In an interview with Ark’s Cathie Wood, Coinbase Founder and CEO Brian Armstrong shared his thoughts on some of the crucial things that are happening in crypto as well as some of the platform’s latest developments. The conversation took place at the State of Crypto Summit 2024.
Layer 2
Armstrong emphasized the significance of the exchange’s layer-2 solution, Base, in advancing blockchain technology. He likened the transition from layer-1 to layer-2 networks to the shift from dial-up to broadband internet, emphasizing the improved speed and reduced costs.
Layer 2 enables features like instant, free USD coin transfers globally, which revolutionize payments, remittance and other economic activities by reducing friction: “That’s a game changer for things like payments and remittance and um you know all kinds of things that just reduce friction in the economy,” he noted.
DeFi
Armstrong also highlighted the evolution of crypto from a mere asset class, now worth over a trillion dollars and used by over 400 million people, to a tool for real-world utility, like payments, voting, decentralized social networks, etc. These developments are crucial for increasing global crypto adoption, potentially reaching over a billion users.
The transformative potential of peer-to-peer transactions lies in eliminating intermediaries, thereby reducing economic friction. Real-time settlement through crypto can cut out middlemen and the associated risks of intraday settlement.
The real potential and innovation here comes from these peer-to-peer transactions. How do we eliminate intermediaries? Crypto really kind of makes a lot of those intermediaries unnecessary. If you can do instant settlement, you don’t have to have uh you know an intermediary with some sort of risk that is introduced with intraday settlement. If it’s just real-time settlement you can cut out the middlemen and you can reduce friction in the economy.
Armstrong envisions a future where crypto powers a significant portion of global GDP, due to its efficiency. He predicts that within a decade, 25% of global GDP could be conducted via crypto rails, driven by their ability to streamline and simplify economic transactions.