Coinbase provides secure accounts for those that use bitcoins. Users can use these accounts to store bitcoins, as well as make and accept payments. Their user base has been growing by approximately 31% each month. Unlike many other bitcoin startups, Coinbase is actively working to get licenses with state regulators.
Bitcoins are an unregulated digital currency. The creators of bitcoins are unknown, and all users are able to remain anonymous, if they wish. There are roughly 12 million bitcoins currently in circulation.
Although many were skeptical at first, bitcoins have gained a great deal of credibility in the last year as their value skyrocketed and legislators actually met to determine if bitcoins should become a legitimate form of currency. Coinbase is currently pursuing licenses, so if bitcoins become a legal currency, they are already licensed to work with them.
Legislators are concerned over the ability of people to use bitcoins for criminal activity since they are unregulated. If bitcoins are made a legal form of currency, the government can then regulate them and monitor their use more easily.
The total second round investment totals $31 million. $25 million coming from Andreessen Horowitz, and the rest coming from Union Square Ventures and Ribbit Capital. Coinbase currently has approximately 600,000 users.
According to Chris Dixon of Andreessen Horowitz, the firm made the decision to invest in Coinbase because it is the most “consumer-friendly” option in bitcoin digital wallet startups.
As part of them being consumer-friendly, Coinbase is one of the only bitcoin digital wallet services that provides all encompassing services to their users. According to Brian Armstrong, Coinbase co-founder, “As far as we know we’re the only site touching all three aspects of the Bitcoin world.”
Other bitcoin startups actively seeking investors include BitPages, which allows users to accept international payments, BitBox, which offers secure bitcoin storage, and BitAngels, a group of investors looking to invest in digital-currency companies.