Below is an internal memo that I shared with Coinbase employees this week and would like to share with the public so that we can see how we are working to increase our economic independence.
Tl; dr: Our main thesis is that further adoption and use of cryptocurrency will increase the economic freedom of the world, because crypto solves many of the flaws of the current financial system that hinder economic freedom.
Every quarter at our company All Hands, we review our mission (That’s what we’re trying to achieve) And our strategy (How do we get there). One question I often hear from employees is: “How does cryptocurrency create more economic freedom in the world?” This is a great question, so I wanted to share my thoughts with all of you.
First, a refresher: an integrated measure of economic independence in 12 areas. It determines the amount of human rights to control their own labor and property in each country and worldwide. Economic freedom changes dramatically around the world, and while our economy is growing globally, the government of a single country has significant control over the financial and economic freedom of its people. Less economic freedom in a given country is not always due to malicious activities (e.g., fraud, oppression, etc.) – it is often due to mismanagement (weak financial and monetary policy) or simply poor infrastructure.
Crypto and economic freedom
The question is asked: How can we build a global economy where anyone can participate with an Internet connection, where property rights are exercised and where money protects its value? Crypto is the solution. Crypto may not directly improve every aspect of economic freedom (e.g., tax policy and government spending), but it can improve most underlying drivers (see below).
Why is crypto so uniquely positioned to increase economic freedom? Because it has the following features:
Crypto is an open, global network
The crypto network is open, removing border barriers. It allows everyone in the world to transact on a shared network, similarly they communicate on a shared network (Internet). More importantly, these networks themselves are not regulated by the government which could impede economic freedom (and prosperity) by using their financial systems. This design policy leads to a more open market and increases trade freedom, investment freedom, financial freedom and financial freedom.
Crypto applies property rights
Property rights allow people to save their income, increase their wealth and make long-term plans because they know that the fruits of their labor are safe from unjust seizure or theft. Before crypto, your confidence in property rights was an act of your trust in your government and respect for the rule of law. With crypto, anyone can acquire and augment their assets without the intervention of a trusted third party such as the government or a bank, or fear that their assets could be easily confiscated. Property rights are also about the ability to enter into a contractual agreement. In some areas around the world, a deal has little value because you can’t be confident in its implementation. Smart contracts apply to the blockchain from the courts, enabling profits from specialization and commercial exchanges.
Crypto networks are often pseudonyms (or even anonymous). They don’t care where you live, what your race or gender is, or who you voted for in the last election. Unlike the current financial system, they are naturally open and neutral. Anyone with an internet connection can create a wallet, pay in crypto, spend in crypto, and acquire wealth in crypto. Service providers like Coinbase have compliance programs under the law, but we do not control access to all crypto and we do not own the network. If we make a bad decision, or are forced into bad control, anyone can access the crypto network through another provider. Also, self-care wallets like Coinbase Wallet offer more freedom in terms of financial inclusion.
Enables crypto mobility
As I mentioned above, there are important elements of economic freedom that cryptocurrency cannot directly benefit (e.g., government integrity, tax policy, financial health, etc.). But cryptocurrency By Switching reduces costs and provides conditions for movement, giving people the opportunity to acquire resources and cross borders. Cryptocurrency is the ultimate symbol of individual power, significantly reducing immigration / exit barriers and thus increasing economic freedom.
As you can see, cryptocurrency can influence many factors that lead to more economic independence. Both of these can help build better-functioning economies in less economically independent countries and facilitate better living. That is why we as a company are having a core thesis More adoption and use of cryptocurrencies will increase the economic independence of the world.
Technology is the longest lever we can pull to improve human condition. At its core, cryptocurrency is a technological advancement that allows us to create more free and open financial systems that enable people to have control over their own labor and property rights. It is the best tool to advance our mission of increasing economic freedom in the world.
What does this mean for Coinbase? Crypto is still newborn in many ways. It’s still hard to use, crypto networks are plagued with scaling challenges, and the economy built on top of crypto infrastructure is in its early days. Our strategy and roadmap are ready to address these challenges: we are focused on creating easily accessible products that eliminate the complexities of blockchain and we are building the primitiveness of a functioning financial system. We still have a long way to go, but the future is bright.
How crypto enables economic freedom was originally published in the medium on The Coinbase blog, where people continue the conversation by highlighting and responding to the story.