[forbes] CoinLab Attracts $500,000 in Venture Capital for Bitcoin Projects

[hazek]

I decided to create a new thread instead of posting in that other long one because I think it's a bit stupid to cram everything in just one thread making it virtually impossible for someone to learn from.

CoinLab Attracts $500,000 in Venture Capital for Bitcoin Projects
4/24/2012 @ 1:25AM

In the first official venture capital raise for a direct investment in bitcoin, CoinLab secured $500,000 today from seed stage Silicon Valley firm Draper Associates and others, including Seattle angel investor Geoff Entress, former assistant treasurer at Microsoft Jack Jolley, and familiar bitcoin investor Roger Ver. Jolley will also join the company as its Chief Financial Officer...

Read all of it here: http://www.forbes.com/sites/jonmaton...coin-projects/


Looks like things are getting serious. Plus there's this:

Bitinstant Hints at New Contract Allowing Bitcoins to be Purchased from 700,000 Locations Including Wal-Mart and 7-11

http://www.thebitcointrader.com/2012...-contract.html


Bitcoin's future sure looks bright!

[DEGuy]

So the giftcard idea would be similar to buying zynga coins or something similar on gift cards at walmart, from what I think I understand about that article. I guess the intended customer would be someone willing to pay a slight premium - because someone would have to profit- for bitcoins in exchange for privacy on the purchase.

[hazek]

buying zynga coins or something similar on gift cards at walmart, from what I think I understand about that article. I guess the intended customer would be someone willing to pay a slight premium

Yep, and then all you have to do is probably go to some sort of website and provide a Bitcoin address to claim them.

[DEGuy]

What bitcoin really needs to happen (and I do believe this will eventually happen) is for a medium or medium-large international internet-based business with small margins to start accepting bitcoins as an alternate form of payment, at a cost that is slightly lower than that for USD. Something like 1 or 2 percent in order to entice the buyer. Take Newegg for example, and a list of reasons why accepting bitcoin could be a sound business decision:

1. Avoid credit card and processing fees - only a few percent, but that makes a big difference on the bottom line
2. Cut profit loss on fraudulent buys - A place like Newegg probably has a lot of fraudulent transactions come through (http://www.topix.com/forum/tucson/T9KB5T738R5M8998L/p7) because of the nature of their business, and they probably handle it was well as anyone online. But it costs time and people (money!) to prevent fraud, along with the possibility of not recovering the fraudulent buy. That might cut a few percent into their profit also. With Bitcoins, a sale is a sale, and the only loss the seller has to worry about it refunding coins to an unhappy customer. But that would be the seller's choice, not a third party credit card company or paypal.
3. Liquidity of money. As an international company, there are probably some tax advantages they could have by exchanging Bitcoins for foreign currency. I'm not a tax expert, but I'm sure there are some significant, yet legal, advantages to it.

Downsides:
1. Bitcoin exchange rates still flucuates wildly, so they would need to keep up-to-date rates and take some risk that rates change before exchanging the coins.
2. There is a stigma to accepting a currency that is unfavorable with the media and politicians.
3. Cost of implementation - probably minimal since there are bitcoin geeks out there that would probably volunteer their time to get it started.

When the advantages start outweighing the disadvantages, all it will take is for one company to do this, and it'll happen. I wouldn't be surprised is some sort of internet centric company like Steam would start accepting coins first.

[hazek]

I agree but I also think it's just a tad too early for that, maybe in 6 months. And I say that because I think the layers of convenience on top of Bitcoin aren't all there just yet for the masses to have an easy enough experience handling their bitcoins. We just last week I think got the blockchain.info ewallet app into the app store for iphones which was also a huge step desperately needed. We just need a few more of those, some guides on how to safely and effectively use them to pop up and get spread around and then it'll be ready for something like you describe to happen. My 2c at least.

[Indy Vidual]

Looked exciting for a minute hazek; Don't think I like what I found though:
They seem to harvest BTC from game players computers?

Turn Play into Pay
There's a hidden goldmine in your game's user base: computing power. CoinLab helps you monetize your non-paying players to earn a profit of over $15 per player per month.
http://coinlab.com

When my extra computing power gets used I quickly shut down the offending programs...

[hazek]

Looked exciting for a minute hazek; Don't think I like what I found though:
They seem to harvest BTC from game players computers?

Turn Play into Pay
There's a hidden goldmine in your game's user base: computing power. CoinLab helps you monetize your non-paying players to earn a profit of over $15 per player per month.
http://coinlab.com

When my extra computing power gets used I quickly shut down the offending programs...

I believe their premise is that not everyone feels like you do about that and some would be willing to offer their "extra computing power" in exchange for digital goods in free to play games. Personally I agree with you.

Whether or not their premise is valid and will take off is besides the point really. The major news here is that someone managed to get a half a million of seed money to fund a purely Bitcoin driven idea and just an idea at that, no actual software developed as far as we know or anything. A good signal Bitcoin is being taken seriously.

[Indy Vidual]

...The major news here is that someone managed to get a half a million of seed money to fund a purely Bitcoin driven idea and just an idea at that, no actual software developed as far as we know or anything. A good signal Bitcoin is being taken seriously.

True