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Coinbase's Fred Ehrsam says you're thinking about Bitcoin all wrong

Susie Ochs | March 12, 2014
AUSTIN--Bitcoin is definitely a big topic of conversation here at South by Southwest, especially after Newsweek's cover story on the identity of the mysterious Bitcoin inventor Satoshi Nakamoto. In fact, at Coinbase cofounder Fred Ehrsam's Monday discussion at SXSW, the first question interviewer Rolfe Winkler of the Wall Street Journal asked was "Is Dorian Nakamoto really Satoshi Nakamoto?"

So what about the notion that it's dumb to spend Bitcoin on, say, a toaster from Overstock, if you think it'll eventually go up in value? Because it's far more economically efficient, Ehrsam says, even if you make a purchase with Bitcoin and then immediately buy that Bitcoin right back — an ability he says Coinbase is working on right now. But later on, Ehrsam explained that consumers don't understand how high the cost of traditional payment networks really is, because it's generally merchants who are stuck with the fees.

Ehrsam thinks 2014 will see a critical mass of merchants wanting to get into Bitcoin to save themselves those fees, so now it's just a matter of time before regular people get on board with the early adopters, miners, libertarians, and geeks. Coinbase is working to make it more accessible to regular people, as easy as online banking. "Today, most people still don't understand how the Internet works," Ehrsam said. "But they know how to use a web browser."


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