August 29, 2013
There are speculations over Bitcoins future considering the decision taken by the Senate last week to scrutinize Bitcoin and other virtual currencies. Buttercoin found in August, 2013 by co-founder Dahl and Bennett Hoffman have made a bold move by launching a business focused on International Bitcoin Exchange.
The co-founders have had a successful history of establishing companies and selling them. They have previously sold a analytics based company, filmed documentaries and had also started a mining operation called CoinHarvest (Hardware platform to mine Bitcoins). While working on CoinHarvest, the duo considered creating a legal platform for creating Bitcoin exchanges and settled on remittance market.
By 2015, World Bank has estimated that the migrants will send about $515 Billion to their families and relatives to their respective countries. Buttercoin is interested in cashing in on this opportunity and has its sights set on competing with the likes of Western Union which charges around 10% per transaction. Buttercoin claims to keep the transactions charges low and has the ability to do that as currently there are no regulations in place in most of the countries for exchanging Bitcoins.
The co-founders of Buttercoin have been successful in raising capital of $1 Million from investors which include Kevin Rose, Rothernberg Ventures, Floodate, Chris Hutchines and Initialized Capital. They have also got Kevin Zhou from Standar & Poors.
Buttercoin has plans to launch in India and 6 other countries in three to nine months time. Their business plan is to partner with the local money transfer businesses and initiate transfer of Bitcoins.
LTP View: Buttercoin is taking a risk of entering a business which involves trading of Bitcoins. This risk also has higher returns if the Governments consider exchanging of Bitcoins to be legal, which has a less likelihood. Buttercoin is still in the infancy stage and their service will be out in 3 months from now if the Government rulings go in the favor of trading Bitcoins.