Amazon Web Services (AWS), one of the most well-known cloud service providers, makes it no surprise that Coinbase, an American cryptocurrency exchange, is trying to capitalize on this success by creating its own cloud infrastructure solution, Coinbase Cloud.
Surojit Chatterjee, Coinbase chief product officer, stated that “We want to become the AWS for crypto” in an exclusive interview with Forbes. “We’re building the whole Coinbase Cloud suite, which you can think about as crypto computing services that will help developers build their apps faster,” said Surojit Chatterjee, chief product officer at Coinbase.
Coinbase Cloud was previously known as Bison Trails. This cloud-based staking solution was purchased by Coinbase earlier this year for an undisclosed sum, which was believed to exceed $80 million. Coinbase states that Bison Trails does not manage staked assets and is therefore a non-custodial platform.
Amazon Web Services (AWS), once an option for Amazon customers in Seattle, was quickly overshadowed and surpassed by Amazon. The Amazon subsidiary, which was established almost 20 years ago, is still the company’s main profit engine. AWS generated $13.5 billion in operating earnings annually in 2020 from a revenue base that was $45.3 billion. This is 63% more than its parent company.
Related: CEO of Coinbase says NFTs could be as big or larger than crypto on Coinbase
Coinbase officials suggested that they should become the “Amazon for cryptocurrencies” as soon possible. Its success is not due to being the first major digital currency company to go public, but rather to having achieved the largest direct listing in history. Its income stream is heavily dependent on transaction fees.
This is often true for line items that are dominated solely by one category’s revenue concentration. Facebook and Google, for instance, are almost entirely dependent on advertising to make their money. Their line items have generally this level of revenue concentration.
Coinbase and other exchanges could be vulnerable due to their dependence on the market, and overall trading volumes. This is because trading volumes are directly linked to price swings and can pose a problem for cryptocurrency platforms such as Coinbase or any other exchange.
Coinbase wants to increase trading income by offering subscription services that are less susceptible to market swings. It offers institutional custody services, staking options, a learning portal that rewards users with crypto, an ecommerce checkout system, and the ability for clients to issue Visa debit card. A subscription plan is being considered that would allow customers to trade for a fixed monthly fee.
According to Chatterjee the acquisition of Bison trails was a crucial step in Coinbase’s transition to a mature financial system. The platform supports crypto custodians and funds, as well as token holders. Its customers include Andreessen Horowitz, Current, and Turner Sports.
Coinbase Cloud currently holds $30 billion worth of crypto assets. Coinbase is one of the most well-known cryptocurrency platforms. It has over 73 million customers, 10,000 organisations, and 185,000 ecosystem partners across more than 100 countries. Coinbase claims that it has processed transactions in excess of $700 billion since its inception.
Eileen Wilson –Technology and Energy
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