Brian Armstrong: Coinbase, Cryptocurrency, and Government Regulation
技术与编程商业与创业音乐与艺术政治与社会生物与进化
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doncoinbasestuffcryptocompanytryingbitcoingoingmoneyinterestingdoingwholebettergotputcompaniesfreedomdidnbunchperson
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🎙️ 完整对话（3745 条）
Lex Fridman (00:00.000)
The following is a conversation with Brian Armstrong,
以下是与布莱恩·阿姆斯特朗的对话，
Lex Fridman (00:02.560)
cofounder and CEO of Coinbase,
Coinbase 联合创始人兼首席执行官，
Lex Fridman (00:05.240)
the largest cryptocurrency exchange platform
最大的加密货币交易平台
Lex Fridman (00:07.800)
with 98 million users in 100 countries,
在 100 个国家/地区拥有 9800 万用户，
Lex Fridman (00:11.360)
listing Bitcoin, Ethereum, Cardano,
列出比特币、以太坊、卡尔达诺、
Lex Fridman (00:13.880)
and over 100 popular cryptocurrencies.
以及超过 100 种流行的加密货币。
Lex Fridman (00:17.320)
I recorded this conversation with Brian
我记录了与布莱恩的对话
Brian Armstrong (00:19.280)
before this week's SEC probe
在本周 SEC 调查之前
Lex Fridman (00:21.880)
into whether some of the crypto listings are securities
一些加密货币上市是否是证券
Lex Fridman (00:25.440)
and thus need to be regulated as such.
因此需要对其进行监管。
Lex Fridman (00:27.880)
As always, with conversations that involve cryptocurrency,
一如既往，在涉及加密货币的对话中，
Brian Armstrong (00:31.240)
I try to make it timeless
我努力让它永恒
Lex Fridman (00:33.000)
so that the price soaring high or crashing down low
使价格飙升或暴跌
Brian Armstrong (00:37.200)
doesn't distract from the fundamental technological,
不会分散对基本技术的注意力，
Lex Fridman (00:40.520)
economic, social, and philosophical ideas
经济、社会和哲学思想
Brian Armstrong (00:42.720)
underlying this new form of money, energy, and information.
是这种新形式的货币、能源和信息的基础。
Lex Fridman (00:47.760)
Our world runs on money, the exchange and store of value,
我们的世界以金钱、交换和价值储存为基础，
Lex Fridman (00:52.400)
and cryptocurrency seeks to build the next chapter
加密货币寻求开创下一个篇章
Lex Fridman (00:55.360)
of how money works and what it can do.
金钱如何运作以及它能做什么。
Brian Armstrong (00:58.680)
Coinbase and Brian are trying to do this
Coinbase 和 Brian 正在尝试这样做
Lex Fridman (01:01.280)
by working together with regulators and governments,
Brian Armstrong (01:04.280)
which is a long and difficult road.
Lex Fridman (01:06.760)
Bureaucracies resist change, for better and for worse.
Brian Armstrong (01:11.240)
The latest SEC probe is a good representation of this.
Lex Fridman (01:14.680)
It is a serious attempt to limit fraud,
Lex Fridman (01:17.480)
but one that also runs the risk of limiting innovation
Lex Fridman (01:20.960)
and limiting financial freedom of individuals.
Brian Armstrong (01:24.440)
This is a complicated mess,
Lex Fridman (01:26.040)
and I applaud everyone involved
Brian Armstrong (01:27.480)
for trying to work through it.
Lex Fridman (01:29.400)
I hope in the end, the interest of the individual wins.
Brian Armstrong (01:33.120)
Decentralization, after all, is a hedge
Lex Fridman (01:35.880)
against the corrupting nature of centralized power.
Brian Armstrong (01:39.320)
This is the Lex Friedman podcast.
Lex Fridman (01:41.320)
To support it, please check out our sponsors
Brian Armstrong (01:43.520)
in the description.
Lex Fridman (01:44.760)
And now, dear friends, here's Brian Armstrong.
Brian Armstrong (01:49.200)
Let's start with the fact that you're a programmer.
Lex Fridman (01:51.680)
What was the first program you've ever written?
Lex Fridman (01:53.960)
Or the first one that you remember?
Lex Fridman (01:55.920)
The first memory I have of programming
Brian Armstrong (01:57.720)
was probably in middle school.
Lex Fridman (01:59.320)
And I remember it was recess,
Lex Fridman (02:01.800)
and they had this time period where you could read books,
Lex Fridman (02:04.800)
and the other kids were reading comic books and stuff.
Lex Fridman (02:07.240)
And for some reason, I had gotten into this idea
Lex Fridman (02:10.240)
that I wanted to get into computers,
Lex Fridman (02:11.560)
and I was playing with computers at home.
Lex Fridman (02:13.920)
And so I got this book, I think from the library,
Brian Armstrong (02:15.880)
it was called How to Learn Java in 30 Days.
Lex Fridman (02:19.520)
So I was reading this book at the recess,
Lex Fridman (02:24.000)
and I didn't understand anything.
Lex Fridman (02:25.680)
And I remember I went home,
Lex Fridman (02:26.960)
and I tried to get this thing working.
Lex Fridman (02:29.600)
And if you've ever written a Java program,
Brian Armstrong (02:31.840)
the first lines are public static void main string args
Lex Fridman (02:35.040)
or whatever.
Lex Fridman (02:35.880)
And it's so foreign, and it's so difficult to get started.
Lex Fridman (02:39.400)
And so I was kind of frustrated.
Brian Armstrong (02:40.520)
I was like, I don't understand anything
Lex Fridman (02:41.840)
that's happening in this book.
Lex Fridman (02:43.280)
So the first thing I wrote was probably just
Lex Fridman (02:45.960)
a Hello World app in Java.
Lex Fridman (02:48.240)
But I felt like I was so confused
Lex Fridman (02:51.640)
about what was actually happening
Brian Armstrong (02:52.840)
that I later learned a bit of PHP.
Lex Fridman (02:55.800)
And PHP was like more fun for me
Brian Armstrong (02:57.680)
because it was like, oh, just print out what you want.
Lex Fridman (03:00.400)
It didn't have all this complexity around it.
Lex Fridman (03:02.080)
So then I got more into PHP,
Lex Fridman (03:04.320)
I started building like some simple websites,
Brian Armstrong (03:06.880)
I think learned some HTML.
Lex Fridman (03:09.240)
So I think that was my introduction to programming,
Brian Armstrong (03:12.120)
at least the very beginning part.
Lex Fridman (03:13.320)
Yeah, you know, Java has a lot of,
Brian Armstrong (03:18.440)
out of all the Hello Worlds it could possibly write,
Lex Fridman (03:20.640)
Java is the one where I think it's the longest.
Brian Armstrong (03:23.160)
Yeah.
Lex Fridman (03:24.160)
Which is quite interesting
Brian Armstrong (03:25.080)
because Java is often at least for a long time
Lex Fridman (03:27.080)
was used as the primary programming language
Brian Armstrong (03:29.160)
to teach people how to program,
Lex Fridman (03:30.800)
or at least about object oriented programming.
Brian Armstrong (03:32.680)
I think most universities have now switched
Lex Fridman (03:35.280)
and high school switched to Python.
Brian Armstrong (03:37.360)
I'm not sure if that's the case.
Lex Fridman (03:38.800)
Probably better.
Brian Armstrong (03:39.640)
It's easier to learn.
Lex Fridman (03:40.480)
It lowers the, it makes it less scary.
Brian Armstrong (03:42.200)
It was like less of a hurdle.
Lex Fridman (03:43.520)
And certainly none of them use PHP.
Brian Armstrong (03:45.320)
I love PHP and I feel like it's a dirty secret.
Lex Fridman (03:48.400)
I have to keep private to myself.
Brian Armstrong (03:51.000)
Like it's somebody I'm seeing on the side
Lex Fridman (03:52.600)
or something like that,
Brian Armstrong (03:53.440)
because it's just not a respected programming language
Lex Fridman (03:56.320)
because I think there's so many ways
Brian Armstrong (03:57.880)
you can write poor code with PHP,
Lex Fridman (04:00.720)
which is why it's not respected.
Brian Armstrong (04:02.080)
Yeah, it's a scripting language more so,
Lex Fridman (04:03.960)
although of course Facebook built like a huge stack
Brian Armstrong (04:06.280)
on top of an invaluable company,
Lex Fridman (04:07.640)
but I still love Ruby to this day.
Brian Armstrong (04:10.200)
Ruby is probably my favorite language.
Lex Fridman (04:12.320)
Python's great too,
Lex Fridman (04:13.160)
but I just love the idea behind Ruby that it's like,
Lex Fridman (04:16.280)
let's make it easier for the human,
Brian Armstrong (04:18.160)
harder for the computer,
Lex Fridman (04:19.480)
and make it a joy to be expressive and all these things.
Lex Fridman (04:22.560)
So I was never the best computer scientist,
Lex Fridman (04:24.920)
but I was a good hacker.
Brian Armstrong (04:26.200)
I could rapidly prototype products
Lex Fridman (04:28.200)
and using languages like Ruby.
Brian Armstrong (04:30.480)
Do a lot of computer science programs still use like Lisp
Lex Fridman (04:33.800)
and Scheme and things like that?
Brian Armstrong (04:35.240)
No, they do for, that's like, that's if you're hardcore.
Lex Fridman (04:39.080)
If you're legit, you're gonna do
Brian Armstrong (04:40.520)
some of the functional languages.
Lex Fridman (04:42.280)
I think there's a few others that popped up,
Lex Fridman (04:44.920)
but Lisp is a distant memory for a lot of people.
Lex Fridman (04:48.600)
That's like somebody has to like,
Brian Armstrong (04:49.960)
you go to library, you dust off the book,
Lex Fridman (04:53.600)
but Scheme a little bit.
Brian Armstrong (04:55.760)
I think if you're starting,
Lex Fridman (04:57.240)
I mean, there's courses about languages themselves,
Brian Armstrong (04:59.440)
like programming languages.
Lex Fridman (05:01.560)
Lisp might be one of those,
Brian Armstrong (05:03.160)
you know how there's languages that nobody uses anymore,
Lex Fridman (05:05.480)
like ancient languages?
Brian Armstrong (05:06.800)
You might have to go to school in that same way
Lex Fridman (05:09.160)
for programming languages.
Brian Armstrong (05:10.640)
Back in the day, we used to use parentheses.
Lex Fridman (05:12.840)
I of course still use Emacs as the editor
Brian Armstrong (05:15.840)
for most things that I do.
Lex Fridman (05:17.440)
And Emacs is, a lot of the customization you can do
Brian Armstrong (05:22.040)
is in Lisp and that's the language probably
Lex Fridman (05:24.960)
when I first really fell in love with programming is Lisp.
Brian Armstrong (05:30.000)
Because for a long time throughout the earlier history
Lex Fridman (05:34.440)
of artificial intelligence,
Brian Armstrong (05:35.520)
Lisp was the primary language,
Lex Fridman (05:36.800)
but it still had a life in the 90s and the aughts
Brian Armstrong (05:41.520)
where some people would use it.
Lex Fridman (05:43.240)
It's such a beautiful functional language,
Lex Fridman (05:46.480)
but it just somehow didn't pick up.
Lex Fridman (05:51.680)
That said, I should say sort of push back,
Brian Armstrong (05:53.480)
PHP, I feel like it's still true
Lex Fridman (05:55.840)
that most of the web runs on PHP.
Brian Armstrong (05:58.880)
Most of the backend is still PHP.
Lex Fridman (06:02.200)
So if you look at, you know,
Brian Armstrong (06:03.760)
it's like the stuff that people don't talk about.
Lex Fridman (06:05.720)
It's like what runs most systems in the world?
Lex Fridman (06:08.520)
What runs the most backend?
Lex Fridman (06:11.080)
What runs most front end?
Brian Armstrong (06:12.960)
JavaScript, you know, HTML.
Lex Fridman (06:15.840)
The Stack Exchange surveys show JavaScript
Lex Fridman (06:18.640)
is the most popular language in the world, I think, right?
Lex Fridman (06:20.360)
Oh yeah, in terms of programmers and numbers of, I wonder.
Brian Armstrong (06:25.480)
By survey of number of programmers on Stack Overflow.
Lex Fridman (06:28.920)
Oh yeah, but that's also the cutting edge, right?
Brian Armstrong (06:31.400)
Those are the people that are just like excitedly
Lex Fridman (06:33.880)
writing code.
Brian Armstrong (06:34.840)
I wonder if there's people that are just like
Lex Fridman (06:37.480)
maintaining gigantic code bases.
Brian Armstrong (06:40.280)
Yeah, I feel like the amount of Java out there
Lex Fridman (06:43.520)
just running industrial systems has gotta be enormous.
Lex Fridman (06:46.680)
And then of course in the banking industry, finance,
Lex Fridman (06:49.280)
it's like even older stuff, Cobalt and whatnot, but.
Brian Armstrong (06:52.760)
I've been actually looking for somebody to interview
Lex Fridman (06:57.400)
who represents Cobalt and Fortran.
Lex Fridman (07:00.840)
Like who's the figure still there that holds the flag?
Lex Fridman (07:05.320)
I did, you know, with Java, founder of Java,
Brian Armstrong (07:07.640)
creator of Java, creator of Python, creator of C++,
Lex Fridman (07:11.360)
but nobody wants to hold the flag for Cobalt and Fortran,
Brian Armstrong (07:14.360)
even though some of the most important systems in the world
Lex Fridman (07:17.920)
still run on those.
Brian Armstrong (07:20.120)
Like power systems and infrastructure systems,
Lex Fridman (07:23.480)
which is fascinating, and ATMs and stuff like that.
Brian Armstrong (07:27.080)
Like a lot of stuff that we rely on,
Lex Fridman (07:30.440)
it just works, and the reason we don't change it
Brian Armstrong (07:32.400)
is because it works well.
Lex Fridman (07:33.920)
It was written in languages that people don't use anymore.
Brian Armstrong (07:36.920)
Yeah, that'd be a cool series of interviews.
Lex Fridman (07:39.600)
Get the stuff that's like tech that was invented
Brian Armstrong (07:42.440)
40, 50 years ago, but still is being used widely.
Lex Fridman (07:45.320)
I mean Emacs is an example of that.
Brian Armstrong (07:47.120)
Let me ask the big question of
Lex Fridman (07:50.800)
what are cryptocurrency exchanges and what's Coinbase?
Lex Fridman (07:54.000)
How does it work?
Lex Fridman (07:55.040)
Before, I'll ask even bigger questions,
Lex Fridman (07:57.440)
but it's just a nice kind of palate cleansing question
Lex Fridman (08:00.800)
of what is Coinbase?
Brian Armstrong (08:03.000)
Coinbase is a cryptocurrency exchange brokerage custodian.
Lex Fridman (08:07.600)
Basically, we're the primary financial account for people
Brian Armstrong (08:11.080)
in the crypto economy, how they buy crypto,
Lex Fridman (08:13.720)
how they store it, how they use it increasingly
Brian Armstrong (08:15.520)
in different ways.
Lex Fridman (08:16.360)
We can talk about that.
Lex Fridman (08:18.520)
So yeah, we want to be the way that a billion people
Lex Fridman (08:20.840)
hopefully access the open financial system globally.
Lex Fridman (08:23.840)
How does it work?
Lex Fridman (08:25.000)
What's cryptocurrency?
Brian Armstrong (08:29.640)
There's Bitcoin, there's Ethereum.
Lex Fridman (08:34.800)
What does it mean to be an exchange?
Lex Fridman (08:37.360)
What does it mean to store?
Lex Fridman (08:39.000)
What does it mean to transact?
Lex Fridman (08:40.560)
How does it, what does Coinbase actually do?
Lex Fridman (08:43.640)
Okay, so basically in any given market,
Brian Armstrong (08:46.680)
there's some people who want to buy,
Lex Fridman (08:47.880)
some people who want to sell,
Lex Fridman (08:49.360)
and you keep an order book of all those prices.
Lex Fridman (08:53.280)
And then if someone's willing to buy
Brian Armstrong (08:56.920)
for more than the lowest price someone's willing to sell,
Lex Fridman (08:59.800)
then you get a trade to execute.
Brian Armstrong (09:02.120)
That's kind of how an exchange works underneath.
Lex Fridman (09:04.440)
And a brokerage is kind of simpler than that even.
Brian Armstrong (09:06.800)
You don't have to know,
Lex Fridman (09:08.000)
look at the whole order book and everything,
Lex Fridman (09:09.440)
but you just go in there and you say,
Lex Fridman (09:10.600)
I want to buy a hundred dollars of Bitcoin
Brian Armstrong (09:12.360)
or whatever cryptocurrency.
Lex Fridman (09:14.000)
You get a quote, and if you like it, you can hit accept.
Lex Fridman (09:16.200)
And the core things that we do to make all that
Lex Fridman (09:19.480)
kind of just work, make it seamless,
Brian Armstrong (09:21.480)
it sounds simple on the surface,
Lex Fridman (09:23.040)
is we have to do payment integrations
Brian Armstrong (09:26.160)
in a variety of places around the world
Lex Fridman (09:27.520)
to make it easy for people to get fiat currency
Brian Armstrong (09:29.560)
into this ecosystem.
Lex Fridman (09:31.720)
We have to do work on cybersecurity a lot.
Brian Armstrong (09:33.720)
There's lots of hackers out there
Lex Fridman (09:35.160)
trying to break into our systems and steal crypto
Brian Armstrong (09:37.080)
or to put stolen credit cards and bank accounts
Lex Fridman (09:39.880)
and things like that into these systems.
Brian Armstrong (09:42.960)
We have to integrate with the blockchains themselves,
Lex Fridman (09:45.480)
which are periodically getting updated
Lex Fridman (09:48.400)
and having various airdrops and all kinds of things.
Lex Fridman (09:51.320)
So we're integrated with lots of different blockchains.
Lex Fridman (09:53.520)
And then we have to store the crypto
Lex Fridman (09:54.560)
that people buy securely as well.
Lex Fridman (09:57.040)
So crypto is kind of like storing,
Lex Fridman (09:59.400)
you store the private keys essentially.
Lex Fridman (10:00.920)
And we've invented a lot of cool technology
Lex Fridman (10:03.040)
about how to do that securely
Brian Armstrong (10:04.800)
that helps me sleep at night
Lex Fridman (10:06.960)
as one of the largest crypto custodians out there.
Lex Fridman (10:10.440)
So those are some of the pieces that had to come together
Lex Fridman (10:12.400)
to get that early simple buy sell experience to work.
Lex Fridman (10:16.360)
And yeah, I mean, Coinbase actually has
Lex Fridman (10:18.640)
a lot of different products now.
Lex Fridman (10:20.000)
So we have like an institutional product.
Lex Fridman (10:21.880)
We have Coinbase Commerce,
Brian Armstrong (10:23.280)
which is like merchant payments, like Stripe for crypto.
Lex Fridman (10:26.120)
We've got a self custodial wallet,
Brian Armstrong (10:27.960)
which we can talk about.
Lex Fridman (10:28.800)
There's all kinds of cool applications
Brian Armstrong (10:30.320)
people are building with web3
Lex Fridman (10:31.560)
and they can access it through that.
Brian Armstrong (10:32.680)
We just launched an NFT product.
Lex Fridman (10:36.280)
I can go on down the list.
Lex Fridman (10:37.640)
So we're sort of like a portfolio of crypto products now.
Lex Fridman (10:39.680)
We're big enough where we can do multiple things.
Lex Fridman (10:42.000)
But yeah, the core thing we got started with
Lex Fridman (10:43.920)
and still the majority of our revenue today
Brian Armstrong (10:45.520)
is people just wanna come in and buy and sell some crypto.
Lex Fridman (10:48.680)
And we help them do that and make it simple
Lex Fridman (10:49.960)
and easy to use.
Lex Fridman (10:51.000)
And I'll ask you about wallet, NFT is about,
Lex Fridman (10:53.880)
what is it called?
Lex Fridman (10:54.720)
The Stripe type?
Brian Armstrong (10:55.680)
Coinbase Commerce.
Lex Fridman (10:56.720)
Coinbase Commerce.
Brian Armstrong (10:58.040)
I'll ask you about all that.
Lex Fridman (10:59.160)
But order books in exchange,
Brian Armstrong (11:01.320)
what's the difference between that and stocks, for example,
Lex Fridman (11:04.840)
which there's also order books.
Brian Armstrong (11:06.520)
Yes, I mean, stocks trade through order books too.
Lex Fridman (11:08.560)
So do commodities.
Brian Armstrong (11:09.600)
There's all similar type of situation.
Lex Fridman (11:12.000)
So when I wanna buy one Bitcoin and I see Coinbase,
Brian Armstrong (11:15.640)
say the price of that Bitcoin is say $40,000
Lex Fridman (11:20.520)
and I press buy, what happens?
Brian Armstrong (11:25.400)
Yeah, okay.
Lex Fridman (11:26.240)
So you've gotten a lot,
Brian Armstrong (11:29.520)
when you press the button on your keyboard,
Lex Fridman (11:30.960)
like an electrical signal goes up the wire
Brian Armstrong (11:32.880)
on your keyboard.
Lex Fridman (11:33.720)
No, we won't cut out the level.
Lex Fridman (11:35.040)
That's also important, the timing, right?
Lex Fridman (11:36.720)
Cause it's not price fixed.
Brian Armstrong (11:38.760)
Yeah, that's true.
Lex Fridman (11:39.600)
It's giving you a quote, right?
Brian Armstrong (11:42.880)
There's a whole concept of like slippage.
Lex Fridman (11:44.520)
And like by the time the quote is executed,
Brian Armstrong (11:48.240)
if the price has moved too much, like we may reject it.
Lex Fridman (11:50.760)
And there's various things like that.
Lex Fridman (11:52.920)
But how do, I mean, what's the simple version I can give you?
Lex Fridman (11:55.040)
So we'll basically check the order book, give you a quote.
Brian Armstrong (11:59.080)
It's good for some period of time
Lex Fridman (12:00.560)
or for some amount of slippage.
Lex Fridman (12:02.480)
And then what's happening is we're initiating a debit
Lex Fridman (12:06.200)
to your payment method, whether that's a credit card
Brian Armstrong (12:08.120)
or a bank account, or you're storing dollars or euros
Lex Fridman (12:11.240)
or something on our platform,
Brian Armstrong (12:12.440)
there's various payment methods.
Lex Fridman (12:13.800)
So we're basically debiting that.
Lex Fridman (12:15.560)
And then we're crediting you the crypto
Lex Fridman (12:17.520)
and we're taking a fee for it too.
Lex Fridman (12:19.640)
So that's fundamentally what's happening underneath.
Lex Fridman (12:24.160)
And then there's just some interesting slippage.
Lex Fridman (12:26.120)
How do you calculate how much slippage is allowed?
Lex Fridman (12:30.640)
Like how do you know these things?
Brian Armstrong (12:33.280)
Cause order books are fascinating.
Lex Fridman (12:36.680)
The dynamics of that is pretty interesting.
Brian Armstrong (12:39.360)
The little I know about it.
Lex Fridman (12:40.720)
Yeah, so there's a lot of people like traders
Brian Armstrong (12:43.720)
who get super into this and like high frequency traders
Lex Fridman (12:46.080)
and arbitrage and all kinds of interesting topics.
Brian Armstrong (12:48.320)
Flash Boys was like an interesting book
Lex Fridman (12:49.880)
on this whole thing.
Brian Armstrong (12:50.840)
You want like access to information the fastest,
Lex Fridman (12:53.840)
sometimes even putting your thing in the data center
Brian Armstrong (12:56.800)
right next to the thing.
Lex Fridman (12:58.160)
We don't allow that colo stuff
Brian Armstrong (12:59.440)
cause we want it to be more democratized.
Lex Fridman (13:03.240)
But basically you give a,
Brian Armstrong (13:05.240)
let's say we wanted to just keep it math simple.
Lex Fridman (13:07.080)
We want to charge a 1% fee.
Lex Fridman (13:08.640)
So if you're buying $100 of Bitcoin
Lex Fridman (13:11.120)
and we'll charge you $101,
Brian Armstrong (13:13.400)
we've presented you the amount of Bitcoin
Lex Fridman (13:14.840)
you're going to get for the $100.
Brian Armstrong (13:16.280)
Now let's say 10 seconds later you hit accept.
Lex Fridman (13:18.720)
We go to fill the order.
Lex Fridman (13:21.000)
So it's going to be some error bound
Lex Fridman (13:23.560)
around that 1% fee, right?
Lex Fridman (13:25.400)
And if we think we're actually losing money on the trade,
Lex Fridman (13:27.520)
I think we'll often reject it.
Lex Fridman (13:29.520)
So some part of the fee,
Lex Fridman (13:31.960)
the slippage is incorporated into that,
Brian Armstrong (13:35.000)
averaged over a large number of people.
Lex Fridman (13:38.240)
Just, it's fascinating.
Brian Armstrong (13:39.680)
Cause like even just like that little detail
Lex Fridman (13:41.560)
probably requires a lot of experimentation.
Brian Armstrong (13:44.240)
Yeah.
Lex Fridman (13:45.080)
And it's kind of like a giant bug bounty out there
Brian Armstrong (13:46.960)
because if you get it wrong,
Lex Fridman (13:48.480)
there's people who are going to arbitrage that.
Lex Fridman (13:50.040)
And we've had people sort of pen test our systems
Lex Fridman (13:53.600)
in a really creative ways where like,
Brian Armstrong (13:58.000)
they'll just fire like programmatically with APIs,
Lex Fridman (14:01.280)
they'll fire off like a million different quotes
Lex Fridman (14:03.560)
and look for one of them that's out of bounds
Lex Fridman (14:05.320)
and then actually take that money right there.
Lex Fridman (14:07.200)
And we get people doing all kinds of crazy stuff.
Lex Fridman (14:10.360)
So how do you protect against that?
Lex Fridman (14:12.320)
How do you protect?
Lex Fridman (14:13.400)
So we'll talk about cybersecurity in interesting ways,
Lex Fridman (14:15.880)
but there's a lot of clever people
Lex Fridman (14:18.240)
trying to do clever things to earn,
Brian Armstrong (14:20.960)
not even just to break into the system,
Lex Fridman (14:22.640)
but to earn an edge of some kind in the system.
Lex Fridman (14:26.280)
How do you stay one step ahead?
Lex Fridman (14:28.840)
There's no silver bullet,
Lex Fridman (14:29.680)
it's a bunch of lead bullets, right?
Lex Fridman (14:30.840)
So it's like, you know, one thing we do is
Lex Fridman (14:34.680)
we just have good test suites, right?
Lex Fridman (14:36.200)
So you're testing every piece of code that goes out,
Brian Armstrong (14:38.440)
that's like just common good best practice,
Lex Fridman (14:40.180)
but it's particularly important in financial services.
Brian Armstrong (14:43.800)
Another thing we do is we hire third party firms
Lex Fridman (14:45.960)
to try to audit this stuff and break in.
Brian Armstrong (14:48.040)
Another one we do is we have a bug bounty program.
Lex Fridman (14:51.280)
So we basically pay white hat hackers to find this stuff
Brian Armstrong (14:55.480)
before the black hats do.
Lex Fridman (14:56.800)
And we've paid out lots of good bug bounties.
Brian Armstrong (14:59.800)
So, you know, try all the above.
Lex Fridman (15:02.780)
And occasionally you don't get it right
Lex Fridman (15:03.840)
and you lose some money and then you fix it
Lex Fridman (15:05.440)
and you keep going, so yeah.
Brian Armstrong (15:07.400)
Let's talk about cybersecurity a little bit more.
Lex Fridman (15:10.360)
You mentioned using stolen bank accounts.
Lex Fridman (15:13.200)
So that's another one, that's another interesting one.
Lex Fridman (15:15.200)
How do you protect against that?
Brian Armstrong (15:17.480)
Okay, so fraud prevention, yeah, is a big topic.
Lex Fridman (15:20.720)
So one of the, there's a lot of things people do,
Lex Fridman (15:23.120)
but one of the things they do
Lex Fridman (15:25.200)
is that you use machine learning, right?
Lex Fridman (15:28.200)
So you look at hundreds.
Lex Fridman (15:29.800)
To protect or to attack?
Brian Armstrong (15:30.920)
To protect against it.
Lex Fridman (15:32.400)
So what you want to do is kind of build up
Brian Armstrong (15:35.620)
a labeled data set of all the different people
Lex Fridman (15:39.000)
who have turned out to be fraudulent and good actors,
Lex Fridman (15:42.720)
and hopefully collect as much data as you can.
Lex Fridman (15:44.240)
And then, you know, you might feed hundreds
Brian Armstrong (15:45.800)
or thousands of these factors
Lex Fridman (15:47.720)
into your machine learning model
Lex Fridman (15:49.480)
and it'll come back with a risk score.
Lex Fridman (15:51.600)
So, you know, an example of like the kinds of factors
Brian Armstrong (15:54.720)
people create or put in there, you know,
Lex Fridman (15:56.460)
obviously I don't want to disclose too many of them
Brian Armstrong (15:57.880)
because it's a cat and mouse game,
Lex Fridman (15:59.740)
but just kind of, I don't know,
Brian Armstrong (16:01.360)
relatively well known stuff might be.
Lex Fridman (16:03.300)
You know, you have device fingerprints, right?
Lex Fridman (16:06.900)
So like, what kind of device are you on
Lex Fridman (16:08.860)
and what fonts do you have installed?
Brian Armstrong (16:10.380)
A lot of people who are farming lots of these accounts,
Lex Fridman (16:12.300)
they're using emulators and like virtual machines and stuff.
Brian Armstrong (16:15.220)
They're not like, you know,
Lex Fridman (16:16.460)
an average person on that device.
Lex Fridman (16:19.160)
And then you'll see sometimes like,
Lex Fridman (16:21.160)
one of my favorite metrics we track for this
Brian Armstrong (16:23.260)
was called like improbable travel velocity.
Lex Fridman (16:26.120)
So we would, we're tracking people's IPS, right?
Lex Fridman (16:28.480)
And you might see someone who was one day in Austin, Texas
Lex Fridman (16:33.340)
and then like an hour later they were in London or something.
Brian Armstrong (16:36.140)
It's like, well, that's very improbable.
Lex Fridman (16:37.560)
I mean, sometimes people are using VPNs.
Lex Fridman (16:39.500)
So you gotta be careful with that
Lex Fridman (16:40.500)
because like there's legitimate people who use VPNs too.
Lex Fridman (16:42.780)
But if it's not possible for them to have gotten on a plane
Lex Fridman (16:46.700)
and gotten there that quickly,
Brian Armstrong (16:47.620)
then that's usually they're like spoofing a device or IP.
Lex Fridman (16:50.260)
Sometimes those are interesting factors.
Lex Fridman (16:52.540)
But yeah, if you feed enough of these in, you will,
Lex Fridman (16:56.100)
oh, another fun one is like, you know,
Brian Armstrong (16:59.460)
real users will type their credit card
Lex Fridman (17:01.580)
like one number at a time.
Brian Armstrong (17:03.720)
Scammers have a list of them
Lex Fridman (17:05.280)
and they'll just paste in a whole number.
Lex Fridman (17:08.260)
So you can look at like the number of milliseconds
Lex Fridman (17:10.760)
between keystrokes.
Brian Armstrong (17:11.900)
Like there's all kinds of stuff people have come up with.
Lex Fridman (17:13.700)
And even for travel velocity,
Brian Armstrong (17:15.340)
you could probably incorporate VPNs too
Lex Fridman (17:17.740)
because there's probably a travel velocity
Brian Armstrong (17:21.100)
for VPN switching too that's human like.
Lex Fridman (17:24.500)
Like if you're using legitimately VPN for something else,
Brian Armstrong (17:27.340)
that might be, there's like legitimate uses too.
Lex Fridman (17:31.060)
Actually, you know, I feel embarrassed
Brian Armstrong (17:32.660)
that I don't know this, probably should.
Lex Fridman (17:34.860)
But the, I'm not a robot.
Brian Armstrong (17:37.640)
Capture thing. Capture thing.
Lex Fridman (17:39.300)
Yeah.
Lex Fridman (17:40.140)
So that probably works in the same way.
Lex Fridman (17:42.580)
Like how do you move your mouse maybe
Brian Armstrong (17:46.020)
or how the dynamics of the clicking.
Lex Fridman (17:48.960)
Totally.
Lex Fridman (17:49.800)
But how does that even work that well then?
Lex Fridman (17:51.660)
And why can't it be fake?
Brian Armstrong (17:52.960)
I need to look into this.
Lex Fridman (17:53.940)
Cause it's such a trivial capture.
Brian Armstrong (17:56.860)
It feels like it should be very crackable.
Lex Fridman (17:58.740)
And yet a lot of high security places use that.
Brian Armstrong (18:02.340)
Yeah.
Lex Fridman (18:03.180)
It's really interesting.
Brian Armstrong (18:04.000)
It's another cat and mouse game.
Lex Fridman (18:04.940)
So I think they've, yeah,
Lex Fridman (18:05.960)
but it's using a lot of similar signals
Lex Fridman (18:07.460)
like mouse movements, keystrokes.
Lex Fridman (18:10.220)
And then obviously all the stuff that comes over
Lex Fridman (18:12.060)
the wire with your browser.
Lex Fridman (18:14.180)
So like what operating system, what fonts,
Lex Fridman (18:17.340)
what headers are being sent over.
Lex Fridman (18:18.940)
And there's actually, there's an old website.
Lex Fridman (18:21.940)
I can't remember what it's called.
Brian Armstrong (18:22.780)
It was kind of like Panoptik Click
Lex Fridman (18:24.180)
or Panopticon or something.
Lex Fridman (18:25.500)
But it basically was like a proof of concept site
Lex Fridman (18:27.560)
that they would just show you all the data
Brian Armstrong (18:30.180)
that was kind of getting sent over with your request.
Lex Fridman (18:33.080)
And like say that there's only one person in the world
Brian Armstrong (18:36.140)
who has this exact set of data.
Lex Fridman (18:37.420)
It's you.
Lex Fridman (18:38.260)
And so it's almost like a workaround,
Lex Fridman (18:41.100)
a clever workaround to track somebody,
Brian Armstrong (18:43.820)
make identify a unique person,
Lex Fridman (18:45.420)
even if like there wasn't a cookie involved or something.
Brian Armstrong (18:48.320)
Yeah, this is a fascinating world
Lex Fridman (18:50.140)
where you can't see anybody here in the dark
Lex Fridman (18:52.740)
and yet you have a lot of signal
Lex Fridman (18:54.060)
and you have to figure out who's a real person, who's not.
Brian Armstrong (18:56.260)
Who's a robot, who's not.
Lex Fridman (18:58.380)
Let me step back.
Brian Armstrong (18:59.220)
We're gonna jump around all over the place.
Lex Fridman (19:00.660)
Let me step back.
Brian Armstrong (19:01.500)
That's why I like your interviews.
Lex Fridman (19:02.320)
You get into like technical topics.
Lex Fridman (19:05.220)
So just let's use Bitcoin as a measure of time.
Lex Fridman (19:09.240)
You started Coinbase when Bitcoin was $10.
Lex Fridman (19:14.460)
And you just mentioned an incredible system
Lex Fridman (19:17.020)
with security, with transactions.
Brian Armstrong (19:19.800)
Everything is thought through.
Lex Fridman (19:20.920)
There's a lot going on.
Lex Fridman (19:21.980)
But what was version one back in those early days,
Lex Fridman (19:25.060)
the first prototype of Coinbase?
Lex Fridman (19:26.740)
What did that look like?
Lex Fridman (19:28.300)
Like what did it take to write it,
Brian Armstrong (19:31.060)
to think through it and make it work enough
Lex Fridman (19:35.420)
to at least make you believe that it's gonna work?
Brian Armstrong (19:38.580)
Well, I definitely didn't know if it was gonna work.
Lex Fridman (19:40.060)
I mean, it was kind of,
Brian Armstrong (19:41.380)
I felt like I was just following my gut.
Lex Fridman (19:44.100)
So, I mean, I was working at Airbnb.
Brian Armstrong (19:47.020)
I was a software engineer there, project manager.
Lex Fridman (19:50.060)
I was working on some fraud prevention stuff, for instance.
Lex Fridman (19:52.660)
And I read the Bitcoin white paper
Lex Fridman (19:55.280)
in kind of December of 2010.
Brian Armstrong (19:57.900)
I started going to some Bitcoin meetups in the Bay Area,
Lex Fridman (1:00:00.060)
not only with Bitcoin,
Brian Armstrong (1:00:00.940)
which is kind of like this new reserve currency,
Lex Fridman (1:00:03.080)
but also with stable coins, right?
Brian Armstrong (1:00:05.900)
Which are new inventions there.
Lex Fridman (1:00:08.220)
So yeah, I basically feel like crypto
Brian Armstrong (1:00:10.860)
is this secret hiding in plain sight
Lex Fridman (1:00:13.120)
that can create economic freedom
Brian Armstrong (1:00:14.780)
for people all over the world
Lex Fridman (1:00:15.780)
and a more fair and free and global economy.
Brian Armstrong (1:00:18.980)
Well, so the limit,
Lex Fridman (1:00:21.060)
and by the way, I didn't know about Argentina.
Lex Fridman (1:00:22.860)
Why'd you end up in Argentina?
Lex Fridman (1:00:25.160)
Okay, so I was basically,
Brian Armstrong (1:00:28.020)
I was living in Houston, Texas after college
Lex Fridman (1:00:30.180)
where I went to school.
Lex Fridman (1:00:31.500)
And I had never studied abroad.
Lex Fridman (1:00:34.240)
I kind of like, I don't know,
Brian Armstrong (1:00:36.220)
I felt like I needed some adventure or something in my life.
Lex Fridman (1:00:38.140)
And I was like, I was running this other startup
Brian Armstrong (1:00:40.220)
that I was trying at the time, a tutoring company,
Lex Fridman (1:00:41.900)
and I could work from anywhere.
Lex Fridman (1:00:43.740)
So my plan was, you know what,
Lex Fridman (1:00:44.940)
I'm just gonna go do like a month
Brian Armstrong (1:00:47.260)
in every city around South America,
Lex Fridman (1:00:49.120)
just like almost like to force myself
Brian Armstrong (1:00:51.260)
out of my comfort zone
Lex Fridman (1:00:52.180)
because I had never traveled by myself
Brian Armstrong (1:00:54.640)
to a foreign country or whatever,
Lex Fridman (1:00:55.720)
and where I didn't really speak the language.
Lex Fridman (1:00:57.340)
And anyway, I landed in Buenos Aires
Lex Fridman (1:01:00.420)
thinking I'd go all around South America
Brian Armstrong (1:01:01.780)
where I had never been there.
Lex Fridman (1:01:03.240)
But I basically, once I was set up in Buenos Aires
Brian Armstrong (1:01:06.600)
with an apartment and a cell phone and stuff,
Lex Fridman (1:01:08.160)
then I was like, I don't wanna do that all again next month.
Lex Fridman (1:01:10.300)
So I just stayed there for most of the time
Lex Fridman (1:01:11.620)
and took some day trips.
Lex Fridman (1:01:12.460)
But yeah, it was kind of a formative experience
Lex Fridman (1:01:15.060)
in that regard.
Brian Armstrong (1:01:15.900)
You got a chance sort of unexpectedly
Lex Fridman (1:01:18.580)
to experience the social effects of hyperinflation,
Brian Armstrong (1:01:21.460)
which is interesting.
Lex Fridman (1:01:22.500)
But I also, I've never been,
Brian Armstrong (1:01:24.380)
I really, really wanna go as a person who likes tangos,
Lex Fridman (1:01:26.860)
a person who likes the Argentinian national team
Lex Fridman (1:01:29.980)
and soccer and steak.
Lex Fridman (1:01:34.340)
All right, and all the other things
Brian Armstrong (1:01:36.620)
that Argentina is known for.
Lex Fridman (1:01:38.240)
Okay, so economic freedom.
Brian Armstrong (1:01:41.380)
One of the limits on economic freedom
Lex Fridman (1:01:43.620)
comes from government and government regulations
Lex Fridman (1:01:46.300)
and all those kinds of things throughout the world.
Lex Fridman (1:01:49.360)
So how does cryptocurrency help resist that?
Lex Fridman (1:01:52.340)
So can you sort of elaborate a little bit further?
Lex Fridman (1:01:55.560)
What are the things that limit economic freedom
Lex Fridman (1:01:57.900)
and how does crypto help ease that?
Lex Fridman (1:02:03.340)
Today the world, like the traditional financial system
Brian Armstrong (1:02:05.420)
is basically every country of the world for the most part
Lex Fridman (1:02:08.060)
has their own currency.
Lex Fridman (1:02:10.220)
And so there's a group of people or institutions
Lex Fridman (1:02:13.280)
in each of those countries that's controlling
Brian Armstrong (1:02:15.360)
that economic policy or that money supply.
Lex Fridman (1:02:18.560)
And it can be manipulated, right?
Lex Fridman (1:02:22.380)
So it's not like many of these currencies
Lex Fridman (1:02:25.100)
are not linked to gold standard.
Brian Armstrong (1:02:26.820)
The U.S. kind of famously came off that in 1970s,
Lex Fridman (1:02:29.260)
for instance, but if you read Ray Dalio and all this stuff
Brian Armstrong (1:02:32.020)
like he talks about, there's thousands of fiat currencies
Lex Fridman (1:02:34.500)
that have been in existence over time.
Lex Fridman (1:02:36.700)
And basically all of them eventually get disconnected
Lex Fridman (1:02:39.660)
from backing of like hard commodities
Lex Fridman (1:02:43.700)
and then they get overinflated and printed.
Lex Fridman (1:02:46.460)
And so in times of stress, with Nixon,
Brian Armstrong (1:02:50.980)
I guess it was like in the U.S. it was the Vietnam War
Lex Fridman (1:02:53.780)
or something like that.
Brian Armstrong (1:02:54.900)
It kind of drove government spending.
Lex Fridman (1:02:56.340)
And so under times of stress, they say,
Brian Armstrong (1:02:57.980)
hey, it's a temporary measure.
Lex Fridman (1:02:59.100)
We need to break the peg.
Brian Armstrong (1:03:00.820)
Temporary was like famous words that he used
Lex Fridman (1:03:02.980)
and they go print.
Lex Fridman (1:03:07.500)
And so the bad thing about that, of course,
Lex Fridman (1:03:09.300)
is that it sort of erodes people's like wealth
Brian Armstrong (1:03:11.980)
if they can only hold their assets in cash,
Lex Fridman (1:03:13.580)
which basically like poor people tend to do that.
Brian Armstrong (1:03:16.820)
If you're wealthy, you can hold stocks
Lex Fridman (1:03:19.220)
or like real estate and things like that.
Lex Fridman (1:03:20.740)
But it's really a tax on the poorest people
Lex Fridman (1:03:22.700)
in society, inflation.
Lex Fridman (1:03:24.760)
So anyway, crypto in a way is a little bit
Lex Fridman (1:03:28.060)
of like a return to the gold standard
Lex Fridman (1:03:30.260)
in this digital era, right?
Lex Fridman (1:03:31.620)
Bitcoin, there's guaranteed scarcity of it.
Brian Armstrong (1:03:33.820)
It's deflationary.
Lex Fridman (1:03:34.940)
There's never gonna be more than 21 million Bitcoin.
Lex Fridman (1:03:37.420)
And so that's a really important principle.
Lex Fridman (1:03:42.300)
I also think not just Bitcoin,
Lex Fridman (1:03:44.300)
but like cryptocurrency generally,
Lex Fridman (1:03:46.980)
it's really important in terms of this,
Lex Fridman (1:03:48.980)
you asked about regulation, right?
Lex Fridman (1:03:50.740)
So think about like, if you wanted to make a global borrowing
Lex Fridman (1:03:55.060)
and lending marketplace or a global exchange,
Lex Fridman (1:03:59.140)
you would have to go to all 200 countries in the world,
Brian Armstrong (1:04:01.800)
sometimes like maybe 50 states in the US
Lex Fridman (1:04:03.780)
and get lending licenses or an operating exchange
Brian Armstrong (1:04:07.860)
or whatever.
Lex Fridman (1:04:09.020)
And that's just an incredible amount of work.
Lex Fridman (1:04:12.900)
And you can't even do business in many of these countries
Lex Fridman (1:04:14.900)
because like you have to bribe somebody
Brian Armstrong (1:04:17.300)
or it's corrupt or whatever.
Lex Fridman (1:04:18.860)
And so, but with DeFi, with decentralized finance,
Brian Armstrong (1:04:22.300)
people have published like Uniswap
Lex Fridman (1:04:24.860)
as a decentralized exchange.
Brian Armstrong (1:04:26.300)
Everybody in the world, no matter what country you're in,
Lex Fridman (1:04:28.040)
what jurisdiction can interface
Brian Armstrong (1:04:30.460)
with that decentralized exchange
Lex Fridman (1:04:32.420)
and there's no central company operating it.
Brian Armstrong (1:04:35.480)
It's a smart contract on the Ethereum blockchain,
Lex Fridman (1:04:38.620)
which is globally decentralized.
Lex Fridman (1:04:40.160)
So there's no throat to choke.
Lex Fridman (1:04:41.260)
There's no one person or a company you can go to
Brian Armstrong (1:04:43.700)
to like, hey, shut this thing down.
Lex Fridman (1:04:45.500)
Even if everybody who's working on Uniswap today stopped,
Brian Armstrong (1:04:48.900)
the Uniswap smart contract would continue to operate
Lex Fridman (1:04:52.180)
on the Ethereum blockchain.
Brian Armstrong (1:04:54.460)
Similarly for like a borrowing and lending marketplace,
Lex Fridman (1:04:56.660)
like somebody in India wants to borrow
Brian Armstrong (1:05:00.860)
from somebody in the US or whatever,
Lex Fridman (1:05:02.380)
there's very difficult to do that
Brian Armstrong (1:05:04.260)
in the traditional financial world,
Lex Fridman (1:05:06.220)
but in a smart contract that's decentralized,
Brian Armstrong (1:05:08.880)
you can enable anybody to access it.
Lex Fridman (1:05:10.660)
So it's really kind of this great democratizing force
Brian Armstrong (1:05:14.260)
that is creating a new financial system
Lex Fridman (1:05:16.300)
that is more fair and more free.
Brian Armstrong (1:05:19.380)
Yeah, and in some ways it's a clever way
Lex Fridman (1:05:24.700)
that's enabling people to do that in a novel way.
Lex Fridman (1:05:28.380)
So is Uniswap in some sense a competitive Coinbase?
Lex Fridman (1:05:32.220)
In which way is it and which way is it not?
Lex Fridman (1:05:34.700)
So because for people who don't know,
Lex Fridman (1:05:38.300)
Coinbase is centralized.
Lex Fridman (1:05:40.660)
So let me ask, doesn't that go against the spirit of crypto
Lex Fridman (1:05:45.920)
since crypto is decentralized?
Lex Fridman (1:05:49.100)
What are the pros and cons of being centralized
Lex Fridman (1:05:51.940)
as an exchange?
Lex Fridman (1:05:53.960)
So I don't think Coinbase is fully centralized.
Lex Fridman (1:05:55.980)
We have many different products.
Lex Fridman (1:05:57.340)
And the way that I think about it is that our exchange
Lex Fridman (1:06:01.100)
or our brokerage is a centralized,
Brian Armstrong (1:06:03.740)
regulated financial service business.
Lex Fridman (1:06:06.100)
And it's actually important for the crypto ecosystem
Brian Armstrong (1:06:08.140)
to have that because you wanna allow a lot of the fiat money
Lex Fridman (1:06:11.500)
in the world to flow into the crypto economy.
Lex Fridman (1:06:13.380)
So we're very proud of that.
Lex Fridman (1:06:15.940)
And I think we've helped a lot of that money flow in.
Brian Armstrong (1:06:18.620)
Now, once people have money in crypto,
Lex Fridman (1:06:20.620)
they can choose to hold it in a variety of ways.
Lex Fridman (1:06:22.280)
And they can choose to hold it in a self custodial wallet,
Lex Fridman (1:06:24.660)
which is more decentralized.
Brian Armstrong (1:06:26.240)
They can choose to use decentralized exchanges,
Lex Fridman (1:06:29.580)
which we love and Uniswap is not really,
Brian Armstrong (1:06:32.780)
I don't think of them as like a direct competitor to us.
Lex Fridman (1:06:34.920)
We basically have integrated Uniswap
Brian Armstrong (1:06:37.460)
into a number of our products.
Lex Fridman (1:06:38.340)
We love DeFi, decentralized exchanges, the whole thing.
Lex Fridman (1:06:41.460)
So Coinbase wallet, which is a self custodial wallet,
Lex Fridman (1:06:46.320)
is more decentralized and it allows people
Brian Armstrong (1:06:48.820)
to hold their own crypto.
Lex Fridman (1:06:51.500)
They don't have to trust us.
Lex Fridman (1:06:52.500)
Can you explain what a self custodial wallet is?
Lex Fridman (1:06:55.860)
What is a wallet and what is a self custodial wallet?
Brian Armstrong (1:06:58.900)
Yeah, so it's confusing.
Lex Fridman (1:07:00.540)
So a custodial wallet means you're trusting Coinbase
Brian Armstrong (1:07:04.260)
to store your crypto, the private keys themselves.
Lex Fridman (1:07:08.420)
And for some people and institutions and everything,
Brian Armstrong (1:07:11.420)
just meeting them where they are today,
Lex Fridman (1:07:12.940)
that's nice because it's simpler.
Brian Armstrong (1:07:17.120)
They're not afraid of losing their crypto
Lex Fridman (1:07:18.720)
if they make some accidental mistake.
Brian Armstrong (1:07:20.660)
Or so custodial crypto products are important
Lex Fridman (1:07:25.140)
to help get a bunch of people into the ecosystem.
Lex Fridman (1:07:27.480)
But I'm very supportive of self custodial wallets.
Lex Fridman (1:07:30.580)
And I think in some ways they are the future
Brian Armstrong (1:07:32.500)
because more and more people are gonna want
Lex Fridman (1:07:34.380)
to store their own crypto,
Brian Armstrong (1:07:35.340)
not trust a third party institution to do it.
Lex Fridman (1:07:37.320)
And in some ways that is much more authentic
Brian Armstrong (1:07:38.940)
to the ethos of crypto.
Lex Fridman (1:07:40.140)
So Coinbase will help you convert the fiat into crypto.
Lex Fridman (1:07:43.700)
And frankly, that's a more centralized thing.
Lex Fridman (1:07:46.020)
But once you have crypto,
Brian Armstrong (1:07:46.940)
you can then go to the self custodial world,
Lex Fridman (1:07:49.080)
store it yourself.
Lex Fridman (1:07:50.100)
And to get into the technical details just for a second,
Lex Fridman (1:07:53.500)
it's basically saying you're gonna store the keys
Brian Armstrong (1:07:56.500)
on your own device.
Lex Fridman (1:07:57.900)
And so even if Coinbase gets some court order to seize it,
Brian Armstrong (1:08:02.860)
we actually can't.
Lex Fridman (1:08:03.900)
From an architecture point of view, we can't do it.
Brian Armstrong (1:08:06.580)
Or if Coinbase gets hacked or something,
Lex Fridman (1:08:08.520)
we can't lose your funds.
Brian Armstrong (1:08:09.960)
Now the thing is you have to take the responsibility
Lex Fridman (1:08:12.300)
because we're not taking it.
Lex Fridman (1:08:13.140)
So the individual person could get hacked.
Lex Fridman (1:08:15.920)
And there's a whole bunch of really cool research happening
Brian Armstrong (1:08:18.960)
to make self custodial wallets more resilient
Lex Fridman (1:08:21.900)
to accidental loss, hacks, and just user error.
Brian Armstrong (1:08:28.060)
I don't know how much you've looked at various cryptography
Lex Fridman (1:08:30.140)
things, but basically, you can have multiple signatures
Brian Armstrong (1:08:35.780)
from different keys on different devices
Lex Fridman (1:08:37.420)
where you need two of the three or three of the five.
Brian Armstrong (1:08:39.740)
There's a whole technology called multi party computation
Lex Fridman (1:08:43.220)
or threshold signing signatures, which is really cool.
Lex Fridman (1:08:46.460)
But those are the things you would run locally?
Lex Fridman (1:08:49.700)
These are all security measures, cryptography measures
Lex Fridman (1:08:52.460)
to protect you without a centralized component?
Lex Fridman (1:08:56.580)
Right.
Lex Fridman (1:08:57.100)
So a simple example would be, let's
Lex Fridman (1:08:59.180)
say you had a two of three key signature.
Lex Fridman (1:09:02.300)
And one key might be stored at Coinbase,
Lex Fridman (1:09:04.820)
but that's not a quorum.
Lex Fridman (1:09:06.220)
So we couldn't unilaterally move your funds.
Lex Fridman (1:09:08.100)
But another key is on your device, on your phone,
Brian Armstrong (1:09:10.100)
let's say.
Lex Fridman (1:09:10.740)
Oh, cool.
Lex Fridman (1:09:12.100)
So in a normal situation, you have a key on your phone.
Lex Fridman (1:09:14.920)
We have one.
Lex Fridman (1:09:17.420)
And so two out of three, it can all
Lex Fridman (1:09:20.060)
get signed very quickly for day to day use.
Lex Fridman (1:09:21.900)
But let's say you lose your phone or something.
Lex Fridman (1:09:23.900)
Now, there has to be a third key.
Lex Fridman (1:09:25.420)
And that's where you could store it in a backup somewhere,
Lex Fridman (1:09:29.580)
like in Google Drive or iCloud.
Brian Armstrong (1:09:31.820)
You could trust a third party that's
Lex Fridman (1:09:34.140)
not Coinbase to also have that one key.
Lex Fridman (1:09:36.260)
And they can't do anything unilaterally with that one key.
Lex Fridman (1:09:39.180)
So that's a simple example.
Brian Armstrong (1:09:40.700)
You can get way more complicated.
Lex Fridman (1:09:42.260)
Yeah, that's an awesome idea.
Lex Fridman (1:09:43.380)
So if your funds get seized, Coinbase can't do anything.
Lex Fridman (1:09:49.820)
But you better not lose your phone, maybe, in that case.
Brian Armstrong (1:09:52.260)
Yeah, yeah.
Lex Fridman (1:09:54.420)
But it provides a, there is, so even if you lose your phone,
Brian Armstrong (1:09:56.660)
then there is a recovery mechanism.
Lex Fridman (1:09:57.820)
Because you can get the one key from Coinbase,
Brian Armstrong (1:09:59.140)
the one from your backup provider,
Lex Fridman (1:10:01.500)
and recover a new one back on your phone.
Brian Armstrong (1:10:03.860)
I know, yeah.
Lex Fridman (1:10:04.620)
But what if Coinbase is no longer,
Lex Fridman (1:10:06.820)
but because of government, because of, say,
Lex Fridman (1:10:09.420)
it's in North Korea, government says you're no longer,
Brian Armstrong (1:10:12.620)
like Coinbase is shut down in that country
Lex Fridman (1:10:14.780)
or something like that.
Brian Armstrong (1:10:15.820)
Then you can get it, even if you have access to those two.
Lex Fridman (1:10:19.460)
So again, perhaps a silly question,
Lex Fridman (1:10:23.140)
but isn't a self custodial wallet a competitor
Lex Fridman (1:10:26.780)
as a notion to Coinbase?
Brian Armstrong (1:10:29.860)
No, I mean, so we offer a self custodial wallet.
Lex Fridman (1:10:33.420)
We've built one, and it's like one.
Lex Fridman (1:10:34.820)
But doesn't it bleed the, like I guess
Lex Fridman (1:10:37.060)
I'm asking a sort of a financial question,
Lex Fridman (1:10:39.580)
is like how does Coinbase make money on transactions?
Lex Fridman (1:10:43.940)
So does this not, it does not decrease the number,
Lex Fridman (1:10:47.140)
or does not significantly negatively affect transactions?
Lex Fridman (1:10:50.700)
Or are you more focused on growing the number of the pie
Lex Fridman (1:10:53.980)
of the number of people that are using cryptocurrency?
Lex Fridman (1:10:56.700)
Yeah, like a traditional financial service firm
Brian Armstrong (1:10:58.580)
would probably say, well, we should be storing,
Lex Fridman (1:11:01.740)
let's keep more of the custody with us,
Brian Armstrong (1:11:03.740)
because that's how we prove to the world
Lex Fridman (1:11:05.780)
that we're valuable or whatever.
Brian Armstrong (1:11:07.540)
I don't really believe that.
Lex Fridman (1:11:08.660)
Like I think that actually we kind of want to encourage
Brian Armstrong (1:11:10.980)
our users to move to self custody over time
Lex Fridman (1:11:13.020)
for those who are ready and willing.
Lex Fridman (1:11:15.020)
And that technology needs to mature.
Lex Fridman (1:11:16.660)
I'm not trying to like force anybody to do it
Brian Armstrong (1:11:18.260)
who doesn't want to do it.
Lex Fridman (1:11:19.100)
But to me, that's like the future
Brian Armstrong (1:11:21.300)
of how we get billions of people using crypto.
Lex Fridman (1:11:23.860)
But doesn't that mean they can go somewhere else easier?
Brian Armstrong (1:11:27.420)
Yeah, that's sort of the point is like,
Lex Fridman (1:11:29.660)
we're all using the same protocol.
Lex Fridman (1:11:31.020)
So there's low switching costs,
Lex Fridman (1:11:32.340)
which keeps all the companies accountable, right?
Brian Armstrong (1:11:34.500)
Like if you want to access the visa network,
Lex Fridman (1:11:38.500)
there's only one company in the world
Brian Armstrong (1:11:39.620)
you can go through to do that, like visa.
Lex Fridman (1:11:41.740)
But if you want to access the Bitcoin network,
Brian Armstrong (1:11:43.500)
there's dozens or hundreds of companies out there
Lex Fridman (1:11:45.780)
who can do that.
Lex Fridman (1:11:46.620)
So it's arguably, you could argue it's worse for us
Lex Fridman (1:11:50.620)
as a company, but I think it's better for,
Brian Armstrong (1:11:53.140)
it's what makes Bitcoin interesting
Lex Fridman (1:11:54.540)
and cryptocurrency interesting is that nobody controls it.
Brian Armstrong (1:11:58.020)
There is low switching costs for customers.
Lex Fridman (1:11:59.940)
It's better for customers.
Lex Fridman (1:12:01.180)
And that means that all the companies in the space
Lex Fridman (1:12:03.260)
are going to be held to a high standard
Brian Armstrong (1:12:04.500)
because the minute you lose someone's trust,
Lex Fridman (1:12:06.060)
they're just going to move their Bitcoin to some other service
Lex Fridman (1:12:08.500)
and that's good for the world.
Lex Fridman (1:12:10.220)
Do you think of Coinbase as,
Lex Fridman (1:12:12.500)
so there's these ideas of layer one,
Lex Fridman (1:12:14.300)
layer two, layer three technologies.
Lex Fridman (1:12:17.060)
Do you think of Coinbase as layer one,
Lex Fridman (1:12:20.020)
layer two, layer three?
Brian Armstrong (1:12:21.700)
Now that said, there's so many products
Lex Fridman (1:12:27.180)
that are under the Coinbase umbrella
Brian Armstrong (1:12:28.740)
that it's hard to answer that question,
Lex Fridman (1:12:30.100)
but what do you think?
Lex Fridman (1:12:31.940)
Do you acknowledge the existence of layer three?
Lex Fridman (1:12:34.340)
So, you know, usually when people are using those terms,
Brian Armstrong (1:12:38.860)
layer one, layer two, so they're referring to like,
Lex Fridman (1:12:40.580)
layer one would be the blockchain,
Brian Armstrong (1:12:42.940)
layer one blockchain itself,
Lex Fridman (1:12:43.820)
like a Bitcoin or Ethereum or something,
Brian Armstrong (1:12:45.780)
not like a centralized service like Coinbase
Lex Fridman (1:12:48.140)
or even our decentralized self custodial wallet.
Lex Fridman (1:12:51.740)
So yeah, I wouldn't consider us to be like a layer one.
Lex Fridman (1:12:56.460)
These are the decentralized protocols
Brian Armstrong (1:12:58.540)
that we're integrating, but Coinbase itself is not those.
Lex Fridman (1:13:01.740)
Yes, but layer two is the thing that was basically
Brian Armstrong (1:13:05.180)
doing transactions without the settlement on the blockchain.
Lex Fridman (1:13:09.180)
And so you get to have some of the benefits
Brian Armstrong (1:13:11.180)
of faster transactions without the security
Lex Fridman (1:13:15.220)
associated with the blockchain.
Lex Fridman (1:13:16.420)
And layer three is, I suppose,
Lex Fridman (1:13:20.300)
sort of apps built on top of that.
Brian Armstrong (1:13:23.060)
So, you know, at least I think talking to Michael Saylor,
Lex Fridman (1:13:26.860)
he considers Coinbase a layer three technology.
Brian Armstrong (1:13:29.940)
Interesting, okay.
Lex Fridman (1:13:31.180)
I'm not really particularly familiar
Brian Armstrong (1:13:34.460)
with this kind of distinction of layer three and two.
Lex Fridman (1:13:37.460)
I don't see them as fundamentally different.
Lex Fridman (1:13:40.340)
But some of the, okay, I mean, one way of asking that,
Lex Fridman (1:13:44.700)
is there some layer two like of magic happening
Brian Armstrong (1:13:48.180)
in order to make transactions associated
Lex Fridman (1:13:50.220)
with the blockchain happen instant, so that they're quick?
Lex Fridman (1:13:55.460)
So that.
Lex Fridman (1:13:56.300)
On Coinbase?
Brian Armstrong (1:13:57.140)
On Coinbase, yeah.
Lex Fridman (1:13:58.860)
Is there some magic going on?
Brian Armstrong (1:14:00.140)
Because you're, okay, we should say,
Lex Fridman (1:14:01.820)
how many cryptocurrencies are currently on Coinbase?
Lex Fridman (1:14:04.980)
So it's more than two.
Lex Fridman (1:14:06.420)
Yeah.
Brian Armstrong (1:14:07.580)
It's a lot more than two.
Lex Fridman (1:14:08.500)
Yeah.
Lex Fridman (1:14:09.340)
So you have to understand,
Lex Fridman (1:14:10.500)
they have to incorporate all these technologies.
Brian Armstrong (1:14:12.580)
Yeah.
Lex Fridman (1:14:13.900)
So how do you make that magic
Brian Armstrong (1:14:16.140)
of sort of universal transactions happen
Lex Fridman (1:14:18.820)
across all of these different cryptocurrencies?
Brian Armstrong (1:14:23.260)
There's our centralized products
Lex Fridman (1:14:24.580)
and decentralized products, right?
Brian Armstrong (1:14:25.860)
The centralized products, we are storing that crypto for you.
Lex Fridman (1:14:31.100)
And so if you're moving from one of your accounts
Brian Armstrong (1:14:33.460)
to another account, like an ETH1 account to ETH2 account,
Lex Fridman (1:14:36.100)
or from my ETH Coinbase centralized account
Brian Armstrong (1:14:39.860)
to your ETH centralized.
Lex Fridman (1:14:40.700)
So we can do that transaction off chain to make it faster.
Lex Fridman (1:14:43.580)
And it saves the customer fees
Lex Fridman (1:14:45.420)
and it just confirms instantly.
Lex Fridman (1:14:47.020)
But it's not truly using the decentralized blockchain,
Lex Fridman (1:14:49.180)
right?
Lex Fridman (1:14:50.020)
So you can also send any Bitcoin address
Lex Fridman (1:14:52.260)
or Ethereum address, for instance.
Lex Fridman (1:14:53.940)
And that is putting the transaction on chain.
Lex Fridman (1:14:56.420)
Now our decentralized products like Coinbase wallet,
Brian Armstrong (1:14:59.300)
the self custodial wallet,
Lex Fridman (1:15:01.020)
every transaction is happening on chain with that.
Lex Fridman (1:15:03.580)
And so basically it just shows a little bit
Lex Fridman (1:15:05.700)
of the evolution of Coinbase and the blockchains themselves.
Brian Armstrong (1:15:07.980)
Like in the early days, these networks were not scalable.
Lex Fridman (1:15:13.220)
And so there were no L2 solutions, for instance.
Lex Fridman (1:15:16.820)
And so we had to do sort of these hacks,
Lex Fridman (1:15:18.540)
like moving the crypto off chain,
Brian Armstrong (1:15:20.140)
if you were moving between your own accounts
Lex Fridman (1:15:21.540)
and stuff like that.
Brian Armstrong (1:15:22.460)
Otherwise the minor fees would have just eaten us alive
Lex Fridman (1:15:24.580)
as a company, right?
Brian Armstrong (1:15:25.780)
Yeah.
Lex Fridman (1:15:26.620)
But now the blockchains are starting to scale.
Brian Armstrong (1:15:29.020)
There's a whole bunch of more work
Lex Fridman (1:15:29.940)
that needs to be done on that.
Lex Fridman (1:15:30.780)
And we're getting L2 solutions.
Lex Fridman (1:15:32.260)
So I think more and more of the transactions
Brian Armstrong (1:15:33.820)
are going on chain, whether it's L2, L1.
Lex Fridman (1:15:36.620)
And ideally we shouldn't be doing that many transactions
Brian Armstrong (1:15:43.820)
off chain, just internal Coinbase ledger or something.
Lex Fridman (1:15:47.060)
That's not really in the spirit of crypto.
Lex Fridman (1:15:48.740)
So when you say on chain, that includes layer two technology
Lex Fridman (1:15:54.900)
that the blockchain proposes.
Brian Armstrong (1:15:56.740)
Yeah.
Lex Fridman (1:15:59.580)
I guess I was asking how much fun magic is happening
Brian Armstrong (1:16:02.500)
off chain within Coinbase.
Lex Fridman (1:16:04.380)
And you're saying in the early days you had to,
Lex Fridman (1:16:07.300)
but you're trying to do less and less.
Lex Fridman (1:16:09.620)
So look, there's a bunch of high frequency traders
Brian Armstrong (1:16:11.620)
that use the centralized products
Lex Fridman (1:16:13.180)
and even just regular retail people,
Brian Armstrong (1:16:15.620)
they don't want to pay the gas fees and stuff.
Lex Fridman (1:16:17.660)
And they're trying to, it actually,
Brian Armstrong (1:16:19.340)
we back at the envelope, calculated this out at one point
Lex Fridman (1:16:24.180)
and just like, it would be completely infeasible
Brian Armstrong (1:16:26.780)
for like high frequency traders
Lex Fridman (1:16:28.140)
to put everything on chain at this point.
Brian Armstrong (1:16:29.780)
That's basically what DEXs are doing.
Lex Fridman (1:16:31.460)
And so both are important.
Brian Armstrong (1:16:33.660)
I think more and more is going to move decentralized
Lex Fridman (1:16:35.700)
over time, which is great.
Lex Fridman (1:16:36.900)
And we're, and we're basically.
Lex Fridman (1:16:38.340)
DEXs are decentralized exchanges by the way.
Brian Armstrong (1:16:40.340)
Yeah.
Lex Fridman (1:16:42.820)
So anyway, we want to encourage more and more of it
Brian Armstrong (1:16:45.460)
to move decentralized over time,
Lex Fridman (1:16:46.860)
but I don't, the centralized things aren't going away
Brian Armstrong (1:16:48.780)
for like a long time.
Lex Fridman (1:16:50.220)
It's a decade from now,
Brian Armstrong (1:16:51.340)
there's going to be some big institution
Lex Fridman (1:16:54.340)
or pension fund or central bank.
Brian Armstrong (1:16:56.660)
That's like, all right, we got to hold crypto.
Lex Fridman (1:16:58.940)
Let's set up the account in a centralized way.
Lex Fridman (1:17:00.740)
So that's, that's fine.
Lex Fridman (1:17:02.020)
Both, both are important.
Lex Fridman (1:17:03.220)
Do you know the number
Lex Fridman (1:17:04.460)
of cryptocurrencies currently on Coinbase?
Lex Fridman (1:17:07.300)
Do you know that number?
Lex Fridman (1:17:08.180)
It's over a hundred, but it depends.
Brian Armstrong (1:17:10.660)
It depends what jurisdiction you're in.
Lex Fridman (1:17:12.260)
And, you know, are you in institution versus retail?
Brian Armstrong (1:17:16.260)
There's like, there's so many different categories now.
Lex Fridman (1:17:19.020)
But over a hundred.
Brian Armstrong (1:17:20.180)
Yeah.
Lex Fridman (1:17:21.660)
So what does it take to become, to, to, to become an asset,
Brian Armstrong (1:17:25.860)
to become a cryptocurrency on Coinbase,
Lex Fridman (1:17:28.260)
to add your technology to Coinbase?
Brian Armstrong (1:17:33.340)
Okay. Well, so we're trying to get away from this idea
Lex Fridman (1:17:36.500)
of being listed on Coinbase as being seen as like
Brian Armstrong (1:17:39.300)
an endorsement or something,
Lex Fridman (1:17:40.500)
because I actually think it's very important
Brian Armstrong (1:17:42.740)
that we are not considered judge and jury about, you know,
Lex Fridman (1:17:47.780)
like imagine it was the early days of the internet
Lex Fridman (1:17:49.460)
and you were like, what's a good webpage
Lex Fridman (1:17:50.700)
and what's a bad webpage.
Brian Armstrong (1:17:51.540)
Like you would have been totally wrong
Lex Fridman (1:17:52.740)
or anytime big tech companies try to make these review,
Brian Armstrong (1:17:57.140)
review boards of like, you know,
Lex Fridman (1:17:58.860)
Apple famously gets in trouble for this a lot
Brian Armstrong (1:18:00.500)
with their app store review process.
Lex Fridman (1:18:02.060)
Right.
Lex Fridman (1:18:02.900)
And so something that you think like a committee of people
Lex Fridman (1:18:06.180)
somewhere thinks looks silly may turn out
Brian Armstrong (1:18:08.060)
to be the next big thing.
Lex Fridman (1:18:08.940)
Right. And so it's very difficult.
Lex Fridman (1:18:10.660)
So what do we do?
Lex Fridman (1:18:11.500)
We basically have a test of legality, right?
Lex Fridman (1:18:15.020)
We check, you know, do we believe this is a security?
Lex Fridman (1:18:19.780)
If so, it can't be listed on Coinbase
Lex Fridman (1:18:21.620)
and there's a very rigorous process we go through for that.
Lex Fridman (1:18:25.060)
Just currently the way the laws are in the US,
Brian Armstrong (1:18:26.620)
you can't do that.
Lex Fridman (1:18:27.900)
And we've been, we acquired a broker duo license
Brian Armstrong (1:18:30.180)
from the SEC.
Lex Fridman (1:18:31.020)
We're trying to work with them to get that operational
Lex Fridman (1:18:32.820)
and hopefully someday we can trade real crypto securities.
Lex Fridman (1:18:35.260)
But today that's not possible in the US at least.
Brian Armstrong (1:18:38.860)
Then we look at sort of the cybersecurity
Lex Fridman (1:18:40.900)
of the crypto asset.
Brian Armstrong (1:18:42.500)
Does it, do we see that there's some flaw
Lex Fridman (1:18:44.260)
in the smart contract or, you know,
Brian Armstrong (1:18:47.060)
a way that somebody could manipulate it
Lex Fridman (1:18:49.340)
without the customer's permission?
Brian Armstrong (1:18:52.500)
We look at some compliance pieces to it as well,
Lex Fridman (1:18:54.700)
like the actors behind it and like, you know,
Brian Armstrong (1:18:57.540)
there any kind of criminal history, anything like that.
Lex Fridman (1:19:00.100)
But if we believe it meets our listing standards,
Brian Armstrong (1:19:02.980)
basically this test of legality and everything
Lex Fridman (1:19:06.260)
for customer protection, then we want to list it
Brian Armstrong (1:19:09.460)
because we want the market to at that point decide.
Lex Fridman (1:19:11.620)
And it's kind of like Amazon or something like that
Brian Armstrong (1:19:16.100)
where, you know, a product might have three stars
Lex Fridman (1:19:18.860)
or it might have five stars,
Lex Fridman (1:19:19.900)
but if it starts to get one star consistently,
Lex Fridman (1:19:22.420)
like it's probably a fraudulent or it's defective
Brian Armstrong (1:19:24.620)
or something like maybe Amazon will remove it.
Lex Fridman (1:19:26.660)
But otherwise you want to let the market decide
Lex Fridman (1:19:29.060)
what these things are.
Lex Fridman (1:19:31.340)
So that's generally how we do it.
Lex Fridman (1:19:32.900)
And by the way, more and more of these assets,
Lex Fridman (1:19:36.180)
I think especially like low market cap assets
Brian Armstrong (1:19:38.380)
are going to be traded on DEXs through Coinbase.
Lex Fridman (1:19:40.500)
It's not that we,
Brian Armstrong (1:19:42.820)
we don't need to list every asset on a centralized exchange.
Lex Fridman (1:19:45.220)
I think DEXs are really good for the long tail.
Lex Fridman (1:19:47.780)
And then it becomes an even,
Lex Fridman (1:19:49.620)
it's even more clear to people,
Brian Armstrong (1:19:50.860)
like this is not some endorsement by a Coinbase of like,
Lex Fridman (1:19:53.980)
this asset's good and this one's bad.
Brian Armstrong (1:19:55.380)
Like, you know, my belief is there's going to be millions
Lex Fridman (1:19:57.900)
of these assets over time.
Lex Fridman (1:19:59.020)
And so I hope it doesn't like make news
Lex Fridman (1:20:02.380)
every time we add one in the future, basically.
Brian Armstrong (1:20:03.780)
Yeah, I wonder how you get there
Lex Fridman (1:20:05.980)
because I, even I look to Coinbase for, for example,
Brian Armstrong (1:20:10.580)
you know, people, as you can imagine,
Lex Fridman (1:20:13.020)
sort of tag me on Twitter or something like that
Lex Fridman (1:20:15.340)
and all that, like you should interview our sort of this,
Lex Fridman (1:20:20.580)
the founder of this particular coin, right?
Brian Armstrong (1:20:23.140)
Yeah.
Lex Fridman (1:20:23.980)
And I, it's so hard for me to know what's,
Lex Fridman (1:20:27.340)
first of all, what's interesting technology?
Lex Fridman (1:20:30.540)
What's, who's a scammer or not?
Brian Armstrong (1:20:34.780)
Who's actually legitimately representing
Lex Fridman (1:20:37.340)
an ambitious new thing versus a scam?
Lex Fridman (1:20:43.340)
And I, you know, there's very few sources
Lex Fridman (1:20:46.180)
of like a verification signal.
Lex Fridman (1:20:50.540)
And unfortunately Coinbase in part
Lex Fridman (1:20:52.780)
has become a little bit of that too.
Lex Fridman (1:20:55.580)
And you're trying to get away from that
Lex Fridman (1:20:57.500)
because you're trying to get as many,
Brian Armstrong (1:20:58.740)
sort of let the people decide.
Lex Fridman (1:21:00.740)
So you're thinking of like Amazon star type system
Brian Armstrong (1:21:03.940)
where the people could rate.
Lex Fridman (1:21:05.660)
Yeah, so I think we'll actually probably add
Brian Armstrong (1:21:07.380)
like user ratings and reviews.
Lex Fridman (1:21:09.060)
So, and we'll be very cautious about like, you know,
Brian Armstrong (1:21:12.660)
these are real people.
Lex Fridman (1:21:15.340)
There's a bunch of stuff we have to do for that already.
Lex Fridman (1:21:17.340)
So I think wisdom of the crowds is good
Lex Fridman (1:21:19.820)
in terms of getting feedback on items,
Lex Fridman (1:21:21.940)
but we also, we're gonna do our own review,
Lex Fridman (1:21:24.180)
which I mentioned earlier, right?
Brian Armstrong (1:21:25.180)
Which is like, okay, it meets this minimum bar
Lex Fridman (1:21:27.620)
to be listed on our site.
Brian Armstrong (1:21:28.700)
Yeah.
Lex Fridman (1:21:30.500)
I think, yeah, both are important.
Lex Fridman (1:21:32.180)
How do you know if a coin is a scam or not?
Lex Fridman (1:21:36.580)
Well, you can see a few things.
Brian Armstrong (1:21:39.100)
So, you know, I hate to use the word scam
Lex Fridman (1:21:41.140)
because a lot of these are judgment calls.
Brian Armstrong (1:21:42.580)
You gotta, I kind of, a court may or a jury
Lex Fridman (1:21:45.140)
may land either way,
Lex Fridman (1:21:45.980)
but things that would be red flags to look at would be,
Lex Fridman (1:21:50.060)
you know, is a bunch of the asset owned by an insider
Brian Armstrong (1:21:53.620)
or insiders with short vesting periods.
Lex Fridman (1:21:56.820)
You know, does the background of the founders,
Brian Armstrong (1:22:02.940)
like they may have criminal records
Lex Fridman (1:22:04.820)
or if they've perpetrated other frauds in the past, right?
Brian Armstrong (1:22:08.260)
There's a difference between something
Lex Fridman (1:22:10.460)
which is just a me too product.
Brian Armstrong (1:22:13.900)
It's like, it doesn't have anything interesting about it
Lex Fridman (1:22:16.100)
and something that's an actual fraud or outright scam.
Lex Fridman (1:22:18.220)
And you have to, a lot of this data,
Lex Fridman (1:22:21.300)
what's cool about it is that it's now available on chain.
Brian Armstrong (1:22:23.540)
You can look at like the tokenomics behind it
Lex Fridman (1:22:25.500)
and see who owns it.
Lex Fridman (1:22:26.340)
And are they selling it, you know, in like inappropriately
Lex Fridman (1:22:32.740)
or are they pumping it on like YouTube and Twitter
Lex Fridman (1:22:35.900)
and making promises about,
Lex Fridman (1:22:38.140)
hey, the value of this thing may be a higher in the future.
Lex Fridman (1:22:40.260)
And like, all those are just big, big no, no's
Lex Fridman (1:22:42.220)
that we would, you know, we just don't wanna go there.
Lex Fridman (1:22:45.860)
So our whole thing is like,
Lex Fridman (1:22:48.220)
we want to enable innovation in this space,
Lex Fridman (1:22:50.900)
but not allow anybody to curtail the advancement
Lex Fridman (1:22:54.620)
of this industry by like doing some kind of fraudulent thing
Brian Armstrong (1:22:57.380)
or get rich quick thing.
Lex Fridman (1:22:58.420)
So.
Brian Armstrong (1:22:59.260)
It's a tricky industry
Lex Fridman (1:23:00.100)
because I'm trying to figure out who to, you know,
Brian Armstrong (1:23:03.780)
what's interesting to understand, to research.
Lex Fridman (1:23:07.820)
And it's hard to know.
Brian Armstrong (1:23:09.860)
Let me ask you about a tricky one
Lex Fridman (1:23:11.780)
to add to a centralized exchange,
Brian Armstrong (1:23:13.460)
which is privacy preserving cryptocurrency.
Lex Fridman (1:23:16.300)
So like Monero.
Brian Armstrong (1:23:17.420)
Yeah.
Lex Fridman (1:23:18.260)
Is that technically difficult or is that why,
Lex Fridman (1:23:21.700)
why is like Monero, for example, forget that specific one,
Lex Fridman (1:23:24.580)
but like privacy preserving cryptocurrency blockchains,
Lex Fridman (1:23:29.860)
why is that, is that ever possible to add?
Lex Fridman (1:23:33.340)
So that's a great question.
Lex Fridman (1:23:35.100)
So the answer is maybe.
Lex Fridman (1:23:36.220)
So here's the reason why.
Lex Fridman (1:23:40.300)
So because we're a regulated financial service business,
Lex Fridman (1:23:43.700)
we have various licenses to do that.
Brian Armstrong (1:23:46.300)
We are regulated by various regulators.
Lex Fridman (1:23:48.500)
Part of those licenses requires us to have a quote,
Brian Armstrong (1:23:51.060)
reasonable program to monitor for suspicious activity,
Lex Fridman (1:23:57.260)
you know, an AML program, anti money laundering, right?
Lex Fridman (1:23:59.660)
And so if it, if a coin is a hundred percent anonymous
Lex Fridman (1:24:03.860)
and we can't really do blockchain analytics
Brian Armstrong (1:24:05.540)
to track source of funds
Lex Fridman (1:24:07.820)
and where these things might be going,
Brian Armstrong (1:24:09.700)
it makes it harder to have a reasonable program around that
Lex Fridman (1:24:15.100)
that's defensible.
Brian Armstrong (1:24:16.020)
Now there are privacy preserving coins like Zcash,
Lex Fridman (1:24:19.420)
which have something called a view key.
Lex Fridman (1:24:21.220)
And a view key is basically another key
Lex Fridman (1:24:23.300)
which allows you to deanonymize the transactions
Brian Armstrong (1:24:26.060)
in specific situations where you want that.
Lex Fridman (1:24:28.100)
So for instance, you know, we do support Zcash.
Lex Fridman (1:24:30.820)
And one of the ways we got comfortable with that
Lex Fridman (1:24:32.420)
is that when you're buying it on Coinbase,
Brian Armstrong (1:24:36.140)
you know, you can basically have a view key.
Lex Fridman (1:24:38.380)
The transactions are not anonymous while you're buying it.
Lex Fridman (1:24:41.100)
And we can see where it goes afterwards
Lex Fridman (1:24:42.660)
and do our whole standard program.
Brian Armstrong (1:24:45.420)
Now, if it gets a few hops away down the road,
Lex Fridman (1:24:48.020)
I mean, people could eventually turn on
Brian Armstrong (1:24:50.100)
privacy preserving aspects.
Lex Fridman (1:24:51.820)
So, you know, these are tough judgment calls,
Lex Fridman (1:24:53.860)
but at least in terms of our interaction
Lex Fridman (1:24:55.780)
with the customer and everything,
Brian Armstrong (1:24:56.940)
we feel comfortable at that.
Lex Fridman (1:24:58.580)
I think there's a broader point here,
Brian Armstrong (1:25:00.380)
which is that I actually think privacy coins
Lex Fridman (1:25:03.260)
are a good thing for the world and they should be allowed.
Lex Fridman (1:25:05.780)
And more like, you know, despite,
Lex Fridman (1:25:08.500)
we've made this judgment call to operate
Brian Armstrong (1:25:10.380)
in a regulated and safe and compliant way,
Lex Fridman (1:25:11.900)
but just taking my Coinbase hat off for a minute,
Brian Armstrong (1:25:15.220)
I think the world would be a better place
Lex Fridman (1:25:17.620)
if there were more privacy coins,
Brian Armstrong (1:25:19.100)
because it's kind of like the internet
Lex Fridman (1:25:20.780)
when it first came online, like there was no HTTPS,
Brian Armstrong (1:25:24.300)
everything was HTTP and there was, you know,
Lex Fridman (1:25:26.620)
so people were afraid to put their credit cards
Brian Armstrong (1:25:28.140)
on the internet and your messages could be intercepted
Lex Fridman (1:25:31.580)
and all this stuff.
Lex Fridman (1:25:32.420)
And now the whole internet has basically moved to HTTPS
Lex Fridman (1:25:34.540)
with a little lock icon in your browser, which is better.
Brian Armstrong (1:25:37.380)
Like, and financial information
Lex Fridman (1:25:39.260)
is like the most important information to keep private,
Lex Fridman (1:25:41.500)
right?
Lex Fridman (1:25:42.620)
So there's times where like,
Brian Armstrong (1:25:44.420)
let's say you're running a charity or something
Lex Fridman (1:25:46.060)
and you want to have total auditability,
Brian Armstrong (1:25:47.940)
transparency for the whole world,
Lex Fridman (1:25:49.700)
who donated and where did the money go?
Brian Armstrong (1:25:51.300)
That's great, you want it to be public.
Lex Fridman (1:25:53.220)
But if it's like your personal money or something like that,
Brian Armstrong (1:25:56.100)
you don't want to be broadcasting that to the whole world.
Lex Fridman (1:25:58.100)
And in some ways that's what blockchains are doing,
Brian Armstrong (1:26:00.620)
you know, pseudonymously,
Lex Fridman (1:26:01.900)
because like, but it is a public ledger.
Lex Fridman (1:26:03.740)
And so if you can know who owns each address,
Lex Fridman (1:26:05.780)
you can basically deanonymize it.
Brian Armstrong (1:26:07.780)
I, you know, I think basically people should fight
Lex Fridman (1:26:11.500)
for privacy and freedoms of all kinds,
Lex Fridman (1:26:13.980)
but privacy of money is a good thing.
Lex Fridman (1:26:16.020)
So I would like to see more of that in the future.
Brian Armstrong (1:26:17.540)
You chosen with Coinbase to have a seat at the table
Lex Fridman (1:26:23.700)
with the regulators.
Lex Fridman (1:26:25.140)
So what kind of conversations are there at that table?
Lex Fridman (1:26:31.380)
What are the regulations like?
Lex Fridman (1:26:33.500)
What is the level of understanding with regulators?
Lex Fridman (1:26:36.860)
What are they worried about?
Lex Fridman (1:26:38.140)
What are they thinking about?
Lex Fridman (1:26:39.260)
What are the positive and what are the negative regulations
Lex Fridman (1:26:42.900)
that you're facing?
Lex Fridman (1:26:44.580)
That you're educating, struggling with, pushing back on,
Brian Armstrong (1:26:48.060)
supporting, all that kind of stuff.
Lex Fridman (1:26:49.780)
Yeah.
Brian Armstrong (1:26:51.220)
Oh man, there's so many.
Lex Fridman (1:26:52.140)
Cause we're, I mean, we're live in like, you know,
Brian Armstrong (1:26:55.540)
maybe a hundred countries or more at this point.
Lex Fridman (1:26:56.980)
So the conversations are all over the map.
Brian Armstrong (1:26:59.900)
I'm trying to think what broad strokes I could paint for you.
Lex Fridman (1:27:02.020)
So I'd say one trend that's positive is that basically
Brian Armstrong (1:27:06.380)
regulators around the world are more and more,
Lex Fridman (1:27:09.140)
over the last five years, I would say,
Brian Armstrong (1:27:11.460)
it's more and more common to find a regulator today asking,
Lex Fridman (1:27:15.780)
how can we preserve the innovation potential
Brian Armstrong (1:27:17.740)
of this technology while keeping the bad actors out
Lex Fridman (1:27:21.140)
than it was five years ago, where they were saying,
Brian Armstrong (1:27:23.500)
this is all bad activity.
Lex Fridman (1:27:24.500)
How do we prevent it?
Lex Fridman (1:27:25.700)
And so maybe this is.
Lex Fridman (1:27:28.500)
When you say more and more, what fraction?
Brian Armstrong (1:27:34.340)
I'll give you like a US specific example,
Lex Fridman (1:27:36.500)
although we operate in many countries.
Lex Fridman (1:27:38.180)
So when I go to DC now, I would say, you know,
Lex Fridman (1:27:42.580)
50, 60% of the people who I meet with are basically,
Brian Armstrong (1:27:46.620)
you know, they're in the camp of crypto,
Lex Fridman (1:27:49.020)
has a lot of potential.
Brian Armstrong (1:27:50.260)
We should regulate it to make sure the bad people
Lex Fridman (1:27:52.300)
don't do something bad with it.
Lex Fridman (1:27:53.540)
But this is here to stay and it has a lot of upside.
Lex Fridman (1:27:56.220)
We should basically create the awful regulation
Lex Fridman (1:27:59.340)
and celebrate it and actually encourage this innovation
Lex Fridman (1:28:01.980)
to happen in the US.
Brian Armstrong (1:28:03.180)
That's a huge change from just three years ago
Lex Fridman (1:28:06.580)
where it was probably 30% of people saying that.
Brian Armstrong (1:28:08.380)
Now it's like 60, it's like almost double.
Lex Fridman (1:28:10.420)
It's getting harder to find like true crypto skeptics
Brian Armstrong (1:28:13.340)
in DC.
Lex Fridman (1:28:15.860)
I'd say that, you know, maybe only like 20 or 30% of people
Brian Armstrong (1:28:19.580)
are like willing to say something negative.
Lex Fridman (1:28:21.900)
Like they actually think it's net negative.
Brian Armstrong (1:28:23.580)
It's like, it's really hard to defend that position
Lex Fridman (1:28:25.660)
at this point, because almost like one in five Americans
Brian Armstrong (1:28:28.660)
have used or tried crypto at this point.
Lex Fridman (1:28:30.100)
So you're kind of condemning 20% of your fellow citizens
Brian Armstrong (1:28:32.940)
if you say that at this point, you know,
Lex Fridman (1:28:36.020)
especially with NFTs and all these things,
Brian Armstrong (1:28:37.260)
like a huge segment of people who don't even care
Lex Fridman (1:28:39.180)
about investing or whatever came into the space.
Brian Armstrong (1:28:41.580)
So, and then basically that's that same conversation
Lex Fridman (1:28:45.420)
is happening, but, you know, delayed by a few years
Brian Armstrong (1:28:49.460)
in like India and Europe and in some Asian countries.
Lex Fridman (1:28:53.140)
And some countries have really embraced crypto
Lex Fridman (1:28:56.260)
and they're like trying to really,
Lex Fridman (1:28:59.660)
they're ahead of where the US is
Brian Armstrong (1:29:00.940)
because they're trying to actually attract
Lex Fridman (1:29:03.340)
the best startups and entrepreneurs like, you know, like Dubai
Lex Fridman (1:29:06.260)
and UK and Australia and all are kind of pushing
Lex Fridman (1:29:08.060)
good regulation, El Salvador actually, I guess,
Brian Armstrong (1:29:11.500)
adopted it as like Bitcoin as a legal tender.
Lex Fridman (1:29:13.540)
There was another country, Central African Republic,
Brian Armstrong (1:29:15.580)
I think that is supposedly did that as well.
Lex Fridman (1:29:18.220)
But, you know, there's countries like China
Brian Armstrong (1:29:20.540)
that are more autocratic that are saying,
Lex Fridman (1:29:22.140)
hey, this is a threat to our power
Lex Fridman (1:29:24.580)
and like, we're gonna try to really curtail it.
Lex Fridman (1:29:26.420)
So what kind of regulations are there that you feel the most
Lex Fridman (1:29:30.700)
that are limiting or that are empowering?
Lex Fridman (1:29:33.260)
Like, is there specific examples?
Brian Armstrong (1:29:35.300)
Yeah, okay.
Lex Fridman (1:29:36.140)
So, I mean, basically I think the securities laws
Brian Armstrong (1:29:39.300)
in the US need to be clarified about what,
Lex Fridman (1:29:44.420)
crypto is many different things.
Brian Armstrong (1:29:45.620)
That's what people don't realize.
Lex Fridman (1:29:46.620)
So like some crypto, like Bitcoin, Ethereum
Lex Fridman (1:29:49.700)
and many others are probably more like commodities.
Lex Fridman (1:29:53.180)
They're not controlled by any one person, you know,
Brian Armstrong (1:29:55.300)
like anyway, there's people who wanna raise money
Lex Fridman (1:29:58.180)
for a company that's sounds more like a security
Brian Armstrong (1:30:00.320)
that should be regulated by the SEC.
Lex Fridman (1:30:02.420)
Commodities are regulated by the CFTC.
Brian Armstrong (1:30:04.540)
Then there's some cryptocurrencies
Lex Fridman (1:30:06.420)
which are more like currencies,
Brian Armstrong (1:30:08.300)
like stable coins and central bank digital currencies.
Lex Fridman (1:30:10.800)
And those are probably, you know,
Brian Armstrong (1:30:12.900)
should be regulated by the treasury or someone like that.
Lex Fridman (1:30:15.180)
And then there's a whole another category
Brian Armstrong (1:30:16.620)
of cryptocurrencies, which are none of those things.
Lex Fridman (1:30:18.380)
They're NFTs like artwork or they're metaverse items
Brian Armstrong (1:30:21.760)
or decentralized identity and voting.
Lex Fridman (1:30:23.620)
And so I think that there's a very unhelpful point of view
Brian Armstrong (1:30:28.620)
out there by some folks, which is,
Lex Fridman (1:30:31.180)
hey, this is all, most of this is like bad activity.
Brian Armstrong (1:30:34.420)
We need to shut it down.
Lex Fridman (1:30:35.860)
So we're just gonna pursue enforcement actions
Brian Armstrong (1:30:38.020)
or something like that.
Lex Fridman (1:30:39.100)
Most people in DC don't feel that way anymore.
Lex Fridman (1:30:41.140)
And I think the people of the US don't feel that way anymore
Lex Fridman (1:30:43.780)
because a lot of them are using this stuff.
Lex Fridman (1:30:45.100)
And their general view is,
Lex Fridman (1:30:47.260)
there's a lot of upside potential here.
Brian Armstrong (1:30:48.820)
We can all agree, let's get rid of the fraud and the scams.
Lex Fridman (1:30:51.100)
We all wanna get rid of that.
Lex Fridman (1:30:52.380)
So let's create a relatively simple test, which says,
Lex Fridman (1:30:56.900)
if it's like nobody controls more than 20% of it
Brian Armstrong (1:31:02.860)
or some threshold, it probably is more like a commodity.
Lex Fridman (1:31:05.540)
If someone's raising money for,
Brian Armstrong (1:31:07.540)
they're selling this thing for a business,
Lex Fridman (1:31:09.980)
then it's probably a security.
Lex Fridman (1:31:11.100)
And then if it's more like a medium of exchange,
Lex Fridman (1:31:14.340)
it's a currency.
Lex Fridman (1:31:15.180)
And if it's none of those things,
Lex Fridman (1:31:16.060)
maybe it's artwork or whatever,
Brian Armstrong (1:31:18.260)
a legal test like that would help clarify who,
Lex Fridman (1:31:21.460)
which regulator is regulating what.
Lex Fridman (1:31:23.540)
And then we also wanna have probably like a sandbox
Lex Fridman (1:31:26.980)
for innovation where if you're a startup
Lex Fridman (1:31:29.100)
and you're doing less than, I don't know, some number,
Lex Fridman (1:31:33.260)
less than some amount of payment volume
Brian Armstrong (1:31:34.980)
or customer funds you're storing,
Lex Fridman (1:31:36.380)
it's like just let those things get off the ground
Brian Armstrong (1:31:38.700)
without a soul crushing amount of legal bills
Lex Fridman (1:31:42.100)
and uncertainty.
Lex Fridman (1:31:42.940)
So if the US can get there, that would be great.
Lex Fridman (1:31:46.020)
I think a bunch of other countries now are rushing
Brian Armstrong (1:31:47.980)
around the world to sort of create that regulation
Lex Fridman (1:31:50.300)
that does attract innovation.
Lex Fridman (1:31:52.540)
And so in the international bodies like IMF and G20
Lex Fridman (1:31:57.100)
and stuff, they're starting to look at proposed regulation.
Brian Armstrong (1:32:00.140)
I hope that Coinbase and a bunch of other crypto companies
Lex Fridman (1:32:02.140)
can help in that conversation too.
Brian Armstrong (1:32:03.300)
We have a whole policy effort.
Lex Fridman (1:32:04.900)
I think actually crypto policy efforts
Brian Armstrong (1:32:07.100)
are like probably one of the biggest things
Lex Fridman (1:32:08.380)
in DC right now.
Lex Fridman (1:32:09.220)
So it moves slow at the speed of government,
Lex Fridman (1:32:13.420)
but yeah, and in the meantime,
Brian Armstrong (1:32:16.660)
we're just trying to help more and more people use crypto
Lex Fridman (1:32:18.500)
because ultimately that's what, in the democracies,
Brian Armstrong (1:32:20.940)
that's what they care about.
Lex Fridman (1:32:22.100)
Like they'll do what the people of the country want.
Lex Fridman (1:32:24.780)
So you want governments to start understanding
Lex Fridman (1:32:27.060)
differences between, in the crypto space,
Brian Armstrong (1:32:29.460)
commodities, securities, currencies, NFTs.
Lex Fridman (1:32:32.460)
I still don't understand.
Lex Fridman (1:32:34.020)
What are they supposed to make sense of NFTs?
Lex Fridman (1:32:37.060)
What is NFTs exactly from a perspective of a regulator?
Brian Armstrong (1:32:41.100)
Yeah, so.
Lex Fridman (1:32:42.980)
Is it the other categories?
Brian Armstrong (1:32:44.820)
Yeah, most NFTs you could think of as like artwork,
Lex Fridman (1:32:47.140)
although it's, who knows where it's gonna go.
Brian Armstrong (1:32:49.020)
It could be.
Lex Fridman (1:32:49.860)
You mentioned Metaverse, right?
Brian Armstrong (1:32:50.700)
You mentioned some kind of unique identity of a thing.
Lex Fridman (1:32:54.860)
Yeah, like there's people selling virtual land in NFTs.
Brian Armstrong (1:32:59.860)
I actually, I bought this NFT that's like,
Lex Fridman (1:33:02.740)
it's like citizenship in this like city, Dow in Wyoming.
Brian Armstrong (1:33:05.940)
Like I've never been there,
Lex Fridman (1:33:06.780)
but it's almost like a badge or an attestation
Brian Armstrong (1:33:11.540)
like to get access to this location.
Lex Fridman (1:33:14.660)
There's like people doing like tickets to events.
Brian Armstrong (1:33:17.380)
Like, you know, they're called a POAPs.
Lex Fridman (1:33:19.660)
Like proof of attendance and things like that.
Lex Fridman (1:33:23.620)
So it'll be very interesting to see where NFTs go over time.
Lex Fridman (1:33:27.820)
It could get, and that's the danger.
Brian Armstrong (1:33:29.940)
You don't wanna try to like define the regulation
Lex Fridman (1:33:31.740)
if you don't even know where this thing's gonna go, so.
Lex Fridman (1:33:33.380)
And so your efforts in the policy arm is education?
Lex Fridman (1:33:37.540)
Yeah, education, advocacy.
Brian Armstrong (1:33:39.900)
We're just trying to be like a helpful educational resource
Lex Fridman (1:33:42.100)
essentially, and then if they give us feedback
Lex Fridman (1:33:43.860)
and they're like, hey, don't do this or don't, or do this,
Lex Fridman (1:33:46.740)
like we're more than happy to do anything that's requested.
Brian Armstrong (1:33:50.540)
We generally go get licenses
Lex Fridman (1:33:52.460)
and we've just tried to do the right thing
Brian Armstrong (1:33:53.820)
in the absence of clarity,
Lex Fridman (1:33:54.940)
because if it's not clear what the law says,
Brian Armstrong (1:33:59.180)
then you should just basically do good things
Lex Fridman (1:34:01.180)
that you think may be required in the future
Brian Armstrong (1:34:02.780)
to show good faith effort towards the right thing.
Lex Fridman (1:34:05.100)
And that's part of like innovating in a regulated field,
Brian Armstrong (1:34:08.700)
which is, you know, a whole topic in itself.
Lex Fridman (1:34:11.060)
So if you are at the table,
Brian Armstrong (1:34:13.820)
let me, this is less the case in the United States,
Lex Fridman (1:34:17.300)
but can government agencies seize a person's cryptocurrency
Lex Fridman (1:34:20.820)
by forcing Coinbase to hand it over?
Lex Fridman (1:34:24.860)
So when you're centralized,
Brian Armstrong (1:34:26.380)
they have a phone number to call.
Lex Fridman (1:34:28.220)
Okay, so this is a complicated topic.
Brian Armstrong (1:34:31.980)
Like if you really wanna be sure that,
Lex Fridman (1:34:34.820)
this is why people wanna store their own crypto, right?
Brian Armstrong (1:34:36.700)
Like with self custodial wallets,
Lex Fridman (1:34:37.980)
like with Coinbase wallet embracing decentralization,
Brian Armstrong (1:34:40.420)
they wanna avoid that.
Lex Fridman (1:34:42.180)
Now in the US, there is rule of law, right?
Lex Fridman (1:34:44.820)
So we have reasonable protections in place around
Lex Fridman (1:34:48.220)
like search and seizure and things like that.
Brian Armstrong (1:34:51.660)
You know, Coinbase does,
Lex Fridman (1:34:52.700)
we publish transparency reports on this.
Brian Armstrong (1:34:54.460)
We get subpoenas, court orders, things like that
Lex Fridman (1:34:56.980)
from various countries around the world.
Lex Fridman (1:35:00.340)
And there are situations where we have been ordered
Lex Fridman (1:35:04.740)
to freeze accounts, things like that.
Brian Armstrong (1:35:08.340)
You know, we have to follow the law,
Lex Fridman (1:35:09.420)
is another way to put it.
Brian Armstrong (1:35:11.020)
We're a regulated financial service business and so.
Lex Fridman (1:35:13.580)
If the money is used as part of breaking the law,
Brian Armstrong (1:35:16.980)
that's what that, in a particular jurisdiction,
Lex Fridman (1:35:20.860)
in a particular.
Brian Armstrong (1:35:22.500)
Right, and then the other thing,
Lex Fridman (1:35:23.940)
sometimes we will actually get court orders
Brian Armstrong (1:35:25.820)
or subpoenas that are overly broad.
Lex Fridman (1:35:27.220)
We've seen, so they need to follow due process, right?
Lex Fridman (1:35:30.940)
And so we've seen some in the past that were like,
Lex Fridman (1:35:34.420)
well, we need you to freeze this huge number of accounts.
Lex Fridman (1:35:36.580)
And it's like, well, we'll actually have gone to court
Lex Fridman (1:35:39.180)
and like pushed back on some of these and said like,
Lex Fridman (1:35:40.820)
what is your probable cause?
Lex Fridman (1:35:42.940)
And has the threshold been met?
Lex Fridman (1:35:44.460)
And like, we've won some of those cases
Lex Fridman (1:35:45.940)
on behalf of our customers.
Lex Fridman (1:35:46.940)
So yeah, it's actually really,
Lex Fridman (1:35:50.100)
it's kind of unfortunate and frustrating.
Brian Armstrong (1:35:51.380)
As a large business, you spend a lot of resources
Lex Fridman (1:35:54.820)
basically interacting with inbound requests
Brian Armstrong (1:35:59.500)
by all kinds of lawyers and people and requesting things.
Lex Fridman (1:36:03.700)
And some of them are silly and ridiculous
Lex Fridman (1:36:06.020)
and you have to push back and say no.
Lex Fridman (1:36:07.420)
And so it's kind of a tax on every company at a certain size
Brian Armstrong (1:36:11.780)
which ultimately gets passed on to the customer
Lex Fridman (1:36:14.340)
in higher fees.
Lex Fridman (1:36:15.180)
So you have to employ armies of lawyers
Lex Fridman (1:36:17.540)
to deal with this stuff.
Lex Fridman (1:36:18.440)
Can you educate me on something?
Lex Fridman (1:36:19.820)
How much innovation is there in the legal space?
Lex Fridman (1:36:23.820)
So for lawyers working with Coinbase
Lex Fridman (1:36:26.340)
because it's such a new cutting edge thing.
Lex Fridman (1:36:30.780)
So you're, there's a lot of gray area
Lex Fridman (1:36:33.580)
you're supposed to be operating under.
Lex Fridman (1:36:36.520)
Like how hard is it being a lawyer at Coinbase?
Lex Fridman (1:36:41.100)
Like how much precedence is there?
Brian Armstrong (1:36:43.380)
I guess is what I'm asking.
Lex Fridman (1:36:44.500)
I mean, just like you said, three years.
Brian Armstrong (1:36:47.920)
It's kind of a new space.
Lex Fridman (1:36:49.580)
Yeah, well, it's probably very hard
Brian Armstrong (1:36:51.700)
to be a lawyer at Coinbase and very fun
Lex Fridman (1:36:53.340)
because whenever you're in a new field that's growing fast,
Brian Armstrong (1:36:57.200)
there isn't a lot of case law and just precedent set.
Lex Fridman (1:37:02.460)
So that's also an opportunity for you
Brian Armstrong (1:37:04.460)
to go create that stuff.
Lex Fridman (1:37:05.420)
And that's what a lot of legal careers are made out of
Brian Armstrong (1:37:07.620)
is like take a complex situation
Lex Fridman (1:37:09.700)
where you have to balance difficult things.
Brian Armstrong (1:37:11.300)
Like how do we prevent bad activity
Lex Fridman (1:37:13.100)
but still enable an innovation?
Brian Armstrong (1:37:14.140)
That's a hard question.
Lex Fridman (1:37:15.900)
And there's, you can go draft legislation
Lex Fridman (1:37:18.460)
and circulate it to policymakers
Lex Fridman (1:37:19.740)
or come up with these policies
Lex Fridman (1:37:21.820)
and how do you operate a business in an environment
Lex Fridman (1:37:25.340)
where the law is just unclear, right?
Brian Armstrong (1:37:27.780)
It's like try to do the right thing,
Lex Fridman (1:37:31.220)
but like strike the right balance.
Lex Fridman (1:37:33.820)
So yeah, a lot of our lawyers have to come up with that.
Lex Fridman (1:37:36.260)
Very creative stuff.
Brian Armstrong (1:37:37.820)
You mentioned one of the things you're focused on
Lex Fridman (1:37:39.580)
is expanding the number of people,
Brian Armstrong (1:37:41.060)
maybe a billion people on Coinbase or using cryptocurrency.
Lex Fridman (1:37:46.340)
Where are we at now?
Lex Fridman (1:37:47.260)
How do we get to a billion?
Lex Fridman (1:37:49.020)
As of Q4 last year,
Brian Armstrong (1:37:50.720)
we had 89 million verified accounts on Coinbase,
Lex Fridman (1:37:53.660)
but in any given quarter, only maybe like 10
Brian Armstrong (1:37:59.220)
or a little more million of those are like really active.
Lex Fridman (1:38:02.100)
So, and then if you look at globally,
Brian Armstrong (1:38:04.940)
I think some of the estimates I've seen
Lex Fridman (1:38:06.220)
is maybe there's like 200 million people
Brian Armstrong (1:38:08.500)
or something like that who have ever used or tried crypto.
Lex Fridman (1:38:11.560)
So we're a long, you know, we're ways from a billion,
Lex Fridman (1:38:15.620)
but it's not like that far off.
Lex Fridman (1:38:18.540)
How do you get there?
Lex Fridman (1:38:19.940)
How do you get to a billion?
Lex Fridman (1:38:21.380)
So a few things.
Brian Armstrong (1:38:22.420)
One is the blockchains have got to become
Lex Fridman (1:38:23.820)
way more scalable.
Brian Armstrong (1:38:26.100)
It's kind of like we're all running dial up modems
Lex Fridman (1:38:28.020)
and we need broadband.
Lex Fridman (1:38:29.020)
And so it's just like too expensive, too slow
Lex Fridman (1:38:32.180)
to do all these transactions.
Lex Fridman (1:38:33.220)
And I think if we just get L2s working and scalability,
Lex Fridman (1:38:37.980)
you know, we'll see another order of magnitude
Brian Armstrong (1:38:39.940)
kind of come out just from that.
Lex Fridman (1:38:42.860)
I think the second one would be more clear regulation.
Brian Armstrong (1:38:44.900)
That would help a lot.
Lex Fridman (1:38:46.860)
I do talk to, you know, pension funds
Lex Fridman (1:38:49.540)
and you know, various asset managers,
Lex Fridman (1:38:52.780)
sovereign wealth funds and stuff.
Lex Fridman (1:38:53.820)
And a lot of them tell me,
Lex Fridman (1:38:55.740)
we've got 1% of our portfolio in crypto today,
Lex Fridman (1:38:58.780)
but we really would rather have like 20% in there.
Lex Fridman (1:39:02.180)
But what we're waiting for is more clear regulation
Brian Armstrong (1:39:06.580)
coming out and saying that clear test that I was saying,
Lex Fridman (1:39:08.860)
these assets are commodities regulated by SCPC,
Brian Armstrong (1:39:11.020)
these are by SCC, these are by treasury, whatever.
Lex Fridman (1:39:13.720)
So that would be a big unlock.
Brian Armstrong (1:39:15.500)
Do transactions.
Lex Fridman (1:39:16.580)
So one of the things that you mentioned, payments, sorry.
Brian Armstrong (1:39:20.940)
Yeah.
Lex Fridman (1:39:21.780)
Well, does that unlock a lot of users?
Brian Armstrong (1:39:25.180)
Yeah, it does.
Lex Fridman (1:39:26.100)
I mean, remittance is like a huge thing.
Brian Armstrong (1:39:28.260)
People sending money home to their families
Lex Fridman (1:39:30.100)
in other countries where the fees are super high.
Lex Fridman (1:39:32.960)
So yeah, if we get blockchains to be more scalable
Lex Fridman (1:39:35.700)
and there's more global adoption,
Brian Armstrong (1:39:37.020)
like I think we'll see remittance quarters
Lex Fridman (1:39:40.240)
move over to crypto a lot.
Brian Armstrong (1:39:42.300)
There's also just,
Lex Fridman (1:39:43.620)
the other thing that's driving a lot of crypto adoption
Brian Armstrong (1:39:45.360)
is basically the creation of more and more third party apps.
Lex Fridman (1:39:49.300)
So, or dApps they're sometimes called decentralized dApps.
Lex Fridman (1:39:52.180)
So a lot of startups now, you know,
Lex Fridman (1:39:55.340)
how like you used to use in the early 2000s,
Brian Armstrong (1:39:57.420)
they called them.com startups,
Lex Fridman (1:39:58.540)
but now you don't need to say.com
Brian Armstrong (1:39:59.980)
cause everybody's using the internet.
Lex Fridman (1:40:01.500)
And so now there's like hundreds or thousands
Brian Armstrong (1:40:04.380)
of these crypto startups,
Lex Fridman (1:40:06.100)
but I think in the future,
Brian Armstrong (1:40:06.940)
you won't need to call them crypto startups
Lex Fridman (1:40:08.180)
cause they'll just be called startups
Brian Armstrong (1:40:09.260)
cause everyone's using the internet and crypto and whatever.
Lex Fridman (1:40:11.900)
So anyway, the use cases,
Brian Armstrong (1:40:14.900)
the utility of crypto is getting better and better
Lex Fridman (1:40:17.060)
with like all these third party apps
Brian Armstrong (1:40:19.060)
getting funded and created.
Lex Fridman (1:40:20.180)
And do you think there's going to be a killer
Brian Armstrong (1:40:22.660)
or a set of killer dApps,
Lex Fridman (1:40:24.940)
like a thing where nobody can live without?
Lex Fridman (1:40:27.700)
Are we still waiting for that?
Lex Fridman (1:40:29.280)
There's going to be a bunch of them.
Brian Armstrong (1:40:30.220)
It's just like, it's like the internet,
Lex Fridman (1:40:31.500)
like what were the killer web companies, you know,
Brian Armstrong (1:40:33.940)
like Uber and Wikipedia and Airbnb and Google.
Lex Fridman (1:40:37.020)
And like, so there's going to be some big winners,
Lex Fridman (1:40:40.420)
but there'll be thousands of,
Lex Fridman (1:40:42.620)
this is basically the new,
Brian Armstrong (1:40:45.020)
it's like what happened with the.com startups
Lex Fridman (1:40:46.740)
in the early 2000s.
Brian Armstrong (1:40:47.580)
It's like a lot of the best entrepreneurs
Lex Fridman (1:40:49.140)
are building crypto startups now.
Lex Fridman (1:40:50.800)
So tons of venture money flowing into the space.
Lex Fridman (1:40:54.100)
A lot of smart young people, so.
Lex Fridman (1:40:55.620)
Do you think Bitcoin or some other cryptocurrency
Lex Fridman (1:40:57.620)
will become the reserve currency of the world at some point?
Brian Armstrong (1:41:01.700)
Cause this is kind of a controversial idea,
Lex Fridman (1:41:03.740)
but I actually think yes.
Brian Armstrong (1:41:06.520)
I do think Bitcoin could end up becoming
Lex Fridman (1:41:08.620)
a reserve currency of the world.
Lex Fridman (1:41:10.820)
So I've been reading Ray Dalio recently
Lex Fridman (1:41:14.320)
with his new book, like The Changing World Order.
Lex Fridman (1:41:16.660)
And I thought it was a really well researched book.
Lex Fridman (1:41:19.900)
He talks in there, he looks back at history, right?
Brian Armstrong (1:41:21.780)
He looks at like empires and going back
Lex Fridman (1:41:25.340)
to various Chinese empires, the Dutch and Ottomans
Lex Fridman (1:41:27.780)
and everybody, and how did they rise?
Lex Fridman (1:41:29.880)
And they were able to have the reserve currency
Lex Fridman (1:41:31.700)
as they rose and what produced that?
Lex Fridman (1:41:34.300)
Like it came from good education and innovation
Lex Fridman (1:41:36.700)
and better trade and anyway.
Lex Fridman (1:41:39.260)
So the US by some measures is kind of looks like it's,
Brian Armstrong (1:41:44.860)
maybe it's had a really good run
Lex Fridman (1:41:46.640)
and it's coming down a little bit
Lex Fridman (1:41:47.940)
and China is kind of coming up.
Lex Fridman (1:41:49.940)
Who knows how that'll play out, by the way,
Brian Armstrong (1:41:51.260)
like the world is very complicated.
Lex Fridman (1:41:52.500)
It could, that could switch.
Lex Fridman (1:41:55.480)
But I guess if the US dollar is gonna be seeing
Lex Fridman (1:41:59.260)
more inflation in the future,
Lex Fridman (1:42:01.960)
the Chinese Yuan is not like necessarily better, right?
Lex Fridman (1:42:05.900)
I mean, they have a ton of debt as well.
Lex Fridman (1:42:08.500)
And it's not like you could really,
Lex Fridman (1:42:13.220)
that the Yuan could be inflated as well, right?
Brian Armstrong (1:42:15.500)
It probably will be.
Lex Fridman (1:42:17.020)
And so I do think that there's this group of people today
Brian Armstrong (1:42:19.960)
which probably most traditional, I don't know,
Lex Fridman (1:42:24.460)
like the people who run big banks
Lex Fridman (1:42:27.340)
and like governments and stuff that they're not,
Lex Fridman (1:42:28.820)
this is not really on their radar today.
Lex Fridman (1:42:29.980)
But I think there's basically a group of younger people
Lex Fridman (1:42:32.720)
in that kind of 25, 35 year old range who are tech savvy.
Brian Armstrong (1:42:37.520)
They're starting to think of crypto as like
Lex Fridman (1:42:39.420)
the primary thing in their financial life.
Brian Armstrong (1:42:42.100)
It's like, I basically hold my wealth in crypto
Lex Fridman (1:42:44.880)
and I use dollars or euros or whatever.
Brian Armstrong (1:42:47.900)
If I happen to need something,
Lex Fridman (1:42:49.400)
I convert it to that at the last minute.
Brian Armstrong (1:42:50.620)
It's like, if I'm traveling,
Lex Fridman (1:42:52.340)
I might convert some local currency in the moment,
Lex Fridman (1:42:54.060)
but that's not where I hold most of my wealth.
Lex Fridman (1:42:57.080)
So this segment of the population is not like massive yet
Brian Armstrong (1:43:01.560)
from a GDP point of view,
Lex Fridman (1:43:02.580)
but I think it's a leading indicator
Brian Armstrong (1:43:05.560)
of where things could be going.
Lex Fridman (1:43:06.680)
And this is actually good for the world.
Brian Armstrong (1:43:07.900)
It's kind of like, especially if China does continue
Lex Fridman (1:43:10.860)
to rise and it has a more authoritarian view,
Brian Armstrong (1:43:13.580)
it'll be kind of this very centralized East
Lex Fridman (1:43:16.880)
versus a decentralized West where people are in the West,
Brian Armstrong (1:43:21.180)
in the free world, really kind of embracing crypto
Lex Fridman (1:43:24.380)
and a more open, fair, free global financial system,
Brian Armstrong (1:43:27.740)
which I think will be enormously beneficial for humanity.
Lex Fridman (1:43:31.020)
And I do think basically Bitcoin is the reserve currency,
Brian Armstrong (1:43:33.900)
the gold standard of the crypto economy.
Lex Fridman (1:43:37.700)
So that's pretty crazy.
Brian Armstrong (1:43:39.260)
Yeah, the gold standard.
Lex Fridman (1:43:40.340)
I mean, it's also like with Ray Dalio,
Brian Armstrong (1:43:43.620)
I feel like China will drive a lot of this,
Lex Fridman (1:43:47.820)
either in response or directly.
Brian Armstrong (1:43:49.940)
I mean, I think the ruble,
Lex Fridman (1:43:52.340)
I'm not paying as close attention to the financial systems,
Lex Fridman (1:43:55.400)
but I think they're trying to tie it to gold once again.
Lex Fridman (1:43:59.980)
So that's an interesting,
Brian Armstrong (1:44:01.660)
maybe it'll be one of the more authoritarian regime
Lex Fridman (1:44:04.620)
that will switch to Bitcoin standard first.
Lex Fridman (1:44:07.900)
And then it's the West that will,
Lex Fridman (1:44:11.360)
out of that pressure will catch up
Brian Armstrong (1:44:14.960)
versus the other way around.
Lex Fridman (1:44:17.500)
It's fascinating to think of what is the forcing function,
Lex Fridman (1:44:23.120)
what kind of perturbation is required to switch,
Lex Fridman (1:44:26.280)
to change anything, honestly, about the financial system.
Lex Fridman (1:44:28.600)
But it could be, as you're saying,
Lex Fridman (1:44:32.700)
just waiting for the people that are young now
Brian Armstrong (1:44:34.960)
that are embracing crypto
Lex Fridman (1:44:36.660)
to enter the positions of power, essentially.
Lex Fridman (1:44:41.020)
But I hope that's not the case,
Lex Fridman (1:44:42.360)
because if for any innovation we have to wait,
Brian Armstrong (1:44:47.400)
sorry to say, for the older folk to pass away,
Lex Fridman (1:44:51.860)
that's not an efficient way to make change.
Brian Armstrong (1:44:54.700)
Yeah, that's a super interesting topic
Lex Fridman (1:44:57.480)
of how people's minds become less plastic as they age.
Brian Armstrong (1:45:02.960)
I guess it's a feature.
Lex Fridman (1:45:05.000)
It's called wisdom,
Lex Fridman (1:45:06.520)
but then we also need the wild ones to explore,
Lex Fridman (1:45:09.120)
exploration versus exploitation.
Brian Armstrong (1:45:12.200)
You wrote a blog post that's really interesting
Lex Fridman (1:45:14.480)
in September 2020 titled
Brian Armstrong (1:45:16.680)
Coinbase is a Mission Focused Company,
Lex Fridman (1:45:18.960)
like what we're talking about.
Lex Fridman (1:45:20.640)
So one interesting thing you said in that blog post
Lex Fridman (1:45:23.520)
is that we're not going to be distracted
Brian Armstrong (1:45:27.540)
by activism within the company
Lex Fridman (1:45:31.000)
that's not related to the mission of the company.
Brian Armstrong (1:45:35.160)
Now, that's a rare thing for a company to state,
Lex Fridman (1:45:38.600)
for a company CEO to state, especially in this climate.
Lex Fridman (1:45:44.560)
Can you, first of all,
Lex Fridman (1:45:46.200)
describe in a little more detail what you meant?
Lex Fridman (1:45:50.320)
Did you receive blowback for this?
Lex Fridman (1:45:52.400)
I definitely received some blowback,
Lex Fridman (1:45:53.620)
but yeah, I'll describe what I meant.
Lex Fridman (1:45:55.020)
And if you want to talk about how it came to that too,
Brian Armstrong (1:45:57.700)
we can talk about that.
Lex Fridman (1:45:58.540)
But what I meant is that there's a lot of companies right now,
Brian Armstrong (1:46:04.040)
including tech companies, but not exclusively,
Lex Fridman (1:46:06.660)
where I think like great companies,
Brian Armstrong (1:46:11.440)
they have an important mission.
Lex Fridman (1:46:12.680)
They're trying to do something really good for the world.
Lex Fridman (1:46:15.080)
And unfortunately, they're getting a little distracted
Lex Fridman (1:46:17.640)
from that at times because of employee activism
Brian Armstrong (1:46:20.840)
that is causing the company to basically jump
Lex Fridman (1:46:25.320)
into whatever the current thing is
Lex Fridman (1:46:26.960)
and try to help is like the positive interpretation.
Lex Fridman (1:46:30.760)
The negative interpretation would be to virtue signal.
Lex Fridman (1:46:33.480)
And my view is that this is actually kind of destructive to,
Lex Fridman (1:46:38.680)
this is largely an American company phenomenon, by the way.
Brian Armstrong (1:46:41.200)
I do worry that this is making America less competitive,
Lex Fridman (1:46:45.640)
even though I think of myself
Brian Armstrong (1:46:46.480)
as kind of internationally minded,
Lex Fridman (1:46:47.820)
but I am a US citizen, had my whole life here.
Lex Fridman (1:46:50.060)
So when we put out this statement,
Lex Fridman (1:46:54.000)
we had employees that were not in the US
Brian Armstrong (1:46:56.020)
who were confused by it.
Lex Fridman (1:46:57.200)
They were like, why did Brian need to say that?
Brian Armstrong (1:46:59.520)
It was just saying you're going to focus on work at work.
Lex Fridman (1:47:02.480)
That's what we were doing already.
Lex Fridman (1:47:04.480)
And there was certain pockets of the US, certain cities,
Lex Fridman (1:47:08.640)
in particular where we had employees
Brian Armstrong (1:47:10.320)
that a very peculiar cultural phenomenon had evolved
Lex Fridman (1:47:15.500)
where I think people really wanted the company
Brian Armstrong (1:47:19.080)
they worked at to be almost acting
Lex Fridman (1:47:24.120)
like the government or something
Lex Fridman (1:47:25.240)
and like trying to solve the hardest societal issues
Lex Fridman (1:47:28.160)
and at least have an opinion on it,
Brian Armstrong (1:47:30.380)
if not contribute to the solution
Lex Fridman (1:47:32.100)
on almost everything.
Lex Fridman (1:47:35.500)
And for me, it was a very uncomfortable situation
Lex Fridman (1:47:39.800)
for me as a CEO.
Brian Armstrong (1:47:40.640)
I'd never quite been in this situation
Lex Fridman (1:47:42.000)
where most of the time when employees in the past
Brian Armstrong (1:47:45.040)
were kind of asking me questions,
Lex Fridman (1:47:47.440)
they would be asking about like,
Lex Fridman (1:47:49.560)
how do we make this product better?
Lex Fridman (1:47:50.800)
Like, what do we do with this competitor?
Lex Fridman (1:47:52.320)
What about this regulator?
Lex Fridman (1:47:54.720)
And it got to a place around that time
Brian Armstrong (1:47:56.680)
where most of the questions we were receiving
Lex Fridman (1:47:59.380)
were I think even about things not related to the company
Brian Armstrong (1:48:02.080)
they were about broader societal issues.
Lex Fridman (1:48:03.260)
Like Brian, what's your stance on XYZ controversial thing?
Lex Fridman (1:48:06.680)
And it was, I often like didn't have an opinion
Lex Fridman (1:48:10.560)
on these really hard questions, right?
Lex Fridman (1:48:12.120)
And I didn't really,
Lex Fridman (1:48:13.640)
I felt like it was distracting the company.
Brian Armstrong (1:48:15.800)
People internally were getting into fights a lot too,
Lex Fridman (1:48:17.780)
like disagreeing with each other.
Brian Armstrong (1:48:19.640)
There was a thing where like the social slack internally
Lex Fridman (1:48:22.520)
was turning into a social media almost
Brian Armstrong (1:48:24.160)
with people putting in flame wars.
Lex Fridman (1:48:26.360)
So, and this culminated by the way
Brian Armstrong (1:48:28.000)
with a walkout that happened in the company.
Lex Fridman (1:48:31.300)
We had received like some demands from employee groups
Brian Armstrong (1:48:34.640)
about various things.
Lex Fridman (1:48:35.520)
And there was like basically an antagonistic thing
Brian Armstrong (1:48:37.680)
with management and employee.
Lex Fridman (1:48:38.720)
And I was like, we're all on the same team here.
Brian Armstrong (1:48:41.960)
If you wanna be antagonistic,
Lex Fridman (1:48:43.240)
let's do it with somebody else outside the company,
Brian Armstrong (1:48:46.480)
that we're trying to improve the world in that dimension.
Lex Fridman (1:48:48.480)
So yeah, eventually I was like, okay,
Brian Armstrong (1:48:51.080)
the company is not aligned on this.
Lex Fridman (1:48:53.760)
I just don't feel, I don't like the job as CEO, frankly.
Brian Armstrong (1:48:56.580)
Like if the job is to come in here every day
Lex Fridman (1:48:58.840)
and like have to squirm in front of like the most difficult
Brian Armstrong (1:49:02.040)
societal questions, I don't think I wanna do that job.
Lex Fridman (1:49:05.400)
So like either they're gonna have to go
Brian Armstrong (1:49:06.720)
or I'm gonna have to go.
Lex Fridman (1:49:08.120)
And I founded this company
Lex Fridman (1:49:09.400)
and I really believe in the mission.
Lex Fridman (1:49:10.340)
So they're gonna have to go.
Lex Fridman (1:49:11.400)
And what I realized was that,
Lex Fridman (1:49:14.140)
so I basically, I made an exit package available
Brian Armstrong (1:49:16.920)
to anybody who wasn't on board with this direction.
Lex Fridman (1:49:19.320)
5% of employees took it.
Brian Armstrong (1:49:21.180)
I got the company realigned towards this mission.
Lex Fridman (1:49:23.900)
We're all here to do work.
Brian Armstrong (1:49:25.140)
By the way, people can, they can go do anything
Lex Fridman (1:49:27.460)
like political or social activism outside of work.
Brian Armstrong (1:49:29.760)
It's totally fine.
Lex Fridman (1:49:30.600)
Like we all, everybody has stuff like that
Brian Armstrong (1:49:33.360)
in their personal life.
Lex Fridman (1:49:34.260)
But while at work, we can also disagree at work,
Brian Armstrong (1:49:36.360)
by the way, on the work.
Lex Fridman (1:49:37.600)
You know, this is not like a no disagreement culture.
Brian Armstrong (1:49:39.820)
Like we should, let's try to get the truth.
Lex Fridman (1:49:42.320)
But don't bring stuff into work
Brian Armstrong (1:49:44.060)
that's just gonna create division.
Lex Fridman (1:49:46.280)
Make the workplace a refuge from division
Brian Armstrong (1:49:48.440)
about all these crazy things.
Lex Fridman (1:49:49.460)
And like, we're all aligned here to work on the mission.
Brian Armstrong (1:49:51.720)
Let's do that.
Lex Fridman (1:49:52.640)
Yeah, that was really, really, really refreshing to hear.
Lex Fridman (1:49:57.240)
So this is me speaking, but there's a sense
Lex Fridman (1:50:00.340)
when companies take on these issues publicly
Brian Armstrong (1:50:03.480)
from a CEO position or anywhere else,
Lex Fridman (1:50:06.120)
that it does seem to optimize for virtue signaling
Brian Armstrong (1:50:10.920)
versus solving a particular problem.
Lex Fridman (1:50:13.480)
Because to solve a particular problem,
Brian Armstrong (1:50:15.620)
you really have to really put in a huge,
Lex Fridman (1:50:18.800)
you have to hire a huge number of,
Brian Armstrong (1:50:20.500)
you basically have to create a company with a company
Lex Fridman (1:50:22.940)
to take on a particular thing.
Lex Fridman (1:50:25.400)
But if you allow yourself to internally care
Lex Fridman (1:50:29.440)
about a particular issue,
Brian Armstrong (1:50:30.620)
you're basically pacifying some number of employee,
Lex Fridman (1:50:34.240)
like making sure Slack doesn't get out of hand.
Lex Fridman (1:50:37.000)
And then you're doing this kind of, from my perspective,
Lex Fridman (1:50:40.180)
especially on issues that care about fake virtue signaling,
Brian Armstrong (1:50:43.780)
basically trying to understand
Lex Fridman (1:50:45.560)
what will make me look the best,
Lex Fridman (1:50:47.240)
what would make the company look the best
Lex Fridman (1:50:48.720)
in this particular aspect.
Lex Fridman (1:50:50.320)
And it just seems very shallow.
Lex Fridman (1:50:52.120)
And it's optimizing for the wrong thing,
Brian Armstrong (1:50:54.300)
not for the solving of the problems,
Lex Fridman (1:50:56.880)
but for the making yourself look like the good guy
Lex Fridman (1:51:01.920)
and trying to then leverage that to say,
Lex Fridman (1:51:04.940)
I'm the good guy in all situations.
Lex Fridman (1:51:07.520)
And it just, it's the wrong thing.
Lex Fridman (1:51:09.760)
And perhaps from your perspective as a CEO, as a leader,
Brian Armstrong (1:51:13.880)
it's also creating division,
Lex Fridman (1:51:16.560)
unnecessary division within people.
Brian Armstrong (1:51:19.300)
Like they get, yeah, there's something about us
Lex Fridman (1:51:21.280)
who gets extremely argumentative about certain topics.
Brian Armstrong (1:51:25.840)
They really bring out the emotion.
Lex Fridman (1:51:28.440)
And I think that probably, as you were saying,
Brian Armstrong (1:51:30.880)
that emotion is even probably okay,
Lex Fridman (1:51:33.960)
maybe productive when that emotion has to do
Brian Armstrong (1:51:36.060)
with the mission of the company.
Lex Fridman (1:51:37.680)
Like you really care about those disagreements
Brian Armstrong (1:51:40.440)
versus like something that has nothing to do
Lex Fridman (1:51:43.920)
with increasing economic freedom using crypto.
Brian Armstrong (1:51:51.340)
Yeah, it's fascinating.
Lex Fridman (1:51:52.720)
But it was so refreshing because it's rare.
Lex Fridman (1:51:55.440)
Why do you think that's a rare?
Lex Fridman (1:51:57.320)
So the city you're mentioning,
Brian Armstrong (1:51:59.840)
I mean, there's a bunch of cities,
Lex Fridman (1:52:01.960)
but San Francisco is one such city when that culture.
Lex Fridman (1:52:07.420)
And it's sad because San Francisco is also,
Lex Fridman (1:52:12.360)
the Bay Area is also the hub historically
Brian Armstrong (1:52:16.680)
of some of the greatest innovation in human history.
Lex Fridman (1:52:20.600)
So there's that tension.
Lex Fridman (1:52:22.040)
How did that culture emerge there?
Lex Fridman (1:52:24.360)
Where like the innovation was done by people
Brian Armstrong (1:52:27.320)
that are very mission driven.
Lex Fridman (1:52:29.000)
You get a bunch of smart people together
Brian Armstrong (1:52:30.800)
to solve a difficult problem.
Lex Fridman (1:52:32.640)
They get maybe sometimes too much blinders on,
Lex Fridman (1:52:35.680)
but they try to balance that.
Lex Fridman (1:52:37.560)
Because it requires that focus to solve an actual problem.
Lex Fridman (1:52:41.400)
And yet that's also the place where this culture emerged.
Lex Fridman (1:52:44.680)
It's a fascinating human dynamic.
Brian Armstrong (1:52:47.280)
I don't know.
Lex Fridman (1:52:48.120)
Somebody will one day tell the history of Silicon Valley,
Brian Armstrong (1:52:52.400)
not just the innovation,
Lex Fridman (1:52:54.240)
but the social dynamics that occurred there.
Lex Fridman (1:52:56.160)
Anyway, why do you think that's so rare?
Lex Fridman (1:52:59.600)
Well, because people don't wanna get attacked.
Lex Fridman (1:53:01.680)
It's like super, you don't wanna get canceled, right?
Lex Fridman (1:53:04.100)
It's super uncomfortable.
Brian Armstrong (1:53:07.640)
Nobody wants to be called a racist
Lex Fridman (1:53:08.960)
or whatever people wanna say on Twitter.
Lex Fridman (1:53:13.320)
Did you get attacked?
Lex Fridman (1:53:14.520)
Yeah, yeah, I definitely got attacked.
Brian Armstrong (1:53:16.000)
I mean, and I knew it would be controversial.
Lex Fridman (1:53:17.960)
The only reason I did it, frankly,
Brian Armstrong (1:53:19.600)
was that I was kind of at my wit's end.
Lex Fridman (1:53:22.560)
I was like, well, like I said earlier,
Brian Armstrong (1:53:24.760)
like the job, the CEO job sucks.
Lex Fridman (1:53:26.440)
Like either I don't wanna do it or they have to go
Lex Fridman (1:53:29.440)
and I'm gonna make the company into something that I want.
Lex Fridman (1:53:31.300)
And I'd spent eight or 90 years of my life at that point
Brian Armstrong (1:53:36.480)
kind of building this thing.
Lex Fridman (1:53:37.320)
I was like, well, I could go start another company,
Lex Fridman (1:53:39.200)
but it takes a long time to get momentum with these things.
Lex Fridman (1:53:41.240)
And Coinbase is a very rare thing that happened in the world.
Brian Armstrong (1:53:44.440)
I feel very passionate about it.
Lex Fridman (1:53:46.240)
So yeah, I'm not gonna go.
Brian Armstrong (1:53:48.800)
Like I need to make this the company that I wanna work at.
Lex Fridman (1:53:51.040)
And what was really interesting was that
Brian Armstrong (1:53:53.960)
there was such a huge outpouring of support.
Lex Fridman (1:53:56.800)
So I knew that it would be controversial
Lex Fridman (1:53:58.240)
and I would get attacked.
Lex Fridman (1:53:59.080)
And predictably, there was some journalists
Lex Fridman (1:54:03.000)
and New York Times and all these people
Lex Fridman (1:54:04.520)
who kind of like went and started writing hit pieces
Brian Armstrong (1:54:06.840)
on the company shortly thereafter.
Lex Fridman (1:54:09.440)
And they basically just call people who've left the company
Lex Fridman (1:54:12.120)
and can get quotes on whatever they want
Lex Fridman (1:54:14.680)
and then they'll write a story.
Lex Fridman (1:54:16.320)
So mainstream media, I lost a lot of trust
Lex Fridman (1:54:18.600)
in mainstream media, frankly, after that.
Lex Fridman (1:54:20.000)
And of course, it's kind of become obvious since then
Lex Fridman (1:54:22.720)
that most mainstream media is like hyper politicized
Brian Armstrong (1:54:25.960)
at this point.
Lex Fridman (1:54:26.800)
It's basically either super left or super right.
Lex Fridman (1:54:28.560)
And it's not really that focused on truth.
Lex Fridman (1:54:33.040)
So that's kind of unfortunate
Brian Armstrong (1:54:35.600)
because I think journalism is actually like really important
Lex Fridman (1:54:37.480)
in society.
Lex Fridman (1:54:38.320)
So that whole thing got eroded in the US.
Lex Fridman (1:54:40.800)
Luckily, there's sort of new media, people like you
Lex Fridman (1:54:43.400)
and a whole bunch of people.
Lex Fridman (1:54:44.720)
Did that blog post help that statement,
Brian Armstrong (1:54:47.680)
the 95 people that remained,
Lex Fridman (1:54:50.600)
is this still something you struggle with?
Brian Armstrong (1:54:52.560)
Because it's also a culture of the broader tech space.
Lex Fridman (1:54:56.660)
Okay, so that was an interesting thing, which was that,
Lex Fridman (1:54:58.880)
so the 95% of people stayed.
Lex Fridman (1:55:00.720)
I got a huge outpouring of support from people who said,
Brian Armstrong (1:55:05.080)
thank God you finally spoke up and said something
Lex Fridman (1:55:07.280)
because frankly, it was making it not a very fun place
Brian Armstrong (1:55:10.920)
to work either.
Lex Fridman (1:55:12.320)
And I realized that there is, I think there was,
Brian Armstrong (1:55:16.280)
I think Nassim Taleb has this blog post
Lex Fridman (1:55:19.040)
about the tyranny of the 1% or something like that.
Lex Fridman (1:55:22.400)
But there's basically a relatively small group,
Lex Fridman (1:55:24.040)
one in 5% or something like that,
Brian Armstrong (1:55:25.560)
that is really upset about something.
Lex Fridman (1:55:28.400)
It's not the majority of the company, it's like 5%.
Brian Armstrong (1:55:30.880)
There's another 15% or something that are sympathetic
Lex Fridman (1:55:33.540)
to the cause.
Brian Armstrong (1:55:34.440)
They're actually somewhat suggestible.
Lex Fridman (1:55:35.980)
They will go along with whatever,
Brian Armstrong (1:55:37.560)
because it sounds reasonable.
Lex Fridman (1:55:38.720)
These are like real issues they're talking about.
Brian Armstrong (1:55:40.400)
It's not to say that it's not real.
Lex Fridman (1:55:42.660)
And they'll kind of get swept up in it.
Lex Fridman (1:55:44.940)
But there's an 80% of the company that basically
Lex Fridman (1:55:48.520)
doesn't agree or just wants to get their work done
Brian Armstrong (1:55:50.400)
without all this drama or distraction.
Lex Fridman (1:55:52.920)
And they're afraid to speak up because if they speak up,
Brian Armstrong (1:55:56.640)
they're afraid of being, again, called a racist,
Lex Fridman (1:55:58.800)
like fired, ostracized amongst their peers.
Lex Fridman (1:56:01.960)
And so it did require it to get to a bad enough place
Lex Fridman (1:56:06.640)
for me to finally say, you know what?
Brian Armstrong (1:56:07.800)
I just, I feel like I have to do this.
Lex Fridman (1:56:10.120)
Live through the short term attacks of the press,
Brian Armstrong (1:56:12.600)
which ultimately was very freeing for me
Lex Fridman (1:56:14.340)
because now I don't really care.
Lex Fridman (1:56:16.360)
And now I can actually just build the company
Lex Fridman (1:56:18.120)
that I want to build without caring about that.
Lex Fridman (1:56:21.560)
And then what was cool was a lot of really great people
Lex Fridman (1:56:24.200)
reached out to the Coinbase too after that.
Lex Fridman (1:56:25.980)
And were like, I'm an early engineer at Google or wherever.
Lex Fridman (1:56:29.740)
And this culture has gotten kind of messed up
Lex Fridman (1:56:33.040)
and I want to work at a company
Lex Fridman (1:56:34.260)
that's willing to stand for that.
Lex Fridman (1:56:35.280)
And so we've gotten a lot of good people come over.
Lex Fridman (1:56:37.420)
Basically what I realized, and by the way,
Brian Armstrong (1:56:38.960)
our diversity numbers and all that stuff,
Lex Fridman (1:56:40.560)
people told me when I was drafting this poster,
Brian Armstrong (1:56:43.160)
don't post this, people, underrepresented groups
Lex Fridman (1:56:46.280)
will never want to work at this company again.
Lex Fridman (1:56:47.880)
And I was like, I don't think that's true.
Lex Fridman (1:56:49.960)
I talked to our ERG groups and they're not telling me
Brian Armstrong (1:56:53.460)
they care about this stuff that much.
Lex Fridman (1:56:54.880)
They're telling me they just want to be respected at work
Lex Fridman (1:56:57.200)
and do good work and contribute.
Lex Fridman (1:56:58.880)
So my gut was telling me that that advice was wrong.
Lex Fridman (1:57:01.640)
And I can tell you a year after doing it,
Lex Fridman (1:57:05.040)
our diversity numbers are basically either the same
Brian Armstrong (1:57:07.200)
or better in every category.
Lex Fridman (1:57:08.880)
So that turned out to be false.
Brian Armstrong (1:57:12.340)
Look, I hate to be polarizing on either dimension here.
Lex Fridman (1:57:17.440)
I just want to get good work done
Lex Fridman (1:57:18.560)
and build good stuff with technology.
Lex Fridman (1:57:20.000)
So I think companies should just have reasonable policies.
Brian Armstrong (1:57:25.840)
You want to get rid of bias in hiring.
Lex Fridman (1:57:27.320)
You want to attract great people from all
Brian Armstrong (1:57:29.640)
different backgrounds.
Lex Fridman (1:57:31.520)
We have pledge 1%.
Brian Armstrong (1:57:32.840)
We put 1% of the company equity into a foundation.
Lex Fridman (1:57:35.080)
I hope we're able to do good stuff with that.
Brian Armstrong (1:57:36.800)
Let's give back in some way.
Lex Fridman (1:57:39.080)
But the main message I guess for me is the core mission,
Brian Armstrong (1:57:46.280)
the core work that we're doing on economic freedom
Lex Fridman (1:57:48.200)
and just all of our products,
Brian Armstrong (1:57:49.940)
that is the main value that we're contributing in the world.
Lex Fridman (1:57:52.440)
Let's just do that more.
Lex Fridman (1:57:53.480)
And hopefully we can get from 89 million verified users
Lex Fridman (1:57:56.520)
to a billion or whatever.
Lex Fridman (1:57:58.100)
And then I just think that's how we'll have
Lex Fridman (1:58:01.200)
the biggest impact.
Brian Armstrong (1:58:02.240)
It's tempting though.
Lex Fridman (1:58:03.400)
It's so interesting how companies get tempted to help.
Lex Fridman (1:58:07.600)
And you step in and it's almost like a drug
Lex Fridman (1:58:10.160)
and then you can't, you forget.
Brian Armstrong (1:58:11.880)
I mean, like all of us in life just have to be companies.
Lex Fridman (1:58:14.740)
You get distracted and maintaining focus.
Brian Armstrong (1:58:18.720)
You're absolutely right.
Lex Fridman (1:58:19.760)
The way for Coinbase to add value to the world
Brian Armstrong (1:58:22.060)
is to maximize the mission that it's on,
Lex Fridman (1:58:25.160)
not other stuff.
Lex Fridman (1:58:27.320)
And when you get wealthier and more successful,
Lex Fridman (1:58:29.880)
it becomes more and more tempting
Brian Armstrong (1:58:31.920)
to just help out in some other shallow ways.
Lex Fridman (1:58:35.160)
It's fascinating.
Lex Fridman (1:58:36.000)
And you just kind of brought that to light.
Lex Fridman (1:58:37.520)
So it was very refreshing.
Lex Fridman (1:58:38.700)
And it shouldn't be controversial
Lex Fridman (1:58:40.240)
to sort of focus on just getting stuff done.
Brian Armstrong (1:58:43.960)
Well, let me ask you,
Lex Fridman (1:58:44.780)
I mean, do you think that this,
Brian Armstrong (1:58:46.200)
it's all these things tie together.
Lex Fridman (1:58:47.620)
There's like a general trend of like more censorship.
Brian Armstrong (1:58:50.540)
There's like more cancel culture.
Lex Fridman (1:58:52.980)
There's some of these like freedom values
Brian Armstrong (1:58:57.320)
are kind of, even like freezing people's accounts,
Lex Fridman (1:59:00.700)
like the trucker thing that happened.
Lex Fridman (1:59:02.500)
And this seems like there's a general trend
Lex Fridman (1:59:05.080)
of more authoritarian policies there.
Lex Fridman (1:59:10.820)
But do you feel like the tide is turning on that?
Lex Fridman (1:59:13.940)
Like there's counter examples to it we've seen recently.
Brian Armstrong (1:59:17.100)
I think it's the last gasp of old way of doing things.
Lex Fridman (1:59:20.920)
And so there's desperation and so on.
Brian Armstrong (1:59:22.940)
Because to be fair, it's kind of the internet,
Lex Fridman (1:59:27.100)
which is where's the source of a lot of this,
Brian Armstrong (1:59:29.660)
where people have a voice,
Lex Fridman (1:59:31.180)
is making the power centers of the world really nervous.
Lex Fridman (1:59:34.300)
And so that's where that's coming from, I think.
Lex Fridman (1:59:36.580)
And the internet is tricky.
Brian Armstrong (1:59:38.780)
It's weird.
Lex Fridman (1:59:39.980)
It's full of bots.
Brian Armstrong (1:59:41.660)
It's full of like misinformation of all kinds,
Lex Fridman (1:59:45.820)
full of large groups with conspiracy theories and so on.
Lex Fridman (1:59:49.860)
And I mean misinformation broadly.
Lex Fridman (1:59:51.580)
People are misusing the word misinformation.
Brian Armstrong (1:59:53.780)
They're just, governments are just labeling
Lex Fridman (1:59:56.200)
random things with misinformation just to censor them.
Lex Fridman (1:59:59.900)
But I just think it's just like a new world
Lex Fridman (20:01.020)
met lots of interesting people there,
Brian Armstrong (20:02.300)
like crazy people, anarchists,
Lex Fridman (20:04.740)
really brilliant people, all the above.
Lex Fridman (20:06.860)
And so I started nights and weekends
Lex Fridman (20:09.220)
trying to put together a prototype.
Lex Fridman (20:11.220)
And my initial thought was,
Lex Fridman (20:13.700)
well, SMTP is a protocol that runs email.
Lex Fridman (20:16.700)
And Git is a protocol for version control
Lex Fridman (20:21.140)
that people made like Gmail and GitHub.
Brian Armstrong (20:23.380)
Most people don't wanna run their own email server
Lex Fridman (20:25.500)
or even their own Git server.
Brian Armstrong (20:26.860)
They just wanna like use a hosted thing
Lex Fridman (20:28.920)
that will do all the security and backups for them.
Lex Fridman (20:31.700)
So the thought in my head at that time
Lex Fridman (20:33.020)
was Bitcoin's this new protocol.
Brian Armstrong (20:34.620)
There's probably gonna be somebody
Lex Fridman (20:35.620)
who makes a hosted service
Brian Armstrong (20:37.460)
that does all the security and backups for you,
Lex Fridman (20:39.300)
makes Bitcoin as a protocol easy to use.
Lex Fridman (20:42.100)
So maybe I should make like a hosted Bitcoin wallet
Lex Fridman (20:45.860)
or something, that was my,
Brian Armstrong (20:47.180)
it was gonna make Gmail for Bitcoin or something.
Lex Fridman (20:50.020)
And a bunch of people told me that was a bad idea.
Brian Armstrong (20:52.860)
Like most of my smart friends who I told about it,
Lex Fridman (20:55.060)
they were like,
Brian Armstrong (20:56.920)
well, first of all,
Lex Fridman (20:57.980)
I don't really get what you're doing at all.
Brian Armstrong (20:59.460)
Like Bitcoin sounds like a scam
Lex Fridman (21:01.100)
or something you've gotten involved in.
Lex Fridman (21:04.180)
But then other people who understood what Bitcoin was
Lex Fridman (21:06.020)
told me they thought it was a dumb idea
Brian Armstrong (21:07.100)
because they're like, dude, if you store all this Bitcoin,
Lex Fridman (21:09.960)
you're just gonna get hacked.
Lex Fridman (21:10.820)
Like nobody, you know, why would you do that?
Lex Fridman (21:14.820)
And so I kind of had this thought like, you know what?
Brian Armstrong (21:18.180)
I'm not gonna go all in and like make a store
Lex Fridman (21:21.140)
everyone's Bitcoin, that would be too much right now.
Lex Fridman (21:22.700)
I have a job, I have a day job, you know?
Lex Fridman (21:25.060)
But let me just make a prototype
Lex Fridman (21:26.580)
and I'll tell people this is like a beta thing.
Lex Fridman (21:28.300)
Like don't put any real money in it
Lex Fridman (21:29.580)
and just see if there's interest.
Lex Fridman (21:31.100)
And if I feel like I'm onto something,
Brian Armstrong (21:32.280)
maybe I'll go do this as a company.
Lex Fridman (21:33.860)
Cause I did, I really wanted to be an entrepreneur
Brian Armstrong (21:35.460)
at that time.
Lex Fridman (21:36.300)
I was like, I was 29, I was almost turning 30.
Lex Fridman (21:38.700)
And I was, I always wanted to like start a company,
Lex Fridman (21:40.520)
but I was, you know, I wasn't yet.
Brian Armstrong (21:43.580)
I was an employee at a company that was great.
Lex Fridman (21:45.020)
But so anyway, I had this prototype.
Brian Armstrong (21:47.740)
I was hacking together nights and weekends.
Lex Fridman (21:50.300)
I actually wrote a whole Bitcoin node in Ruby,
Brian Armstrong (21:53.900)
which turned out to be a, maybe a weird decision
Lex Fridman (21:55.760)
in hindsight, cause Ruby wasn't the most
Brian Armstrong (21:57.200)
performant language.
Lex Fridman (21:58.040)
We've subsequently had to rebuild that many times.
Lex Fridman (21:59.680)
But yeah, I had this hosted Bitcoin wallet
Lex Fridman (22:03.140)
and the thing that I didn't have any users for it,
Brian Armstrong (22:05.980)
by the way, I applied to Y Combinator
Lex Fridman (22:08.020)
cause I was like, maybe if somebody there writes me a check,
Brian Armstrong (22:10.700)
this will like make it feel like a real company.
Lex Fridman (22:12.340)
And I was trying to find a co founder at that time
Brian Armstrong (22:14.660)
unsuccessfully.
Lex Fridman (22:16.100)
So I was basically just wandering in the desert.
Brian Armstrong (22:18.220)
I had a lot of self doubt about this cause I was like,
Lex Fridman (22:21.580)
I don't know, all my friends don't think this is kind of dumb
Lex Fridman (22:24.220)
and maybe Bitcoin is just gonna get shut down
Lex Fridman (22:27.380)
and like, this is all be some stupid thing.
Lex Fridman (22:29.020)
So there was definitely a feeling of just wandering
Lex Fridman (22:31.820)
lost in the desert, lots of self doubt.
Brian Armstrong (22:35.020)
Paul Graham and the Y Combinator group
Lex Fridman (22:37.180)
kind of wrote me the first check
Brian Armstrong (22:38.580)
after I went and interviewed and stuff.
Lex Fridman (22:39.860)
And they wrote me a check for like 150K.
Lex Fridman (22:42.380)
And that was the first time somebody
Lex Fridman (22:43.980)
who I really looked up to kind of said,
Brian Armstrong (22:46.020)
this is worth pursuing.
Lex Fridman (22:47.540)
Like maybe you're onto something, maybe you're not,
Lex Fridman (22:49.240)
but like, let's at least try it.
Lex Fridman (22:50.940)
And so that was kind of what gave me the confidence
Brian Armstrong (22:53.740)
to quit my job and try it.
Lex Fridman (22:55.420)
And I'll wrap the story here by saying that like we,
Brian Armstrong (22:59.820)
I found the right co founder after Y Combinator.
Lex Fridman (23:02.860)
We still didn't have any customers.
Brian Armstrong (23:03.980)
The thing that,
Lex Fridman (23:05.220)
I basically launched the hosted Bitcoin wallet.
Brian Armstrong (23:07.600)
There were people signing up.
Lex Fridman (23:09.100)
I just posted on Reddit and places like that.
Lex Fridman (23:11.300)
And maybe like a hundred people would sign up
Lex Fridman (23:13.300)
and then nobody would come back.
Lex Fridman (23:14.980)
And so I was like, I just in Y Combinator,
Lex Fridman (23:18.300)
they often tell you like,
Brian Armstrong (23:20.300)
talk to your customers and improve your product.
Lex Fridman (23:21.860)
Talk to your customers, improve your product.
Brian Armstrong (23:23.140)
That's all you're supposed to be doing.
Lex Fridman (23:24.220)
Try to find product market fit.
Lex Fridman (23:25.760)
So I emailed like five of the users that had signed up
Lex Fridman (23:28.820)
and I was like, hey, I worked on this app.
Brian Armstrong (23:30.540)
I saw you signed up.
Lex Fridman (23:31.380)
Can I get on the phone with you?
Brian Armstrong (23:32.200)
I get on the phone with like five of these folks.
Lex Fridman (23:34.420)
And I was like, why didn't you come back?
Lex Fridman (23:36.820)
And the guy was like, well, the app was okay
Lex Fridman (23:38.860)
for a beta, but like, I don't have any Bitcoins.
Lex Fridman (23:41.620)
So I didn't really know what to do with it.
Lex Fridman (23:43.380)
And I remember this light bulb kind of went off in my head.
Brian Armstrong (23:45.000)
I was like, well, if I put a buy Bitcoin button in there,
Lex Fridman (23:48.900)
would you have used it?
Lex Fridman (23:49.740)
And he was like, yeah, maybe.
Lex Fridman (23:51.500)
So then I had this, we went about the process.
Brian Armstrong (23:54.180)
My co founder at that time,
Lex Fridman (23:55.140)
we like got basically had to get like a bank partnership,
Brian Armstrong (23:57.920)
payment rails, you know, an exchange,
Lex Fridman (23:59.300)
basic exchange functionality,
Brian Armstrong (24:00.420)
all that stuff I was mentioning earlier in place.
Lex Fridman (24:03.620)
And the minute we launched that feature
Brian Armstrong (24:05.340)
where you could just click buy,
Lex Fridman (24:06.260)
put in your bank counter credit card,
Brian Armstrong (24:07.620)
buy Bitcoin, it showed up in your account.
Lex Fridman (24:09.580)
From that day forward,
Brian Armstrong (24:10.400)
like the number of users started to go up like this.
Lex Fridman (24:12.620)
And so we finally had found product market fit
Brian Armstrong (24:14.980)
after two years of wandering in the desert.
Lex Fridman (24:17.140)
So you weren't even thinking about to buy the on ramps.
Brian Armstrong (24:20.460)
You would think it would be just the wallet,
Lex Fridman (24:22.060)
a place to store Bitcoin that you've already gotten.
Brian Armstrong (24:26.340)
Yeah. Okay.
Lex Fridman (24:27.500)
This is, I mean, cause that's such a pain to do,
Brian Armstrong (24:31.140)
to have to work with others to convert dollars
Lex Fridman (24:34.380)
and fiat currency into Bitcoin.
Brian Armstrong (24:37.820)
Yeah.
Lex Fridman (24:38.660)
So did you, I mean,
Brian Armstrong (24:39.700)
were you overwhelmed by the immensity of the task here
Lex Fridman (24:45.400)
or were you just sort of not allowing yourself
Brian Armstrong (24:51.860)
to think too deeply through this whole thing
Lex Fridman (24:53.860)
and just letting the optimism take over here?
Brian Armstrong (24:59.020)
You know, I was really looking forward
Lex Fridman (25:00.560)
to like doing something crazy and like a big challenge.
Lex Fridman (25:03.300)
And I wanted to, I love kind of crisis moments like that
Lex Fridman (25:09.580)
where, you know, I'm very determined, right?
Lex Fridman (25:12.300)
And especially when I get like very set on something
Lex Fridman (25:14.820)
and I'm just like, you know what?
Brian Armstrong (25:15.700)
I'm gonna figure out a way to make this fucking thing work,
Lex Fridman (25:18.420)
like no matter what.
Lex Fridman (25:19.700)
And so I reveled in that.
Lex Fridman (25:23.160)
I was sort of, I had read all these books about startups
Lex Fridman (25:26.220)
and like every startup has these like, you know,
Lex Fridman (25:28.140)
major setbacks and just like nothing works.
Lex Fridman (25:30.340)
And so that was a sign that you're doing something right.
Lex Fridman (25:33.460)
I had no idea if I was doing anything right at all,
Lex Fridman (25:35.500)
but I was like, I was kind of loving the experience of it
Lex Fridman (25:38.260)
in a weird way.
Brian Armstrong (25:39.100)
It felt, it felt stressful at the time.
Lex Fridman (25:41.000)
Like, you know, nothing was working and,
Lex Fridman (25:43.820)
but I was just, I felt like I was on the right path somehow.
Lex Fridman (25:47.220)
And so I just kept going, I don't know.
Lex Fridman (25:50.940)
What was the darkest moment that you've gone to
Lex Fridman (25:53.940)
in your mind during that time?
Lex Fridman (25:56.500)
What was, what were some of the tougher moments?
Lex Fridman (25:58.700)
You said self doubt.
Brian Armstrong (26:00.460)
Yeah.
Lex Fridman (26:01.860)
Have you, yeah, where'd you go?
Lex Fridman (26:04.700)
Where'd you go in your mind?
Lex Fridman (26:06.020)
Is there a moment where you're just like laying there?
Brian Armstrong (26:10.460)
This is, this is hopeless.
Lex Fridman (26:13.380)
Well, there's a couple of moments I'm remembering.
Brian Armstrong (26:15.500)
I mean, so for whatever reason,
Lex Fridman (26:18.280)
I had this like big chip on my shoulder at that time.
Lex Fridman (26:20.780)
And I was like,
Lex Fridman (26:21.900)
I really want to do something important in the world.
Brian Armstrong (26:23.900)
Like, you know, I could have a good life
Lex Fridman (26:26.260)
and like work for some good companies
Lex Fridman (26:27.860)
and write some software.
Lex Fridman (26:29.100)
And I'm, for some reason, I never wanted that for myself.
Brian Armstrong (26:31.940)
That probably would have been healthier, honestly,
Lex Fridman (26:33.340)
just to like, as an expected value outcome,
Brian Armstrong (26:35.860)
that's probably a better thing in life.
Lex Fridman (26:38.020)
But I was like, I was like, man,
Brian Armstrong (26:40.260)
I really want to do something important
Lex Fridman (26:41.940)
and have a bigger impact.
Lex Fridman (26:43.140)
And I was like, I was willing to sacrifice a lot for that.
Lex Fridman (26:46.220)
I was like sleep and not going out with friends and stuff.
Brian Armstrong (26:49.620)
I remember one of the,
Lex Fridman (26:50.660)
just for like years working on this stuff,
Brian Armstrong (26:52.740)
I remember one of the darker moments was,
Lex Fridman (26:55.940)
we probably had like maybe five employees at that time.
Lex Fridman (27:00.160)
And I remember like a bunch of bad things happened
Lex Fridman (27:03.560)
like all at once.
Lex Fridman (27:04.440)
And it was, so first of all,
Lex Fridman (27:06.660)
you have to remember at this time,
Brian Armstrong (27:08.860)
we were all very sleep deprived,
Lex Fridman (27:10.400)
which kind of exacerbates everything.
Brian Armstrong (27:11.900)
If you look at like the Exxon Valdez spill
Lex Fridman (27:14.460)
and all these like natural disasters,
Brian Armstrong (27:16.300)
like sleep deprivation is often involved.
Lex Fridman (27:18.520)
So, because the reason why we were so sleep deprived
Brian Armstrong (27:20.960)
is not just because we were working so much,
Lex Fridman (27:22.080)
but like the site would go offline in the middle of the night
Lex Fridman (27:25.240)
and we'd get, I'd get paged.
Lex Fridman (27:26.280)
I was like on pager duty.
Lex Fridman (27:27.180)
So I'd get woken up sometimes
Lex Fridman (27:28.280)
like two or three times a night,
Brian Armstrong (27:29.400)
like have to try to fix something, go back to sleep.
Lex Fridman (27:31.920)
So in that environment, you can kind of get,
Brian Armstrong (27:35.000)
you can get discouraged.
Lex Fridman (27:37.040)
So one bad thing that happened was,
Brian Armstrong (27:39.360)
we had a bug on the website
Lex Fridman (27:40.680)
and there was thousands of people on Reddit and Twitter
Brian Armstrong (27:43.760)
who were all like pissed at Coinbase
Lex Fridman (27:46.640)
because like the balances were showing wrong.
Lex Fridman (27:48.320)
And they were just like, fuck this company, it's over.
Lex Fridman (27:51.580)
Like, I hate these guys.
Lex Fridman (27:52.520)
And so that was, I'd never had this feeling
Lex Fridman (27:55.320)
of a thousand people mad at me at the same time.
Brian Armstrong (27:57.280)
You know, I feel like I'm a pretty chill guy.
Lex Fridman (27:58.840)
Like most of the time people don't get mad at me.
Lex Fridman (28:00.440)
So that was one.
Lex Fridman (28:02.080)
Another one was that.
Lex Fridman (28:03.400)
Can we pause on that?
Lex Fridman (28:04.240)
That's so interesting.
Lex Fridman (28:05.220)
So you were saying like, here's a dream.
Lex Fridman (28:07.100)
I'm trying to create something.
Lex Fridman (28:08.660)
And now forever, the reputation of this dream is ruined.
Lex Fridman (28:13.200)
It will never, it's irrecoverable.
Brian Armstrong (28:15.000)
It's over, that kind of feeling.
Lex Fridman (28:17.220)
Yeah, well, I didn't, you're right.
Brian Armstrong (28:18.640)
I didn't know at that time.
Lex Fridman (28:19.600)
I was like, is this, is this the end?
Brian Armstrong (28:21.640)
Like everybody, we're so, we're so tiny.
Lex Fridman (28:24.200)
Now everybody hates us.
Lex Fridman (28:25.120)
So is it over?
Lex Fridman (28:26.320)
Yeah.
Brian Armstrong (28:28.760)
Nobody told me this before starting a company
Lex Fridman (28:30.760)
that like, you're a bunch of people will hate you for this,
Brian Armstrong (28:33.560)
which is like a very counterintuitive thing.
Lex Fridman (28:35.200)
Cause you know, most companies I think are doing
Lex Fridman (28:38.200)
good things in the world, at least you're trying, right?
Lex Fridman (28:39.760)
And so even if someone's like trying,
Lex Fridman (28:41.960)
but they're not, they're failing,
Lex Fridman (28:42.840)
I'm generally rooting for them.
Lex Fridman (28:43.920)
At least you're trying, right?
Lex Fridman (28:45.360)
But that's not the case at all.
Lex Fridman (28:47.080)
And most founders I've known have gone through this too,
Lex Fridman (28:50.160)
where they're very surprised at the amount of hate
Brian Armstrong (28:53.320)
that they get.
Lex Fridman (28:54.160)
And if it's, I think it's actually like a muscle
Brian Armstrong (28:55.920)
you can build your tolerance to it.
Lex Fridman (28:57.720)
Like, because you know, you go talk to somebody who's like,
Brian Armstrong (29:01.440)
for you, it feels terrible
Lex Fridman (29:02.400)
cause you're at the center of this storm and like,
Lex Fridman (29:04.480)
but if you go, then you go talk to like, you know,
Lex Fridman (29:06.360)
your family or some other person like, dude,
Brian Armstrong (29:08.120)
I didn't even hear about that.
Lex Fridman (29:08.960)
Like my, they're just busy in their own life.
Lex Fridman (29:11.300)
And so they, they have no idea
Lex Fridman (29:13.400)
that you had all this negative press
Brian Armstrong (29:14.800)
or like whatever it was.
Lex Fridman (29:16.500)
Can I put once again, put a link on that?
Brian Armstrong (29:19.000)
Yeah.
Lex Fridman (29:20.400)
There's an interesting person I'd like to bring up
Brian Armstrong (29:23.520)
just as an example, Bill Gates.
Lex Fridman (29:26.480)
Yeah.
Lex Fridman (29:27.600)
So he gets a very large amount of hate on the internet.
Lex Fridman (29:31.560)
Yeah.
Lex Fridman (29:32.400)
And there's something about him,
Lex Fridman (29:34.240)
this is me talking that you,
Brian Armstrong (29:35.440)
that he seems out of touch about that hate.
Lex Fridman (29:39.960)
I believe at least in my understanding
Brian Armstrong (29:43.440)
that with the resources he has,
Lex Fridman (29:46.280)
he's trying and is actually doing a lot of good.
Lex Fridman (29:50.360)
And yet there's a gigantic amount of hate,
Lex Fridman (29:52.640)
conspiracy theories and stuff like that.
Brian Armstrong (29:54.660)
Right.
Lex Fridman (29:55.500)
And it feels like that's the case
Brian Armstrong (29:57.960)
because he's somehow out of touch with people.
Lex Fridman (2:00:03.540)
where the internet is really finally taking hold,
Brian Armstrong (2:00:06.100)
where there's billions of devices
Lex Fridman (2:00:07.600)
and everybody has a voice.
Brian Armstrong (2:00:09.260)
It's almost, basically governments and powerful people
Lex Fridman (2:00:15.900)
are slightly losing hold of power.
Lex Fridman (2:00:18.420)
And they're starting to freak out a little bit.
Lex Fridman (2:00:20.540)
That's it.
Lex Fridman (2:00:21.420)
And once you have young people that are coming up now,
Lex Fridman (2:00:25.620)
gain power, I think we'll rebalance everything.
Lex Fridman (2:00:28.660)
And then there's, like you said,
Lex Fridman (2:00:30.420)
promising signs that it's obvious
Brian Armstrong (2:00:34.820)
that the majority of people want freedom.
Lex Fridman (2:00:38.180)
And that means a lot of things.
Brian Armstrong (2:00:39.420)
That means economic freedom.
Lex Fridman (2:00:40.620)
That means freedom to have a voice,
Brian Armstrong (2:00:44.380)
freedom to move around,
Lex Fridman (2:00:45.620)
freedom to act in the way they,
Brian Armstrong (2:00:47.940)
without reasonable sort of limitations
Lex Fridman (2:00:53.220)
by people that don't have their best interests.
Lex Fridman (2:00:55.020)
And I gain more hope from just regular people
Lex Fridman (2:00:59.700)
that are fighting and like demanding
Brian Armstrong (2:01:05.820)
being able to have freedom of speech,
Lex Fridman (2:01:08.620)
or more specifically sort of resisting
Brian Armstrong (2:01:12.260)
crude overreach of government in the acts of censorship,
Lex Fridman (2:01:16.460)
at least in the United States.
Lex Fridman (2:01:19.780)
And hopefully that percolates out to the rest of the world
Lex Fridman (2:01:22.640)
that's struggling on a much more basic level
Brian Armstrong (2:01:25.340)
where people are being put in prison for the words they say,
Lex Fridman (2:01:27.780)
not just banned from Twitter.
Brian Armstrong (2:01:30.060)
Right, it could be worse.
Lex Fridman (2:01:31.500)
What are some lessons from your failures and your successes
Lex Fridman (2:01:37.660)
about what it takes to run a company?
Lex Fridman (2:01:40.080)
I think one of the things that I learned about leadership
Brian Armstrong (2:01:43.740)
is that I never really thought of myself
Lex Fridman (2:01:47.260)
as a very natural leader, to be honest.
Brian Armstrong (2:01:48.860)
I don't think I was a natural leader.
Lex Fridman (2:01:51.580)
But so I always envisioned good leaders
Brian Armstrong (2:01:54.060)
as like these military generals,
Lex Fridman (2:01:55.500)
like they seem so confident and they're just like bark orders,
Brian Armstrong (2:01:58.980)
charge that hill and do this.
Lex Fridman (2:02:00.360)
And I was actually like more introverted
Lex Fridman (2:02:03.260)
and kind of, I wasn't really confident
Lex Fridman (2:02:06.720)
in the way I communicated.
Lex Fridman (2:02:09.300)
And so what I realized is that
Lex Fridman (2:02:11.940)
there's lots of different kinds of leaders.
Lex Fridman (2:02:13.140)
You can be any kind of CEO you want, right?
Lex Fridman (2:02:15.020)
I was kind of more of like a product, technical focus CEO.
Lex Fridman (2:02:18.180)
And I preferred to sort of hear everyone's opinion.
Lex Fridman (2:02:21.720)
And it wasn't just gonna like render a decision in the room
Brian Armstrong (2:02:23.780)
in some like kind of heated moment
Lex Fridman (2:02:25.100)
and like piss off half the people.
Brian Armstrong (2:02:26.260)
I would do like, all right, I'm gonna go think about it
Lex Fridman (2:02:28.380)
and I'll send you my decision later today
Brian Armstrong (2:02:30.660)
or tomorrow or whatever.
Lex Fridman (2:02:32.140)
And so I found ways to kind of make it work for me
Brian Armstrong (2:02:35.040)
where I could basically, I always tried to avoid like,
Lex Fridman (2:02:40.420)
when people getting like super emotional about something
Lex Fridman (2:02:42.580)
and like, I think they're thinking,
Lex Fridman (2:02:44.540)
their judgment goes down, right?
Lex Fridman (2:02:46.460)
And just like never make a decision when you're angry, right?
Lex Fridman (2:02:48.460)
And so I would always sort of try to get a sense of,
Brian Armstrong (2:02:50.960)
are these people like trying to be right
Lex Fridman (2:02:52.260)
or are they trying to seek the truth?
Lex Fridman (2:02:54.640)
And you can do these little tricks like,
Lex Fridman (2:02:57.260)
okay, you argue that person's position
Lex Fridman (2:02:59.380)
and you argue the other one
Lex Fridman (2:03:00.380)
and like see if you can genuinely represent it.
Brian Armstrong (2:03:02.840)
Now I know you're listening and these kinds of things.
Lex Fridman (2:03:06.300)
But I guess, sorry,
Brian Armstrong (2:03:07.140)
getting back to your question about leadership,
Lex Fridman (2:03:08.540)
I think I basically just kept doing things
Brian Armstrong (2:03:12.160)
that were a little outside my comfort zone.
Lex Fridman (2:03:15.140)
And then my comfort zone kept getting bigger and bigger.
Lex Fridman (2:03:17.780)
You know?
Lex Fridman (2:03:18.600)
And so I think that's how you build confidence
Brian Armstrong (2:03:22.060)
is you do the thing that's scary
Lex Fridman (2:03:24.940)
and it's like a little outside.
Lex Fridman (2:03:26.820)
And like when I first started Coinbase,
Lex Fridman (2:03:29.100)
I had never managed anybody.
Brian Armstrong (2:03:30.220)
I would have been scared to death
Lex Fridman (2:03:32.060)
to have put out like a very controversial opinion like that
Lex Fridman (2:03:34.660)
and sort of, all right, 5% of people will go,
Lex Fridman (2:03:38.340)
we didn't know what percent it was gonna be by the way.
Brian Armstrong (2:03:39.540)
It could have been 1%, it could have been 50%.
Lex Fridman (2:03:41.340)
Like, but we went into it scary
Brian Armstrong (2:03:44.100)
because it was a scary thing.
Lex Fridman (2:03:45.220)
I was like, I don't know, I think this is right.
Brian Armstrong (2:03:47.540)
I'm just gonna do it.
Lex Fridman (2:03:49.420)
So if you do enough scary things,
Brian Armstrong (2:03:50.940)
like you'll build the confidence.
Lex Fridman (2:03:52.820)
And I feel like I'm still on that journey.
Brian Armstrong (2:03:54.540)
Every year or two at Coinbase,
Lex Fridman (2:03:57.060)
there's some big thing that comes out as like,
Brian Armstrong (2:03:58.700)
oh my God, like I didn't sleep well for a week
Lex Fridman (2:04:00.620)
and like, this is the next level, right?
Lex Fridman (2:04:03.580)
But that's how you learn and grow.
Lex Fridman (2:04:05.580)
So you're still going up that mountain
Brian Armstrong (2:04:07.500)
through the fog one step at a time.
Lex Fridman (2:04:09.340)
Yeah.
Brian Armstrong (2:04:10.580)
Can I just quickly ask you about a couple of other efforts
Lex Fridman (2:04:13.980)
that are super interesting that you're involved with?
Lex Fridman (2:04:15.860)
So first of all, a little bit more old school,
Lex Fridman (2:04:18.900)
fascinating effort of research hub.
Lex Fridman (2:04:22.340)
So what's that about the GitHub for open science?
Lex Fridman (2:04:26.980)
Yeah, okay, so basically I've had a chance
Brian Armstrong (2:04:28.740)
to try to help a couple other companies
Lex Fridman (2:04:30.100)
get off the ground too,
Brian Armstrong (2:04:30.940)
cause I wanna see various efforts out there succeed.
Lex Fridman (2:04:34.620)
And one of them I've always thought about
Brian Armstrong (2:04:37.180)
like why is scientific research
Lex Fridman (2:04:39.820)
not more like open source software
Lex Fridman (2:04:41.260)
or why couldn't it be much faster, right?
Lex Fridman (2:04:42.700)
And there's, you've probably have seen this
Lex Fridman (2:04:44.780)
like in an academic setting, right?
Lex Fridman (2:04:46.020)
But there's all kinds of things that feel very antiquated
Brian Armstrong (2:04:48.980)
to me about scientific research,
Lex Fridman (2:04:50.500)
everything from the funding process and grants
Brian Armstrong (2:04:53.700)
to how peer review works, to how you submit to journals,
Lex Fridman (2:04:57.620)
all the costs associated with journals,
Brian Armstrong (2:05:00.020)
you know, that the people,
Lex Fridman (2:05:01.220)
you'd think like you'd get paid for this or something
Lex Fridman (2:05:02.940)
and it would then be available to all the taxpayers for free
Lex Fridman (2:05:05.140)
but no, they're like, they're all pay walled
Lex Fridman (2:05:06.700)
and there's like these big companies
Lex Fridman (2:05:08.100)
that have sort of, in my view,
Brian Armstrong (2:05:09.820)
kind of held back innovation here.
Lex Fridman (2:05:12.020)
So, and the preprint servers like bioarchive
Lex Fridman (2:05:14.940)
and archive.org have really helped this
Lex Fridman (2:05:16.580)
but those websites are,
Brian Armstrong (2:05:17.700)
they look like they're kind of from like 15 years ago
Lex Fridman (2:05:19.820)
or something.
Brian Armstrong (2:05:20.660)
Yeah, it's like Craigslist or something.
Lex Fridman (2:05:21.700)
Yeah, so anyway, one of the things I,
Brian Armstrong (2:05:24.780)
once Coinbase went public last year,
Lex Fridman (2:05:26.300)
I had a little bit of liquidity and I was like,
Brian Armstrong (2:05:27.580)
all right, let me fund a small team
Lex Fridman (2:05:28.900)
and let's see if we can,
Brian Armstrong (2:05:30.540)
if they can like go off and make something better here.
Lex Fridman (2:05:32.700)
So we have a prototype out there,
Brian Armstrong (2:05:35.140)
it's at researchhub.com, people can check it out.
Lex Fridman (2:05:37.380)
And it's basically, you know,
Brian Armstrong (2:05:39.700)
the first version is kind of like Reddit for science.
Lex Fridman (2:05:41.540)
There's like various hubs, which are like journals,
Lex Fridman (2:05:44.500)
but you know, you can publish papers there,
Lex Fridman (2:05:46.460)
you can use an electronic lab notebook
Brian Armstrong (2:05:48.260)
to sort of have a modern day paper,
Lex Fridman (2:05:49.740)
which is not just a PDF that's static,
Lex Fridman (2:05:51.540)
but it's a living document.
Lex Fridman (2:05:53.580)
Ideally in the future, you know,
Brian Armstrong (2:05:54.460)
you can get comments and feedback from people in there,
Lex Fridman (2:05:56.580)
you can update it over time.
Brian Armstrong (2:05:57.980)
We want people to be able to share the code
Lex Fridman (2:06:00.180)
and the data sets associated with their paper,
Brian Armstrong (2:06:02.100)
research paper is not just a PDF.
Lex Fridman (2:06:05.020)
And in the future, we want to make it even where like,
Brian Armstrong (2:06:07.020)
you know, people can get funding for science
Lex Fridman (2:06:09.860)
through that site and even license out innovations
Brian Armstrong (2:06:13.660)
that they've made.
Lex Fridman (2:06:14.500)
Because the other thing I've noticed in life
Brian Armstrong (2:06:16.380)
is that there's kind of like,
Lex Fridman (2:06:17.940)
there's a bunch of people working on science
Lex Fridman (2:06:19.220)
and there's a bunch of people building companies
Lex Fridman (2:06:21.100)
and they very rarely intersect,
Lex Fridman (2:06:23.340)
but when they do, you get the best things
Lex Fridman (2:06:25.180)
like SpaceX and Genentech and even Google
Lex Fridman (2:06:28.020)
and like even Coinbase was based on a research paper,
Lex Fridman (2:06:31.020)
the Bitcoin white paper.
Lex Fridman (2:06:32.460)
And so most business people are like creating companies
Lex Fridman (2:06:35.300)
that don't have any scientific innovation,
Brian Armstrong (2:06:36.780)
they're just like marketing based on, you know, whatever.
Lex Fridman (2:06:40.220)
And then a lot of scientists are making things
Brian Armstrong (2:06:42.740)
which never actually benefit humanity
Lex Fridman (2:06:44.740)
because they're not commercialized and turned into products.
Lex Fridman (2:06:47.540)
And so if we can somehow create a translation layer
Lex Fridman (2:06:50.660)
between those two groups and help them,
Brian Armstrong (2:06:53.300)
you know, helps align the market forces,
Lex Fridman (2:06:56.260)
align scientific research to market forces
Lex Fridman (2:06:58.100)
so that they're more incentivized.
Lex Fridman (2:06:59.140)
Like if you discover CRISPR or something like that,
Brian Armstrong (2:07:01.740)
like you should be a billionaire, you know,
Lex Fridman (2:07:03.220)
and like all the downstream implications of that,
Brian Armstrong (2:07:05.500)
not going through some antiquated tech transfer office
Lex Fridman (2:07:07.820)
or whatever.
Lex Fridman (2:07:08.660)
And if you're an entrepreneur,
Lex Fridman (2:07:11.140)
you should be looking to commercialize
Brian Armstrong (2:07:12.540)
the latest scientific innovations.
Lex Fridman (2:07:14.740)
And so that's kind of like the longterm vision
Brian Armstrong (2:07:17.020)
for that site.
Lex Fridman (2:07:18.660)
I think it's just an early step today,
Lex Fridman (2:07:20.180)
but we've got like a really passionate community on there
Lex Fridman (2:07:22.540)
that are jumping into like, you know,
Brian Armstrong (2:07:24.780)
computer science or longevity or various bio hubs
Lex Fridman (2:07:29.700)
or whatever and like beginning to source
Brian Armstrong (2:07:31.780)
the best innovations, but also discuss them, improve them
Lex Fridman (2:07:34.620)
and publish through the site.
Lex Fridman (2:07:36.220)
So I have a question about incentives,
Lex Fridman (2:07:38.220)
but first let me say for people listening
Brian Armstrong (2:07:39.980)
who are outside of academia might not be familiar
Lex Fridman (2:07:42.660)
with an absurd situation.
Lex Fridman (2:07:44.260)
So there's journals, like you mentioned,
Lex Fridman (2:07:47.220)
and scientists publishing those journals
Lex Fridman (2:07:51.620)
and the journals provide very little value
Lex Fridman (2:07:56.300)
except matching you with reviewers that are unpaid.
Lex Fridman (2:08:00.620)
And so in the digital world,
Lex Fridman (2:08:05.540)
they're providing basically almost no value
Brian Armstrong (2:08:07.460)
except hosting your paper.
Lex Fridman (2:08:10.300)
And they put up a paywall and charge people to access that.
Lex Fridman (2:08:15.580)
And that charge is not like even Netflix fees,
Lex Fridman (2:08:18.500)
you're talking about a lot of money.
Lex Fridman (2:08:20.860)
So they're basically blocking your research
Lex Fridman (2:08:24.060)
that should be wide open from the world
Lex Fridman (2:08:27.060)
and creating a paywall.
Lex Fridman (2:08:28.220)
It's a fascinating like scam that's actually holding back.
Brian Armstrong (2:08:32.860)
I don't, it's a shitty scam
Lex Fridman (2:08:34.620)
because you're not making that much money.
Brian Armstrong (2:08:37.300)
I feel like a definition of a scam,
Lex Fridman (2:08:38.780)
you should at least be making money.
Lex Fridman (2:08:40.780)
So like significant amount of money,
Lex Fridman (2:08:42.140)
you're basically making shady money
Lex Fridman (2:08:44.380)
and holding back all of human knowledge, okay.
Lex Fridman (2:08:46.860)
So that put aside and people get a little confused
Brian Armstrong (2:08:49.220)
because the journals aren't the ones paying the scientists.
Lex Fridman (2:08:53.420)
People think like the journals are somehow
Brian Armstrong (2:08:55.820)
funding the scientists, therefore they have the right
Lex Fridman (2:08:59.980)
to put up a paywall.
Brian Armstrong (2:09:01.140)
No, no, no, the funding is coming from elsewhere.
Lex Fridman (2:09:03.500)
Journals are the middleman that nobody asks for,
Brian Armstrong (2:09:07.060)
especially in the digital world.
Lex Fridman (2:09:08.220)
Anyway, that said, there is a interesting kind of incentives
Brian Armstrong (2:09:13.500)
for scientists, which is prestige and so on.
Lex Fridman (2:09:16.100)
So there's a thing with journals,
Brian Armstrong (2:09:20.060)
if there's a prestigious journal
Lex Fridman (2:09:22.300)
and you pass the review process, you get into that journal
Brian Armstrong (2:09:26.660)
or a prestigious conference in computer science,
Lex Fridman (2:09:29.780)
then that's seen as a good thing in your resume.
Brian Armstrong (2:09:33.420)
And, oh, not just your resume, within your community,
Lex Fridman (2:09:36.100)
that's a respected thing.
Brian Armstrong (2:09:37.380)
Is there some way to achieve that same kind of incentive
Lex Fridman (2:09:40.700)
in the open setting of research hub?
Lex Fridman (2:09:44.740)
So like where I could say, I got X, Y and Z,
Lex Fridman (2:09:49.480)
like, look, I'm impressive
Brian Armstrong (2:09:50.820)
because this happened on research hub.
Lex Fridman (2:09:52.680)
I think you're right.
Brian Armstrong (2:09:53.520)
Like the whole academia, like progress track
Lex Fridman (2:09:56.920)
is about like where you got published
Lex Fridman (2:09:58.900)
and how many citations.
Lex Fridman (2:09:59.840)
And it's kind of like a false economy of reputation
Brian Armstrong (2:10:04.240)
because like, there's not real money backing it.
Lex Fridman (2:10:06.900)
And so I think we've thought about this a little bit.
Lex Fridman (2:10:10.220)
And I think the research hub team has an opportunity
Lex Fridman (2:10:12.180)
to do something here that basically says like,
Brian Armstrong (2:10:14.860)
okay, I had the top paper for 2022
Lex Fridman (2:10:18.060)
in biology on in here.
Lex Fridman (2:10:21.580)
And you basically publish a list,
Lex Fridman (2:10:23.220)
a leaderboards of these like top for the month,
Brian Armstrong (2:10:26.180)
the year in all these different categories.
Lex Fridman (2:10:29.180)
Then actually, we should probably give out grants
Lex Fridman (2:10:31.820)
and awards in addition to that,
Lex Fridman (2:10:34.500)
fund those people almost like fellows
Brian Armstrong (2:10:36.340)
or even give out like, you know how like the Nobel prize,
Lex Fridman (2:10:40.100)
there should be like a research hub prize or something
Lex Fridman (2:10:42.080)
and like ship people,
Lex Fridman (2:10:43.940)
maybe even ship like a print version of a journal
Brian Armstrong (2:10:47.740)
that is the top papers in each category
Lex Fridman (2:10:50.260)
in each month or whatever.
Lex Fridman (2:10:51.260)
And then like people want to put that in their wall
Lex Fridman (2:10:53.060)
and in the lab.
Lex Fridman (2:10:53.900)
And like, so I do think we need to sort of change,
Lex Fridman (2:10:57.580)
I don't know, like the traditional folks in academia
Brian Armstrong (2:10:59.980)
or science would probably think this is like crazy idea.
Lex Fridman (2:11:02.540)
But I think we need to change the culture
Brian Armstrong (2:11:04.580)
to not celebrate getting published in paywall journals,
Lex Fridman (2:11:09.360)
almost like friends don't let friends publish
Brian Armstrong (2:11:11.420)
in like paywall journals.
Lex Fridman (2:11:14.140)
Like, cause that's, it's just not helping humanity.
Lex Fridman (2:11:16.500)
So like, you know, it should be more prestigious
Lex Fridman (2:11:19.060)
to publish in an open science way and get the top spot.
Brian Armstrong (2:11:23.940)
That should be celebrated above being published
Lex Fridman (2:11:25.740)
in whatever, I don't even want to name one of them,
Lex Fridman (2:11:27.540)
you know?
Lex Fridman (2:11:28.380)
Well, there's currently,
Brian Armstrong (2:11:30.100)
the culture has already shifted
Lex Fridman (2:11:31.300)
to where almost everybody publishes on archive
Lex Fridman (2:11:33.660)
and by archive and so on.
Lex Fridman (2:11:34.900)
Yeah.
Brian Armstrong (2:11:36.100)
But, so that the culture is there on that scene,
Lex Fridman (2:11:39.740)
friends don't let friends not publish open,
Lex Fridman (2:11:42.400)
but then the prestige thing is missing,
Lex Fridman (2:11:44.700)
which is like anyone can publish an archive.
Lex Fridman (2:11:48.020)
So how do you know it's actually a strong paper?
Lex Fridman (2:11:50.040)
Now, funny enough, even with the crappy systems we have now,
Brian Armstrong (2:11:55.000)
word of mouth is powerful.
Lex Fridman (2:11:56.580)
Like you have a, like citation system is pretty powerful.
Lex Fridman (2:12:00.280)
So like you say, okay, this is a strong paper.
Lex Fridman (2:12:02.700)
We don't need reviewers, our human eyes are the reviewers,
Brian Armstrong (2:12:06.180)
like the community is the reviewers.
Lex Fridman (2:12:08.540)
So it's already, like that part is there,
Lex Fridman (2:12:11.060)
but it would be nice to have like, you know,
Lex Fridman (2:12:15.980)
nature level, like this is respect,
Brian Armstrong (2:12:18.460)
this is a respectful accomplishment.
Lex Fridman (2:12:21.060)
Yeah.
Lex Fridman (2:12:21.900)
And something like a leaderboard,
Lex Fridman (2:12:23.780)
but a stable kind of system.
Brian Armstrong (2:12:25.980)
Yeah.
Lex Fridman (2:12:26.820)
And I should mention too,
Lex Fridman (2:12:27.660)
so there's a crypto angle to this too,
Lex Fridman (2:12:29.100)
which is, so research hub has a coin associated
Brian Armstrong (2:12:31.540)
with research coin.
Lex Fridman (2:12:32.580)
And it's basically, if people, you know,
Brian Armstrong (2:12:34.400)
upvote your paper or like support it,
Lex Fridman (2:12:37.100)
you'll accumulate more research coin,
Brian Armstrong (2:12:38.980)
which is basically like rep or like a reward token.
Lex Fridman (2:12:42.180)
And so that is a way to, I guess,
Brian Armstrong (2:12:45.340)
measure the community's collective view of that paper,
Lex Fridman (2:12:49.500)
a form of peer review.
Lex Fridman (2:12:51.180)
And it can even be weighted by like the reputation
Lex Fridman (2:12:53.140)
of the people voting on it and that sort of thing over time.
Brian Armstrong (2:12:57.100)
Yeah, I think the last thing I'll just say is that,
Lex Fridman (2:12:59.500)
so I think from a rep, like a prestige point of view,
Brian Armstrong (2:13:03.660)
it won't start off that way.
Lex Fridman (2:13:05.100)
It'll probably start off like being a little more quirky,
Brian Armstrong (2:13:07.440)
like, you know, like remember when YouTube first started,
Lex Fridman (2:13:10.100)
it was like people posting weird cat videos and stuff.
Brian Armstrong (2:13:13.260)
And, but now like, you know,
Lex Fridman (2:13:14.400)
if you have a million subscribers on YouTube,
Brian Armstrong (2:13:16.020)
that's probably better than getting like a TV show on NBC
Lex Fridman (2:13:18.460)
or whoever the traditional gatekeeper was.
Lex Fridman (2:13:21.000)
So my hope, it might take 10 years, 20 years, whatever,
Lex Fridman (2:13:23.460)
but I'm hoping that this can sort of be the new
Brian Armstrong (2:13:27.140)
prestigious way that young people publish in science
Lex Fridman (2:13:30.060)
and it'll come to be viewed as more prestigious.
Brian Armstrong (2:13:32.460)
The journals, the traditional journals
Lex Fridman (2:13:34.100)
will be viewed as old fashioned.
Brian Armstrong (2:13:36.020)
Well, it's definitely a system that could do a lot better.
Lex Fridman (2:13:41.440)
And there's a lot of incredible, brilliant people
Brian Armstrong (2:13:43.380)
doing science, they deserve better, the better platforms.
Lex Fridman (2:13:47.500)
So another thing you're taking on and helping out with
Brian Armstrong (2:13:50.260)
is this new limit, which is looking at longevity.
Lex Fridman (2:13:53.820)
What's the idea there?
Brian Armstrong (2:13:55.660)
Yeah, okay, so as you can see, I'm excited about science.
Lex Fridman (2:13:58.080)
Like I think, you know, science is sort of the,
Brian Armstrong (2:14:01.140)
basically if you get scientific innovation,
Lex Fridman (2:14:03.300)
then you get better products and you get better
Brian Armstrong (2:14:06.340)
economic growth and then you get all kinds of like surplus
Lex Fridman (2:14:09.700)
in society that can go to arts and philosophy
Lex Fridman (2:14:12.500)
and like all kinds of stuff.
Lex Fridman (2:14:13.340)
But with new limits, so yeah, I kind of got,
Brian Armstrong (2:14:17.660)
I started hosting some dinners with scientists last year
Lex Fridman (2:14:21.080)
and I was learning about all kinds of the latest stuff
Brian Armstrong (2:14:23.620)
happening in bio and there's a lot of really cool stuff
Lex Fridman (2:14:26.340)
happening with like CAR T cells and CRISPR
Lex Fridman (2:14:28.340)
and all these things.
Lex Fridman (2:14:29.180)
And anyway, one of the topics I started to learn more about
Brian Armstrong (2:14:32.740)
was something called cell reprogramming.
Lex Fridman (2:14:35.140)
And, you know, people maybe have heard of this
Brian Armstrong (2:14:38.700)
induced pluripotent stem cells where you could take
Lex Fridman (2:14:40.700)
like a skin cell and turn it back into a stem cell.
Lex Fridman (2:14:43.260)
And Shinya Yamanaka won the Nobel prize for this work
Lex Fridman (2:14:46.900)
that was done in 2006.
Brian Armstrong (2:14:49.020)
And, you know, it's kind of a crazy thing.
Lex Fridman (2:14:51.780)
You can turn one cell into another type of cell.
Brian Armstrong (2:14:54.300)
Well, people recently have been experimenting
Lex Fridman (2:14:58.020)
with different types of transcription factors
Brian Armstrong (2:15:01.280)
that would either not,
Lex Fridman (2:15:02.900)
you don't want the cell to go all the way back
Brian Armstrong (2:15:04.140)
to being a stem cell.
Lex Fridman (2:15:05.600)
You can end up getting like cancerous cells
Lex Fridman (2:15:07.320)
and things like that.
Lex Fridman (2:15:08.160)
But you want it basically the cell to revert
Brian Armstrong (2:15:10.520)
a little bit earlier in its, you know,
Lex Fridman (2:15:13.380)
it would call it the Waddington landscape,
Lex Fridman (2:15:15.020)
but it's basically like go, become act,
Lex Fridman (2:15:17.660)
start to act like a bit of a younger cell,
Lex Fridman (2:15:19.700)
but not to de differentiate and become more like a stem cell.
Lex Fridman (2:15:23.020)
And so I decided this might be an interesting area
Brian Armstrong (2:15:25.760)
to go fund.
Lex Fridman (2:15:27.020)
I think that that team has come together.
Brian Armstrong (2:15:28.780)
There's like some really talented people
Lex Fridman (2:15:30.900)
who've come together to help get that off the ground.
Lex Fridman (2:15:32.540)
And they're basically building a platform
Lex Fridman (2:15:36.080)
that can test a lot of different transcription factors
Brian Armstrong (2:15:38.820)
on different cell types and hopefully find ways
Lex Fridman (2:15:41.420)
to rejuvenate different types of cells and tissues
Brian Armstrong (2:15:44.380)
to extend human health span.
Lex Fridman (2:15:45.520)
I mean, the moonshot goal here, you know,
Brian Armstrong (2:15:47.760)
the get to Mars is that there could be some therapy here
Lex Fridman (2:15:51.700)
that in, I don't know, 10 or 20 years that you take
Lex Fridman (2:15:54.260)
and from a whole body point of view
Lex Fridman (2:15:56.580)
is sort of rejuvenating tissue,
Brian Armstrong (2:15:58.340)
not just one type of tissue like your immune system,
Lex Fridman (2:16:00.740)
but eventually your whole body, maybe even your brain
Lex Fridman (2:16:02.560)
so that, you know, we don't have that issue
Lex Fridman (2:16:04.900)
where people who are older have trouble learning
Brian Armstrong (2:16:06.540)
or they're more ossified in their thinking.
Lex Fridman (2:16:10.100)
To me, this is just, I always think about, you know,
Lex Fridman (2:16:13.700)
it's actually a little inspired by Elon, right?
Lex Fridman (2:16:15.540)
Is like, what are some of the biggest things in the world
Brian Armstrong (2:16:18.060)
like that are probably high technology risk,
Lex Fridman (2:16:20.520)
but if they did work,
Brian Armstrong (2:16:21.540)
maybe they're kind of low chance of working,
Lex Fridman (2:16:23.560)
but if they did work would have enormous impact.
Brian Armstrong (2:16:26.040)
I like the idea of trying hard tech problems,
Lex Fridman (2:16:28.380)
especially for people like founders like me
Brian Armstrong (2:16:30.880)
who've made some money in software,
Lex Fridman (2:16:32.460)
which I think we're in kind of like a golden age of software
Lex Fridman (2:16:34.700)
so there's like fortunes to be made,
Lex Fridman (2:16:36.540)
but if you do make some money in that,
Brian Armstrong (2:16:38.680)
my hope is people will like do atoms, not bits, you know,
Lex Fridman (2:16:42.700)
and try some of the harder things like in biotech
Brian Armstrong (2:16:45.020)
or, you know, I guess he's doing cars and rockets and stuff,
Lex Fridman (2:16:48.460)
but anyway, I think we should try hard tech
Brian Armstrong (2:16:52.500)
or, you know, physical science problems as well
Lex Fridman (2:16:54.640)
and see if that can advance for team human.
Brian Armstrong (2:16:58.140)
Yeah, so he's also doing bio with Neuralink
Lex Fridman (2:17:02.740)
and I feel like bio is tough because it's messy.
Brian Armstrong (2:17:07.340)
We don't understand it as well.
Lex Fridman (2:17:08.380)
We don't understand it.
Brian Armstrong (2:17:09.460)
The risk is higher in terms of, not the risk is higher,
Lex Fridman (2:17:14.240)
but like you have to deal with the actual sort of,
Brian Armstrong (2:17:18.260)
to get to human, to get to stuff
Lex Fridman (2:17:21.500)
where it could be therapies for actual human bodies
Brian Armstrong (2:17:24.680)
is tricky because you have to prove that it's safe,
Lex Fridman (2:17:29.620)
it's effective, all those kinds of things with FDA.
Brian Armstrong (2:17:33.560)
I mean, it's just, it's tricky.
Lex Fridman (2:17:34.880)
It's very difficult.
Brian Armstrong (2:17:36.160)
It's a long journey.
Lex Fridman (2:17:38.520)
I mean.
Brian Armstrong (2:17:39.360)
If I can give a quick plug.
Lex Fridman (2:17:41.700)
So yeah, I'm on the board at New Limit.
Brian Armstrong (2:17:43.420)
We're hiring talented scientists
Lex Fridman (2:17:45.160)
that are interested in the cellular programming space.
Brian Armstrong (2:17:47.040)
They don't necessarily have to be coming
Lex Fridman (2:17:48.840)
from like an aging background or anything like that.
Brian Armstrong (2:17:50.720)
There's sort of a small group of people doing even.
Lex Fridman (2:17:53.120)
So this is a new thing?
Lex Fridman (2:17:54.240)
This is a, is New Limit relatively new?
Lex Fridman (2:17:56.400)
Yeah, it's very new.
Brian Armstrong (2:17:57.640)
There's a small team today, just a handful of people.
Lex Fridman (2:18:00.700)
And so we're hiring more there.
Brian Armstrong (2:18:03.660)
If people are excited about that space, reach out.
Lex Fridman (2:18:05.600)
And same thing for Research Hub.
Brian Armstrong (2:18:07.920)
There's a small team there that's really awesome.
Lex Fridman (2:18:10.100)
That's doing more like software engineering,
Brian Armstrong (2:18:12.400)
design, product, that kind of stuff.
Lex Fridman (2:18:15.040)
What advice would you give?
Brian Armstrong (2:18:16.760)
If you put on your old, wise, sage hat,
Lex Fridman (2:18:21.240)
what advice would you give to young people today?
Brian Armstrong (2:18:24.000)
High school, maybe undergrad and college about life.
Lex Fridman (2:18:29.560)
So like career, having a career they can be proud of,
Brian Armstrong (2:18:34.200)
or maybe a life they can be proud of.
Lex Fridman (2:18:37.720)
So people can do whatever they want to be happy, right?
Lex Fridman (2:18:40.440)
So there's not one way to do it.
Lex Fridman (2:18:42.360)
I do think that some people,
Brian Armstrong (2:18:44.840)
a particular type of people out there,
Lex Fridman (2:18:46.440)
a lot of people actually,
Brian Armstrong (2:18:47.280)
they want to have an impact on the world.
Lex Fridman (2:18:48.480)
That's how they get a sense of fulfillment, right?
Lex Fridman (2:18:50.960)
So I mean, you need to have like health, physical health.
Lex Fridman (2:18:53.680)
You need to have good relationships,
Brian Armstrong (2:18:55.040)
like there's lots of things.
Lex Fridman (2:18:56.440)
But most people want to do something important.
Brian Armstrong (2:18:58.440)
They want to have fulfilling work,
Lex Fridman (2:18:59.720)
a way that they can feel like they're contributing.
Brian Armstrong (2:19:02.800)
I think a lot of people, young people today are thinking
Lex Fridman (2:19:05.240)
like I should be an activist or something like that.
Lex Fridman (2:19:09.560)
And there's people in the world who have power
Lex Fridman (2:19:11.480)
and a lot of people who don't, I don't have power.
Lex Fridman (2:19:13.840)
And so the way to change the world is to speak truth
Lex Fridman (2:19:18.120)
to power or like criticize power
Lex Fridman (2:19:20.440)
and try to pressure them to change.
Lex Fridman (2:19:25.400)
To me, I don't think that's the right way
Brian Armstrong (2:19:27.040)
to actually have an impact on the world
Lex Fridman (2:19:28.880)
because everybody has probably,
Brian Armstrong (2:19:33.720)
I think people have more power than they realize.
Lex Fridman (2:19:36.840)
And by the way, it's easy to be a critic.
Brian Armstrong (2:19:39.520)
It's hard to actually change these things and fix it.
Lex Fridman (2:19:42.200)
And so you'll get a lot of accolades
Brian Armstrong (2:19:44.680)
from friends and things like that
Lex Fridman (2:19:46.080)
if you kind of go around criticizing, it's easy to do.
Brian Armstrong (2:19:48.600)
Like everything is broken and could be better,
Lex Fridman (2:19:51.520)
including stuff I'm working on.
Brian Armstrong (2:19:53.360)
I find like so frustrating.
Lex Fridman (2:19:56.040)
There's a million things I want to be better about
Brian Armstrong (2:19:57.640)
like what we're doing in Coinbase.
Lex Fridman (2:20:01.200)
So be the person in the arena,
Brian Armstrong (2:20:04.120)
like that Theodore Roosevelt quote,
Lex Fridman (2:20:05.520)
I think he said it right.
Brian Armstrong (2:20:06.960)
Like go chew glass and stare into the abyss.
Lex Fridman (2:20:10.160)
Like if you really want to have an impact,
Brian Armstrong (2:20:11.840)
either join a company that has a mission
Lex Fridman (2:20:14.560)
that is trying to fix the thing you're passionate about
Brian Armstrong (2:20:16.200)
or start that company if it doesn't exist
Lex Fridman (2:20:18.960)
or start a charity if it's not suitable
Brian Armstrong (2:20:21.640)
to be a company or whatever it is,
Lex Fridman (2:20:23.080)
but go try to be a part of the solution.
Brian Armstrong (2:20:25.680)
Don't just criticize or be a part of the problem.
Lex Fridman (2:20:30.320)
My hope is that more people can realize
Brian Armstrong (2:20:37.520)
that they actually can have a meaningful impact that way.
Lex Fridman (2:20:39.880)
And I think that to me,
Brian Armstrong (2:20:41.720)
technology is actually one of the most important ways
Lex Fridman (2:20:44.360)
to improve the world.
Brian Armstrong (2:20:45.480)
Like if you look at climate change,
Lex Fridman (2:20:49.200)
like a lot of the best ideas like carbon sequestration,
Lex Fridman (2:20:51.960)
all these things, it's a technology thing, right?
Lex Fridman (2:20:53.640)
If you want to try to fix education,
Brian Armstrong (2:20:55.960)
it's like look at like Khan Academy
Lex Fridman (2:20:57.400)
and all this stuff going online, right?
Brian Armstrong (2:20:59.080)
If you want to fix, you know, whatever transportation
Lex Fridman (2:21:02.760)
and like the financial system and global freedom
Lex Fridman (2:21:06.280)
and like equality of all these things,
Lex Fridman (2:21:07.840)
like there's typically the way to get something changed
Brian Armstrong (2:21:11.240)
in the world today is with technology.
Lex Fridman (2:21:13.280)
And so I do think people, it's very bizarre to me
Brian Armstrong (2:21:15.880)
that there's this kind of like anti tech thing going on.
Lex Fridman (2:21:19.200)
Look, nothing is perfect.
Brian Armstrong (2:21:20.520)
Like if you create something new
Lex Fridman (2:21:21.640)
and like tens of millions of people use it
Brian Armstrong (2:21:23.520)
or billions of people use it,
Lex Fridman (2:21:24.400)
it's like there's going to be some bad people
Lex Fridman (2:21:26.440)
who use it too, okay?
Lex Fridman (2:21:27.360)
And there's, you know, society is complicated,
Lex Fridman (2:21:29.520)
but like I think most of these things have been net positive
Lex Fridman (2:21:33.040)
because most people in the world are good
Brian Armstrong (2:21:34.640)
is at least my view.
Lex Fridman (2:21:36.200)
So yes, we can mitigate like the 1% of bad people
Brian Armstrong (2:21:39.120)
trying to abuse something,
Lex Fridman (2:21:41.000)
but 99% of people in the world are good.
Lex Fridman (2:21:42.640)
And the way you can improve the world is with technology,
Lex Fridman (2:21:45.040)
joining companies, starting companies
Brian Armstrong (2:21:46.480)
that are working on the right stuff.
Lex Fridman (2:21:48.260)
So I hope more young people do that.
Lex Fridman (2:21:50.920)
And just, if you're not sure what to do,
Lex Fridman (2:21:53.560)
like just get started with anything.
Brian Armstrong (2:21:54.880)
That's how you learn.
Lex Fridman (2:21:55.780)
And basically have the optimism
Brian Armstrong (2:21:57.800)
that you have the power to do the change.
Lex Fridman (2:22:00.240)
So it's easy to distract yourself by being the critic.
Brian Armstrong (2:22:06.240)
That's almost like acknowledging to yourself
Lex Fridman (2:22:08.200)
that that's all you can be,
Lex Fridman (2:22:09.600)
but basically everybody has the power to be the fixer.
Lex Fridman (2:22:16.160)
I like, chew glass and look into the abyss.
Brian Armstrong (2:22:21.600)
That's much more fun than it sounds.
Lex Fridman (2:22:25.760)
What do you think is the meaning of this whole thing?
Lex Fridman (2:22:27.400)
Why are we here?
Lex Fridman (2:22:29.040)
Life.
Lex Fridman (2:22:29.960)
Yep, what's the meaning of life?
Lex Fridman (2:22:31.760)
What's this existence we got?
Brian Armstrong (2:22:34.120)
You're trying to increase the amount of economic freedom
Lex Fridman (2:22:36.380)
on this planet or trying to alleviate
Brian Armstrong (2:22:38.240)
some of the suffering.
Lex Fridman (2:22:39.500)
Yeah.
Lex Fridman (2:22:40.340)
But why?
Lex Fridman (2:22:41.840)
I don't really think there is any point to life.
Brian Armstrong (2:22:46.000)
You know, somebody once told me,
Lex Fridman (2:22:50.600)
you know, if you go into these like,
Brian Armstrong (2:22:51.680)
kind of really big existential questions,
Lex Fridman (2:22:54.600)
it can get a little scary
Brian Armstrong (2:22:55.680)
because like you stare off the cliff
Lex Fridman (2:22:58.160)
and there's like, there's nothing there.
Brian Armstrong (2:22:59.360)
You know, this one person told me one time they were like,
Lex Fridman (2:23:03.920)
you know, Brian, you should probably snorkel, don't scuba.
Brian Armstrong (2:23:08.180)
I guess, and I think they were trying to say like,
Lex Fridman (2:23:11.380)
I, some of my friends have done this, right?
Brian Armstrong (2:23:13.080)
They'll go to like, you know, epic meditation retreats
Lex Fridman (2:23:16.940)
and like, they'll kind of come back
Brian Armstrong (2:23:19.360)
with all this existential dread of like,
Lex Fridman (2:23:21.580)
what's the meaning of it all.
Lex Fridman (2:23:22.420)
And then like, as far as I can tell,
Lex Fridman (2:23:24.120)
we are just some organic molecules in the ocean
Brian Armstrong (2:23:27.740)
started like dividing and replicating
Lex Fridman (2:23:30.000)
and the selfish gene and all this stuff,
Brian Armstrong (2:23:32.500)
like basically ended up here.
Lex Fridman (2:23:34.600)
And our only, it's some kind of like really naive algorithm
Brian Armstrong (2:23:38.080)
that's just kind of trying to get us
Lex Fridman (2:23:39.760)
to survive and replicate.
Lex Fridman (2:23:40.960)
And we have DNA just like every other animal.
Lex Fridman (2:23:43.600)
And so we happened to develop
Brian Armstrong (2:23:45.240)
these like really cool neocortexes.
Lex Fridman (2:23:46.920)
And so now we're sort of self aware
Lex Fridman (2:23:48.600)
and we have all these big questions
Lex Fridman (2:23:51.000)
and maybe we'll create another, you know,
Brian Armstrong (2:23:54.080)
as computers get better,
Lex Fridman (2:23:55.000)
we'll create the simulation inside our thing.
Lex Fridman (2:23:57.080)
And I think it's cool.
Lex Fridman (2:23:58.780)
Like we should basically,
Brian Armstrong (2:23:59.800)
I just want to keep watching the movie, you know, unfold.
Lex Fridman (2:24:02.680)
That's part of why I want to work on,
Brian Armstrong (2:24:04.640)
like New Limit is really cool.
Lex Fridman (2:24:05.920)
Cause it's helped, if people can live longer,
Brian Armstrong (2:24:07.720)
whether that's uploading their brain to the cloud
Lex Fridman (2:24:10.680)
or, you know, basically through we get biology to work
Brian Armstrong (2:24:14.300)
or the strong AI to work or whatever.
Lex Fridman (2:24:17.140)
One of those two hopefully works out.
Lex Fridman (2:24:18.760)
And then we get to keep watching the movie
Lex Fridman (2:24:20.680)
and see how it all unfolds.
Brian Armstrong (2:24:22.160)
I think that's fun.
Lex Fridman (2:24:23.360)
And so I don't know if that's like an answer,
Lex Fridman (2:24:25.640)
but I guess I don't think there's any real purpose.
Lex Fridman (2:24:27.640)
So just try to have fun.
Brian Armstrong (2:24:28.640)
Well, the cool thing is that we get to write the movie
Lex Fridman (2:24:32.760)
as we watch it.
Brian Armstrong (2:24:34.480)
Yeah, that's exactly right.
Lex Fridman (2:24:36.640)
I mean, that's like the Steve Jobs quote and all that,
Brian Armstrong (2:24:38.680)
where he's like, everything around you was invented
Lex Fridman (2:24:40.400)
by somebody who just was like,
Brian Armstrong (2:24:42.400)
this was a crazy idea they thought up.
Lex Fridman (2:24:43.560)
So once you realize you can kind of do anything you want,
Brian Armstrong (2:24:51.000)
then that's what you start to go,
Lex Fridman (2:24:53.040)
you start to go try crazier stuff.
Brian Armstrong (2:24:55.120)
I mean, this is another one of those areas where,
Lex Fridman (2:24:57.720)
not to get too out there,
Lex Fridman (2:24:58.560)
but like, you know, when you're,
Lex Fridman (2:25:00.280)
I think you can build your comfort zone
Brian Armstrong (2:25:02.060)
around like people being upset with you.
Lex Fridman (2:25:03.980)
You can also build your range
Lex Fridman (2:25:06.940)
of what you think is possible, right?
Lex Fridman (2:25:08.180)
Like when I was in my 20s,
Brian Armstrong (2:25:10.480)
I was like reading all these books
Lex Fridman (2:25:12.160)
about like self improvement and goal,
Lex Fridman (2:25:13.880)
how to write down your goals and stuff.
Lex Fridman (2:25:15.080)
And my goals were like,
Brian Armstrong (2:25:17.960)
someday I wanna make $100,000 a year or something like,
Lex Fridman (2:25:21.920)
and that was, and you know,
Lex Fridman (2:25:25.420)
and it seemed like a little outlandish or what,
Lex Fridman (2:25:28.080)
I wrote down these goals,
Brian Armstrong (2:25:28.980)
like I wanna own rental property or something anyway.
Lex Fridman (2:25:31.680)
And then I slowly started to get some of these things done
Brian Armstrong (2:25:35.120)
over a couple of years.
Lex Fridman (2:25:35.960)
And so I started to think a little bigger.
Brian Armstrong (2:25:38.460)
I remember one time I wrote down this goal where I was like,
Lex Fridman (2:25:41.060)
what's the craziest thing I could think of?
Lex Fridman (2:25:42.920)
And I was like, what if I, I wanna write,
Lex Fridman (2:25:44.680)
I wanna start a billion dollar tech company.
Brian Armstrong (2:25:47.320)
That's crazy.
Lex Fridman (2:25:48.240)
And I had never started like a million dollar tech company
Brian Armstrong (2:25:50.960)
or any tech company really.
Lex Fridman (2:25:52.200)
So what business did I have writing that goal down?
Brian Armstrong (2:25:54.960)
I remember I wrote that on a piece of paper like,
Lex Fridman (2:25:58.440)
like probably every day for a year or something almost,
Lex Fridman (2:26:00.980)
right?
Lex Fridman (2:26:01.820)
I don't know if it was every day,
Lex Fridman (2:26:02.640)
but like I wrote it down a lot.
Lex Fridman (2:26:03.680)
And so little things started to happen.
Brian Armstrong (2:26:06.680)
I was like, all right,
Lex Fridman (2:26:07.560)
well, maybe I should move back to the Bay area
Brian Armstrong (2:26:09.280)
from Buenos Aires.
Lex Fridman (2:26:10.120)
Maybe I should try to apply to Y Combinator or whatever.
Brian Armstrong (2:26:13.080)
Like, and I started thinking about these ideas.
Lex Fridman (2:26:15.280)
And so whatever it gets you fired up,
Brian Armstrong (2:26:16.960)
it doesn't have to be like some company goal
Lex Fridman (2:26:18.760)
or startup thing.
Lex Fridman (2:26:19.600)
It could be anything, right?
Lex Fridman (2:26:21.620)
Maybe you wanna publish a book
Brian Armstrong (2:26:22.600)
or like do something creatively or whatever.
Lex Fridman (2:26:25.120)
Anyway, I think like within seven years, no,
Brian Armstrong (2:26:32.160)
it's probably more like 10 years
Lex Fridman (2:26:33.280)
of me writing that goal down.
Brian Armstrong (2:26:36.160)
Coinbase had a valuation over a billion dollars.
Lex Fridman (2:26:38.800)
So it was out of my realm of what was even possible.
Lex Fridman (2:26:42.880)
And then within 10 years,
Lex Fridman (2:26:44.640)
you can accomplish more in 10 years than you think,
Brian Armstrong (2:26:46.680)
less in a year than you think.
Lex Fridman (2:26:48.480)
So now I'm like, okay, what's the next goal?
Brian Armstrong (2:26:51.680)
What's the, okay, maybe I wanna get a billion people
Lex Fridman (2:26:55.640)
accessing the open financial system
Brian Armstrong (2:26:57.580)
through our products every day.
Lex Fridman (2:27:00.040)
That would be cool for humanity.
Lex Fridman (2:27:01.680)
And that's a pretty crazy goal.
Lex Fridman (2:27:03.480)
Like there's only 8 billion people or something, right?
Lex Fridman (2:27:05.080)
So there's one out of eight.
Lex Fridman (2:27:07.940)
Or maybe I can radically,
Brian Armstrong (2:27:09.760)
like if I make some like the right investments or whatever,
Lex Fridman (2:27:12.780)
I can like help radically extend human health span
Lex Fridman (2:27:16.580)
or whatever, right?
Lex Fridman (2:27:18.840)
So try crazier stuff.
Brian Armstrong (2:27:21.240)
I don't know, even if it doesn't work,
Lex Fridman (2:27:22.520)
like hopefully you'll advance the state of affairs,
Brian Armstrong (2:27:27.560)
like something interesting will happen.
Lex Fridman (2:27:29.120)
And so most people today,
Brian Armstrong (2:27:31.160)
they look at people trying this stuff and they're like,
Lex Fridman (2:27:33.500)
oh my God, they're so, they're a genius or whatever.
Lex Fridman (2:27:35.800)
And it's like, or they're an idiot.
Lex Fridman (2:27:37.040)
Like one of the two, neither one are true.
Brian Armstrong (2:27:39.600)
It's just like anybody can start
Lex Fridman (2:27:42.020)
by thinking about what they want and then like go for it.
Lex Fridman (2:27:45.200)
And then once you get that,
Lex Fridman (2:27:46.400)
like go for something a little bigger
Lex Fridman (2:27:47.480)
and like you just have fun with it.
Lex Fridman (2:27:48.920)
And the universe is a way of smiling and helping you out
Brian Armstrong (2:27:53.560)
if you just write it down and you dream big.
Lex Fridman (2:27:57.440)
There's something about just karma,
Brian Armstrong (2:27:59.800)
about the energy you put into this world.
Lex Fridman (2:28:03.000)
Other people will help you out, doors will open.
Brian Armstrong (2:28:05.240)
You'll notice that the doors opened
Lex Fridman (2:28:07.460)
and you actually have a shot at making it happen.
Brian Armstrong (2:28:10.600)
It's a funny world.
Lex Fridman (2:28:12.240)
Yeah, I mean, I don't really subscribe
Brian Armstrong (2:28:14.360)
to all like the woo woo interpretations of this,
Lex Fridman (2:28:16.040)
but my very rational brain interpretation of it
Brian Armstrong (2:28:18.360)
is that if you just wake up every day
Lex Fridman (2:28:20.200)
and write down like what you want to get done
Lex Fridman (2:28:22.160)
and towards your longer goals, your larger goals,
Lex Fridman (2:28:24.400)
it's just on your mind that day.
Lex Fridman (2:28:26.580)
So you start to notice opportunities
Lex Fridman (2:28:28.040)
and you think about it more.
Lex Fridman (2:28:29.380)
So Brian, thank you for dreaming big.
Lex Fridman (2:28:32.080)
Thank you for doing what you're doing,
Brian Armstrong (2:28:33.440)
doing incredible engineering at scale,
Lex Fridman (2:28:37.140)
trying to help people from all over the world
Lex Fridman (2:28:39.600)
and actually helping me personally get more into crypto
Lex Fridman (2:28:43.360)
just cause it's so easy.
Lex Fridman (2:28:46.400)
So thank you so much.
Lex Fridman (2:28:48.080)
And thank you so much
Brian Armstrong (2:28:49.600)
for giving your extremely valuable time today
Lex Fridman (2:28:51.920)
to this awesome conversation.
Brian Armstrong (2:28:53.320)
Thanks for your awesome podcast.
Lex Fridman (2:28:55.080)
I love it and I listen to it often.
Brian Armstrong (2:28:57.560)
Thanks for listening to this conversation
Lex Fridman (2:28:59.000)
with Brian Armstrong.
Brian Armstrong (2:29:00.520)
To support this podcast,
Lex Fridman (2:29:01.720)
please check out our sponsors in the description.
Lex Fridman (2:29:04.320)
And now let me leave you with some words
Lex Fridman (2:29:06.200)
from Benjamin Franklin.
Brian Armstrong (2:29:08.300)
An investment in knowledge pays the best interest.
Lex Fridman (2:29:13.000)
Thank you for listening and hope to see you next time.
Lex Fridman (30:02.080)
So I wonder how you stay in touch
Lex Fridman (30:04.360)
with the voice of the people
Brian Armstrong (30:05.520)
without being destroyed by the outrage.
Lex Fridman (30:08.800)
Is there any wisdom you have to that or?
Brian Armstrong (30:11.160)
I don't know about wisdom, but I've thought about this too,
Lex Fridman (30:14.440)
because yeah, you wanna always be open to feedback,
Brian Armstrong (30:19.080)
especially from people who have
Lex Fridman (30:20.160)
like your best interests at heart, right?
Lex Fridman (30:22.380)
And if you can become isolated from it
Lex Fridman (30:25.440)
and just like, you know, surrounded by yes people.
Lex Fridman (30:28.320)
And I mean, who knows, maybe like she and Putin
Lex Fridman (30:32.480)
and people like that are in situations I have no idea.
Lex Fridman (30:36.660)
But if you listen to too much of it
Lex Fridman (30:39.080)
and you just try to please everyone,
Brian Armstrong (30:40.260)
you'll never get anything done.
Lex Fridman (30:41.460)
And I mean, most of the best leaders are people
Brian Armstrong (30:44.880)
who they can act when they believe
Lex Fridman (30:47.900)
that they're doing something net positive
Brian Armstrong (30:49.740)
for the world and humanity.
Lex Fridman (30:51.520)
And they actually don't really care
Brian Armstrong (30:52.720)
if they piss off some portion of the people.
Lex Fridman (30:55.600)
Almost anything you're gonna do of significance
Brian Armstrong (30:58.160)
in the world today is gonna piss off 5% of people,
Lex Fridman (31:01.080)
maybe 49% of people or whatever, maybe 60%, I don't know.
Lex Fridman (31:04.840)
So you never wanna become so surrounded
Lex Fridman (31:07.700)
by people who just work for you and will say yes.
Lex Fridman (31:09.720)
And then you think like, well, I'm a genius
Lex Fridman (31:11.480)
and I'm like, that's how you become a dictator or whatever.
Lex Fridman (31:15.240)
But you also can't care so much about what people think
Lex Fridman (31:18.080)
because then you'll never do anything
Brian Armstrong (31:19.320)
that's truly authentic to yourself.
Lex Fridman (31:21.560)
One other thought on that, by the way,
Brian Armstrong (31:22.800)
I think it's a really good question.
Lex Fridman (31:25.120)
So I've thought about this a lot.
Brian Armstrong (31:26.520)
Like why, you know, people generally kind of hate on Zuck
Lex Fridman (31:29.560)
and they hate on Bill Gates and they hate on,
Brian Armstrong (31:33.400)
they don't really hate on Elon.
Lex Fridman (31:34.800)
Well, actually Elon has a lot of haters too,
Lex Fridman (31:36.040)
but it's a different thing.
Lex Fridman (31:37.360)
This is measured, this is measured, I was looking
Brian Armstrong (31:40.160)
at some surveys, so I think Zuck is the most,
Lex Fridman (31:43.800)
so loved and hated, right?
Brian Armstrong (31:46.520)
Zuckerberg is the most, both loved and hated.
Lex Fridman (31:50.720)
He's the most hated.
Lex Fridman (31:52.280)
And then I think it's Bill Gates and Elon is down there.
Lex Fridman (31:55.280)
I think it's like 40% hate Zuck, people asked.
Lex Fridman (31:59.880)
And then Elon is in the double digits,
Lex Fridman (32:02.600)
but low double digits.
Lex Fridman (32:04.200)
And so it's interesting, you just look at this data,
Lex Fridman (32:06.760)
ask yourself why.
Brian Armstrong (32:08.080)
Right, so I ask myself this sometimes too,
Lex Fridman (32:10.400)
because I don't claim to know any of these people well,
Lex Fridman (32:13.080)
but like I've met them briefly.
Lex Fridman (32:15.080)
And my impression is that they're actually all smart people
Brian Armstrong (32:17.720)
trying to do good things in the world.
Lex Fridman (32:18.760)
So there's not too much difference there,
Brian Armstrong (32:21.120)
despite public perception.
Lex Fridman (32:23.280)
So why is it that some are really hated and some aren't?
Brian Armstrong (32:25.440)
I mean, it's a complicated question.
Lex Fridman (32:28.080)
Obviously Zuck in his Facebook got blamed
Brian Armstrong (32:31.240)
for the whole election thing and all that didn't help.
Lex Fridman (32:34.240)
Social media has gotten a lot of pressure
Brian Armstrong (32:36.280)
just from like, hey, why aren't you solving
Lex Fridman (32:39.640)
all of society's tough problems?
Brian Armstrong (32:40.800)
It's like, well, they're just one company.
Lex Fridman (32:42.640)
But one thing I've noticed is that a lot of these people,
Brian Armstrong (32:47.520)
they have like Asperger's, right, a little bit.
Lex Fridman (32:49.800)
And sometimes people with Asperger's
Brian Armstrong (32:53.360)
don't really emote in the same way.
Lex Fridman (32:54.760)
And so I think it's almost a form of like
Brian Armstrong (33:00.840)
bias against their cognitive type or something,
Lex Fridman (33:05.840)
which is like that person doesn't emote right.
Brian Armstrong (33:07.960)
I don't trust their intentions.
Lex Fridman (33:11.320)
And the other thing I've thought about too
Brian Armstrong (33:14.440)
is that sometimes I think some leaders,
Lex Fridman (33:18.040)
like maybe Zuck or Bill Gates,
Brian Armstrong (33:19.320)
they can come across as like a little bit PR rehearsed.
Lex Fridman (33:22.960)
Like they're basically,
Brian Armstrong (33:24.920)
they're giving the PR approved answers
Lex Fridman (33:26.960)
where Elon just says whatever he thinks like to a fault.
Lex Fridman (33:29.720)
So even if people hate what he says or like,
Lex Fridman (33:31.320)
at least I believe it's authentic.
Lex Fridman (33:33.240)
So I've always thought about that too for myself.
Lex Fridman (33:34.960)
I'm like, how do I,
Lex Fridman (33:36.520)
cause you can fuck it up on both sides, right?
Lex Fridman (33:38.480)
Like if you just come out and you're like saying
Brian Armstrong (33:39.960)
whatever stream of consciousness,
Lex Fridman (33:42.240)
you'll often end up like pissing off people on your team
Brian Armstrong (33:44.680)
or like saying tripping over some like regulation
Lex Fridman (33:47.520)
that you've, there's all kinds of things
Brian Armstrong (33:50.400)
about running a public company,
Lex Fridman (33:51.680)
you can't say certain stuff.
Lex Fridman (33:53.120)
But if you're too PR approved and your answer is like,
Lex Fridman (33:56.360)
nobody trusts you what you're saying.
Lex Fridman (33:58.280)
And so anyway, this is something I think about a lot.
Lex Fridman (34:00.480)
I don't think I have the right answer,
Lex Fridman (34:01.560)
but I'm trying to find that balance.
Lex Fridman (34:02.800)
And more and more with the internet, there's a premium
Brian Armstrong (34:05.360)
on authenticity, just like you're saying.
Lex Fridman (34:07.600)
People really, really appreciate that.
Lex Fridman (34:09.080)
So for leaders, it's a challenge to be,
Lex Fridman (34:11.960)
how do I make sure I'm authentic,
Lex Fridman (34:15.640)
but also don't say stupid shit.
Lex Fridman (34:19.600)
And so that's an interesting thing.
Brian Armstrong (34:21.000)
I've noticed that just having interacted
Lex Fridman (34:23.720)
with a bunch of leaders that you have to be careful
Lex Fridman (34:28.920)
how much you surround yourself with PR folks.
Lex Fridman (34:31.960)
Because the best, I would say, let me just say a nice thing
Brian Armstrong (34:34.520)
about marketing and PR folks,
Lex Fridman (34:36.360)
the best marketing folks are extremely good.
Lex Fridman (34:40.720)
So they understand exactly what great marketing is
Lex Fridman (34:43.680)
and great PR, it's authenticity.
Brian Armstrong (34:46.080)
It's showing, revealing the beauty.
Lex Fridman (34:48.300)
As opposed to PR and marketing out of fear.
Brian Armstrong (34:51.500)
Oh, don't say that, don't say this, don't that.
Lex Fridman (34:54.440)
Because then you start living in this kind of,
Brian Armstrong (34:57.140)
that pushes you towards a bubble
Lex Fridman (34:58.520)
where you can't express the,
Brian Armstrong (35:00.280)
your beautiful quirks and weirdness
Lex Fridman (35:02.040)
and all that kind of stuff.
Lex Fridman (35:03.280)
And also the cool, the beautiful things
Lex Fridman (35:06.060)
about what you're doing.
Brian Armstrong (35:07.120)
I find like, especially with tech things,
Lex Fridman (35:10.280)
like even like Coinbase,
Brian Armstrong (35:12.120)
the way to reveal the beauty of it
Lex Fridman (35:15.080)
is not only by showing all the things you could do with it,
Lex Fridman (35:18.460)
but showing that there's great engineering
Lex Fridman (35:20.640)
going on underneath.
Lex Fridman (35:22.180)
So letting the nerds shine too.
Lex Fridman (35:23.760)
It doesn't have to be like these kind of commercials
Brian Armstrong (35:28.540)
where it's like a happy family using Coinbase
Lex Fridman (35:33.500)
to send a transaction about flowers for mom
Brian Armstrong (35:36.680)
or something like that.
Lex Fridman (35:37.680)
Like it could be also like gritty stuff and real stuff.
Lex Fridman (35:41.600)
So that's a general just observation I made.
Lex Fridman (35:45.280)
But you said you were talking about dark moments
Lex Fridman (35:46.960)
and that there's people on the internet
Lex Fridman (35:49.040)
that were pissed off that the site was down.
Lex Fridman (35:51.200)
And you said there might be something else.
Lex Fridman (35:54.080)
Yeah, so sleep deprived,
Brian Armstrong (35:55.860)
like a bunch of people on the internet were pissed at me.
Lex Fridman (35:57.800)
The balances were fucked up.
Brian Armstrong (35:59.440)
Like people were tweeting the company's over,
Lex Fridman (36:01.200)
just give the money back, whatever.
Lex Fridman (36:03.600)
And then, oh yeah, somebody posted.
Lex Fridman (36:07.800)
So we had all this, we didn't,
Brian Armstrong (36:09.520)
we started to get all these customer support inquiries
Lex Fridman (36:11.300)
and like, we only had like a few people at the company.
Lex Fridman (36:14.200)
And so we were backed up maybe like 20,000 support requests.
Lex Fridman (36:18.000)
So people couldn't get ahold of us.
Lex Fridman (36:19.760)
So somebody posted my cell phone number on Reddit
Lex Fridman (36:22.800)
and they were like, they were like,
Brian Armstrong (36:24.220)
if you need to get ahold of the CEO, whatever,
Lex Fridman (36:25.800)
cause everyone's upset about where their money is.
Lex Fridman (36:28.240)
So I remember we're in the office,
Lex Fridman (36:30.000)
it's like late at night.
Brian Armstrong (36:31.460)
We've been working like 12 hours, we're all sleep deprived.
Lex Fridman (36:33.560)
I'm trying to hack and like get this bug fixed.
Lex Fridman (36:36.640)
And we all need like food at the office.
Lex Fridman (36:38.680)
And so my phone has been blowing up all day
Brian Armstrong (36:41.040)
cause someone posted my phone number on the internet.
Lex Fridman (36:43.040)
And there's like a guy,
Brian Armstrong (36:45.360)
there was a guy like trying to deliver food
Lex Fridman (36:46.960)
and I needed to answer my phone
Brian Armstrong (36:48.480)
to like get the food from downstairs.
Lex Fridman (36:50.440)
So I was like, shit, I gotta just see who, if that's him.
Lex Fridman (36:53.000)
So I started answering the call and it's like,
Lex Fridman (36:55.960)
is this Brian?
Brian Armstrong (36:56.780)
I'm like, nope, wrong number, click.
Lex Fridman (36:58.480)
And I pick up the next call.
Brian Armstrong (37:00.920)
It's like every, when I finished the call,
Lex Fridman (37:02.640)
another call is like coming in.
Lex Fridman (37:03.480)
So I was like, I'm a reporter from Japan,
Lex Fridman (37:06.400)
like asking about a security, nope, wrong number, click.
Lex Fridman (37:09.040)
And then I like, finally I get the delivery guy downstairs,
Lex Fridman (37:11.120)
bring the food up.
Brian Armstrong (37:11.960)
We were all like surviving to like fix this bug.
Lex Fridman (37:17.080)
I remember there was just basically a point that night
Brian Armstrong (37:18.980)
where I was like, fuck, I need to just,
Lex Fridman (37:20.660)
I basically just curled up on like a ball on the floor.
Lex Fridman (37:24.440)
And I just like cried for a little bit.
Lex Fridman (37:28.440)
I think I let myself just kind of wallow in self pity,
Brian Armstrong (37:31.040)
kind of took a nap for about five minutes.
Lex Fridman (37:32.760)
And I was like, let's fucking solve this.
Lex Fridman (37:35.160)
And I like, you know, stop being like a little whatever
Lex Fridman (37:38.320)
and like got back up.
Brian Armstrong (37:39.800)
Sleep deprivation combined with just the stress
Lex Fridman (37:42.200)
and the pressure of the site going down
Lex Fridman (37:44.720)
and everybody wants the site to be up.
Lex Fridman (37:47.080)
Just the pressure from people
Lex Fridman (37:48.640)
and the number of users is growing and growing and growing.
Lex Fridman (37:51.360)
So that pressure is just mentally, mentally tough.
Lex Fridman (37:54.600)
What was your source of strength during that time?
Lex Fridman (37:58.320)
Like what, like somebody that patted you on the back
Lex Fridman (38:02.100)
and said, we got this.
Lex Fridman (38:04.160)
Yeah, well, it definitely helped to have a co founder.
Brian Armstrong (38:06.800)
So, you know, there's like that old saying about
Lex Fridman (38:10.000)
it's better to be in a great relationship than to be single,
Lex Fridman (38:12.280)
but it's better to be single than in a bad relationship.
Lex Fridman (38:14.000)
So co founders actually blow up a lot of companies too.
Lex Fridman (38:17.320)
But when you find the right co founder,
Lex Fridman (38:18.680)
which I was lucky to find with, with Fred or some,
Brian Armstrong (38:21.560)
that was very important.
Lex Fridman (38:22.520)
There was definitely moments where, you know,
Brian Armstrong (38:24.920)
I was like kind of, you know, at the width end or whatever.
Lex Fridman (38:28.840)
And he was like, it's like, dude, let's rally.
Brian Armstrong (38:31.600)
Like, and he basically carried the team, you know,
Lex Fridman (38:33.440)
a couple of times, like in really key moments.
Lex Fridman (38:35.440)
What advice would you give to startup founders
Lex Fridman (38:39.060)
about this particular stage about surviving it
Brian Armstrong (38:43.480)
to the five and through the five employees stage
Lex Fridman (38:46.760)
where you were?
Brian Armstrong (38:47.600)
Yeah, well, if your pre product market fit,
Lex Fridman (38:50.040)
the best advice that I have from that period
Brian Armstrong (38:52.760)
is action produces information.
Lex Fridman (38:55.800)
So just like keep doing stuff, you know,
Brian Armstrong (38:58.800)
I remember like Paul Graham, Paul Graham had this great
Lex Fridman (39:04.920)
line like that.
Brian Armstrong (39:05.740)
I think that's his line.
Lex Fridman (39:06.580)
And he was like, startups are like sharks.
Brian Armstrong (39:08.560)
If they stop swimming, they die.
Lex Fridman (39:10.520)
You know, so even if you're like, not sure what to do,
Brian Armstrong (39:12.320)
like just do anything because when you do it,
Lex Fridman (39:14.440)
it'll like, it'll produce some information.
Brian Armstrong (39:16.160)
Like people liked it.
Lex Fridman (39:17.000)
They didn't, this was very true for me.
Brian Armstrong (39:18.640)
There was times where I just did something
Lex Fridman (39:22.640)
instead of debating it endlessly and like, just try it.
Brian Armstrong (39:24.720)
You know, like, all right.
Lex Fridman (39:25.560)
So we shipped it.
Lex Fridman (39:26.380)
And like, there was a couple of times where like
Lex Fridman (39:27.980)
the minute I shipped it and I was like, I knew,
Brian Armstrong (39:30.640)
I know we built this wrong,
Lex Fridman (39:32.880)
but now I have an idea of what to do next.
Lex Fridman (39:34.400)
And it wasn't, I only would have had the idea
Lex Fridman (39:36.520)
if we'd actually gone through the exercise
Brian Armstrong (39:37.960)
of going to build it.
Lex Fridman (39:38.920)
It's like my other favorite analogy for this is that
Brian Armstrong (39:42.660)
you're like at the base of a mountain that's shrouded
Lex Fridman (39:44.560)
in fog and you're looking up at the mountain
Lex Fridman (39:47.120)
and you're trying to think like, okay,
Lex Fridman (39:48.180)
how do I get up there?
Lex Fridman (39:49.020)
But you can only see like three or four steps ahead
Lex Fridman (39:51.000)
cause the fog is so thick.
Lex Fridman (39:52.600)
So you have to just take steps into the unknown.
Lex Fridman (39:55.920)
And when you take three steps,
Brian Armstrong (39:57.680)
another three steps will be revealed ahead of you.
Lex Fridman (39:59.960)
And sometimes you'll end up on some local maximum.
Brian Armstrong (40:01.940)
You'll have to retrace your steps or whatever,
Lex Fridman (40:03.580)
but, or come up to a cliff, you know,
Lex Fridman (40:06.040)
but most people in life don't take the steps into the fog,
Lex Fridman (40:11.480)
into the unknown because it's scary.
Lex Fridman (40:14.200)
Or they're like, I don't know, what if I fail?
Lex Fridman (40:15.860)
Or like, I don't know how that's going to work
Brian Armstrong (40:17.640)
or I might run out of money
Lex Fridman (40:18.480)
or I won't be able to get a job after,
Brian Armstrong (40:19.800)
or I don't know, whatever reason.
Lex Fridman (40:21.720)
But that is like one of the things that separates,
Brian Armstrong (40:24.520)
I think entrepreneurial people with that kind of inclination
Lex Fridman (40:27.180)
is that they have sort of a comfort with this risk tolerance
Lex Fridman (40:31.720)
but it's actually not really risky if you think about it.
Lex Fridman (40:33.880)
It's not like, you know, at least in most places,
Brian Armstrong (40:38.200)
like, you know, if you go to a startup and it fails,
Lex Fridman (40:40.800)
like you're going to, you're even more valuable
Lex Fridman (40:42.640)
to your next employer, right?
Lex Fridman (40:44.180)
Or you can go raise a seed round, pay yourself a salary,
Brian Armstrong (40:47.260)
try it for like two years or three years.
Lex Fridman (40:49.080)
If it doesn't work, go get another job.
Brian Armstrong (40:50.520)
It's not like you're,
Lex Fridman (40:51.520)
you weren't paying yourself a salary during that time.
Lex Fridman (40:53.320)
So I think, I think people overestimate the risk
Lex Fridman (40:55.700)
of doing a startup and they just never,
Brian Armstrong (40:57.480)
they never start because it seems crazy
Lex Fridman (41:00.960)
and all your friends think it's silly.
Brian Armstrong (41:02.140)
Like that's sort of the default nature
Lex Fridman (41:03.600)
of every big startup idea.
Brian Armstrong (41:05.600)
It's just basic fear.
Lex Fridman (41:06.840)
It's the same kind of fear that if you see a,
Brian Armstrong (41:08.920)
if you're a guy, see a cute girl at a bar,
Lex Fridman (41:11.680)
it's the fear associated with coming up to her,
Brian Armstrong (41:14.480)
you like her, asking her.
Lex Fridman (41:15.840)
It's like, what's the actual risk exactly?
Brian Armstrong (41:18.160)
Right.
Lex Fridman (41:19.320)
She'll say, no thanks, I'm not interested.
Brian Armstrong (41:20.800)
No thanks.
Lex Fridman (41:21.640)
I guess the risk is like,
Brian Armstrong (41:23.380)
that's going to be mentally difficult
Lex Fridman (41:26.040)
to deal with rejection.
Lex Fridman (41:27.680)
So just like it's mentally difficult to deal with failure.
Lex Fridman (41:31.040)
If you had a bunch of ideas and you were excited about them
Lex Fridman (41:33.800)
and you implement them and you realize they're not good,
Lex Fridman (41:37.160)
that could be difficult to keep pushing through that.
Lex Fridman (41:40.360)
But I suppose that's life.
Lex Fridman (41:41.880)
You're supposed to, you know,
Brian Armstrong (41:44.200)
perseverance through the failures and then the risk is low.
Lex Fridman (41:48.080)
So that's, and then the whole time through the fog
Brian Armstrong (41:50.120)
up the mountain, you're looking for product market fit.
Lex Fridman (41:52.360)
Yeah, that's right.
Lex Fridman (41:53.360)
So you know, you have it when the usage of your product
Lex Fridman (41:55.620)
keeps growing without any marketing dollars
Brian Armstrong (41:57.400)
or anything like that.
Lex Fridman (41:58.240)
It's just like more people keep coming back
Brian Armstrong (41:59.680)
every week or month.
Lex Fridman (42:01.180)
So you're kind of keep,
Brian Armstrong (42:02.020)
you're basically watching your stats.
Lex Fridman (42:04.400)
Nothing is working.
Brian Armstrong (42:05.840)
You see these little wiggles of false hope in your metrics
Lex Fridman (42:09.360)
and you basically just keep talking to customers,
Brian Armstrong (42:11.380)
fixing the, improving the product,
Lex Fridman (42:12.680)
talk to customers, improve the product,
Brian Armstrong (42:13.880)
talk to customers, improve product, you know,
Lex Fridman (42:16.280)
and try not to run out of money.
Lex Fridman (42:17.120)
So be really scrappy.
Lex Fridman (42:19.280)
And then if you're lucky, you hit some kind of threshold
Brian Armstrong (42:22.320)
where like, okay, the thing is good enough now,
Lex Fridman (42:24.060)
or we hit on some use case and then it'll organically
Brian Armstrong (42:26.760)
start to grow a bit.
Lex Fridman (42:28.340)
And then you have a whole different set of problems
Brian Armstrong (42:30.740)
once you hit product market fit,
Lex Fridman (42:31.680)
which is how do we scale this thing?
Lex Fridman (42:34.220)
How do we hire people?
Lex Fridman (42:35.720)
How do we, you know, hire an executive team
Lex Fridman (42:39.120)
or raise more money?
Lex Fridman (42:39.960)
And like, so the problems totally change, but yeah.
Brian Armstrong (42:42.760)
Well, you were there through the whole thing.
Lex Fridman (42:45.080)
So that's the other question that's fascinating.
Brian Armstrong (42:48.120)
Again, back to the girl at the bar,
Lex Fridman (42:50.960)
how do you hire people?
Lex Fridman (42:52.240)
It's like, how do you find good friends?
Lex Fridman (42:55.360)
How do you find good relationships?
Lex Fridman (42:57.800)
And in this specific case, how do you hire good people?
Lex Fridman (43:01.100)
Engineers, executive, all of it.
Brian Armstrong (43:04.940)
One thing is I've done a lot of reps on hiring
Lex Fridman (43:06.720)
at this point.
Lex Fridman (43:07.560)
So Coinbase has about 5,000 people,
Lex Fridman (43:12.040)
probably the first 500 people or something,
Brian Armstrong (43:14.440)
maybe in that range.
Lex Fridman (43:16.020)
You know, I interviewed every single one of those,
Lex Fridman (43:18.200)
but you have to remember there's probably like,
Lex Fridman (43:20.780)
I don't know, on average, maybe 10 people
Brian Armstrong (43:22.520)
that we went in the process for every one we hired
Lex Fridman (43:25.040)
or something.
Lex Fridman (43:25.860)
So it was like, by the time that we had 500 employees,
Lex Fridman (43:29.360)
I had done like 5,000 interviews or something.
Brian Armstrong (43:31.280)
I was like very burned out on interviews.
Lex Fridman (43:32.880)
I had been doing, some days I did like seven interviews
Brian Armstrong (43:36.400)
in a day or maybe, you know, you've been doing
Lex Fridman (43:39.320)
lots of interviews, maybe you wouldn't get burned out,
Lex Fridman (43:40.720)
but different kind of interviews.
Lex Fridman (43:42.480)
Very different, very different, very different,
Brian Armstrong (43:45.000)
because you're, so first of all,
Lex Fridman (43:49.200)
most of your interviews lead to rejection.
Brian Armstrong (43:51.440)
Yeah.
Lex Fridman (43:52.560)
Which is also exhausting.
Brian Armstrong (43:54.760)
Yeah, and there's a whole part of the interview
Lex Fridman (43:57.440)
which is about candidate experience, right?
Brian Armstrong (43:59.160)
Sometimes you know it's not the right person,
Lex Fridman (44:00.880)
but you wanna make sure they have a good experience.
Brian Armstrong (44:02.440)
Yes.
Lex Fridman (44:03.280)
Like, if you're just exhausted
Lex Fridman (44:04.120)
and you're on your sixth interview
Lex Fridman (44:05.080)
and you're like, well, thanks for coming in
Lex Fridman (44:06.840)
and you wrap and you just, and then like,
Lex Fridman (44:08.600)
you're gonna create a detractor.
Brian Armstrong (44:09.840)
Someone who's out there like, fuck that company
Lex Fridman (44:11.400)
or Brian was rude to me or whatever.
Lex Fridman (44:12.680)
So I had to, honestly, I had to work on that a little bit
Lex Fridman (44:15.080)
in the early days because I was doing so many interviews.
Brian Armstrong (44:16.680)
Like I needed to make sure that when people came in,
Lex Fridman (44:20.040)
I was like, you know, made them feel comfortable,
Brian Armstrong (44:23.560)
asked them a couple of like warmup questions,
Lex Fridman (44:25.280)
just like, oh, how was it getting in the office?
Lex Fridman (44:27.040)
Like, did you find it okay?
Lex Fridman (44:27.960)
And like, what have you been up to this week?
Lex Fridman (44:29.220)
And not just like, you know, like a factory assembly line
Lex Fridman (44:32.760)
like boom, boom, boom, like, yeah.
Lex Fridman (44:34.880)
But also there's a moment,
Lex Fridman (44:35.840)
cause I've interviewed a bunch of people
Brian Armstrong (44:37.040)
for like teams and stuff.
Lex Fridman (44:38.680)
There's also a moment when you, early on,
Brian Armstrong (44:40.600)
know it's not gonna be a good fit
Lex Fridman (44:42.720)
and you still have to land that plane
Lex Fridman (44:45.000)
and all that kind of stuff.
Lex Fridman (44:46.840)
And that could get really, really, really exhausting.
Lex Fridman (44:49.340)
So yeah, anyway, sorry.
Lex Fridman (44:50.360)
So.
Brian Armstrong (44:51.520)
Yeah, so basically we tried all,
Lex Fridman (44:53.280)
we've tried so many things over the years
Brian Armstrong (44:54.400)
to make interviews more efficient
Lex Fridman (44:55.640)
cause it's a huge time sink for the team.
Brian Armstrong (44:58.860)
So, you know, we basically,
Lex Fridman (45:00.720)
we'll usually get them down to like 25 minutes.
Brian Armstrong (45:03.320)
I've seen, if you're trying to hire like a big team,
Lex Fridman (45:05.880)
let's say, you know,
Brian Armstrong (45:08.480)
of people who are like contractors or something,
Lex Fridman (45:10.140)
not necessarily full time employees.
Brian Armstrong (45:11.280)
I've seen people actually do 10 minute interviews.
Lex Fridman (45:14.280)
You can even interview like a thousand people
Brian Armstrong (45:16.400)
almost like in a week or something.
Lex Fridman (45:17.760)
I'm not sure if that quite works out,
Lex Fridman (45:18.920)
but let me a little less than that.
Lex Fridman (45:20.860)
But you can basically get six and six done in an hour.
Brian Armstrong (45:23.680)
If you're just, I need to get a team of 30 contractors
Lex Fridman (45:25.880)
for whatever purpose.
Lex Fridman (45:26.720)
But if you're talking about full time employees,
Lex Fridman (45:28.480)
I usually do like 25 minute.
Brian Armstrong (45:30.760)
You know, you're oftentimes like,
Lex Fridman (45:32.880)
one thing we've done is we'll put like a Google form online
Lex Fridman (45:37.320)
and it's like, put some basic hurdles in there.
Lex Fridman (45:39.560)
Like, you know, ask them to put in an answer,
Brian Armstrong (45:43.160)
which you can check in a spreadsheet
Lex Fridman (45:44.260)
if it was correct or not.
Lex Fridman (45:45.200)
And like, there was some funny examples
Lex Fridman (45:46.760)
in the early days of Coinbase
Brian Armstrong (45:47.600)
where we'd put in like brain teasers and stuff,
Lex Fridman (45:49.280)
but we don't do that anymore.
Brian Armstrong (45:50.480)
We do like normal interviews, we do references.
Lex Fridman (45:52.640)
The kinds of things I ask in interviews,
Brian Armstrong (45:56.140)
you know, it's usually like,
Lex Fridman (45:57.840)
I like to think about what do we need this person
Lex Fridman (46:00.380)
to accomplish in this role, right?
Lex Fridman (46:03.000)
And get really specific about that.
Brian Armstrong (46:05.300)
It's like usually something pretty hard.
Lex Fridman (46:07.200)
And then I'll ask them a question.
Brian Armstrong (46:08.540)
It's like, tell me about a time you did X
Lex Fridman (46:11.360)
and, or tell me about the hardest,
Brian Armstrong (46:14.580)
the hardest kind of problem you've had to solve in Y
Lex Fridman (46:17.400)
and what did you do specifically to overcome it, right?
Lex Fridman (46:20.360)
So I'm asking to see if they can actually do the stuff
Lex Fridman (46:22.400)
we need to get done.
Lex Fridman (46:23.240)
But then I'm also kind of asking like culture questions
Lex Fridman (46:25.860)
if I'm interviewing for that.
Lex Fridman (46:27.440)
And so I'm trying to see like,
Lex Fridman (46:29.400)
are they concise communicators?
Lex Fridman (46:30.840)
Can they just give me a clear answer and stop talking?
Lex Fridman (46:34.440)
Some people like ramble on for like five, 10 minutes
Brian Armstrong (46:37.200)
if you ask the first question.
Lex Fridman (46:38.720)
Some people are, you know, they're interrupters
Brian Armstrong (46:41.220)
like church of interruption.
Lex Fridman (46:42.160)
So like they won't stop talking until you interrupt them,
Brian Armstrong (46:44.840)
which for me, I'm always patient and I wait.
Lex Fridman (46:46.780)
So that's weird.
Brian Armstrong (46:49.380)
I'm looking to see for humility too.
Lex Fridman (46:50.900)
Like, you know, I'll tell us people,
Brian Armstrong (46:53.360)
I'll tell you about a time something went really wrong.
Lex Fridman (46:55.420)
Like you had conflict with someone on a team
Brian Armstrong (46:57.080)
or what I'm kind of looking for is,
Lex Fridman (47:00.200)
were they part of the solution
Brian Armstrong (47:01.320)
or are they still holding onto like blame and criticism
Lex Fridman (47:03.780)
about that and be like,
Brian Armstrong (47:04.620)
well, I told them they shouldn't do that way,
Lex Fridman (47:06.360)
but they didn't listen to me.
Lex Fridman (47:07.360)
And you know, these are all like bad signs.
Lex Fridman (47:09.440)
So I'm looking for, yeah, can they get the job done?
Lex Fridman (47:11.960)
Will they work together on a team?
Lex Fridman (47:13.600)
Can they communicate effectively?
Brian Armstrong (47:15.800)
Do they fit into our cultural values and you know,
Lex Fridman (47:18.280)
those kinds of things.
Brian Armstrong (47:19.120)
Yeah, I mean, there's a,
Lex Fridman (47:20.220)
cause I've even for help with this podcast here,
Lex Fridman (47:24.420)
but also at MIT and so on, I've done a bunch of hiring
Lex Fridman (47:27.420)
and I was always looking for, you said, brain teasers,
Brian Armstrong (47:30.360)
all kinds of simple questions that can,
Lex Fridman (47:33.080)
they can reveal a lot of information
Lex Fridman (47:35.600)
and it's always been challenging.
Lex Fridman (47:36.860)
I used to, I still ask this question,
Lex Fridman (47:39.060)
but do you think it's better to work hard or work smart?
Lex Fridman (47:45.580)
And you know, I had this idea that I've,
Brian Armstrong (47:50.320)
that I think I've matured about,
Lex Fridman (47:54.900)
which is I kind of believe that people who say work smart
Brian Armstrong (47:59.060)
on that question don't actually work smart.
Lex Fridman (48:03.300)
So the right textbook answer is it's better to work smart.
Lex Fridman (48:07.880)
But the reality is it's people that haven't actually
Lex Fridman (48:12.140)
ever done anything that say work smart.
Brian Armstrong (48:14.980)
They're like, they haven't really struggled
Lex Fridman (48:17.860)
because my general belief at the time
Brian Armstrong (48:20.640)
was in order to discover what it means to work smart,
Lex Fridman (48:25.780)
to be efficient, to, you have to work your ass off.
Lex Fridman (48:29.060)
So you have to really fail a lot
Lex Fridman (48:30.940)
and failure feels like hard work.
Lex Fridman (48:33.460)
And so I was always suspicious of people
Lex Fridman (48:36.380)
that would say work smart.
Brian Armstrong (48:37.860)
I would want to interrogate that question.
Lex Fridman (48:41.380)
But then I also, you know, have learned that there is people
Brian Armstrong (48:45.540)
that are just exceptionally, exceptionally efficient.
Lex Fridman (48:51.340)
They really do know what it means to work smart,
Brian Armstrong (48:53.860)
even at a young age.
Lex Fridman (48:55.700)
And so like, you can't just disqualify based on that.
Brian Armstrong (48:58.500)
You have to dig in deeper.
Lex Fridman (49:00.340)
But some of the most interesting people I've ever worked
Brian Armstrong (49:02.780)
with would say work hard unapologetically.
Lex Fridman (49:05.020)
And they're usually the ones that know how to be efficient,
Brian Armstrong (49:08.580)
which is, it's just an interesting thing like that.
Lex Fridman (49:11.220)
And I've always searched for questions of that nature
Brian Armstrong (49:13.940)
to see can I get a person to reveal something profound
Lex Fridman (49:21.220)
about them in as brief of a question as possible?
Lex Fridman (49:26.940)
And I, you know, and then of course,
Lex Fridman (49:28.540)
there's basic attention to detail and brain teasers
Lex Fridman (49:31.500)
and stuff like that, depending on the role,
Lex Fridman (49:33.380)
programming and so on to see can they solve a tricky puzzle
Lex Fridman (49:38.060)
and do so, like one that doesn't require a lot of effort,
Lex Fridman (49:40.960)
but requires a certain nonlinear way of thinking.
Brian Armstrong (49:46.300)
Is there some, I mean, maybe you don't want to reveal,
Lex Fridman (49:49.800)
but is there some questions that you sometimes
Lex Fridman (49:52.740)
find yourself leaning on?
Lex Fridman (49:55.020)
You said like, how did you solve a hard problem
Lex Fridman (49:58.140)
in your past and have them talk through it?
Lex Fridman (50:01.380)
That's one.
Brian Armstrong (50:02.220)
You know, we started with brain teasers periodically
Lex Fridman (50:04.780)
at Coinbase and we got away from that relatively quickly.
Lex Fridman (50:07.700)
And I think one, it's a tough one
Lex Fridman (50:10.860)
because I actually think it does show how somebody
Brian Armstrong (50:15.180)
kind of performs under pressure,
Lex Fridman (50:16.420)
but it's, I don't think it's a super reliable indicator
Brian Armstrong (50:18.680)
because there's some people who are really good
Lex Fridman (50:22.420)
in the typical work situation,
Lex Fridman (50:25.180)
but that's not a typical work situation
Lex Fridman (50:26.460)
where somebody puts you on the spot,
Brian Armstrong (50:27.620)
like in a live interview and sometimes people get nervous
Lex Fridman (50:29.920)
and they can't think clearly
Lex Fridman (50:31.020)
and like they don't have their computer in front of them
Lex Fridman (50:32.700)
or whatever they normally use.
Lex Fridman (50:35.700)
So yeah, I'm a little skeptical now
Lex Fridman (50:39.220)
of the brain teaser thing.
Brian Armstrong (50:42.340)
There is a whole, yeah, there is a whole question about,
Lex Fridman (50:46.380)
like a lot of universities are getting rid of,
Brian Armstrong (50:48.100)
you know, entrance exams.
Lex Fridman (50:48.980)
So if you're hiring right out of universities,
Brian Armstrong (50:52.680)
sometimes it's becoming a less reliable indicator
Lex Fridman (50:54.700)
of like, are they in that university?
Lex Fridman (50:56.560)
And I've heard some companies, we haven't done this yet,
Lex Fridman (50:58.500)
but I've heard some companies are actually creating
Brian Armstrong (50:59.780)
their own like for college grads,
Lex Fridman (51:01.660)
like their own basically exams, like standardized testing
Brian Armstrong (51:06.700)
almost to get people in the door
Lex Fridman (51:08.140)
because the degree almost like doesn't mean
Lex Fridman (51:10.380)
what it used to, which is the whole topic, but.
Lex Fridman (51:12.820)
Yeah, that's fascinating because it's fascinating both
Brian Armstrong (51:17.140)
for that, because it's not just about you trying
Lex Fridman (51:19.380)
to hire a great team, it's also to help them find
Brian Armstrong (51:22.300)
the right place to work at.
Lex Fridman (51:23.420)
Yeah.
Brian Armstrong (51:24.260)
It's like a two way street.
Lex Fridman (51:28.140)
All right, so once you found the product market fit,
Lex Fridman (51:32.180)
how did Coinbase become what it is today?
Lex Fridman (51:38.180)
Ooh.
Lex Fridman (51:39.020)
So let me ask an engineering question actually.
Lex Fridman (51:42.180)
Sort of from the Ruby wallet days,
Lex Fridman (51:47.540)
what are some of the interesting challenges there?
Lex Fridman (51:50.420)
Or are they not engineering?
Lex Fridman (51:52.340)
Just the things that had to be solved, what were they?
Lex Fridman (51:56.540)
Engineering, regulation,
Lex Fridman (51:59.100)
financial hiring, lawyers, what was it?
Lex Fridman (52:07.700)
So post product market fit, yeah, a lot of it's scaling
Lex Fridman (52:10.580)
and you got to build out an actual company.
Lex Fridman (52:12.420)
So I remember I was still writing a lot of code there
Brian Armstrong (52:15.500)
for a while and we were hiring in,
Lex Fridman (52:17.220)
we had like maybe 25 people or something.
Brian Armstrong (52:19.420)
I remember one of our investors came by one day
Lex Fridman (52:21.060)
and he was like, Brian, how much of your time
Lex Fridman (52:22.860)
are you spending writing code?
Lex Fridman (52:24.340)
And I was like, maybe 50% or something.
Lex Fridman (52:27.260)
And he was like, how much time are you spending hiring people?
Lex Fridman (52:29.660)
I was like, probably 20%.
Lex Fridman (52:31.980)
And he was like, I think you need to flip those numbers.
Lex Fridman (52:35.220)
Like this company is not going to scale.
Brian Armstrong (52:36.740)
You're the CEO, you don't need to be writing code every day.
Lex Fridman (52:39.420)
You're going to have to transition that stuff.
Brian Armstrong (52:40.820)
Like even if people can't,
Lex Fridman (52:41.940)
all that stuff's locked in your head.
Lex Fridman (52:43.180)
So maybe they're not going to do it as well as you
Lex Fridman (52:44.740)
for the first six months or something.
Lex Fridman (52:46.580)
But like, if you don't start to transition it,
Lex Fridman (52:48.380)
you're never going to build a real company.
Brian Armstrong (52:49.740)
It's just going to be, you're going to be the bottleneck.
Lex Fridman (52:52.620)
So, you know, like a lot of founders that took me a while
Brian Armstrong (52:55.860)
to like really internalize that lesson.
Lex Fridman (52:57.260)
I'd always heard people say that and, you know,
Lex Fridman (52:59.780)
but I still was holding on too much to decision making.
Lex Fridman (53:02.900)
And I probably still am, by the way,
Brian Armstrong (53:04.100)
like even to this day at Coinbase,
Lex Fridman (53:05.380)
where we continually have to push down decision making
Brian Armstrong (53:08.580)
in the org, like even with 5,000 people,
Lex Fridman (53:10.700)
like who are the owners of each of these things?
Lex Fridman (53:12.260)
And so the temptation is people to push it up
Lex Fridman (53:14.180)
and you become a bottleneck.
Lex Fridman (53:15.060)
And anyway, so yeah, you basically need to make sure
Lex Fridman (53:19.020)
you have enough money where you don't die
Brian Armstrong (53:21.180)
if there's some kind of a downturn
Lex Fridman (53:23.220)
or hit break even profitability.
Brian Armstrong (53:24.980)
We were in a position where we were periodically profitable
Lex Fridman (53:27.700)
during up periods, but then crypto would go down
Lex Fridman (53:29.300)
and we were unprofitable.
Lex Fridman (53:30.620)
And so we had to kind of manage our own psychology
Lex Fridman (53:33.300)
and the balance sheet to make sure we didn't like die
Lex Fridman (53:35.940)
in the downturn, which a lot of crypto companies did.
Brian Armstrong (53:38.980)
We had to basically professionalize a whole bunch
Lex Fridman (53:41.060)
of services that had been just very quickly thrown together
Lex Fridman (53:44.020)
by like 20 year olds, right?
Lex Fridman (53:46.060)
Whether that was cybersecurity, it's like, okay,
Lex Fridman (53:47.900)
how do you get like a really senior experienced
Lex Fridman (53:50.380)
cybersecurity person, but not someone who's so senior
Brian Armstrong (53:52.420)
that they can't get their hands dirty
Lex Fridman (53:53.500)
and they can come into a company with 25, 50 people.
Lex Fridman (53:56.380)
How do you get a finance person to come in and do that?
Lex Fridman (53:58.140)
Our finances were a mess.
Brian Armstrong (54:00.060)
Like we didn't even really know how much money we had
Lex Fridman (54:01.900)
at certain times and stuff.
Brian Armstrong (54:03.020)
I mean, this was, it's embarrassing to say,
Lex Fridman (54:04.900)
but it was true.
Brian Armstrong (54:05.740)
Like I remember there was a point where we had raised,
Lex Fridman (54:09.700)
I think like our series C or something like that.
Lex Fridman (54:12.060)
And I think we had our bank accounts.
Lex Fridman (54:14.940)
I just put like $25 million, like in a different bank
Brian Armstrong (54:17.100)
account that none of this stuff was touched
Lex Fridman (54:19.020)
to the actual operations of business.
Brian Armstrong (54:20.140)
Cause I was like, our operations were so messy
Lex Fridman (54:23.620)
and we needed to hire a new finance person.
Lex Fridman (54:25.380)
And I was like, I'd heard horror stories
Lex Fridman (54:28.340)
of actually startups where they thought
Brian Armstrong (54:29.540)
they had X amount of money.
Lex Fridman (54:31.420)
And then it turned out they had way less.
Lex Fridman (54:33.080)
And then the whole thing was insolvent in like three weeks.
Lex Fridman (54:35.180)
So you wanted to have some padding to at least like,
Brian Armstrong (54:37.260)
all right, I can at least count on this to save us
Lex Fridman (54:39.800)
if we go to like super negative.
Brian Armstrong (54:41.460)
Right, I mean, it was like a cheap hack,
Lex Fridman (54:43.580)
but that was like the only I could come up with.
Lex Fridman (54:46.060)
And until we could hire like a real CFO and finance team
Lex Fridman (54:49.660)
who like, okay, now we got our arms around
Lex Fridman (54:52.000)
how much cash we have.
Lex Fridman (54:52.840)
It sounds silly, but we had such high volume
Brian Armstrong (54:55.620)
of money coming in and out.
Lex Fridman (54:56.620)
Anyway.
Lex Fridman (54:57.460)
What was the ordering of hiring by the way?
Lex Fridman (54:59.840)
Like how many engineers was it early on?
Brian Armstrong (55:03.420)
You said CFO was not, you didn't even have a CFO for a bit.
Lex Fridman (55:06.980)
Like what was the landscape of hiring
Lex Fridman (55:10.860)
as you building up this company?
Lex Fridman (55:13.380)
Was it engineering focused?
Brian Armstrong (55:15.260)
Well, let's see.
Lex Fridman (55:16.100)
I mean, so the first person we hired was just like,
Brian Armstrong (55:18.540)
we need to solve customer support.
Lex Fridman (55:20.040)
So we brought someone to do that
Brian Armstrong (55:20.980)
because we were all staying up till midnight every night
Lex Fridman (55:22.500)
trying to do customer support.
Lex Fridman (55:23.840)
And then we got more engineers.
Lex Fridman (55:26.420)
And then I think maybe the sixth hire
Brian Armstrong (55:27.980)
or something like that was a recruiter.
Lex Fridman (55:29.540)
Cause that turned out to be, you need to build,
Brian Armstrong (55:31.980)
hire the person who can hire more people.
Lex Fridman (55:34.340)
That turned out to be a great force multiplier.
Lex Fridman (55:37.180)
And then you're going down the list.
Lex Fridman (55:39.780)
Eventually you want to hire some more senior people.
Brian Armstrong (55:43.640)
We needed legal and compliance.
Lex Fridman (55:45.220)
We needed that really badly.
Brian Armstrong (55:46.460)
Cause we, it was all kinds of questions about
Lex Fridman (55:48.540)
what the legality of it was.
Brian Armstrong (55:50.400)
Was it hard to find legal people that work with crypto,
Lex Fridman (55:52.740)
like serious adults?
Brian Armstrong (55:54.940)
Cause it's such a cutting edge new world.
Lex Fridman (55:57.540)
Yeah, I mean, there was nobody who had like more than,
Brian Armstrong (56:01.100)
nobody had three years of experience with it
Lex Fridman (56:02.380)
cause it had only been around a few years.
Lex Fridman (56:04.180)
So yeah, we were finding people from adjacent fields.
Lex Fridman (56:07.180)
There's a certain personality type of people
Brian Armstrong (56:08.860)
who are willing to join early companies
Lex Fridman (56:10.420)
because they have no structure.
Brian Armstrong (56:12.500)
You can't really commit to them about
Lex Fridman (56:14.100)
you're going to have this team or this boss or whatever.
Brian Armstrong (56:16.620)
Like everything's in chaos and flux.
Lex Fridman (56:18.920)
So it takes, yeah, hiring is one of the hardest things
Brian Armstrong (56:22.340)
in the early stage for sure.
Lex Fridman (56:23.220)
You got to find people crazy enough
Brian Armstrong (56:24.620)
to join you on this journey.
Lex Fridman (56:26.240)
So one of the interesting things about Coinbase
Lex Fridman (56:28.180)
and you've written, we've talked, we'll talk about it a bit.
Lex Fridman (56:31.340)
You're very focused on the mission.
Brian Armstrong (56:33.540)
Yeah.
Lex Fridman (56:34.380)
You're very kind of, I think that simplifies things
Brian Armstrong (56:37.980)
that makes hiring easier,
Lex Fridman (56:40.700)
that makes working at Coinbase easier,
Brian Armstrong (56:42.820)
that makes, I mean, it's similar.
Lex Fridman (56:44.980)
So Elon has the same thing.
Brian Armstrong (56:46.780)
It's pretty clear.
Lex Fridman (56:47.740)
It's pretty clear what we're here to do.
Lex Fridman (56:50.460)
So I suppose what's the mission of Coinbase?
Lex Fridman (56:55.540)
Well, it's to increase economic freedom in the world.
Lex Fridman (56:57.860)
And what is economic freedom?
Lex Fridman (56:59.940)
Yeah, so economic freedom is this term kind of like GDP
Brian Armstrong (57:02.660)
that economists use.
Lex Fridman (57:04.060)
And it's basically a measure of different countries
Brian Armstrong (57:05.820)
around the world.
Lex Fridman (57:06.660)
It looks at things like,
Lex Fridman (57:07.660)
are there property rights enforced?
Lex Fridman (57:09.700)
Is there free trade?
Lex Fridman (57:10.780)
Is the currency stable?
Lex Fridman (57:12.520)
Can you start companies that you wanna start?
Lex Fridman (57:14.100)
And can you join the ones you wanna join?
Lex Fridman (57:15.340)
And is there corruption and bribery prevalent
Lex Fridman (57:18.620)
or is it relatively free of that?
Lex Fridman (57:20.700)
And so there's several different organizations
Brian Armstrong (57:24.280)
that basically score countries by economic freedom.
Lex Fridman (57:27.220)
And the really cool thing about economic freedom
Brian Armstrong (57:28.840)
is that basically it positively correlates
Lex Fridman (57:31.740)
with things that we all want in society,
Brian Armstrong (57:33.340)
like not only higher growth of the economy,
Lex Fridman (57:36.620)
but also things like higher self reported happiness
Brian Armstrong (57:39.340)
of citizens, better treatment of the environment,
Lex Fridman (57:41.780)
better income for the poorest 10% of people.
Lex Fridman (57:44.360)
And it negatively correlates with things
Lex Fridman (57:45.860)
we don't want in society,
Brian Armstrong (57:46.780)
like corruption and bribery and war,
Lex Fridman (57:48.980)
even in things like that.
Lex Fridman (57:50.500)
And so it's this pretty crazy provocative idea,
Lex Fridman (57:53.980)
which is that if you give people good property rights
Lex Fridman (57:58.580)
and rule of law and allow them to trade,
Lex Fridman (58:01.160)
it basically encourages them to do more good stuff
Lex Fridman (58:03.380)
and the whole society benefits.
Lex Fridman (58:05.240)
Like one of the things, you may have noticed this
Brian Armstrong (58:08.320)
growing up in various places you did,
Lex Fridman (58:09.660)
or I spent a year living in Buenos Aires, Argentina
Brian Armstrong (58:12.220)
that went through hyperinflation.
Lex Fridman (58:13.340)
And there's a certain like pessimism
Brian Armstrong (58:15.820)
that can creep into countries
Lex Fridman (58:18.520)
when they don't have economic freedom,
Brian Armstrong (58:21.040)
which it's basically like everyone has this bit of this vibe,
Lex Fridman (58:24.020)
which is like, don't stick your head up,
Brian Armstrong (58:26.620)
don't try too hard because it could all be gone tomorrow.
Lex Fridman (58:28.960)
Like the things that really are valuable in life
Brian Armstrong (58:30.900)
are just family and friends
Lex Fridman (58:32.540)
and the past was better than the future will be.
Lex Fridman (58:35.440)
And so you don't really, people don't try as many,
Lex Fridman (58:37.580)
they don't try hard because you're not really sure
Brian Armstrong (58:40.240)
you can actually keep the upside of your labor
Lex Fridman (58:42.080)
if you try hard, so you just don't try as hard.
Brian Armstrong (58:44.840)
Whereas in America, historically,
Lex Fridman (58:47.700)
or high economic freedom countries,
Brian Armstrong (58:51.060)
people basically like they just try more stuff
Lex Fridman (58:53.720)
because they're like, if I do good for other people,
Brian Armstrong (58:55.520)
I'll get to keep part of it for myself
Lex Fridman (58:56.800)
and I can improve my lot in life
Lex Fridman (58:58.100)
and for my children and my community, whatever.
Lex Fridman (59:00.560)
So I realized when I read the Bitcoin white paper
Brian Armstrong (59:03.700)
a long time ago, that at least I had a hunch.
Lex Fridman (59:06.700)
At the time I was like,
Brian Armstrong (59:07.760)
this might be a really powerful piece of technology
Lex Fridman (59:09.920)
that can inject good financial infrastructure
Brian Armstrong (59:13.640)
into all these countries around the world that don't have it.
Lex Fridman (59:15.940)
Basically good economic freedom principles
Brian Armstrong (59:18.020)
in like property rights and things like that
Lex Fridman (59:20.700)
into these countries all over the world,
Brian Armstrong (59:22.180)
which just as long as you had a smartphone
Lex Fridman (59:23.620)
and now crypto got invented,
Brian Armstrong (59:25.140)
everybody could have economic freedom.
Lex Fridman (59:27.260)
And it's crypto is kind of really well suited
Brian Armstrong (59:28.960)
for economic freedom,
Lex Fridman (59:29.800)
because if you want property rights,
Brian Armstrong (59:31.840)
it's based like crypto is,
Lex Fridman (59:32.940)
if you can remember a 12 word phrase
Brian Armstrong (59:34.620)
or have an app on your phone,
Lex Fridman (59:37.020)
you can store as much wealth as you want.
Lex Fridman (59:38.620)
And it can't be taken away from you.
Lex Fridman (59:39.780)
You can even, there's like refugees who need to flee
Lex Fridman (59:42.980)
and they wanna take their wealth with them
Lex Fridman (59:44.660)
and they can't do it often
Brian Armstrong (59:46.240)
in the traditional financial system.
Lex Fridman (59:47.500)
And so crypto lets them do that, right?
Brian Armstrong (59:49.760)
Crypto is inherently global.
Lex Fridman (59:51.060)
So it allows free trade and cross border payments.
Brian Armstrong (59:54.840)
It makes it easy to accept payments from people globally.
Lex Fridman (59:57.860)
It provides a stable currency to everyone,
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