the size of Google. I have no doubt these are amazing companies, but the valuations are jaw-dropping.
Or maybe Google and Tesla are still undervalued? I tweeted this stat the other day:
"Dogecoin currently has a market cap of $14 billion. It's now the 13th largest cryptocurrency in the world. Its market cap is bigger than companies like GameStop GME, Factset FDS, Davita DVA, Kohl's KSS, and Coors Light TAP. It's possible equity markets are TOO efficient compared to other markets." - Tweet here
So to answer that question and to dive in, here are some facts I found about Coinbase. Enjoy - by the way these facts come from a various list of sources and official documentation from Coinbase itself:
• 56 million users in the most recent quarter, which is compared to 32 million in 2019. • The Coinbase IPO was a direct listing, actually not an IPO, which means there was no money raised. • Coinbase gets 95%+ of its revenue from transaction fees and that needs to change • The company wants to soon move into credit cards, which make up 50% of sales in the next 5-10 years • Coinbase revenue has apparently climbed nine-fold from over the last 12 months to $1.8 billion • Net income has jumped somewhere to $730 million and $800 million and only last year it was $32. • Coinbase is larger than the NYSE and Nasdaq COMBINED.
So that's it.
Curious to hear your thoughts below. Thanks for reading.
Comment
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Coinbase is larger than the NYSE and Nasdaq COMBINED. (by market cap)
What do you mean by "Coinbase is larger than the NYSE and Nasdaq COMBINED."
Are you talking about the profits Coinbase generated? or marketcap?
iTradeAIMS
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@cuongvitruong, yes, the crypto market currently has really high transactional costs. its a rip off tbh. comparatively the stock exchanges are much more efficient and relatively cheaper. IMHO
scheplick
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@cuongvitruong, I should been more clear: market cap combined
I've sent you an important message. Please get in touch with me!
Thank you in advance
Sincerely,
C44
Coinilicious44
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Dear scheplick,
thank you for your analysis. In my opinion you did good not to invest into this asset, due to the fact that it's rise is fueled by nothing but a hype in a highly volatile and energy consuming, hence dangerous asset: Bitcoin.
Just the fact that the company used direct listing for its IPO shows two things [and many more]:
1.) The company does not trust banks/ and or does not want other's to set its fair value
2.) A company that makes barely two Billion in revenues for a year and probably uses a perpetual interest model with exponentially rising interest factor i [probably 1+9, or more ] to derive it's ridiculous value.
a.) The fact that is worth more than NYSE and NASDAQ combined should ring you alarm bells, as those institutions have existed and fueled the world's economy for centuries
Wake up guys, you are investing into tomorrows bubble.
Remember 2008, remember the housing market bubble based on "real estate"?
Bitcoin is a giant Ponzi scheme, with the one benefit that the schemers do not have to promise people anything... Those poor fools beliefe that it will take those "to the moon"
You do not know what you are doing to the world's financial stability and it's environment by following this ridiculous greed driven believe.
Also, since you work at trading view,
Is it possible to kindly ask you for a small business related favour regarding order entries?
Sincerely,
Coinilicious 44
NakulPandav
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@Coinilicious44, Giant Ponzi scheme? Energy consumption? XD
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Ok Boomer!
well, I did read a newspaper article recently which stated that the enitre "system" needs more than twice as much energy as Austria, an industrialized country with steel works, mills, farms, car industy etc...
take that into consideration.
also and here's the Ponzi aspect, it takes 10 minutes for a computer located in China, driven by coal energy to decipher one block.
For every successful deciphered block, the first "encoder" receives 6,5 bitcoins as a reward..
Do you see where this is going Nakul?
Say you and I have a transaction.
I want to buy a piece of land from you.
You set the price to 380.000 $,
I pay with bitcoin [I am a miner btw.]
Hence I wire roughly 6,5 BTC from my wallet to your wallet.
While I do so, the whole transaction and it's entire history, in short the "block of chains" is exchganged via hash values between you and I.
Since I wire 6,5 BTC it should take about one hour on average [still fast compared to traditional wiring]
But this is where it gets tricky:
Since I'm a miner, my own computers are basically doing the transaction, and, we're gonna assume that my computers are the closest to the main host network.
and just for my cause, we are going to assume that my computers manage to decipher the block first, I receive 6,5 BTC back as a reward.
I basically pay nothing for your land, but still have it.
Since I now do hundreds of thousands of such transactions every week, my wallet keeps growing and growing, while the chain keeps expanding and expanding
--> it costs more storage and more energy to keep deciphering, but my cost average still is a linear one:
1 computer, *100 $ a month, 2 computer 200$ a month etc etc...
For simplicity reasons I'm gonna ignore scale effects and external harddrives and all sorts of modules etc.. etc...
The point is, even with 10000 computers I'm still only paying 1000000$ in electricity payment, and since I'm located in China, I get coal driven energy which true costs is ten, if not hundredfold...
hence in order to cover my cost given the current price I only need to decipher ~17 transactions a day, or, even better I have the actual algorithm [I'm still not quite sure but like with every asset, somebody sits at the very bottom of it, what sets it apart from a ponzi scheme is that it has actual intrinsic value:
Amazon
Google
Facebook
all were once called overrated and people were sceptical because they had no traditional business model such as GM, GE, OPEL, VOLKSWAGEN, VERBUND, MERCEDES, etc. you name it.
But, ever since the digital process has advanced, the companies have mingled, if not merged... All mentioned above use Google for example for search purposes and ads, Facebook to reach customers [ads, PR, CR, etc.., and Amazon to sell merchandise, spare parts and or even the whole product via direct business channels or middlemen.
Thus the companies have developed a value that has proven itself, and, that is important DIVERSIFIED IMMEDIATLY as soon as they had the
Why? Because nobody wants to dangle on an intangible asset such as ad recipient value and rely on it throughout their entire existence.
What if channels change, what if ads become less important?
What if it turns out we are overrated [look up the dotcom bubble if interested - those companies have learned from the failures and extensive hypes there]
Hence Google went into all sorts of Hardware, and, that is important, tangible software [think of your phone, internet explorers, glasses, self driving cars and all sorts of subsidiaries..
Wouldn't be surprised if they had huge holdings of other companies]
Facebook also did so, but it stayed loyal to their credo.
Whatsapp, Instagram etc, are software components a "modern human being" cannot think to exist without anymore.
But facebook still makes most of it's money via ads
Their asset is your data. Whatever you may think of it, if you complain, don't cause you posted it on there for free.
Hence just by seeing your statuses, what you like, what you don't like, your pictures, and public communication facebooks algorithm, and this is where the hard value comes in,
can tell their big business customers [GM, GE, OPEL, VOLKSWAGEN, VERBUND, MERCEDES] what kind of behavior and what kind of profile their most prospective customer group has, and receives money for their work.
I doubt that I have to explain Amazon, but I will do so anyway because it is an amazing success story.
One man in 1994 used what would later become famous as "the internet" to sell books from his garage, when everyone, literally everyone was telling him that it was useless. You had giant established publishing companies that owned physical stores or companies that would send out catalougues from where you could order via phone fax [whatever that is] or traditional by means of a letter [:O I sent one recently hence the face]... weeks to months later you would then receive your book.
Jeff said, hey, if I have a "website" [doubt that he knew what a website was, but think of a catalogue] with this thing they call "intranet" and make it public, and I know it will once all the companies cannot keep it small anymore, I can skip those expensive print media and save paper..
Does Gutenberg ring a bell? He should, because from 1450 he revolutionized the way humans would interact with each other for centuries... If you want he is the actual father of the catalogue, even though his most favourite "catalogue" was the bible...
So Jeff goes... All we need is a catalogue that does not need to be reprinted and redistributed every year [remember the telephone book/yellow pages]. That saves cost and money, I'll run a bookshop from my garage and people can order via this new magic called "email". I look it up and send the book via FedEx. Boom. I keept the profit I don't have to spend on all sorts of distribution channel related investments I would normally have to undertake.
did they see what giant transition was on it's way [think of Nokia and the AI phone] and simply left it aside..
Now, years passed and Amazon started replacing stores in many ways, first the book stores, I doubt that it was Jeff's goal to get rid of the book shop around the corner, but obviously the small businesses that had to
rely on ordering small quantities and had to pay logistics on their own had to shut down first.
amazon on the other hand ued giant automatized warehouses, and optimized logistics [FedEx] to keep costs the lowest possible, and could order in large quantities as it had the space to do so, regarless if it was a best seller or not, if not, you could always make it one later.
Keep in mind that usually every organization faces chaos at some point, so did Jeff.
But Jeff also had a simple solution: Nothing keeps a team around a table like a Pizza.
Hence no "core" team could be bigger than 8 people, cause they had to be able to split a Pizza without anyone starving [not quite sure how they managed vegetarians and non vegetarians in a team]
In any way, today Amazon has expanded into all sorts of retail, owning physical stores ranging from food to freakin furniture [random guess Jeff] but their business model hasn't, at least not the core:
If you need something, anything you can google it and find a phyiscal store or, a link to oh wow, amazon.
You click on that link and find another search engine: Amazon's prime google:
you type "Random stuff I only use once but I'm to lazy to go to the store all the way across town to buy it, since I may need it twice, but then I'll order again. "
And you'll find it in 95% of cases. Anything. Virtually anything. Even movies and audiobooks. Kindles and diapers. You can even order food from Amazon.
You click on it, buy and this is where the big difference between a ponzi and a non ponzi scheme lies
think of paypal. What sets it apart from Bitcoin? [maybe the speed?]
Wouldn't you say it is at least just as safe while not self expanding?
I link my account/credit card to my paypal account and it wires the money across the globe with a small fee.
Yes I know, Blockchain.. Ever heard of Double-entry Accounting?
It is the exact same thing. I can promise you, that for an expert auditor, every [wired] transaction is retraceable, heck they can even find cash withdrawals]
the big difference it is not storable in one place, centralized so to say, which makes fraud easier, yes and harder to find yes, but impossible on a large scale.. and if so, always leads to a recession
Bitcoin on the other hand has to be stored somewhere, since I can retrace every coin via the chain. Do you know where? And if so, do you know who has access to that data since it is not guarded by any central banks, supranational organization, or any other regulatory or audititioning body? Do you know if it actually 100 % waterproof?
What if somebody has the knowledge to alter with the hashes? What if suddenly Billi
ions of Bitcoin dollars are flooding the US market, and blow it out of proportion, think of GME, and many other, young coompanies in particular.
So while Paypal and Bitcoin fulfill the exact same purpose, to wire money without a ridiculous bank fee across borders, paypal charges a fee and submits to traditional audition by one of the big four, and has to
come up with a balance sheet every year clearly stating where it's money went. On top of that, they have confidential information where my money went and will have to report if I start to transfer money to a webpage called "weshouldallbuyillegalchemicals.com" [does not exist]
while Bitcoin does not. Coinbase has to, but coinbase is not involved in my transactions as such. It is one of many wallets, probably one of the few serious ones, but the problem still remains if I used "other means" to store my coins. Technically I could even program my own [not me, but others].
but the main difference is that Paypal does not receive money if it succesfully encrypts a datasheet [I'm certain that their transactions are also well encoded]. Nobody says, BRAVO Elon, here's six and a half dollars for doing your job. I have to pay good Elon a small fee of 0,1 or 0,2 % of the transaction sum if I wire. Which is way less than with a bank where it is often a fixed quanity of 20€ or so for money to US, at least here in Europe. So paypal cannot increase the currency quantity, that is the job of a central bank.
And normally a central bank has to back any increase in the amount of currency with a passiva that represents this value. In our case this would be debt, since FIAT money is debt driven.
With Bitcoin, it can simply self expand because it is driven by the sheer belief that it will surge "to the moon". But what you don't know is that the corresponding passiva would be the {true] environmental cost of it's production. Hence it is like a vicious circle: More Bitcoins produce more miners, produce more energy consumption, which leads to more environmental reproduction, in order to do what?
Pay back debt. Debt that you and I have with the central banks via or countries of origin and their entrusted banks.
Wow that is complex, I found that in a book called: The {financial} world explained - How to leave debt driven currencies and resettle on to substantial sustainable asset driven valuta, by a coinilicious Grand man called L.J.R [not me, and not Tolkien for all the friends of moral fantasy out there]
Therefore
I want to make one think clear. I do not object cryptocurrencies as a whole. The concept is not bad, and has reason, BUT.
I do object the self growing [cancerous] aspect
The survival of the fittest competition in between currencies
The lack of transparency and regulation
I've been told by one of my best friends that XRP is almost CO2 neutral, another new work out friend spoke of a coin that you receive for creating a positive CO2 footprint.
Am I saying we should make XRP the new BTC?
Are you talking about the profits Coinbase generated? or marketcap?