The first version of Coinbase launched with just a hot wallet - a risky proposition. We were in beta and the app prominently told people not to store any money there they couldn't afford to lose. But the amounts of deposits kept steadily rising.
I realized we needed to build build a cold storage system to improve security (otherwise a single hot wallet breach would mean we were insolvent and the company would die), and called the two cryptography/security experts I knew (@zooko and @octal if memory serves) and asked them what the best architecture would be. They were super helpful and gave me a crash course, since I had never built such a system before. I asked them how long it would take to build and I remember one of them said it might take a team of ~10 people 18 months to get it all up and running and tested.
The problem was we had about 8 weeks until the total deposits on the platform would exceed the total assets of the company, and only 2 engineers (including myself) to build it. We were seeing signs that hackers were already trying to break in, a true do or die moment.
@satoshilite and I buckled down and set about coding the new cold storage system from scratch, and integrating it into the app. We made some reasonable trade offs but what we came up with was fundamentally secure, and a massive improvement. We even unboxed some new laptops for key generation, stored backup material across several safe deposit boxes and locations. With about a week remaining, we started the process of transferring funds over to the new system. We were both extremely sleep deprived (how mistakes happen!), and paired up to double check each others work as we sent over the first test transaction, then a bigger one, and so on until it was fully transferred. We breathed a sigh of relief and went home to sleep for about 12 hours.
This was one of my proudest technical accomplishments from the early days of Coinbase: coding our v2 key storage system with 2 people in about 8 weeks, which should have taken 10 people 18 months. And it worked and served us well for years.
We're now on ~v5 of key storage, and have advanced way beyond what we came up with that day. But if we hadn't gotten it out in time, Coinbase very well may not exist today. It's a great testament to how constraints breed creativity, top talent matters in startups, and teams are often capable of more than they think when there is no other option.
Most products which succeed have early moments like this, where someone has to step up and make a play on the field that defies all the odds. As we face new challenges and deadlines across our many products, I always look out for who on the team is ready to step up and make the game winning play on the field.
I realized we needed to build build a cold storage system to improve security (otherwise a single hot wallet breach would mean we were insolvent and the company would die), and called the two cryptography/security experts I knew (@zooko and @octal if memory serves) and asked them what the best architecture would be. They were super helpful and gave me a crash course, since I had never built such a system before. I asked them how long it would take to build and I remember one of them said it might take a team of ~10 people 18 months to get it all up and running and tested.
The problem was we had about 8 weeks until the total deposits on the platform would exceed the total assets of the company, and only 2 engineers (including myself) to build it. We were seeing signs that hackers were already trying to break in, a true do or die moment.
@satoshilite and I buckled down and set about coding the new cold storage system from scratch, and integrating it into the app. We made some reasonable trade offs but what we came up with was fundamentally secure, and a massive improvement. We even unboxed some new laptops for key generation, stored backup material across several safe deposit boxes and locations. With about a week remaining, we started the process of transferring funds over to the new system. We were both extremely sleep deprived (how mistakes happen!), and paired up to double check each others work as we sent over the first test transaction, then a bigger one, and so on until it was fully transferred. We breathed a sigh of relief and went home to sleep for about 12 hours.
This was one of my proudest technical accomplishments from the early days of Coinbase: coding our v2 key storage system with 2 people in about 8 weeks, which should have taken 10 people 18 months. And it worked and served us well for years.
We're now on ~v5 of key storage, and have advanced way beyond what we came up with that day. But if we hadn't gotten it out in time, Coinbase very well may not exist today. It's a great testament to how constraints breed creativity, top talent matters in startups, and teams are often capable of more than they think when there is no other option.
Most products which succeed have early moments like this, where someone has to step up and make a play on the field that defies all the odds. As we face new challenges and deadlines across our many products, I always look out for who on the team is ready to step up and make the game winning play on the field.
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