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Posted on September 19, 2018Correcting the record: Coinbase does not engage in proprietary trading
Coinbase welcomes the New York Virtual Markets Integrity Report, which shines a helpful spotlight on important compliance issues in digital asset exchange practices. Unfortunately, some media coverage inaccurately characterized the report’s findings, which are based on information we voluntarily provided in the Virtual Markets Integrity Initiative Questionnaire. We would like to correct the record.
The report states: “Coinbase disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading.”
Coinbase does not trade for the benefit of the company on a proprietary basis. In order to provide an easy-to-use customer experience, Coinbase Consumer quotes a price and then quickly fills the order from our exchange platform (Coinbase Markets). This takes advantage of the liquidity provided by the entire Coinbase ecosystem.
When Coinbase executes these trades, it does so on behalf of Coinbase Consumer customers, not itself.
The volume figure stated in the report has been misreported in the media as “self-trading,” which is inaccurate. The figure represents customer-driven volume via Coinbase Consumer. Coinbase does not operate a proprietary trading desk, nor does it undertake market making actions.
Our goal is to be the world’s most trusted place to buy, store and interact with cryptocurrency. We welcome oversight and will continue to work with regulators to promote the cryptocurrency ecosystem.
Correcting the record: Coinbase does not engage in proprietary trading was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on September 19, 2018Welcome Brian Brooks, Coinbase’s new Chief Legal Officer
From the time it was founded seven years ago, Coinbase has been a leading advocate for the adoption of cryptocurrency. We’ve engaged proactively with regulators as we built products and services that allow people to buy, sell and use cryptocurrency all over the world. In recent years, the industry expanded faster than we could have imagined with an explosion in customer demand and entrepreneurial activity pushing the capabilities of the ecosystem forward. As this trend continues, it is more important than ever that we contribute to a public policy and regulatory environment that fosters innovation while protecting investors.
That is why I’m thrilled to welcome Brian Brooks as the new Chief Legal Officer for Coinbase. His arrival is part of our effort to expand our legal, compliance and government affairs capabilities as we head into this next chapter for the company and the cryptocurrency industry as a whole.
From left to right Brian Armstrong (CEO), Brian Brooks (Chief Legal Officer), and Asiff Hirji (President & COO). Brian most recently served as Executive Vice President, General Counsel and Corporate Secretary of Fannie Mae, the nation’s largest financial institution. He led the company’s 200-person legal department and government relations group, and acted as a senior advisor to the CEO and Board of Directors. Prior to Fannie Mae, Brian led the legal department at OneWest Bank, N.A., a regional depository institution that he helped sell to CIT Group. Brian also played a key role in managing the bank’s senior regulatory relationships.
Brian joined OneWest in 2011 from O’Melveny & Myers LLP, where he served as managing partner of the firm’s 150-lawyer Washington, D.C. office; chair of the firm’s 40-lawyer national Financial Services Practice Group; and a member of the firm’s three-partner executive committee. At O’Melveny, Brian was involved in many of the most important financial services policy issues of the past decade, including representing former Federal Reserve Chairman Alan Greenspan and other clients before the Financial Crisis Inquiry Commission.
Mike Lempres successfully led our legal function through an important chapter of the company’s history. He will now focus on scaling the company’s government affairs program, which includes Coinbase as a founding member of the Blockchain Association and managing the Coinbase Political Action Committee.
We’d like to thank Mike for his leadership and welcome Brian to the team!
Welcome Brian Brooks, Coinbase’s new Chief Legal Officer was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on September 18, 2018The marriage between crypto and community journalism
A conversation with Manoush Zomorodi, host of the podcast ZigZag, a crypto and blockchain explainer
As a podcaster, journalist, and generally curious person, Manoush Zomorodi has made a career out of examining the intersection of technology and human behavior. The former host and creator of WNYC’s Note to Self, a “tech show about being human,” Zomorodi decided to leave her job in June 2018, join forces with her producer Jen Poyant and launch ZigZag, a podcast documenting their journey of understanding crypto — and their decision to join Civil Media Company. Over 12 episodes in Season One, Zomorodi and her co-host Poyant “translate the head-scratching lingo, odd habits, and important basics of digital currencies,” sometimes with the help of a musician they call Blockchain Guitar Man. (Listen to the podcast through iTunes or the Google Play Store).
Manoush Zomorodi and Jen Poyant, hosts of the ZigZag podcast Civil is a new, decentralized journalism platform built on top of the Ethereum blockchain that has partnered with the Associated Press and Consensys and is supported by its own token, the CVL; the intention is that, as a token-curated registry, Civil will allow anyone to get involved with and support independent newsrooms.
At Coinbase, we believe an open financial system will become a reality as many more people get involved in the utility phase, and so we looked to hear Zomorodi’s thoughts on what made this journalist interested in participating in the experiment.
“I think there’s a real branding problem with the crypto world, which is that it’s all people who want to make money, fast. What a lot of people don’t know is that there’s also this very small, nascent sector of utility-based tokens, these token-curated registries, where it’s about trying to do something important and good for the world, not simply about the potential for financial gain.
That element is the only reason I wanted to learn about crypto economics in the first place. I wasn’t interested in this until there was a use case — until there was a reason to use it other than to speculate and make a lot of cash. I think that’s what this inflection point is all about. If crypto is going to go mainstream, it’s going to be through these kinds of projects like Civil that people care about.”
“About 20 newsrooms, including ours, have been given grants by Civil to be an initial class of journalism makers: Popula, Cannabis Wire, Sludge, to name a few. Anyone who wants to support Civil can register for the token sale, set up a cryptocurrency wallet, and buy tokens. And I think we’re all waiting to find out: Where does the CVL token fit in? Will it work?
Unlike, say, Kickstarter, or giving money to a traditional media outlet, Civil says their project is not just supporting an organization and leaving them to it. Holders of CVL tokens are able to vote and have their voice heard about how you think the platform should be governed. According to Civil, the system is set up to require that the people who support the concept also contribute to the actual making of the community.
The idea is that by combining blockchain with crypto-economics and a voting-and-governance system, you can start to create a new kind of community, or ecosystem. Let’s say there’s someone on there who’s always writing about this mattress company and how amazing it is. That’s not news. So the idea is that you can stake tokens to have this newsroom voted off of the Civil registry.
I hate to use the word “policing,” but after awhile there’s a quality-control element to using your tokens. The more time you spend on the platform — maybe making sure quality is good, or commenting — you get rewarded. There are going to be — and I’ve only seen prototypes of this — but ways where if you want to start your own newsroom, you have to stake a certain number of tokens to have your own website included in the Civil ecosystem.
It’s really a social experiment. Civil says it’s built in a bunch of protective measures. There’s something called the Civil Council that’s headed up by Vivian Schiller, the former CEO of NPR. It includes a lot of smart, experienced people who are there to provide some human, ethical standards, if everything starts to spin out of control.”
“This kind of project is why I got into journalism originally — I used to be a breaking news reporter. Despite not being on the daily news grind anymore, the stakes are quite fascinating to me. And I think we’re all waiting to find out: Will it work? Is it going to create a ecosystem where we all help each other find content, where there’s a thriving, healthy, fertile online place for journalism? Where, thanks to the blockchain, the soil remains rich? There’s definitely a utopian quality to the crypto community, where people are like, “the blockchain will solve it!” I go back and forth on that. But you have to have that utopian belief or else you wouldn’t put in the hard work.
None of us journalists at Civil are blockchain people. We’re the humanists. We’re witnessing the dawn of a new technology. I think a lot of us didn’t get to do this the first time around, with the Internet. So for me it was like: Cool, a do-over!
And I’m right there, with a front row seat. I get to call out to the people on the stage and ask them questions and they have to stop and tell me what they’re doing. I’m not sitting back. That’s so exciting to me.”
Visit ZigZag at zigzagpod.com and Civil at www.civil.co. ZigZag returns with a second season on October 11.
As told to Amy Standen exclusively for Coinbase; transcript edited and condensed for clarity.
Disclaimer: The views expressed herein belong to Manoush Zomorodi and do not represent the views or opinions of Coinbase, Inc. and its affiliates. This blog post and the links contained within it do not imply an endorsement, approval or recommendation by Coinbase of any product offering, or initiative.
The marriage between crypto and community journalism was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on September 14, 2018WATCH: What is bitcoin?
Coinbase CEO answers the number 1 question in crypto
There’s a big gap between people curious about crypto and and the hodlers out there. Coinbase CEO Brian Armstrong has launched a new video series, Crypto Curious, intended to newcomers by answering common questions — starting with “What is Bitcoin?”
Visit Coinbase.com to learn more about crypto and Coinbase.
WATCH: What is bitcoin? was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on September 6, 2018Why hackathons are an important part of Coinbase culture
Great engineers love building creative solutions to important problems. That’s certainly true for us here at Coinbase. While it’s easy to get caught up in the daily tasks and to-dos, we strongly believe in giving ourselves the space to experiment with creative ideas — even if they aren’t directly related to the company’s near-term goals.
At Coinbase, hackathons are an opportunity to have fun and forge new friendships, to try new things we’re not sure will work, and to learn new skills or platforms. It’s a chance to explore big ideas and to build prototypes we wouldn’t otherwise build. Building an open financial system for the world is no easy task, and it’s one that requires us to always explore, innovate, build, and rebuild. That’s why we hack.
While Coinbase has hosted a hackathon every year, this one was set to be the biggest yet. It needed a big name and vision to match. This is where Vision Hack 2028 was born — a five day, all-company hackathon that took place last week. The goal was to build ideas that would reshape what an open financial system could look like in 10 years.
These Vision Hack posters were hung all over Coinbase’s San Francisco office During Vision Hack 2028, we issued no specific guidance and few constraints. New features, product improvements, even standalone experiments, and apps were all fair game. The week was all about building and trying new things in a space where it was okay to fail. It was about enabling the potential of crypto and blockchain, about bringing us closer to the open financial system. The bigger and more futuristic the idea, the more excitement there is to take it on.
This year more than 150 ideas were submitted from across the company — new engineers, managers, executive assistants, recruiters, and even our CEO, Brian, spent some time planning, designing or coding. Over the course of the week, the hack teams spent time together brainstorming, coding, testing and bringing their idea to life and, on Friday, judges determined winners and handed out prizes based on various categories such as —
The Hard Fork Award (a project that solved the most technical debt), The Proof of People Award (a project voted the favorite by all employees), The Values Award (a project that best embodied our 4 values of clear communication, positive energy, continuous learning and efficient execution), The Satoshi Award (a project with best use of Crypto), and The Vision Hack Award (the best overall project) to name a few.
One fun project encouraged participants to draw the infamous founder of Bitcoin Lots of projects got us excited, but here are just a few highlights:
Project Spend Less Money: Like many fast-growing startups, we’re no stranger to scaling challenges, and it’s something we actively work to get ahead of every day. For hack week, some of our infrastructure team set out to use site reliability engineering principles to determine the saturation points of our most expensive services and implement auto-scaling solutions. By the end of the hack week, they surpassed their initial goal and the solutions developed were projected to reduce backend overhead costs significantly. To top it off, they were proud winners of the Vision Hack Award for the best overall project.
Crypto Point of Sale: As the easiest and most secure crypto wallet and browser, Coinbase Wallet is your gateway to the decentralized web. At the Vision hack, the wallet team and commerce team partnered together to work on Crypto Point of Sale. The idea was “How might we enable anyone anywhere in the world to start accepting cryptocurrency at brick and mortar locations?” This team made it happen with an app that seamlessly links to Coinbase Commerce and allows merchants to accept cryptocurrency on one or more devices.
The PWNed Watch: Security at Coinbase is a top priority and that includes helping protect our employees’ personal information. This is a prototype for an optional tool for Coinbase employees to register their personal information to help monitor and alert both the employee and the security team for signs of security breaches, like SIM swaps, password dumps or phone porting attacks.
Octopus: Octopus is the internal code name for the dynamic configuration management tool that provides a streamlined solution for managing configuration style data. It rapidly enables or disables individual features and updates configurations for experiments on all services without a code push, while providing robust version control and rollback functionality. Having the right infrastructure for development and product lifecycle management is essential to moving fast with quality. This project raises the bar!
Web Animations: This project focused on improving the user experience on Coinbase by enhancing selected interfaces with animations, and engaging with the users in delightful ways.
While most of these ideas are just prototypes at this stage, we’re excited to explore ways to incorporate them into our vision of building an open financial system for the world. Be sure to stay tuned.
We believe in giving our people the space to bring their own creative ideas to life — and Vision Hack is just one fun example. If you enjoy working in a fun, high energy environment and want to join our next hackathon, check out our open positions on our careers page. We’d love to hear from you.
Unless otherwise indicated, all images and video provided herein are by Coinbase.
Why hackathons are an important part of Coinbase culture was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on September 5, 2018Coinbase Pro announces support for trading bitcoin, ethereum and other cryptocurrencies using…
Coinbase Pro announces support for trading bitcoin, ethereum and other cryptocurrencies using British Pounds (GBP)
Following our announcement earlier this month that we would be introducing support for British pounds (GBP) to our UK-based customers, today we’re launching a number of new GBP trading pairs starting at 9am BST, Friday 7 September 2018.
With support for UK domestic bank transfers in GBP via the Faster Payments Scheme, it is now significantly easier, faster and cheaper for UK customers to trade cryptocurrencies on the Coinbase platform. Coinbase Pro is the only major digital currency trading platform that supports UK Faster Payments and it’s our goal to be the trading platform of choice for UK crypto traders. In advance of the launch of the new trading pairs, all UK customers now have access to send GBP to their Coinbase accounts via domestic bank transfer.
The new pairs that we are launching are: ETH–GBP, ETC–GBP, LTC–GBP and BCH–GBP. Coinbase Pro already supports BTC–GBP. The detailed launch process and timings are outlined below.
The Stages of the GBP trading pairs launch
As outlined below, there will be three stages to the launch. We will follow each of these stages independently for each new order book: ETH–GBP, ETC–GBP, LTC–GBP, BCH–GBP. Each phase will be announced in real time via Coinbase Pro’s Twitter.
If at any point one of the new order books does not meet our assessment for a healthy and orderly market, we may keep the book in one stage (as identified below) for a longer period of time, or suspend trading as per our Trading Rules.
- Post-only. In the first stage, customers can post limit orders but there will be no matches (completed orders). Order books will be in post-only mode for a minimum of 10 minutes.
- Limit-only. In the second stage, limit orders will start matching but customers are unable to submit market orders. Order books will be in limit-only mode for a minimum of 10 minutes.
- Full trading. In the final stage, full trading services will be available, including limit, market, and stop orders.
Coinbase Pro announces support for trading bitcoin, ethereum and other cryptocurrencies using… was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on August 31, 2018Bookmark your favorite dapps on Coinbase Wallet
Everyone has a few favorite decentralized apps (dapps) — whether it’s a collectibles game, a token trading platform, or a decentralized social network. Bookmarks have been one of our most requested features since we launched dapps on Coinbase Wallet. Now, you can bookmark your favorite dapps and see them on your Coinbase Wallet homescreen.
Add and manage your bookmarks with Coinbase Wallet. And that’s not all we’re shipping in this update. We’ve also launched the dapp explorer — your homebase to discover the latest and greatest dapps on the decentralized web. The dapp explorer is now the default home screen in Coinbase Wallet’s browser, so go check it out now.
Use the new dapp explorer to learn, discover, and personalize your experience. We’ve also made some usability improvements to continue providing the best user experience on the decentralized web. You can now easily switch between the browser and the wallet, without leaving the dapp you’re currently using.
Finally, with this update we’re removing chat from Coinbase Wallet. One of our product design priorities for Coinbase Wallet has been to make it easy to send crypto to friends. We have some ideas for how to do that in an even better format than chat. In the meantime, eliminating chat makes for a more streamlined experience for users looking to store crypto or explore the decentralized web. Stay tuned for updates!
We love hearing from you, our users. Your feedback helps us make Coinbase Wallet better for everyone. You can now reach us at wallet.support@coinbase.com. Please reach out with feedback or if you ever need some troubleshooting.
Bookmark your favorite dapps on Coinbase Wallet was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on August 31, 2018This Month in Crypto: Experimental art, presidential campaign donations, and Yale economic research
A curated selection of meaningful moments in August that are bringing us all closer to realizing an open financial system for the world.
Artists Ai Weiwei and Kevin Abosch create conceptual art called Priceless on the Ethereum blockchain
Artists Kevin Abosch and Ai Weiwei. Source: https://whatispriceless.com/ Berlin-based Chinese artist Ai Weiwei has partnered with New York-based Irish artist Kevin Abosch to explore the concept of value in a work called PRICELESS. The work is largely made up of two standard ERC-20 tokens on the Ethereum blockchain, with PRCLS as its ticker. The works feature blockchain wallet-address alphanumerics representing different “priceless moments” shared between the artists. Each wallet is filled with a nominal amount of PRCLS token, validating the wallet and “symbolically inoculating the moment.”
Crypto accepted for first time as official donation for a U.S. presidential candidate
Andrew Yang, who is currently campaigning for the 2020 US presidency on the Democratic Party ticket, announced that he will accept bitcoin and any ERC-20 tokens as forms of donation. Donors who choose to give to the campaign using crypto will be verified through Yang’s compliance team by phone. The maximum allowed amount will be $2,500.Blockchain is the fastest growing skill for US freelancers: Upwork
In the most recent release of its quarterly Skills Index, Upwork, a global freelancing site, reported that blockchain topped the list as the fastest growing skill in Q2 out of more than 5,000 skills for the second consecutive quarter. The Skills Index calculates growth rates years over year based on freelancer billings. By that measure, blockchain experienced more than 3,500 percent year-over-year growth.Turkey establishes the country’s first blockchain center
The Istanbul Blockchain and Innovation Center (BlockchainIST Center) was inaugurated at Bahçeşehir University (BAU). According to the center’s director Bora Erdamar, as reported in the local news outlet Daily Sabah, BlockchainIST aims to be “the most important center of research and development and innovation in Turkey in which scientific studies and publications are made in blockchain technologies.”Zcash has announced its latest release, 2.0.0, which is compatible with the Sapling network performance upgrade, making it possible for developers to have cheaper access to the privacy features of the token. . . .With the launch of Flowertokens, the terra0 group is experimenting with tokenizing physical, natural objects on the Ethereum blockchain. Through the project, you can purchase either portions of an object or a complete physical object in real life, starting with dahlias (using ETH).
Coinbase Wallet features decentralized apps (or Dapps), which are apps powered by crypto. With Dapps, you can actually use your crypto in games, earn crypto, trade crypto, and more. Here’s a selection of what’s new and popular this month:
Popular Dapps
- Gods Unchained: A turn based card game similar in style to Magic: The Gathering and Hearthstone
- Peepeth: A blockchain-powered decentralized social network
- CryptoArte: Algorithmically generated art based on the Ethereum blockchain
- Cent: Earn crypto by answering questions and helping others
Recently Added
- MLB Crypto Baseball: One of the first Dapps to license IP from a major franchise
- CryptoGoods Swag: Create unique, physical goods like shirts, mugs, and iPhone cases with the cryptogoods you own
- Cryptovoxels: A virtual world on the blockchain where you can build and explore
- John Orion Young: Art made in virtual reality and traded on the Ethereum blockchain
- Tok’n’Talk: Social media that only the holders of an asset or a collectible can take part in
Yale economists study risks and returns of cryptocurrency: National Bureau of Economic Research
Yale Economics professor Aleh Tsyvinski and Economics Ph.D. candidate Yukun Liu analyzed years worth of past price data for Bitcoin, Ripple and Ethereum and created an index of exposures to cryptocurrencies of 354 industries in the US and 137 industries in China, which they published in a paper with the National Bureau of Economic Research. “Cryptocurrencies have no exposure to most common stock market and macroeconomic factors,” the authors state. “They also have no exposure to the returns of currencies and commodities. In contrast, we show that the cryptocurrency returns can be predicted by factors which are specific to cryptocurrency markets. . . . .We establish that the risk-return tradeoff of cryptocurrencies (Bitcoin, Ripple, and Ethereum) is distinct from those of stocks, currencies, and precious metals.” (The prices studied for bitcoin span from 2011 to 2018, while Ripple’s XRP and Ethereum’s ether data begins at the newer currencies’ inceptions in 2012 and 2015, as reported by CNBC.)Banks can save $27 billion annually by 2030 by adopting blockchain: Juniper Research
Market intelligence firm Juniper Research predicts that banks that integrate blockchain will achieve cost reductions amounting to over $27 billion before the end of 2030, as published in a report “The Future of Blockchain.” The savings would come not just in payment processing and reconciliation, but also in treasury operations and compliance.Two politicians officially disclose crypto holdings in their 2017 Financial Disclosure statements
- Bob Goodlatte is the first first member of Congress to disclose crypto holdings. The chair of the House Committee on the Judiciary indicated that he owned between $15,001 and $50,000 worth of BTC, while also holding positions in BCH and ETH valued at between $1,001 and $15,000 each. (His son, Bobby Goodlatte, is an angel investor in Coinbase.)
- U.S. Representative Tulsi Gabbard of Hawaii disclosed that she bought litecoin and ether late last year.
READ MORE: This Month in Crypto: July
READ MORE: This Month in Crypto: June
This website may contain links to third-party websites or other content (“Third-Party Sites”) for informational purposes only. The Third-Party Sites are not under the control of Coinbase, Inc., and its affiliates (“Coinbase”), and Coinbase is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. Coinbase is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by Coinbase of the site or any association with its operators.
This Month in Crypto: Experimental art, presidential campaign donations, and Yale economic research was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on August 29, 2018Understanding Web 3 — A User Controlled Internet
Coinbase breaks down the motivation and technology behind the development of Web 3
This 3-part post focuses on the why, what and how of the latest chapter in the world wide web’s history, called Web 3. Part 1 explains shortcomings of today’s web and how Web 3 represents an improvement; Part 2 focuses on what the Web 3 stack is; and Part 3 focuses on how developers can build on it.
Today’s world wide web, or the internet, has two key missing properties:
- It doesn’t hold “state”, independent of trusted operators
- It doesn’t have a native mechanism to transfer state
Lack of state is a result of the simplicity of the protocols that the web is built on, such as HTTP and SMTP. At any moment, if you were to query a node (a device connected to the internet) about its history or current state, it has no idea. From a user’s perspective, this would be like using the internet for the first time from a new browser (no history, favorites, saved settings or auto-complete), every time you use anything connected to the internet. Imagine having to submit your user information every time you’re trying to use a service or downloading all your favorite apps every time you open your device. The internet would not be useable, or at least extremely inefficient.
State, however, is crucial to the development of services and applications as it can represent value. As such, two key developments have remedied the state drawback. First, as Brendan Eich highlights, cookies were invented in order for web based applications written in JavaScript to preserve state on each local device. The problem with cookies however is that they are created and controlled by service providers, not the user. The user does not have any control over which provider is giving them state or has access to their state.
The second development that addressed the lack of state is centralized service providers that hold user state on their own machines. Today’s large internet companies like Google and Facebook all hold the state, and hence the value created, by billions of people. There’s nothing inherently wrong with this, as their users have benefited from services and value created by the same companies. The problem lies in how the internet benefits these centralized companies way more than it does the public.
The second key missing property of the internet, the lack of a native mechanism to transfer state, is partly a by-product of the first issue. If you can’t hold state (and the value it creates), you can’t transfer it. The ability to easily and efficiently transfer value is at the heart of economic development and modern finance. Any improvement in how efficiently you can transfer value has cascading positive effects. Today’s internet has made it easier to transfer information by orders of magnitude and thus has created immense potential for new businesses and services. However, if there’s no easy way for businesses to trade value, they need to find another way to profit from their services.
This is why, over the years, the web’s incumbent business model has become advertising, as advertising businesses are the only ones that can efficiently store and transmit the state of billions of users. Again, there is nothing inherently wrong with advertising. But the problem, this time, is three-fold:
- Third-party intermediaries facilitate and profit from every single advertising transaction;
- Advertising favors established businesses, which puts new businesses at a disadvantage, limiting the economy’s growth potential;
- A richer advertising economy is reliant upon more user data (which feeds ad models), creating misaligned incentives with users and bad UX.
A Direction for the Internet
The web, in and of itself, is a technological development. It’s just a bunch of pipes, indifferent to what humans do with it. Humans, ultimately, need to decide where to point it. Over the years, it’s become obvious that its current direction will not benefit those who aren’t already benefiting from it. For the web’s next decade or two, a better direction would be to facilitate:
- The creation of native economic value by any participant; and
- The transfer of this native value to any participant.
With the invention of blockchains, thanks to Satoshi Nakamoto and other academics before her/him/them, we now have a way for each participant in a network to hold and transfer state in a digitally native format. Many developers and entrepreneurs around the world have started to build (or #BUIDL, as the case may be) on this new state layer. With the advent of open platforms such as Ethereum, this is becoming easier by the day. As people become aware of what these new capabilities allow them to do, they have started to rally around the cry for an internet that is more open and fair, otherwise known as Web 3.
As explained in Part 1, today’s internet is a stateless internet — its participants can’t hold their own state, nor transfer it from one to another, natively. Blockchains, starting with Bitcoin, gave us a way to hold state in a digitally native way. Those of us in the crypto and blockchain ecosystem have started to refer to this new fundamental capability as Web 3. Although we’re still in the very early days, we’re starting to have a rough understanding of what benefits it will bring. L4, for example, has put together some great insights on these benefits.
This part is about what the Web 3 stack looks like today, and likely in the future:
The Web 3 Stack — A modular framework The layers in the framework above start from the top and get built down the y-axis. Colors represent compatibility between modules in the different layers. For example, today’s Crypto Goods (yellow), as depicted above, are compatible with EVM (blue to yellow) but not with the Bitcoin Script (green to red). EVM, in turn, is compatible with the Ethereum Blockchain (blue), but not with the Bitcoin Blockchain (green). This allows us to place in to the framework a future Crypto Good that is compatible with the Bitcoin Script and hence is recorded on the Bitcoin Blockchain (although this is highly unlikely due to technical challenges). Such a modularity is crucial to the robustness of Web 3, as upgrading one of the layers should not require a complete rewrite of everything below it. It’s also important to note that although the modules within each layer may end up looking completely different in 5 years, the layers themselves are intended to be comprehensive and cover all the pieces that make up Web 3.
State Layer
The state layer preserves the state of all that happens below it. It is almost exclusively provided by blockchain infrastructure and allows for any participant to take part as long as they obey the rules of the preferred network. Any successful network’s goal will be to be a default and reliable infrastructure, akin to today’s DNS providers. No one recognizes them when they work as intended (99% of the time), but we all feel the pain when they don’t.
This layer can either be a public or private/permissioned layer. One can argue that by default, state is a singular and universal truth, and that creating private layers is akin to creating parallel universes. There are also technical differentiators between public and permissioned layers, but they are beyond the scope of this piece and hence will be deferred to developers as a design choice for their products.
From hereon every layer is built on or is compatible with the layers below it.
Computation Layer
Software allows humans to give instructions to computers. The Web 3 Computation Layer allows humans to instruct the State Layer to do what they want. Not every Computation Layer allows for anything to be done, though. Bitcoin’s Script for example is very limited in that it allows for very little beyond transaction orders. The Ethereum Virtual Machine (EVM) on the other end is a full Turing Complete machine and, as such, allows for any arbitrarily complex computation to be executed by a state layer that supports EVM.
The choice of Computation Layer for application developers (as well as blockchain developers) is a key one as it determines which blockchains a given application can run on. For example any application compiled to EVM can today run on the Ethereum blockchain and not on the Bitcoin blockchain. The Ethereum Foundation is working to change Ethereum’s default computation layer to another technology called eWASM, based on WebAssembly, or WASM. Other State Layer projects such as Dfinity are also planning to be WASM compatible. This would mean that an app compiled to eWASM could theoretically work on both Ethereum and Dfinity blockchains, and any other blockchain that decides to be WASM compatible.
Component Layer
Combining the State Layer with the Computation Layer increases the design space for new types of digital value by 1,000x (aka programmable money). As such, we have already started seeing a ton of experimentation by developers. Some of these implementations have so much potential (examples below), it’s possible to imagine entire sub-economies being built on top of a given component. My colleague here at Coinbase, Jacob Horne, has laid out this phenomenon (along with the Protocol Layer) as Cryptoeconomic Primitives and did a deep dive on one of them, Crypto Goods.
Components are built on the Computation Layer, reusing standardized smart contract templates. OpenZeppelin is a well established resource to access such templates. The creator of a component is required to issue new smart contracts onto the State Layer.
Examples of these components are:
- Native Currency: A required and core part of any public blockchain. Gives any participant the right to pay the blockchain and receive the desired service in return, usually in the form of a transaction. Examples: Bitcoin, Ether
- Crypto Assets: Fungible assets which have a basic set of functionalities and metadata associated. Gave rise to the ICO boom as it allows anyone to create their own money. Beyond money, enables many other asset types to be digitized such as stocks, bonds, ownership rights. Most common standard is ERC-20.
- Crypto Goods: Non-fungible assets which have a basic set of functionalities and a richer set of metadata associated with it. Also known as Non-Fungible Tokens (NFTs) or crypto collectibles. Was first explored by CryptoPunks and made popular by CryptoKitties. Enables unique goods to be digitized such as collectible items, game assets, access rights, art. Most common standard is ERC-721.
- Identity: A self-sovereign container for identity information. In and of itself, provides very little valuable information about what it identifies. However, it allows for claims to be associated with the container, which can come from a large array of sources, such as governments or other trusted parties (e.g. Google, Coinbase). Leading proposals are ERC-725/ERC-735 and some of the protocol proposals by uPort. Ethereum Naming Service (ENS) is also highly relevant as a different type of identifier.
- Stablecoins: Crypto assets with a stable value, pegged against a source, such as the value of the USD. A very complex problem with different types of theoretical and practical solutions. Some examples are TrueUSD, Dai and Reserve.
Protocol Layer
Once you have Components created on the State Layer, they need to come alive. Certain functions are so fundamental and common to the lifecycle of these components that they are becoming standardized. This is not only because these functions need to talk the same language (hence the name Protocol Layer) but also because network effects make them more efficient. These protocols essentially enable the formation of healthy markets for relevant components, much like we have in the physical world, only orders of magnitude cheaper and more efficient.
Multiple different protocols have started to gain traction. These take the form of canonical smart contracts that are deployed by the team developing the protocol and called by each application that wants to apply the relevant function onto a component:
- Trading: If a component is to have value, it needs to be tradable. Trading protocols allow wallet-to-wallet trading of assets in a trustless way. It’s important to draw the distinction between these “relayers” and most “decentralized exchanges”, which take custody of assets on a smart contract. Trades that get facilitated via trading protocols never take custody of the traded assets. Some leading projects include 0x and Kyber Network. To find out more about the daily trading volumes supported on the 0x protocol, you can visit here.
- Lending: Lending increases the efficiency of any asset as it facilitates a return on the investment, which otherwise may have been zero. With a standard lending protocol, an individual in the US can lend money to another individual in Zimbabwe, smartphone-to-smartphone. Dharma and ETHLend are currently the two leading projects in this space.
- Derivatives: The market for derivatives is the largest in the world, estimated at $1.2 quadrillion globally. Building derivatives as a protocol allows trustless markets to form for components native to the State Layer. dy/dx and Market Protocol are two projects in this space.
Scalability / Transfer Layer
Blockchains’ scalability problems are infamous. Bitcoin’s blockchain has a transaction capacity of 7 transactions per second and Ethereum’s is 15 per second. Although there is ample debate about whether blockchains themselves should make concessions to facilitate thousands of transactions per second or not, it’s becoming widely accepted that a different layer (also known as Layer 2 scalability) for the transfer of state is required to support a robust topology. These scalability solutions need to be compatible with the Computation Layer of the underlying blockchain.
There are multiple proposals for how this can be done. Below are some examples:
- Payment Channels: Allows only for transfer of a given native currency. Is done via verifiable signatures that are attached to transactions on the State Layer. Requires funds to be deposited to facilitate disputes. Examples: Lighting Network for Bitcoin, Raiden for Ether, SpankChain’s Vynos implementation for Ether.
- State Channels: Allows for the transfer of any state. Is done via verifiable signatures that are attached to transactions at the State Layer. Requires funds to be deposited to facilitate disputes. Examples: Counterfactual for EVM, Celer Network for EVM, Arcadeum for EVM, FunFair’s Fate Channel for EVM, Connext for EVM.
- Side Chains: Allows for transfer of any state. Is done by other blockchains that are compatible with the main chain. Requires the side chain to be able to talk to the Computation Layer on the main chain. Also require funds to be locked to facilitate disputes. The side chain may be a centrally or privately managed infrastructure. Examples: PoA Network for EVM, Loom Network for EVM, Plasma Framewok for EVM. It should be noted that Plasma (which has a number of different implementations) has additional requirements built into it so that it provides users with a guarantee to securely withdraw their assets to the Computation Layer. In this way its value proposition is more similar to state and payment channels.
Now that we’re up to the fifth layer, we can see how this modular stack allows developers some independence from lower level design choices, such as which blockchain to build on. Let’s take the example of a hypothetical Stable Coin smart contract in the not so distant future — compiled to eWASM, runs on Ethereum and is compatible with a Counterfactual state channel (i.e. it can be transferred on the state channel). The same code for said Stable Coin would theoretically be compatible with both the EOS and Dfinity blockchains, as both run WASM. It could even be transferable on a similar state channel running on these blockchains.
User Control Layer
Up until this layer, it’s almost impossible for an average user to consume any of the functionality created, unless s/he talks directly to the Computation Layer via a command line interface. The main functionality of this layer is to manage a user’s private keys and be able to sign transactions on the State Layer. A transaction at the State Layer changes the state of a user’s account and hence is at the core of how users interact with Web 3 applications.
Anatomy of a Transaction on the Ethereum Blockchain There are two types of wallets:
Hosted Wallets: Made popular by Coinbase or other crypto exchanges, manage funds on behalf of the user by controlling a limited set of proprietary balances on the State Layer. These may pool users’ funds into aggregated accounts and, as such, manage individual users’ states themselves, outside of the State Layer. This operation may be feasible and economic if the only consideration is monetary value, however it becomes more complex with the increasing number of states that Web 3 applications bring.
There are also examples of newer type of Hosted Wallets which manage a dedicated blockchain wallet for each user and support the use of decentralized applications. These promise further flexibility, however are yet to be proven at scale.
User Controlled Wallet: Provide a much more flexible and direct way to consume all the arbitrarily complex operations made possible by Web 3. What makes a wallet a User Controlled Wallet is local custody of a user’s private keys and local signing of each transaction. This means that the wallet software doesn’t replicate the user’s private keys in a way that allows a third party to submit transactions on the user’s behalf.
This is the ultimate user touch point for all the underlying layers and thus needs to expose all available functionality to applications accessed through this layer. This is usually done through front-end libraries such as web3.js. Part 3 of this post dives deeper on how all of this comes together.
Application Layer
Much like the traditional web, the majority of the activity on Web 3 will be through third-party applications built on all the layers below. As an example, users realize value in CryptoKitties, which are Crypto Goods, because of all the functionality made available through apps that consume CryptoKitties, such as cryptokitties.co or kittyrace.com or cryptogoods.com. Applications built on Web 3 have different properties and requirements than traditional web applications, and thus are mostly referred to as decentralized apps, or DApps. As laid out by Matt Condon, DApps will need to become indistinguishable from existing apps if they are to be used by millions of users.
However, the new functionalities enabled by decentralization are precisely why DApps are so powerful and why we may see usage numbers beyond today’s web as the stack matures. We are already seeing cutting edge use cases being created by developers around the world in different categories, and users responding to them by putting their money where they see value.
- Fundraising: Close to $20B raised, 723,000 unique accounts participated, 8,000+ companies received investments. While the space has seen its share of fraud, as of the date of this article, it is the most popular application category, based on the number of accounts that have taken part. Additionally, its attraction continues, as seen by the many new fundraising platforms that facilitate ICOs that are subject to regulation.
- Trading Platforms: Whereas traditional crypto trading platforms act as an intermediary between you and the State Layer (by acting as Hosted Wallets), trading platforms built as Web 3 enabled applications allow users to remain in control of their funds and not deposit them in to a third party wallet address. In addition, there are potential UX benefits for the trading experience. Many different projects are working to overcome some of the technical challenges, but we’re already seeing usage pick up in this area.
- Games & Collectibles: $50–100M raised with 60,000 unique accounts owning some Crypto Good. Although way smaller than fundraising, games that interact with Crypto Goods offer an exciting potential for the huge gaming market.
Summary of Part 2
In this part, I aimed to put together a holistic picture of the Web 3 stack. As explained, the Web 3 stack is comprised of modular components that allow for state to be preserved across all participants, whilst preventing vendor lock-in to layers underneath. Thanks to this, an application does not need to rewrite its entire stack if it wants to change the state layer (i.e. blockchain). This is powerful as it creates healthy competition, and allows each layer to preserve the value it creates, without having to worry about what happens if the rules of the game get changed later on.
In Part 1, we reviewed how today’s internet is a state-less internet — its participants can’t hold their own state, nor transfer it from one to another, natively. Blockchains, starting with Bitcoin, gave us a way to have a stateful web of computers. Those of us in the crypto and blockchain ecosystem have started to call this new internet as Web 3, which we reviewed in Part 2.
Web 3 adds a whole new infrastructure layer for applications to interact with, as well as new client functionalities and requirements. The users also need to learn new UX concepts to be able to use these applications. As such, the architecture of Web 3 applications introduce additional elements to the current Web 2.0 framework, as well as new building blocks and tools for a developer to get familiar with.
Architecture of a Web 2.0 application vs that of a Web 3.0 application Web 2.0 vs Web 3.0 Architecture
A simplistic version of today’s Web 2.0 architecture includes a client software, usually a browser or a self-contained application, and a suite of servers providing content and logic, which are all controlled by the same entity — let’s call it Game Co. In this model, Game Co. has sole control over who may access its servers’ contents and logic, as well as the track record of which users own what and how long that content is kept live. There are many examples in the pages of technology history of how internet companies have changed the rules on their users or stopped their service, with users having no power to preserve the value they’ve created.
Web 3.0 architecture leverages what’s enabled by a universal State Layer. It does this by allowing two things:
- Allowing applications to place some or all of their content and logic on to a public blockchain. Contrary to standard Web 2.0, this content and logic can become public and accessible by anyone.
- Allowing users to exert direct control over this content and logic. Unlike Web 2.0, users don’t necessarily need accounts or privileged API keys to interact with what’s on the blockchain.
Web 3 applications enable this with the help of two key infrastructure pieces:
- Wallets: Beyond just being the User Control Layer for the Web 3 stack, modern wallets, such as Coinbase Wallet, interact with the main client front-end to allow a seamless user experience. They do this by allowing applications to send requests to the wallet itself using standard libraries, web3.js being the most popular of these. A sample web3.js call can be a payment request, asking the user to confirm that the wallet can send a specified amount of funds to the application’s address. When the user accepts, two things happen: 1) the wallet lets the application front-end know with a response, so it can present a “Payment Submitted” screen, 2) the wallet makes an RPC call to the blockchain server to submit the approved transaction to the blockchain. This is where the second infrastructure piece comes into play.
- Blockchain Node: There are two types of agents that constantly monitor and engage with a blockchain — miners and nodes. Miners directly maintain and run the blockchain, whereas, nodes monitor and submit transactions to the blockchain. One can think of them analogous to ISPs versus cloud services providers (e.g. AWS). Similar to how most applications today use AWS’s services to run their application backends, blockchain node providers, such as Infura, do the same with blockchain nodes. When a wallet wants to submit a transaction to the blockchain, or query state information from the blockchain, it makes a call to the node provider. Applications’ app servers can also interact with the node providers themselves, to keep the app’s logic up to date, by making similar RPC calls.
What Do Developers Need To Know?
Tools & Frameworks
Knowing what tools and frameworks to use and being proficient with them is a considerable portion of any developer’s life. Although the Web 3 space is still in its early days, we’re starting to have usable tools that enable developers to get to an MVP stage and iterate faster and faster. This is most visible on Ethereum where, thanks to the work of many in the community, developers are starting to flock in increasing numbers.
Credit for chart: Stefano Bernardi; Source of data: Github Although I won’t go through the tools available in detail, it’s helpful to know which ones are at developers’ disposal. The list below is by no means comprehensive (in fact, there is such a list here), but includes tools new developers should start with.
Design Choices
What to decentralize: This is a new and key choice. Most early developers have targeted to decentralize the maximum amount possible and put everything on the blockchain. Given the slow and expensive nature of present day blockchains however, this is not possible to do at scale. CryptoKitties was perhaps the first DApps that tried to keep certain portions centralized. For example, their breeding logic is not public. Although they have received some criticism for this, it hasn’t stopped users from spending a significant amount of money to purchase cats bred by this logic. Gods Unchained is another example where the game itself will be hosted on a standard cloud infrastructure, but ownership of assets will be tracked on the State Layer.
Although many DApps will take different approaches on decentralization, a first principles way of approaching this choice would be to adopt a “minimally viable public state” approach. If you are building a game where users can own assets, then ownership should be on the blockchain. If you are building a prediction market, then the reporting and pay out of your market should be on the blockchain. At the end of the day, users will find your application valuable if they can claim true ownership over the key activities your application enables.
Web app vs native app: This is a choice that’s decades old, yet takes on new form with Web 3 applications. Most DApps today are web apps because of two simple reasons: a) it doesn’t require the user to download a new app every time, b) users can use your app without having to create a new wallet every time. The small number of native DApps that exist all lead the user to create a new wallet, which is not the ideal user experience. It’s easy to see how this is not a feasible future, as users will not maintain keys for hundreds of wallets. There will, in the near future, be more seamless ways of enabling native apps to go past this UX challenge, but for now, web apps allow a much easier onboarding experience.
Desktop vs mobile: The Web 3 version of this choice isn’t about choosing between one or the other, but about how users end up using your DApp on both. On desktop, a Chrome extension like MetaMask has been how most users have interacted with DApps. Although it requires the user to download a new extension, the user is still interacting with a browser interface they are familiar with.
On mobile however, extensions are not possible, at least on iOS. That’s why wallet apps, such as Coinbase Wallet, place browsers inside their apps. Once in the browser view, the DApp experience is the same as on desktop. There also are several technical nuances to be aware of when developing for mobile, which Coinbase Wallet’s Head of Engineering Pete Kim covers here.
Other challenges with no solutions to date:
- Who pays for gas: Every DApp built on Ethereum today makes its users pay the cost of transactions, called gas for the Ethereum blockchain. This won’t be feasible over the long term if millions of non-crypto-native people are to use Web 3 applications. There are a number of theoretical solutions, some which are closer to being practical, such as gas relayers, however none are functional yet.
- App-specific accounts or not: One of the exciting applications of Web 3 is universal identity. Since there aren’t many functional identity solutions today, some DApps are still asking users to create an account, enabling some identity to be associated with their activity on the app. This is not too different than the Web 2.0 way of doing things. Once we have functional decentralized identity solutions, how should DApps treat and present this? Although there’s no clear answer, some are already presenting proposals, such Origin’s demo built using ERC-725 and 735.
Summary
In Part 3, I aimed to summarize the modifications Web 3 brings to the architecture of applications and what developers should know when starting to build Web 3 apps. A great resource for beginners is Cryptozombies, which is a fun workshop teaching anyone how to create their first Web 3 app.
Although the way to build Web 3 apps will change in many ways as the infrastructure around it evolves, what’s key is that apps are being built today. It’s the wild west of the web as we know it and a lot of really smart teams are starting to tackle the challenges and opportunities made available.
This concludes our three part post on Understanding Web 3 — A User Controlled Internet. Here at Coinbase, we are building products to support an Open Financial System, and we see Web 3 as the way developers all around the world will build the products and businesses that make this vision a reality. If you want to join us and the rest of the ecosystem by building your own Web 3 application, make sure to check out Coinbase Wallet to get access to the many users who are already using DApps! We’re also hiring for many different roles and investing in the companies that will build the decentralized web with us.
Thanks to Linda Xie, Josh Stark, Tony Sheng, Sid Coelho-Prabhu, Jacob Horne and Daniel Harrison for feedback.
Unless otherwise indicated, all images provided herein are by Coinbase.
Disclaimer: This website may contain links to third-party websites or other content for information purposes only (collectively, “Third-Party Sites”). The Third-Party Sites are not under the control of Coinbase, Inc., and its affiliates (“Coinbase”), and Coinbase is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. Coinbase is not responsible for webcasting or any other form of transmission received from any Third-Party Site. Coinbase is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by Coinbase of the site or any association with its operators.
Understanding Web 3 — A User Controlled Internet was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
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Posted on August 28, 2018The rise of crypto in higher education
Coinbase regularly engages with students and universities across the country as part of recruiting efforts. We partnered with Qriously to ask students directly about their thoughts on crypto and blockchain — and in this report, we outline findings on the growing roster of crypto and blockchain courses amid a steady rise in student interest.
Key Findings
- 42 percent of the world’s top 50 universities now offer at least one course on crypto or blockchain
- Students from a range of majors are interested in crypto and blockchain courses — and universities are adding courses across a variety of departments
- Original Coinbase research includes a Qriously survey of 675 U.S. students, a comprehensive review of courses at 50 international universities, and interviews with professors and students
When David Yermack, the finance department chair at New York University Stern School of Business, first offered his course on blockchain and financial services in 2014, 35 students signed up, eight fewer than the school’s typical elective.
By spring 2018, the number of enrolled students climbed to 230, forcing Stern to move the class to its largest auditorium. This academic year, Yermack will teach the blockchain course both semesters to meet interest from students.
Yermack says he first developed the class because he was interested in bitcoin and how quickly interest in the cryptocurrency was growing. But other reasons soon emerged, notably demand from companies for people who understood cryptocurrency-related issues. Now, he sees his class as a way to give students the skills they’ll need for jobs in the future.
“A process is well underway that will lead to the migration of most financial data to blockchain-based organizations,” he says. “Students will benefit greatly by studying this area.”
Similar scenes are playing out at top universities around the world. Students are flocking to classes on cryptocurrency and blockchain — the “distributed ledger” technology that makes decentralized financial systems work — motivated in part by a hot job market for graduates with training in those fields.
Universities, in turn, are forming research centers and adding more crypto-related courses, in part to meet rising demand and also because they now see cryptocurrency as an area worthy of serious academic study.
Coinbase reviewed course catalogs at the top 50 universities and found cryptocurrency classes across a variety of departments, including anthropology and finance — not only computer science.
In fact, the rise in offerings across disciplines maps to student interest: Students with a diverse set of majors say they’d like to take cryptocurrency classes, according to a Coinbase survey conducted in partnership with Qriously. Nearly half of all social science majors expressed interest in taking a crypto class.
One possible reason for such diverse interest in blockchain is its potential to impact society across many domains. “Blockchain combines theory and practice and can lead to fundamental breakthroughs in many research areas,” says Dawn Song, a computer science professor at University of California, Berkeley. “It can have really profound and broad-scale impacts on society in many different industries.”
To assess the current landscape of cryptocurrency in higher education, Coinbase analyzed the courses at the world’s top 50 universities as ranked by U.S. News and World Report. Our study focused on classes available to undergraduate-level students in the fall 2018 semester or the most recent semester for which information was available online.
The analysis found that 42 percent of the top 50 universities offer at least one class on blockchain or cryptocurrency, and 22 percent offer more than one. Expanding the results to include longstanding foundational classes on cryptography, 70 percent of universities offer at least one crypto-related class.
Blockchain and cryptocurrency courses are most prominent in the U.S. Only five of the 18 international universities on the list, or 27 percent, offer at least one class on blockchain or cryptocurrency. And only two — Swiss Federal Institute of Technology Zurich and National University of Singapore — offer more than one.
Johns Hopkins University offers a business course on blockchain, where students learn about its security features and “the potential benefits and weaknesses of its fundamental structure as applied to businesses and organizations,” according to the school’s course catalog.
At Princeton, students can take an information-security class focused on secure computing systems, cryptocurrencies, blockchain, and related economics, ethics, and legal issues.
Cornell offers the highest number of classes when including cryptography, cryptocurrency, or blockchain. The 28 courses include “Anthropology of Money” and “Introduction to Blockchains, Cryptocurrencies, and Smart Contracts,” which covers the cryptocurrency bitcoin and “the technological landscape it has inspired and catalyzed,” according to the course description.
More than half of the universities analyzed offer at least one class on cryptography, the study of creating and solving coded messages and a key technical foundation for blockchain and cryptocurrencies.
“The techniques used in blockchain aren’t necessarily new,” says Song, as it draws on areas such as cryptography, game theory, and distributed systems. These are areas “where research and even education has been around for a really long time.”
Stanford launched its Center for Blockchain Research this summer to bring together students and faculty from across the school’s departments to work on various aspects of cryptocurrencies and blockchain.
Dan Boneh, a professor of computer science and electrical engineering at Stanford University and co-director of the center, said that every time he talks with a new team in the group he finds himself walking away with three new research ideas. “There are new technical questions being raised by blockchain projects that we would not work on otherwise,” he says.
Other leading universities that are known for strong engineering programs are adding courses and programs centered around blockchain, too. The University of Waterloo, Georgetown University, and the University of Illinois at Urbana-Champaign are among those expanding their research and course offerings.
At Berkeley, Song co-taught a course in the spring semester of 2018 on “Blockchain, Cryptoeconomics, and the Future of Technology, Business and Law.” It was a collaboration between the school’s computer science, business, and law schools and admitted an equal number of students from each school.
Song says the course was “hugely popular,” noting that the instructors had to turn away more than 200 students because their classroom only had a 70-student capacity.
That interdepartmental approach may emerge as a hallmark of cryptocurrency and blockchain education, given the number of departments that are currently offering classes on the subject. Coinbase’s analysis found that of the 172 classes listed by the top 50 universities, 15 percent were offered by business, economics, finance, and law departments, and four percent were in social science departments such as anthropology, history, and political science.
Harvey says students recognize how in-demand this kind of knowledge is now. “If you’re graduating from law school it’s a tough market these days,” Harvey says. “However, the law students that are trained in blockchain, they don’t need to apply anywhere. People are just asking them to join their firms.”
Among students, interest in cryptocurrency and blockchain cuts across fields. In fact, more social science majors — 47 percent — said they were interested in learning about cryptocurrency than computer science and engineering majors — 34 percent — according to a survey of 675 U.S. students commissioned by Coinbase and conducted by Qriously.
The survey found that 17 percent of computer science and engineering majors have already taken a course that focuses on cryptocurrency and blockchain, as have 15 percent of economics and math majors and 11 percent of business majors. Just five percent of social science majors have taken such a course, the survey found.
Among all students surveyed, 17 percent said they consider their knowledge of cryptocurrency and blockchain very good, compared to just nine percent of the general population surveyed at the same time. Similarly, 18 percent of students said they own (or have owned) cryptocurrency, twice the rate of the general population.
A quarter of all students said they would definitely or probably take a course focused on cryptocurrency or blockchain.
“There’s tremendous excitement” among students right now, says Benedikt Bünz, a doctoral student at Stanford focusing on cryptocurrencies.
Bünz was pursuing a master’s degree in artificial intelligence when he took a cryptography class. That sparked his interest in cryptocurrencies, setting the direction for his doctoral degree.
People often approach Bünz asking if he’d be able to recommend someone with knowledge of cryptocurrencies for a job, he says, but the high demand means all the candidates he knows already have positions secured.
These days, he says, “if you’re an expert in cryptocurrencies and cryptography you’ll have a difficult time not finding a job.”
There are also plenty of options for people not currently enrolled at a university to learn more about crypto. Online learning sites like Udemy, Coursera, edX, and Udacity offer hundreds of courses, including general lessons in foundational cryptography and more specialized classes on blockchain and cryptocurrency.
These classes draw on a range of experts, including professors from some of the top 50 global universities and practitioners in the field. For instance, Coinbase Chief Technology Officer Balaji S. Srinivasan is one of several industry experts featured as part of the Udacity nanondegree program called “Become a Blockchain Developer.” The program has two three-month terms and is focused on “mastering job-ready skills with a hands-on approach.”
Academia isn’t known for moving quickly. But professors say that the maturation of blockchain and cryptocurrency and their adoption by businesses and other groups over the last few years has made it clear that it’s a field with the potential for wide-ranging impact. And that’s causing universities to take it seriously. “You need to prepare your students for the future,” Duke’s Harvey says, and “blockchain is not going away.”
A note on methodology
Coinbase analyzed the courses currently offered at the world’s top 50 universities as ranked by U.S. News and World Report: Best Global Universities 2018. Our study focused on classes available to undergraduate-level students in the fall 2018 semester or the most recent semester for which information was available online. The research excluded classes that are graduate-level only. It left in classes that are open to undergraduate and graduate students or classes that were not clearly marked as graduate-level only. Results for the search term “crypto” were excluded from the tallies and course descriptions listing if they were clearly unrelated to cryptocurrency or the foundational math principles underlying the technology.To assess student sentiments about crypto, Coinbase also commissioned a study conducted by Qriously of 675 U.S. students ages 16 and older. The general population survey included 6,011 respondents over the age of 16.
The rise of crypto in higher education was originally published in The Coinbase Blog on Medium, where people are continuing the conversation by highlighting and responding to this story.
