Coinbase is getting big money in venture capital funding another $25 million announced just last week. Venture capitalists like Coinbase because they think it might be the company to bring the use of Bitcoin from the nerds to the rest of us. Bitcoin co-founder and CEO Brian Armstrong certainly hopes so. He characterizes his company as a sort of PayPal for Bitcoin, that both connects merchants with consumers, and allows people a way to store their money online.
"I don't think it will ever have the same characteristics of proprietary payment networks, like credit cards or wires or bank transfers before it," Armstrong says. "The reason is that it's fundamentally an open system. So let's look at email as an example. If you ever didn't like your particular email provider that you were using, you could switch to another one -- and economists might call that 'low switching costs' -- but the net effect to consumers is that the price of those services always has a downward pressure on it. It's a competitive market because the underlying platform beneath it is open, and anyone can participate on it."
