Balaji Srinivasan is the former Chief Technology Officer (CTO) of Coinbase.
He took on this role in 2018, after that his Earn.com was acquired by the exchange. In fact, he was the first person to take on that role at Coinbase, as the exchange prior to 2018 had never had a CTO. By the following year, he left the company when Coinbase Earn was shut down.
It is worth noting that at this time there appears to be no one on Coinbase’s executive staff with the specific role of CTO, despite there being a CEO, a CFO (Chief Financial Officer), a COO (Chief Operating Officer), a CLO (Chief Legal Officer), and even a CPO (Chief People Officer).
The head of information and technology operations is expected to be Executive Vice President of Engineering Manish Gupta.
The career of the former CTO of Coinbase
Srivasan is an Indian-born US entrepreneur and investor
Today he is 42 years old and has done many things in his already long career.
His first success was co-founding Counsyl, in 2007, which is a genetic testing company that was purchased by Myriad Genetics in 2018 for $375 million.
It is worth noting that Srinivasan has a bachelor’s degree and two master’s degrees, one in electrical engineering and one in chemical engineering.
In 2013, he joined the venture capital firm Andreessen Horowitz as a general partner, but later went out on his own as an investor.
In 2013, he founded a Bitcoin mining startup, but it later failed after raising more than $120 million from investors.
However, this company later morphed into Earn.com, a company that enabled digital currency payments, and which was later acquired by Coinbase.
In 2014 he also co-founded Teleport, which is a job search engine later acquired by Topia in 2017.
Since 2020 he has lived in Singapore, and last year he published a book, The Network State: How To Start a New Country, which was met with some success.
Srinivasan owes his fame to a curious initiative he took this year.
In fact, in mid-March he posted a tweet on his official Twitter profile in which he effectively announced that he had bet $1 million that the price of Bitcoin would reach $1 million within ninety days.
News of this bet went around the world, briefly making Srinivasan something of a celebrity.
Frankly, it was clear from the start that it was a losing bet, and that most likely the real goal was just to gain visibility.
Indeed, on 2 May he posted a video announcing that he had effectively burned through a million dollars.
Given that he has been an author of books with sometimes science fiction content since last year, Srinivasan needs visibility right now.
In his best-selling book, he describes “how to create a new state” to build something new without historical constraints.
He tells how there are in his view at least six ways to create new states, three of which are conventional and three unconventional.
The most sci-fi one is the sixth, which is the idea of colonizing other planets. He argues that although many people consider it technically unfeasible, or even completely insane, Elon Musk’s SpaceX is actually seriously working out the possible logistics of starting a new state on Mars.
In the book he also adds a seventh way, probably devised by him, by which a “cloud country,” or digital community, could be created.
Admittedly, of all the methods listed, this seems to be the most feasible and concrete.
Then again, digital communities already exist.
Apple and Google according to the former CTO of Coinbase
All this clearly indicates where Srinivasan wants to go with his Twitter communication strategy.
It is worth noting that he has less than a million followers, which is less than half as many as Dogecoin founder Shibetoshi Nakamoto, just to give you an idea.
His goal is probably to convince as many people as possible that it is necessary to make a clean slate politically and socially, but that at the same time it is convenient to do so peacefully and without necessarily having to start by destroying the existing.
After all, his idea of cloud country is based precisely on the concept of creating something new to add to what we have, and not of destroying the existing.
It is possible that such inspiration came to him from Bitcoin itself, and its evolution through second layers that build on the existing layer 1 without destroying or changing it.
At this point, it seems quite logical that he calls Apple and Google “systemic risks,” although specifically he is referring to the crypto world.
The crypto world
According to Srinivasan, the problem with giants like Apple and Google in the crypto world is that they could become complicit with governments to “run backdoors on iPhones and Android to exfiltrate private keys.”
It is most likely that Srinivasan took his cue from the recent events surrounding Ledger.
In fact, the famous hardware wallet maker has in fact stated that there is a way to extrapolate the seed of these wallets. Until recently it was thought that this was not technically possible, thus making it absolutely impossible for anyone to extrapolate them.
And yet apparently there is a system, although exactly how it works is not yet clear since the software code for Ledger hardware wallets is not public.
The point is that if the owner of a hardware wallet can authorize the export of the seed, even if in three separate, encrypted fragments, then in theory it might also be possible for a government to force the wallet company to do so.
This was also confirmed a few days ago by former Ledger CEO Éric Larchevêque, who said that a government could issue an order directed at the custodians of those shards to force them to hand them over.
Srinivasan goes further, and instead of referring only to Ledger’s hardware wallets, he refers to all smartphone apps that hold users’ private keys.
The risk for wallets on smartphones
Apple and Google are the two manufacturers of the two largest smartphone operating systems, iOS and Android.
In theory, a powerful government could actually force the two companies to include a feature in their operating systems that could retrieve any private keys saved in the clear from the phone’s memory so they could send them to the authorities. Perhaps they might even be able to decrypt them in case they were instead saved on the phone’s memory in an encrypted manner.
At present these are just theories without any kind of concreteness, as far as is known, but what Srinivasan imagines is far from absurd. Right now it seems like science fiction, but nothing precludes that it could become reality tomorrow.
This is why he defines Apple and Google as systemic risks to the crypto sector, even though these are actually only potential risks and not at all concrete in the current state of affairs.