Tue Nov 10, 2015 10:43 pm

Hi Charlie,



Can you speak to the resources being devoted to Coinbase Merchants. Is there any focus by the engineering team to building this out more? How has this been received by other developers and the merchants who use these services?



How many merchants use Instant Exchange to convert the currency locally to avoid price volatility and what % would you say actually keep their revenues in Bitcoin?



Thanks!

The bitcoin merchant business is a tough one. As can be seen from the difficulties at BitPay. This is a chicken and egg problem. Paying with bitcoin needs to be simpler and cheaper than paying with credit cards. It currently is neither simpler (qr codes) or cheaper (no rebates). Until it is simpler and cheaper, people won't use it. If people don't use it, there are no incentives for merchants to accept it. Those that do are doing it mainly for marketing purposes. And there's no reason for them to pass along their savings to their users. Without a discount, there's no reason for users to purchase bitcoin just to spend it.The way to break this chicken and egg problem is to get bitcoins into the hands of users in the first place. So we are focusing a lot of our engineering efforts in doing that. Make Coinbase the easiest place to buy bitcoin.Most of the larger businesses convert to fiat because they run their business in fiat and cannot take volatility risks. A lot of the smaller merchants do keep bitcoin as they are bitcoin supporters and believe in it.