Given that Amazon Web Services (AWS) is one of the most popular cloud service providers on the planet, it’s no surprise that Coinbase, a US-based cryptocurrency exchange, is trying to capitalize on its success by developing its own infrastructure solution on Cloud. Coinbase Cloud.
“We want to be the AWS of cryptocurrencies,” Coinbase Chief Product Officer Surojit Chatterjee said in an exclusive interview with Forbes. “We are building this entire suite of Coinbase Cloud products that you can consider as crypto computing services to help developers build their applications faster.”
Before becoming Coinbase Cloud, the service was called Bison Trails, a cloud-based participation infrastructure solution that Coinbase purchased earlier this year for an undisclosed amount rumored to exceed $ 80 million. According to Coinbase, Bison Trails is a non-custodial platform, which means that it does not manage client assets.
Amazon Web Services (AWS) was once a secondary consideration for Amazon in Seattle, overshadowed by Amazon. Yet the Amazon subsidiary that debuted nearly 20 years ago is the company’s main profit engine today. AWS made $ 13.5 billion in annual operating profit in 2020 on a revenue base of $ 45.3 billion, or 63 percent of its parent company’s total.
Related: NFTs Could Be ‘As Big Or Bigger’ Than All Cryptocurrencies On Coinbase, Says CEO
Coinbase officials have suggested that they should become the “Amazon of cryptocurrencies” as soon as possible. o Because most of its accolades are not only for being the first major digital currency company to go public, but also for doing so by achieving the highest direct listing ever, its revenue stream is overly dependent on trading fees. transaction.
This is often the case for line items that are dominated by single-category revenue concentration. Facebook, for example, and Google rely almost entirely on advertising to make money, so their line items generally have this degree of revenue concentration.
However, due to their significant dependence on the market and overall trading volumes, Coinbase and other exchanges can be highly vulnerable. Because trading volumes are closely related to price fluctuations, such dependence can be a major drawback for crypto platforms like Coinbase or any other exchange.
Coinbase seeks to increase trading revenue by providing subscription services that are more resilient to market changes to mitigate this risk. For example, it provides institutional custody services, gambling possibilities, a learning portal that provides crypto users as a reward, an e-commerce payment system, and the ability to issue Visa debit cards to customers. It is also testing a subscription plan that would give customers a monthly business allowance for a fixed price.
The Bison Trails acquisition, according to Chatterjee, was a critical step in Coinbase’s transition to a more mature financial system. The platform supports crypto custodians, funds, decentralized applications, and token holders. Some of his clients are Andreessen Horowitz (a16z), the New York-based fintech firm Current, and Turner Sports.
As of November 2021, Coinbase Cloud has $ 30 billion in crypto assets staked on its platform. Coinbase, one of the most popular cryptocurrency platforms, has more than 73 million genuine customers, 10,000 organizations, and 185,000 ecosystem partners in more than 100 countries. According to Coinbase, since its founding, it has handled transactions worth more than $ 700 billion.