Union Square Ventures’ Fred Wilson announced this morning that he’s investing in Coinbase, a startup that makes transactions through the web with Bitcoin possible.
This is big news for a number of reasons.
Wilson is a New York-based venture capitalist who wisely saw the rise of “social” on the Internet. He was an early investor in Tumblr, Twitter, Zynga, and Kickstarter.
He hadn’t made an investment in almost two years. He said he was trying to figure what was next, which is what makes this investment in particular interesting. Apparently, he thinks Bitcoin, the limited virtual currency is going to be big.
Bitcoin has been up and down, but with Wilson’s investment it’s a sign that people think it’s here to stay and it’s going to be mainstream.
He explained his investment in Coinbase on the Union Square Ventures blog.
The short explanation: “We believe that Bitcoin represents something fundamental and powerful, an open and distributed Internet peer to peer protocol for transferring purchasing power. It reminds us of SMTP, HTTP, RSS, and BitTorrent in its architecture and openness.”
And here’s the full thing:
We have been thinking about and looking to make an investment in the Bitcoin ecosystem for several years. Today, we are happy to be able to talk about our first investment in the sector. We have made an investment in Coinbase along with our friends at Ribbit Capital, SV Angel and Funders Club.
We believe that Bitcoin represents something fundamental and powerful, an open and distributed Internet peer to peer protocol for transferring purchasing power. It reminds us of SMTP, HTTP, RSS, and BitTorrent in its architecture and openness. Like what happened with those other low level protocols, entrepreneurs and developers are now building technology on top of Bitcoin to make it more useful, more accessible, and more secure.
Coinbase is in some ways a perfect example of that trend. It was founded by Brian Armstrong, who as an engineer at Airbnb who wanted an easier way to incorporate Bitcoin into transactional systems on the Internet. Brian was joined by co-founder Fred Ehrsam, a computer scientist and former currency trader. The two of them have quickly built Coinbase into one of the leading Bitcoin platforms in the market.
Coinbase offers three important features: an online wallet to store Bitcoin; a merchant platform that allows services to accept Bitcoin as payment; and a service that allows individuals and merchants to buy/sell Bitcoin into fiat currencies. Coinbase is located in San Francisco and the company’s details and key metrics are available on its about page. Coinbase is hiring and their openings are on its jobs page. And of course, they also have a blog.
If you are a merchant and want to accept Bitcoin as a form of payment, you can do that with Coinbase. The platform for accepting Bitcoin is free and you only get charged a small fee if you want to convert Bitcoin to fiat currency, which you can do automatically.
If you would like to buy Bitcoin and store it online, you can do that with Coinbase. Coinbase is where I have purchased my Bitcoin and keep it. Coinbase has native mobile wallets for iOS and Android and works great on mobile web as well.
Even though Bitcoin has been all over the media lately as its exchange rate has surged, collapsed, and surged again, we believe that we are in the very early days of Bitcoin and other digital currencies. There is much that must be built on top of of these digital currencies to make them work well enough to support real business at scale. And we are thrilled to be invested in a team that is well suited to do that work and build a large and successful business in the Bitcoin sector.