A San Francisco-based operator of an exchange for the bitcoin digital currency  has raised $5 million from a large venture capital company, The Wall Street Journal reported.

 Coinbase, an 11-month-old startup, raised the money from Union Square Ventures. The deal will help the company cover operating expenses and hire engineers, designers and business support staff. Coinbase is a platform that allows users to buy bitcoins and store them in a "digital wallet." About 300 merchants have signed up for the service, including Reddit.com and OKCupid.com.

Bitcoin is a digital currency that uses peer-to-peer technology with no central authority. Take a crash course in bitcoin by reading this Business Record article.

Today's news is part of a larger trend, according to another story in the Journal. In the past year, multiple companies have raised millions of dollars collectively from prominent venture-capital firms and angel investors.

How usable is the currency? This Forbes article documents a reporter who tried to live for a week using bitcoins alone.