Buttercoin officially launched today, bringing what it calls a "reliable, domestic bitcoin marketplace to the US", one it believes provides the first advanced foundational service to the ecosystem's largest, and perhaps most complex market.
Boasting Centralway Ventures, Google Ventures, Reddit co-founder Alexis Ohanian, Rothenberg Ventures and Y Combinator among its investors, Buttercoin claims to allow US bitcoin businesses to sell bitcoins and receive payout in just one business day.
Founder and CEO Cedric Dahl framed Buttercoin as a competitor to major international bitcoin exchanges, which he argues are ill-equipped to satisfy the needs of a business clientele that includes merchant processors and mining facilities, companies that may need to sell 200,000–500,000 BTC at a time to ensure their finances.
Dahl told CoinDesk:
"We're the only option that wallets and other bitcoin businesses have to quickly get out between USD and bitcoin here in the US. We don't compete with wallets or merchant processors, we offer a safe domestic alternative to exchanges. We operate in the daylight here in the US, and we have some fantastic backers."
Throughout the interview, Dahl stressed that Buttercoin is not an exchange, but rather an eBay-like service that connects buyers and sellers and that does not hold customer funds.
Buttercoin declined to provide details about its banking partnerships, or how it is able to offer a faster settlement for its customers, citing competitive interests.
According to Dahl, the history of Buttercoin began shortly after the original bitcoin white paper was released by Satoshi Nakamoto. At the time, Dahl said Buttercoin co-founder and CTO Bennett Hoffman became intrigued by bitcoin as he wasn't able to break its security features.
Intrigued by bitcoin's potential, Dahl and Hoffman began investing in the currency, buying bitcoin for $10 and celebrating its rise to $270 thereafter.
Dahl indicated that the genesis of Buttercoin was the night the price of bitcoin crashed back down to $55, a development that lead him to investigate issues in the bitcoin ecosystem further.
"We reverse engineered what had happened and we found that Mt Gox was really having a lot of issues because it has more demand for orders than it could actually solve in real time," Dahl said. "There was this trade execution lag that was causing there to be a discrepancy between the prices people thought they were getting and what they were actually paying."
With this in mind, Dahl set out to create a trade execution engine that could be marketed to exchanges like Mt Gox. The first version, he said, garnered attention and then investment, but he framed today's launch as a vindication of the hard work of his team. Buttercoin, he said, is a name that emerged from the company's informal beginnings and that has stuck with the project ever since.
"It takes a long time to build a reliable bitcoin marketplace. You know, there's security, technology, liquidity, compliance issues, these are all big complex issues that require real sophisticated solutions," he said.
Dahl suggested that while the Buttercoin marketplace is open to both consumers and merchants, its primary target is the US bitcoin business sector, which argues is underserved by overseas exchanges.
Indeed, Buttercoin offers a simple and intuitive interface for customers, with clearly marked features that emphasize usability. Both business and consumer clients also interact with the same version of the marketplace.
Calling Bitstamp the "only alternative", he said that the service can't compete with Buttercoin as its geography prohibits it from one-day settlement. Further, he argued that time will show how Buttercoin can compete against the European exchange giant in terms of liquidity.
"We have a hedge fund that makes our markets, so the marketplace is fully liquid," Dahl said. "For people who want to buy less than 20 BTC at a time, we generally have the best price worldwide, and we're competitive with Bitstamp up to approximately 50 BTC at a time, depending on several factors."
MegaBigPower CEO Dave Carlson said that he chooses to use the Buttercoin marketplace because of its ability to handle large-volume bitcoin trades, adding: "With Buttercoin, I can get payouts in one day, overseas exchanges can take two-plus weeks."
Dahl said that while Buttercoin had been selective about its early clients, it now intends to work with any business that meets its anti-money laundering (AML), know-your-customer (KYC) and know-your-business (KYB) standards.
He said that Buttercoin asks businesses using its platform to validate they are who they claim to be, adding that certain types of businesses such as money services businesses (MSBs) may need to meet additional steps.
Dahl said that Buttercoin doesn't intend to advertise its businesses to consumers, but he expressed his personal hope that the next generation of innovators will take advantage of resources his company will now make available.
"For people who are thinking about starting a businesses or seeing what's possible, we have an excellent set of APIs," he said. "We want Buttercoin to be open to them, and for them to be able to build on top of Buttercoin."
Images via Buttercoin;
Boasting Centralway Ventures , Google Ventures, Reddit co-founder Alexis Ohanian, Rothenberg Ventures and Y Combinator among its investors, Buttercoin claims to allow US bitcoin businesses to sell bitcoins and receive payout in just one business day.
At launch, Buttercoin also lists impressive names […]
Risk Disclaimer - By using this web site you agree to its terms and conditions. All materials, including but not… Read More
Thailand’s vibrant digital asset scene was shaken earlier this month when its most popular exchange unexpectedly announced an imminent closure.… Read More
Distributed, Decentralized, Disintermediating While still in its infancy with regards to proven capabilities and real-life adoption, blockchain technology remains one… Read More
- Tim Tams sold for BTC on Online Blockchain's new crypto marketplace site - LONDON, Sept. 17, 2019 /PRNewswire/ --… Read More