Coinbase makes history, raising largest-ever round for bitcoin startup

No matter how dubious you — you, the general public, the consumer, the average person carrying a wallet with credit cards — are about Internet currencies such as bitcoin, venture capitalists and Wall Street are just downright giddy about them.

Coinbase, one of the most successful startups of its kind, has raised $75 million in the single-largest venture-capital fundraising round by a bitcoin-related company. According to the Wall Street Journal, investors included banks and the New York Stock Exchange, the first time traditional financial institutions have — ironically enough — propped up a cryptocurrency enterprise.

Coinbase is an Internet platform to buy, accept and store bitcoins. The San Francisco company says it has about 2.2 million customers with bitcoin wallets and supports 38,000 merchants who accept bitcoin. News of the latest funding round, which brings Coinbase’s total funding to $106 million, was first reported in November.

The NYSE described bitcoin as “an important growth market” and said it planned to use its expertise along with Coinbase to “bring additional transparency” to the bitcoin market, according to the Wall Street Journal report.

Other investors include VC firms Draper Fisher Jurvetson, Union Square Ventures, Ribbit Capital and Andreessen Horowitz — Marc Andreessen has been loudly bullish on bitcoin. At a two-day bitcoin conference in San Francisco last year, Andreessen said to a crowd of thousands that bitcoin is ” as bulletproof as anything I have ever seen.” He said this about a month after the world’s largest bitcoin exchange, Japan-based Mt. Gox, filed for bankruptcy after losing — or so it said — about 500,000 bitcoins.

Bitcoin is a cyber currency and payments network that was created in 2009 by a mathematical formula. Bitcoins are added to the network through a process called mining.The total amount of bitcoins that can be created is capped at 21 million, and bitcoin can be bought and traded on global Internet exchanges. No company, government or organization controls the currency, and no traditional banks are involved in any transactions. The Internal Revenue Service chose to tax bitcoin as property and not recognize it as legal currency.

On Wednesday, one bitcoin was valued at $219. Last year, the cryptocurrency’s value reached more than $1,200.

Despite the volatility, retailers such as, Tesla and Zynga accept bitcoin as payments. Square and PayPal can make bitcoin transactions. It’s catching on, at least in the tech world, and there is a growing community rallying around bitcoin.


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