Coinbase Talks 1 Million Wallet Milestone, Mt. Gox and What's Next

Coinbase co-founder Fred Ehrsam reflects on his company's surging adoption and teases new services his company is considering.

AccessTimeIconFeb 27, 2014 at 10:42 p.m. UTC
Updated Apr 10, 2024 at 2:32 a.m. UTC
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San Francisco-based bitcoin wallet provider Coinbase has revealed that it officially passed 1 million wallet downloads on 27th February, a major milestone in the lifecycle of the less than two-year-old company.

Founded in June 2012, Coinbase is the second most downloaded consumer bitcoin wallet behind rival Blockchain, which passed its 1 million wallet mark in January.

But, that doesn't make Coinbase's numbers any less impressive. At the beginning of 2013, Coinbase had facilitated just 13,000 wallet downloads, meaning it saw more than 7,000% growth over the course of 2013. Further, the company's internal estimates suggest it's now adding five new users a minute.

Coinbase co-founder Fred Ehrsam told CoinDesk that growth is coming so quickly in both its consumer and merchant services that he's barely had the time to reflect since learning of the news:

"Honestly, there's been so much going on so quickly, you want to make sure you're iterating on the product as much as possible."

But during the interview, Ehrsam did stop to reflect on his company's last year and his own personal journey in the bitcoin space.

Throughout the talk, Ehrsam showed that he's eager to put past challenges behind so that he can focus on what lies ahead.

Improving the product

Ehrsam addressed the challenge that comes with operating in a space with seemingly endless opportunities, but said he's always grounded himself with the knowledge that Coinbase is, at its core, about making bitcoin easy to use.

Said Ehrsam:

"You can think about going out doing things like deterministic hierarchical wallets or building other unique things on top of the block chain or doing a full blown industrial exchange.

There's a lot of opportunity out there, but I want to propel this into the mainstream."

The personal goal for Ehrsam is for one of those 1 million wallet users to be his mom or a friend from school, the kind of users that will require bitcoin to become more approachable for mainstream commerce.

Right now, Ehrsam estimates Coinbase is 70 to 80% of the way there, but that obstacles remain.

The impact of Mt. Gox

Of course, one vital part of convincing more consumers to enroll will be providing education, a matter that is particularly noteworthy given the media storm surrounding bitcoin as the result of troubled Japan-based exchange Mt. Gox.

For his part, Ehrsam chooses to see the good that has come out of the development, noting that he's been impressed by the resilience of the bitcoin space.

Still, Ehrsam acknowledges this likely won't be the last bad news that surfaces as part of a broader transition, one where bitcoin businesses must now play by the rules of regulators. Ehrsam even went so far as to suggest that Coinbase could have ended up falling victim to the same fate as Mt. Gox, had it not made key early decisions.

He traces Coinbase's success back to its decision to embrace regulatory compliance, one he noted at the NYDFS hearings came with considerable cost:

"When we saw [the FinCEN decision] come out, there was definitely a decision that needed to be made. We could take a risky or defiant route and say 'Hey maybe we don't fall under money services business [MSB] standards,' or meet it head on.'"

2014 and beyond

Despite recent challenges, Ehrsam is still optimistic about his company's user growth and the growth of the ecosystem in 2014.

This year, he suggested that bitcoin will become more liquid around the world and enter the remittance market. It's possible that he even shared a hint with a rather bold prediction:

"I think 2014 is going to be the year where you see 10 $1 billion retailers, probably almost exclusively online ones, start accepting bitcoin," he said.


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