Week in Review - Twitter, the Coinbase killer?

Hello readers and welcome back to Week in Review,

This is my final week writing this newsletter! After what seems to be just over three years’ worth of weekly updates, I’m starting another newsletter at TechCrunch called Chain Reaction, which had its first issue this week! Alongside the newsletter, I also debuted a companion crypto podcast for TechCrunch with my colleague Anita Ramaswamy, which you can listen to here.

If you want to continue keeping up with my crypto updates, please subscribe!

Next week, you’ll continue to get Week in Review in your inbox, but the author will be my colleague Greg Kumparak. He’s a fellow Bay Area resident who has been crunching tech for a very long time. I’m sad to hand over the reins, but I know he’ll do a killer job.

This week, I’m going to do my best to convince any remaining stragglers here to come aboard and subscribe to my new Chain Reaction newsletter, so here’s the update I published in my first issue on why Twitter should abandon publishing for more exotic product pursuits.

the big thing

Even with tens of millions of crypto owners out there, the fact is that web3 and NFTs have a comically small number of users relative to the anger and ecstasy those topics generate.

Nevertheless, Silicon Valley venture capitalists are betting that these platforms will reach the mainstream quickly, and are bestowing hefty valuations on private startups aiming to expose users to things like NFTs. Just looking at relatively fresh startups like Dapper and OpenSea fetching valuations of $7.6 billion and $13.3 billion, respectively, and you can see just how thirsty VCs are.

But when it comes to crypto powerhouses, I’d still argue there’s no bigger presence in web3 than Twitter. The social network is at the heart and soul of crypto and NFTs (whether they like it or not) and the vast majority of deals and relationships in the space spark up because of interactions on the Twitter platform.

The above is my justification to talk a bit about Elon Musk’s Twitter bid and the world that could be. Now, Musk’s stated intent of making Twitter a safer hub for free speech doesn’t explicitly have much at all to do with crypto, but fielding a $43 billion offer will likely lend Twitter’s board and shareholders a moment to consider the current state of the business and where it could be making more concerted strides.

This week, Coinbase launched a beta of their NFT marketplace with partnerships with a handful of top NFT collections. They’re looking to take on OpenSea, which dominates NFT sales volume, and it appears a big part of Coinbase’s offering will be social features with groundbreaking features like… commenting. I won’t judge the effort too much out of the gate, but it’s clear that they’re mainly looking to compete on the strength of their reach.

But as I think about an NFT marketplace with social at its heart and reach aplenty, I’m left wondering how Twitter could possibly ignore the opportunity they have to build their own NFT storefront and OpenSea competitor.

The social media giant has largely treated its crypto-enthused users as a happy little accident. Hilariously, the only way it monetizes these users — who are spending billions on NFTs which they are largely discovering and hocking via tweets — is through their $2.99 per month Twitter Blue subscription, which gives users a nice little hexagon to let their NFTs live inside. In the meantime, Twitter is basically serving as the central curation frontend for every NFT storefront and letting users leave the platform to transact before they come back to surf the timeline.

It shouldn’t be a huge surprise that the company is leaving money on the table. Twitter has spent the last decade or so sucking at product, but the last couple of years they’ve sucked a lot less, making more aggressive monetization moves, buying startups and generally proving themselves a bit more as they look to stay competitive with rivals like Spotify and Substack.

That said, Twitter has more unrealized potential than any other consumer company of its size, but its unilateral focus on publishing opportunities is causing it to miss bigger vertical opportunities that its much larger Big Tech competitors would kill for the chance at building. Facebook likely could not buy its way into dethroning OpenSea with any amount of money possible, but here Twitter is with a wide-open pathway toward web3 dominance and the company is just ignoring it.

Twitter has flirted with community-specific features over the years, including their fledgling Communities product, but something like a dedicated marketplace would really shake things up. Crypto is hardly the easiest place to start — NFT spam has already proven to be a formidable opponent for Twitter — but the vertical is still ripe for the picking.

Ultimately, the realest stumbling block with Twitter is the same one that gaming chat app Discord has struggled with: mainstream user perception. Twitter knows that they would infuriate just as many users as they would excite if they built out their own NFT platform. Discord tried to beta test some NFT-centric features several months ago and a short tweet showcasing an in-app wallet plug-in led to thousands of dunk tweets on the Discord CEO and a concerted pullback. This would undoubtedly be the case for Twitter, which already finds itself wandering ass-backwards into plenty of controversies, so I can understand that they might be a little wary to walk straight into more.

But with a $43 billion offer on the table, it’s worth questioning how a company at the center of an industry worth trillions is gleefully ignoring the chance to be indispensable to it.

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other things

Here are a few stories this week I think you should take a closer look at:

Apple Store in Atlanta files for union election
As Big Tech’s network of employees has spread from high-paid engineering jobs to hourly workers, we’ve seen increased union interest, though it’s still pretty sparse. This week, an Apple retail store in Atlanta made news for reaching a majority decision to file for a union election — which would be the first of its kind stateside.

Obama says social media is ‘well designed’ to destroy democracies
In a Stanford address, former President Obama shared some harsh words about the ill effects of social media platforms, saying they had contributed to “another tumultuous, dangerous moment in history,” and that the government should eye regulation.

Coinbase CEO calls out Apple
In a podcast interview, Coinbase CEO Brian Armstrong took a rare shot at Apple, saying the company had banned features from their apps and had generally not been friendly to the cryptocurrency industry. He said this before busting out the “A” word and saying that their actions could have “potential antitrust issues.” Fighting words.

added things

Some of my favorite reads from our TechCrunch+ subscription service this week:

Fraud as a service
“…Rather than relegating their activities to dark web marketplaces, scammers are hiding in plain sight on encrypted messaging apps. They collaborate through publicly available forums on these platforms to target BNPL providers with new tactics…”

What am I worth now?
“…Many private companies are faced with lower valuations — a down round or secondary trading at lower levels — especially if their last valuation was set in the last year or two, regardless of how much they grew in that time…“

4 questions tech execs should have about the metaverse
“…The metaverse is still a moving target. Today, we are more or less at a similar stage in its development lifecycle as we were in the early 1990s for the internet. But unlike in the ’90s, today we have a much better idea of the sort of threats that can emerge in powerful digital ecosystems, which means we can be much better prepared for what comes next…”

• Web Producer at Thayer School of Engineering at Dartmouth College (Hanover, New Hampshire, USA)
• Fullstack Engineer at Resemble AI (United States)
• Identity and Access Management Developer (0652U) 34408 at University of California, Berkeley (Berkeley, CA, USA)
• Entry Level Software Engineer at Smoothstack (Anywhere)
• IT Support Analyst at Human Rights Watch (New York, NY, USA)

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