New California-based bitcoin exchange, called Buttercoin, was officially launched in the US. The exchange will allow digital currency users to send and receive funds in just one day.
Buttercoin solves the problem of delayed payouts, as most of the exchanges are not able to handle large transaction volumes. This make the company one of the key competitors to other bitcoin exchanges.
The UK-based BitStamp also offers one-day settlements for its users, however, its services are available only in Europe. Buttercoin will be able to compete with the European exchange in terms of liquidity.
The new company received about $1 million investments from Google Ventures, Y Combinator, Rothenberg Ventures, Floodate, Reddit co-founder Alexis Ohanian and Initialized Capital. As of September 2013, the exchange received about $1.6 million, including $250,000 from Central Ventures.
Buttercoin founder and CEO Cedric Dahl said: “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.”
“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.”
Dahl noted that Buttercoin is an eBay-like service that connects buyers and sellers and does not hold customer money. Buttercoin will be able to process about 200,000-500,000 bitcoins at a time. The exhcange offers a simple interface for its customers, with features that improve usability.
According to Dahl, Buttercoin is primarily targeted at customers within the US bitcoin business sector.
One of the Buttercoin clients, a mining company MegaBigPower, pointed out to the ability to process large amounts of money as one of the key benefits of the exchange. The firm’s CEO Dave Carlson said: “With Buttercoin, I can get payouts in one day, overseas exchanges can take two-plus weeks.”
Dahl also told what money services businesses are required to do to sign up at Buttercoin. He said: “For people who are thinking about starting a businesses or seeing what’s possible, we have an excellent set of APIs. We want Buttercoin to be open to them, and for them to be able to build on top of Buttercoin.”