With Amazon Web Services (AWS) being one of the most popular cloud service providers on the planet, it should come as no surprise that Coinbase, a US cryptocurrency exchange, is trying to build on its success by developing its own cloud infrastructure solution, Coinbase Cloud. …
“We want to be an AWS for crypto,” Coinbase Chief Product Officer Surojit Chatterjee said in an exclusive interview with Forbes. “We are building this entire suite of Coinbase Cloud products that you can think of as crypto services to help developers build their apps faster.”
Before it became Coinbase Cloud, the service was called Bison Trails, a cloud-based betting infrastructure solution that Coinbase acquired earlier this year for an undisclosed sum of more than $80 million. According to Coinbase, Bison Trails is not a custodian platform, which means that it does not manage client assets.
Amazon Web Services (AWS) was once classified as a secondary Amazon in Seattle, giving way to Amazon. However, the Amazon subsidiary, which debuted nearly 20 years ago, is now the company’s most important revenue stream. AWS generated annual operating revenue of $13.5 billion in 2020 with base revenue of $45.3 billion, or 63% of the parent company’s total revenue.
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Coinbase encouraged them to become the “Amazon of Cryptocurrency” as soon as possible. Most of the awards are not due to the fact that it was the first major cryptocurrency exchange to be listed on the exchange, but rather because it achieved the largest direct listing in history. As a result, revenue streams are highly dependent on transaction fees.
This is often the case with goods in which the concentration of income to one category predominates. Facebook, for example, and Google depend almost entirely on advertising to make money. Thus, their order lines usually have this level of revenue concentration.
However, due to its high dependence on the market and overall trading volumes, Coinbase and other exchanges can be very vulnerable. Since trading volumes are closely related to price fluctuations, this dependence can be a serious drawback for crypto platforms like Coinbase or any other exchange.
Coinbase is committed to increasing trading revenue by offering subscription services that are more resilient to market fluctuations in order to mitigate this risk. It provides, for example, institutional guardianship services, betting opportunities, an educational portal that provides users with cryptocurrency as a reward, an e-commerce cash register system, and the ability to issue Visa debit cards to customers. He’s also trying out a subscription plan that offers customers a monthly business discount at a set price.
Chatterjee said the acquisition of Bison Trails was a crucial step in Coinbase’s transition to a more mature financial system. The platform supports crypto managers, enterprises, decentralized applications, and token holders. Some of their clients are Andreessen Horowitz (a16z), a financial technology firm Current and Turner Sports in New York.
As of November 2021, Coinbase Cloud has invested $30 billion in cryptocurrency on its platform. Coinbase, one of the most popular cryptocurrency platforms, has more than 73 million real customers, 10,000 institutions, and 185,000 ecosystem partners in over 100 countries. It has processed more than $700 billion in transactions since its inception, according to Coinbase.