Sun. Sep 19th, 2021


Brian Armstrong became one of the richest people in the world after Coinbase Global Inc. went public Wednesday.

Coinbase, co-founded by Mr. Armstrong in 2012, runs the largest bitcoin exchange in the U.S. and was the first major cryptocurrency-focused company to go public in the country. In early trading, it fetched a valuation of more than $100 billion, which would make Mr. Armstrong’s 20% stake worth about $20 billion. That puts the 38-year-old chief executive among the 100 wealthiest people in the world, based on Forbes’ billionaires list.

Yet Mr. Armstrong remains largely unknown outside crypto circles and is something of an enigma within them. He isn’t the typical, brash Silicon Valley founder or crypto evangelist. He rarely talks in the press and attends few conferences. His Twitter account is, by that platform’s standards, unusually tranquil.

What propels him, a number of people who have worked with him said, is a steadfast focus on bringing bitcoin to the masses.

Mr. Armstrong was an early enthusiast of bitcoin. Introduced in 2008 by the pseudonymous Satoshi Nakamoto, bitcoin was designed as a digital version of cash.

Users downloaded a program that allowed them to “mine” bitcoins and gave them a “wallet” to store them. They could then exchange bitcoins with anyone else on the network. The goal was to create a world that didn’t require people to entrust their finances to intermediaries such as banks.

That idea resonated with Mr. Armstrong, who first heard about bitcoin in 2010 while he was running an e-learning startup. “I couldn’t get it out of my head,” he said in an interview.

One thing he realized during those early days would become a pillar of Coinbase: Bitcoin was unusable for almost everyone. Back then, a user had to download the bitcoin program and operate a “node” on the network. This was beyond the ability of most people who weren’t programmers, he said. If bitcoin were to reach the mainstream, he decided, someone would have to build an easy-to-use on-ramp.

That goal became Coinbase’s lodestar. Mr. Armstrong and co-founder Fred Ehrsam bucked bitcoin’s anarchist leanings and worked with regulators, banks and Silicon Valley’s venture capitalists to try to make bitcoin as accessible to the public as email.

Mr. Armstrong’s vision was even bigger than that. Adam Draper, who runs a Silicon Valley accelerator program called Boost VC, was a young venture capitalist in August 2012 when he met Mr. Armstrong and first heard his vision for Coinbase.

Two things stood out in that conversation, Mr. Draper recalled. Mr. Armstrong foresaw a world with one financial infrastructure based on bitcoin. Then he put a price on it.

“He said it could be a trillion-dollar market,” Mr. Draper said. “I had never had a founder pitch me and say ‘trillion dollars,’ and he said it so rationally.”

Mr. Armstrong might have actually underestimated the opportunity. This month the total value of the cryptocurrency market passed $2 trillion. Bitcoin’s value alone is half that. Its price has soared over the past year, rising above $60,000 from about $7,000 as more institutional investors jumped onto the bandwagon.

Mr. Armstrong is an open-minded and clear thinker, said Mr. Ehrsam, who served for five years as Coinbase’s president and still sits on its board. He has the ability to ask “the simple question that matters,” he said.

Mr. Ehrsam was the more talkative and socially dynamic of the two, taking the lead in meetings while Mr. Armstrong listened. It was a productive partnership, he said, adding they never clashed, even in the early days when they were crammed into a small apartment in San Francisco, working 16 hours a day, seven days a week.

“All we cared about was making Coinbase work,” Mr. Ehrsam said.

One of the biggest tests of Mr. Armstrong’s leadership arose in early 2017, when Mr. Ehrsam stepped down from his executive role. Other early employees also departed, leaving Mr. Armstrong to run the show on his own. By that time, Coinbase was growing fast: At one point, it had the No. 1 app in Apple’s app store.

He was drowning,” said Asiff Hirji, a former operating adviser at the venture-capital firm Andreessen Horowitz. “It was pretty clear he needed somebody to help him.”

Mr. Hirji joined Coinbase as president and chief operating officer in 2017. He said he helped smooth the operations and restaff the executive team, including bringing on current Chief Financial Officer Alesia Haas and President Emilie Choi.

But Mr. Hirji departed less than two years later and now runs his own blockchain startup. Mr. Armstrong’s reflective style and his commitment to his own ideas clashed with two themes Mr. Hirji said he felt strongly about: building products for professional investors and defining Coinbase’s culture.

The company’s fortunes are closely tied to bitcoin’s notorious momentum swings, and Mr. Armstrong was mostly content to ride those waves, Mr. Hirji said. “It’s hard to get Brian to make a decision on the clock,” he said. “He’s not that person.”

As for the culture at Coinbase, Mr. Hirji said the company nearly quadrupled its staff within a year, creating additional headaches. “Any time you grow more than two times, the culture breaks,” he said. “It’s impossible to keep culture when most people have been there less than a year.”

Mr. Armstrong declined to comment on Mr. Hirji’s criticism.

Eventually, Mr. Armstrong did refocus the company on attracting institutional clients, who today comprise about half of the $223 billion in assets on the platform, according to the company. And last year, he finally addressed the culture issue.