During an interview with Ark\’s Cathie Wood, Coinbase Founder and CEO Brian Armstrong discussed some key developments in the crypto space and shared insights on the latest advancements on the platform. This conversation took place at the State of Crypto Summit 2024.
Layer 2 Solutions
Armstrong highlighted the importance of Coinbase’s layer-2 solution, Base, in driving blockchain technology forward. He compared the transition from layer-1 to layer-2 networks to the evolution from dial-up to broadband internet, emphasizing the enhanced speed and reduced costs.
The implementation of layer 2 technology enables features such as instant, free USD coin transfers globally, which have the potential to revolutionize payments, remittances, and other economic activities by minimizing friction. Armstrong stated, “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.”
Decentralized Finance (DeFi)
Armstrong also discussed the transformation of crypto from a mere asset class to a tool with real-world utility, valued at over a trillion dollars and utilized by more than 400 million individuals. These advancements are critical for driving global adoption of crypto, with the potential to reach over a billion users.
The potential of peer-to-peer transactions lies in eliminating intermediaries, thereby reducing economic friction. By enabling real-time settlement through crypto, middlemen and the associated risks of intraday settlement can be eliminated.
The real innovation stems from peer-to-peer transactions. Crypto has the ability to make many intermediaries redundant. With instant settlement, the need for intermediaries and the risks associated with intraday settlement can be eliminated, reducing friction in the economy.
Armstrong envisions a future where crypto plays a significant role in global GDP, driven by its efficiency. He predicts that within the next decade, 25% of global GDP could be transacted through crypto rails, streamlining and simplifying economic transactions.
