Leading American cryptocurrency exchange Coinbase today announced that it has reached an agreement to buy blockchain infrastructure provider Bison Trails.
In a Jan. 19 statement on its blog, Coinbase portrayed the move part of a grand design, calling it “an important step in delivering on our mission to create an open financial system for the world.”
It’s also part of a business strategy to turn the infrastructure Coinbase built for itself into a suite of products available to any developer.
The expansion comes at a vital point in Coinbase’s growth, as it recently filed paper beginning the process of going public with a stock offering. That would make Brian Armstrong the first CEO of a major cryptocurrency company to hold an initial public offering—the IPO that many early crypto entrepreneurs tried to bypass with initial coin offerings (ICO) that eventually brought down the wrath of the U.S. Securities and Exchange Commission (SEC).
That growth has not been without growing pains, as Armstrong got Coinbase entangled in a fight over corporate support of social issues, announcing a neutrality policy that led more than 60 employees to depart. That in turn led to a harsh New York Times feature in which black former employees described a culture of discrimination, and another that accused the firm of underpaying female employees—charges the company strenuously denied.
The grand design
In explaining the purchase, Coinbase’s blog described its goals for Bison Trails in grandiose terms, comparing the creation of a reliable infrastructure for the cryptocurrency and blockchain industry to the creation of a similar infrastructure to support dot-coms trying to transform the world wide web into the internet we know today.
Twenty years ago, building a “reliable managed infrastructure” for the internet enabled dot-coms to unleash “a wave of innovation,” Coinbase said, adding that finding or building “reliable, secure, and scalable blockchain infrastructure,” is one of the biggest obstacles crypto innovators face today.
“[O]ur strategy is to offer turn-key solutions to power distributed and scalable crypto infrastructure, enabling the innovators and builders of tomorrow to do what they do best: build.” The company added:
“This will help drive one of the greatest transformations in finance in the last hundred years, and will drive us closer to achieving our mission of creating an open financial system.”
Bison Trails CEO Joe Lallouz used much the same language in a statement in which he called joining Coinbase “a major milestone in our journey… [to] enable the pioneers of tomorrow.”
The company supports many proof-of-stake blockchains, ranging from privacy-focused Oasis Network and Ethereum competitor NEAR Protocol to the Facebook-founded Diem stablecoin—formerly Libra—and Ethereum 2.0.
Noting that it has been an investor in Bison Trails since its Series A venture round, Coinbase said that it was a customer of Bison Trails as well as an investor, and promised that the firm would remain a standalone business—one that already provides a foundation for Coinbase’s “ecosystem suite of products.”
But having Bison Trails so closely integrated would make it possible for Coinbase to turn the infrastructure and API services that it built for its own products into tools available to the entire crypto industry. The blog said:
“In the same way that we simplified access to the cryptoeconomy for individuals and institutions, we will continue developing a suite of products and services to help other companies build protocols and applications, helping to grow the cryptoeconomy overall.”