Coinbase crypto platform investment explained: "The investment in Coinbase is still highly profitable because we entered when it was a small company": Carlos Torres, president of BBVA, defends his venture capital fund's bet on the crypto platform.
The market turbulence has also been noticed in cryptocurrencies, which are experiencing their bearish rally. In this context, the president of BBVA, Carlos Torres, has defended one of the investments of his venture capital fund, Propel, in which it is now one of the large companies in the crypto sector.
"Our investment in Coinbase is still a very profitable investment because we entered when it was a small company," he said. Torres added that Propel is a venture capital fund and this is an investment within its diversification strategy.
Coinbase crypto platform investment
BBVA invested in 2015 in Coinbase, a platform which had been founded in 2012 in San Francisco, whose business is based on providing consumers and businesses the ability to buy, sell, and make transactions easily using bitcoin, and provides developers the tools to create new applications on its technology platform.
The bank invested seventy-five million in the platform in that fiscal year in a Series C financing round. Coinbase went public in 2021.
Torres, to questions from journalists in the course organized Sustainability and digitization: the levers of recovery, organized by the Association of Economic Information Journalists (APIE), stressed that more than Bitcoin itself, what he considers to be more important is the technology behind it.
Coinbase crypto platform investment statement
"Bitcoin has a very high volatility and there have been practices around it that are not correct in terms of consumer protection, in terms of products and services," Torres said.
"That is, perhaps, what is less interesting because the disruptive potential is that of blockchain technology and the potential digitization of a physical asset in a programmable blockchain," said the BBVA president, who pointed out the relevance of smart contracts and the potential that this technology has in the future of finance.
Of course, he has conceded that it is still too early to see the full potential of this technology that is in the process of development. "It is incipient, it is too early for it to be a reality because it is not something that is easy to use for any client," he said.
Coinbase crypto platform investment details
What is blockchain?
Blockchain, or blockchain, is the database that contains the entire accounting history of transactions that occur on the network of a cryptocurrency such as Bitcoin. As an analogy, it is useful to think of blockchain as an accounting book where all bitcoin transfers between users are recorded.
The first blockchain was born with Bitcoin in 2009, from the hands of the anonymous character "Satoshi Nakamoto".
It is important to consider that while blockchain is a database, its particularity lies in the fact that it is a decentralized database, which means that your information is replicated on thousands of computers around the world, achieving redundancy and security.
Another important feature is the fact that even though the Bitcoin Blockchain is 100% transparent, the owner of each bitcoin can only modify the information. This is achieved thanks to the use of (asymmetric) encryption. In other words, everyone can see, but only those who can mathematically prove to own a bitcoin can move it.
The charge of keeping the information up to date with transactions that occur (counters), as well as to ensure that the information is not altered fraudulently (guards), commonly called “miners,” and are computers that consume electricity and processing power in exchange for a financial incentive in the form of new bitcoins are created, or “mined,” every 10 minutes. This is the only way new bitcoins are created. At the time this article was written, the prize is equivalent to 12.5 bitcoins, or USD $81,000, given the price of bitcoin.
