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SAN DIEGO COMPANY CASHING IN ON VIRTUAL CURRENCY San Diego company opens new marketplace

SAN DIEGO COMPANY CASHING IN ON VIRTUAL CURRENCY San Diego company opens new marketplace

ized early on with Cashie Commerce is that merchants need help driving traffic to their sites and driving sales,” said Chief Executive Hieu Bui.

Sounds like Etsy, right? Except it’s not.

BitDazzle customers will be able to pay with PayPal, credit card or Bitcoin — a virtual, digital-only currency that saves online retailers money by leaving financial institutions and credit card “swipe” fees out of the equation.

Think of it as a PayPal account that allows you to store and spend cyberspace dollars without a bank or credit card company in the middle, and no central authority. Consumers can convert existing cash into Bitcoin currency and back again.

Part of its appeal for consumers resides in the increased privacy and decreased regulation the digital crypto-currency provides. It’s also a “currency without borders,” allowing the transfer of digital funds without fees or international exchange rates.

It has its downsides, though. It is not widely accepted, digital “wallets” storing the cyber-money can be lost in hard drive crashes, and its value fluctuates based on demand. Three years ago, one bitcoin was valued at $1, but it now has shot up to $140.

Although it is probably best known for the part it played in the Silk Road, a notorious online drug marketplace that was shut down on Oct. 1 when the FBI arrested its alleged founder, Bitcoin has legitimate commercial potential, Bui argues.

The use of the peer-to-peer currency in the BitDazzle marketplace is what Bui calls a “win-win” for shoppers and retailers: It drives a new community of shoppers to merchants, who also enjoy the lower transaction fees Bitcoin offers, and gives shoppers more payment options.

At a cost of about 1 percent per transaction compared with credit card fees that can run as high as 4 percent, Bitcoin is a less expensive payment option for retailers.

The new marketplace is also good for shoppers who prefer the digital currency. Because it is so new, a limited number of retailers accept it, making it difficult for Bitcoin holders to find products on which to spend their virtual cash. Some Bitcoin marketplaces do exist, Bui acknowledged, but most specialize in “early adoption” merchandise like high-end technology and electronics.

The big two are Coingig and

BitCoinStore.com.

“When you look at them, you’ll see that they’re not very consumer-friendly, and the types of products on there are not the type that your average Joe will buy,” Bui said.

BitDazzle aims to change that, taking the currency mainstream for both shoppers and retailers. The marketplace launched Tuesday, in time for the holiday shopping season, with more than 100,000 products from about 1,000 merchants.

The project is possible through a partnership with venture-backed Coinbase, a leading Bitcoin “wallet” in San Francisco, which will handle the market’s Bitcoin transactions. Coinbase allows users to send, receive and store Bitcoin. It charges 1 percent for each transfer from Bitcoin to dollars and vice versa. Sending the currency between online wallets, friends or merchants is free.

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This entry was posted on October 17, 2013 by and tagged , , , .

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bitcoinvancouver2013@gmail.com

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