Coinbase Offers Speedier Bitcoin Payments – For Users It Knows

Bitcoin exchange Coinbase will offer instant purchases for users that supply identity information, with others having to wait four days for transactions to complete.

The digital currency Bitcoin is known for its near-anonymity compared to other methods of digital payments. Coinbase's approach balances privacy and speed by letting the end user decide which is most important.

Users that undergo a verification process, called "level 2" users, can buy and sell up to 50 bitcoins at a time, and their transactions will fund instantly, Coinbase said in a blog post July 11. All accounts currently designated as level 2 are being bumped to level 1 until they complete the identification setup.

The level 2 verification steps requires address verification and other publically available identity data that's often used by credit card companies and banks as part of their security checks. A reporter's attempt to register on July 12 failed, though the failure message said up to 10 bitcoins per day could be traded without verification.

While virtual currencies are a potentially disruptive force in payments, the near-anonymity of Bitcoin and other virtual currencies is the subject of controversy, with critics contending the anonymity lends itself to criminal activity.

Bitcoin exchanges have also suffered from security issues, technology glitches and regulatory conflicts.

Coinbase's move is part of a trend in the Bitcoin industry legitimize the digital currency by adding steps to improve security and bring its use in line with regulators' expectations.