Bitcoin Marketplace Buttercoin Folds Despite $1.3 Million Investment

Lorenzo

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I don't get it. How could an exchange burn through $1.3 million in four months? That's almost $4 million a year. Why does a four month old exchange with zero customers even need $1.3 million in the first place? An exchange that isn't used much shouldn't have high server or operating costs. And advertising on established Bitcoin news sites like CoinDesk and running a sig campaign shouldn't cost anywhere near this amount either.

Facebook was able to prosper despite probably having less than 1/10th the amount these guys had in their first four months:

Quote

Facebook was initially incorporated as a Florida LLC. For the first few months after its launch in February 2004, the costs for the website operations for thefacebook.com were paid for by Mark Zuckerberg and Eduardo Saverin, who had taken equity stakes in the company. The website also ran a few advertisements to meet its operating costs.

This is what Google's servers looked like four months after it was launched in 1997:

Sure doesn't look like $1.3 million to me.

bryant.coleman

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Quote from: sangaman on April 08, 2015, 03:08:19 PM

There were definitely promos but perhaps they weren't advertised well enough. They had a referral program with signup bonuses, as well as no fee trading (which was slightly misleading as there was still a fee on the bank transfer to fund your account).

There were referral programs, but as you have already posted, they were not used in a meaningful way. Should have done something better.... like zero-fees on deposits and withdrawals for a limited time period.

ChuckBuck

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better everyday ♥

Believe it or not, this is the first I've heard about Buttercoin.

Sucks, because like others are saying, it's a further stain on failed Bitcoin ventures that never met their promise.

Somehow, I think whoever came up with the name, deserves a big smack upside the head. Buttercoin! Sounds like another shitcoin to be perfectly honest...

sangaman

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Quote from: bryant.coleman on April 06, 2015, 09:51:05 PM

Quote from: sangaman on April 06, 2015, 03:19:15 PM

It's a shame, I used this exchange a bit and really liked the interface and some of their blog posts, but they never really seemed to attract much volume. I'd speculate they were partly overshadowed by other new US exchanges like Coinbase.

Agreed. But I never saw any promotions by them to attract new users. Even here in Bitcointalk, I hardly ever say any of their offers or discounts. Accept the truth. These guys were not interested in running the site. Their intentions were something else.

There were definitely promos but perhaps they weren't advertised well enough. They had a referral program with signup bonuses, as well as no fee trading (which was slightly misleading as there was still a fee on the bank transfer to fund your account).

Bitcoinpro

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Quote from: bryant.coleman on April 07, 2015, 02:11:47 AM

Quote from: Bitcoinpro on April 07, 2015, 02:05:41 AM

buttercoin is this story by any chance from the 1st of April

Unfortunately not. The investors were either extremely careless or stupid to pour in so much money in to a venture which lacked solid credentials. But in the end, the reputation of Bitcoin suffers.

its fake man think about it, their is many of us for rich people to contact and do business with

and if they where to have just purchased 1 million of BTC or LTC and rip it from the exchange into

wallets it would cause a significant enough price swing upwards to make them profit

bryant.coleman

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Quote from: Bitcoinpro on April 07, 2015, 02:05:41 AM

buttercoin is this story by any chance from the 1st of April

Unfortunately not. The investors were either extremely careless or stupid to pour in so much money in to a venture which lacked solid credentials. But in the end, the reputation of Bitcoin suffers.

Bitcoinpro

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buttercoin is this story by any chance from the 1st of April

crazyivan

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DMD Diamond Making Money 4+ years! Join us!

Well 1.3 mill VC can cover your operational costs but it does not guarantee that the you ll successfully cope with the competitions. IMHO, they are just using the lack of VC as a cover up story for them not being able to survive in the market. After all, it is very competitive market.

bryant.coleman

legendary

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Quote from: ¡ndustrialcoinmagic on April 07, 2015, 12:40:51 AM

some are just investment to cover some other purposes .

Remember the dot-com bubble of 1999-2000? A group of cons would suddenly put up a tech company, claiming that it will be having billions of USD in profits within a few weeks. Grin

Unsuspecting (and greedy) investors would flock together to buy stocks and the promoters will vanish once they have sold a majority of their shares. Many of the Bitcoin based ventures are similar.

¡ndustrialcoinmagic

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Quote from: bryant.coleman on April 06, 2015, 09:51:05 PM

Quote from: sangaman on April 06, 2015, 03:19:15 PM

It's a shame, I used this exchange a bit and really liked the interface and some of their blog posts, but they never really seemed to attract much volume. I'd speculate they were partly overshadowed by other new US exchanges like Coinbase.

Agreed. But I never saw any promotions by them to attract new users. Even here in Bitcointalk, I hardly ever say any of their offers or discounts. Accept the truth. These guys were not interested in running the site. Their intentions were something else.

some are just investment to cover some other purposes .

bryant.coleman

legendary

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Quote from: sangaman on April 06, 2015, 03:19:15 PM

It's a shame, I used this exchange a bit and really liked the interface and some of their blog posts, but they never really seemed to attract much volume. I'd speculate they were partly overshadowed by other new US exchanges like Coinbase.

Agreed. But I never saw any promotions by them to attract new users. Even here in Bitcointalk, I hardly ever say any of their offers or discounts. Accept the truth. These guys were not interested in running the site. Their intentions were something else.

ebruwifxnx

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I hope that their balance sheets show some sort of justified use of the funds or else those involved will never get another VC investment. People make this mistake all the time, woo 1.3 million in funding lets all pay ourselves 300k a year and then they go bankrupt. They start another company and no VC firm wants to go anywhere near them. Getting funding doesn't mean you can stop being frugal.

IlaughAtU

newbie

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That should have been enough to get it off the ground.

If not their business model or their business plan, or both, were unsound.

Better now than later when they would have taken a bunch of people with them.

sangaman

sr. member

Activity: 342

Merit: 250

It's a shame, I used this exchange a bit and really liked the interface and some of their blog posts, but they never really seemed to attract much volume. I'd speculate they were partly overshadowed by other new US exchanges like Coinbase.

GTO911

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Quote from: ?? on ??

Maybe it was the name. Buttercoin??

Maybe buttcoin was better?

bryant.coleman

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Quote from: umairsaleem on April 06, 2015, 08:29:33 AM

SiliconVstreet is losing interest in Bitcoin, investors are losing interest, this is the harsh reality we have to face, espacially the ones who always say wall street big money all the day, the situation is not so optimistic.

Investors need to accept the reality. After setbacks such as Mt Gox and Sheep Market Place, it is clear that Bitcoin might take at least a few years time to recover. As far as I know, these investors are looking for quick returns, which is not going to happen with Bitcoin in near future.

umairsaleem

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Quote from: tokeweed on April 06, 2015, 06:49:21 AM

Another one bites the dust.

Quote

US bitcoin marketplace Buttercoin is shutting its doors, despite launching just four months ago with at least $1.3m in investor backing.

In a farewell post to customers today, the Buttercoin team announced the service will go offline this Friday (April 10th) at 11pm PST.

Stressing that it was "100% secure and solvent", the Palo Alto-based platform blamed a lack of VC interest for its closure, stating:

"With the dip in bitcoin interest among Silicon Valley investors, we weren't able to generate enough venture capital interest to continue funding Buttercoin."

Buttercoin's nine-person team had raised at least $1.3m from investors including Reddit co-founder Alexis Ohanian, Y Combinator, Centralway Ventures, Google Ventures and Wedbush Securities – though its exact funding total is unclear.

http://www.coindesk.com/bitcoin-marketplace-buttercoin-folds-despite-1-3-million-investment/

SiliconVstreet is losing interest in Bitcoin, investors are losing interest, this is the harsh reality we have to face, espacially the ones who always say wall street big money all the day, the situation is not so optimistic.

gentlemand

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Welt Am Draht

Quote from: tokeweed on April 06, 2015, 08:20:53 AM

If they burned 1.3m in a matter of days. Then that start up was the wrong one to invest in.

I'm sure they were more diligent than that, but it's small fry for VC spending. Quite often hundreds of millions disappear down black holes that never made a penny back.

tokeweed

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Life, Love and Laughter...

Quote from: gentlemand on April 06, 2015, 08:13:47 AM

Quote from: Q7 on April 06, 2015, 07:38:00 AM

That will only further erode people's confidence that they have in bitcoin. With that size of funding, I don't know how it can ended up becoming a failed business model but obviously there must be something happening within that we did not see.

1.3 million is comparative peanuts in the VC world. You can burn through that in a few days spending on offices, branding, schmoozing.

Businesses fail constantly everywhere because they're not attractive to customers. At least it didn't steal anything from anyone. If they wanted to survive they should've been as appealing as existing options. For whatever reasons, they're not.

Bitcoiners feel a little bit like arsehole yuppy parents sometimes, screeching when their special snowflake acquires a chipped fingernail. I don't scrap my car when the nearest fuel station closes down.

If they burned 1.3m in a matter of days. Then that start up was the wrong one to invest in.

gentlemand

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Welt Am Draht

Quote from: Q7 on April 06, 2015, 07:38:00 AM

That will only further erode people's confidence that they have in bitcoin. With that size of funding, I don't know how it can ended up becoming a failed business model but obviously there must be something happening within that we did not see.

1.3 million is comparative peanuts in the VC world. You can burn through that in a few days spending on offices, branding, schmoozing.

Businesses fail constantly everywhere because they're not attractive to customers. At least it didn't steal anything from anyone. If they wanted to survive they should've been as appealing as existing options. For whatever reasons, they're not.

Bitcoiners feel a little bit like arsehole yuppy parents sometimes, screeching when their special snowflake acquires a chipped fingernail. I don't scrap my car when the nearest fuel station closes down.

Topic: Bitcoin Marketplace Buttercoin Folds Despite $1.3 Million Investment (Read 1252 times)