Here’s what Coinbase’s blue dot means
Brian Armstrong, co-founder and CEO of Coinbase, speaks at the Singapore Fintech Festival. Bryan van der Beek—Bloomberg/Getty Images
On Wednesday, Coinbase’s main Twitter account posted a six-second video of a blue dot fading into a black background. Thursday date – Feb. 23, 2023 – was all that was revealed. Speculation on Crypto Twitter was rife.
🔵 2.23.23 pic.twitter.com/DRvvBS5y9v
— Coinbase (@coinbase) 22 February 2023
The publicly traded cryptocurrency exchange announced later Thursday that it is launching Base, an ecosystem built on top of the Ethereum blockchain that allows developers to build decentralized applications, or dapps.
“To bring billions of users into the crypto-economy, dapps must be easier, cheaper and safer to interact with,” the company wrote in a blog post. “For this to happen, we need to make it even easier for developers to build these dapps.”
Coinbase’s latest offering continues a push toward a long-stated goal of making cryptocurrency and blockchain technology, which can seem impenetrable to lay customers and some developers, accessible to a wider audience. And for a cryptocurrency exchange that relies heavily on trading fees, the launch of the new developer ecosystem is another attempt to diversify the company’s products amid the extended cold of Crypto Winter.
1/ 🔵 We are happy to announce @BuildOnBase.
Base is an Ethereum L2 that offers a secure, affordable, developer-friendly way for anyone, anywhere, to build decentralized apps.
Our goal with Base is to make onchain the next online and onboard 1B+ users in the crypto economy. pic.twitter.com/RmwZFJzGGs
— Coinbase (@coinbase) 23 February 2023
Base, which Coinbase describes as “secure, affordable, [and] developer friendly”, is built on top of Ethereum, one of the largest and most widely used blockchains. This makes it a layer-2 network, or a system built on top of another blockchain. Fees paid to operate on Base will be paid with Ether, Ethereum’s native cryptocurrency, not with a new token, the company said.
To launch Base, the cryptocurrency exchange is partnering with Optimism, another layer-2 network that makes using Ethereum more affordable for users and developers. (Each time Ethereum users post a transaction on the blockchain, they must pay “gas,” or a fee, with Ether. Optimism allows developers to process these transactions in batches, reducing gas.)
To commemorate the announcement, Coinbase released a new non-fungible token collection of, unsurprisingly, blue dots. The NFTs are free to create, or download to a crypto wallet, and will be available through Sunday.
Despite the blue dot glow, Coinbase’s business took a hard hit in 2022, when several prominent crypto companies declared bankruptcy, including rival exchange FTX.
On Wednesday, Coinbase released fourth-quarter earnings that, while beating analysts’ expectations, were markedly lower than a year earlier. The company’s full-year 2022 revenue was down 57%, and it lost $557 million in the fourth quarter, compared to a profit of $840 million in the same quarter in 2021.
