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December 13, 2013

Bitcoin startup raises $25m

Coinbase will use the funding to ‘educate the market’.

By Ben Sullivan

A Bitcoin startup that acts as a trading service has raised $25m in venture capital funding, the largest ever boost to a Bitcoin service.

The virtual currency’s value passed the $1000 mark recently, and its attracting more and more interest daily.
Coinbase said it will use the funding to "educate the market, and promote the mainstream adoption of Bitcoin".

"We are nearing a tipping point for broad adoption of Bitcoin – what we at Coinbase believe to be one of the most important shifts in the global economy in our lifetime," the firm said in a blogpost.

In October, a US Senate committee described Bitcoin as a "legitimate financial service." This December, the first burger was sold via a bitcoin payment at Silicon Roundabout in London.

However, China has banned banks from handling Bitcoin transactions, saying that the crypto currency has no legal status.

Coinbase said the number of people who use its Bitcoin wallet had doubled to more than 600,000 in the past two months, and that nearly 10,000 people are signing up to use it every day.

"We are making it easier for consumers to buy, merchants to sell, and developers to build," the firm said.
Chris Dixon, of venture capital fund Andreessen Horowitz , which led the Coinbase funding, said in a blogpost that "Bitcoin needs a killer app the same way HTTP had web browsers and SMTP had email clients.

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"Consumers can use Coinbase to convert to and from other currencies and to pay for goods and services. Merchants can use Coinbase to accept payments and convert currencies. Developers can build new services using Coinbase’s API."

He said the potential applications of Bitcoins include "machine-to-machine payments to reduce spam" and offering "low-cost financial services to people who, because of financial or political constraints, don’t have them today".

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