Earn.com acquisition signals more Bitcoin-industry consolidation, like the early days of the oil business

Leo Zhang

By Leo Zhang

News & Commentary

The big story in the cryptocurrency space today is Coinbase's acquisition of Earn.com for over $100 million, adding another distribution mechanism to the exchange's stack.

Since last year's rapid price increase, cryptocurrency exchanges have become well-capitalized enough to begin buying up adjacent businesses. As gateways between traditional assets and novel ones, exchanges are profitable during the capital-formation phase of a new industry--much like the oil industry in late 1800s, where companies like Standard Oil used early profits to quickly consolidate distribution networks.

The hiring of a dedicated M&A director at Coinbase suggests Earn.com is unlikely to be the last major acquidition. Read the announcement from Brian Armstrong, CEO of Coinbase, here.

The $100 million man
(TwoBitIdiot)

"Most importantly, will it perform as an investment? If it does, it would make for a key milestone for Coinbase — an acquisition of a going concern that continued to thrive under new management. That would have ripple effects in the coming years as other teams consider exiting to what looks like it will be the industry’s first IPO."

Commentary on Earn.com as a distribution method

Discussion thread on the utility of 21Inc from 3 years ago

Commentary on the transaction

An (incomplete) list of acquisitions

Centralize, then decentralize
(Medium, by Arjun Balaji)

"Early-stage projects are fraught with risk across every conceivable axis and need the freedom to be able to quickly pivot and iterate. This is only possible with some form of centralization. Ethereum, ZCash, and even Bitcoin (by way of obscurity) were much less decentralized when they were first designed."

Technical & Updates

Discussion thread on mining on centralized pools

The importance of governance: analyzing the aftermath of the Monero hard fork
(btcmanager, by Noah Pierau)

"The aftermath of the Monero hard fork provides an excellent example of why governance is such an important theme for blockchains. Sustained chain splits resulting from (scheduled) hard forks can endanger the success of the original project. Blockchain governance has the potential to streamline the process of updating the consensus rules while minimizing the risk of sustained hard forks."

Explanation of SiaFund - a tokenized security offering

How long does it take to crack iOS passcodes