Topic: Dwolla growth email - success and relation to Bitcoin? (Read 5853 times)

Dwolla's model makes sense.  $0.25 for a $100 transfer is much less than the $3.20 that PayPal charges.  I've already had it happen where someone I've sent money to previously has now asked for the payment to be sent with Dwolla instead (to minimize the transaction costs).  Of course,Bitcoin was the only reason that person had already signed up with Dwolla but kudos to Dwolla for being in the right place at the right time.

One of the worries that I had was that if Bitcoin were to start to take market share from the payment networks, would they simply lower their fees to lessen the cost advantage that Bitcoin offers?

Then I realized that Dwolla can actually take away some of the profitable business away from Visa/MC.  The remaining business for Visa/MC will be the more problematic, less profitable transactions (merchants with a higher rate of chargebacks, customers who are paying with credit because they don't have the cash and thus might default at higher rates, etc.)

So Dwolla succeeding fantastically at the expense of the legacy payment networks will actually be something to look foward to.  Going from one payment method (payment card only) to two methods (payment card or Dwolla) is much harder than going from two methods to three (payment card or Dwolla or Bitcoin).  Dwolla can do a little trail blazing for Bitcoin.

If not currently we were. Dwolla released data on how many transactions they had done, we compared that to our data and Gox's data and found that combined we made up almost all of their volume.
They have more non Bitcoin related transfers now though. They seem to be growing fast, I hope they thank Bitcoin for the bump.

Jered

I don't know if they really "know" they are their second largest customer...

I believe Magical Tux said roughly 6 million so far with Dwolla. We did 1.2 million (roughly) in June (started June 8th). I would imagine this is most of Dwollas June volume.
At this point they have probably grown enough off Bitcoin that they can continue to grow through other means. To say Bitcoin didn't give them a huge push seems to be an understatement.
They can probably lose Bitcoin at this point and continue to grow. Hopefully they prefer to make things right and clear the air on this issue.

Jered

Well this Dwolla story gets more interesting!  TradeHill released a PR today on their site regarding the issue, and I found this:

From Jared Kenna of TradeHill:

I think we can assume that MtGox is thus Dwolla's largest customer, right? So the two top customers of Dwolla's growth are both Bitcoin exchanges. My original suspicion seems incontrovertible now - Dwolla's celebration of growth in their recent announcement is really a celebration of Bitcoin's success, not exactly theirs.

+1

So now that dwolla reverses transactions, when do they send out the email about their spiral into obscurity now that noone uses it with bitcoin exchanging anymore?

Yes, I'm an admitted conspiracy theorist, but...

I believe that there is a huge value in understanding the relationships between individuals, and that is the reason for the extreme interest in social networks these days.  Just ask Mubarak how much he wished he had had actionable information about this in a timely manner.

This is at least part of the reason I have avoided Facebook, Twitter, etc, etc, and why I will probably avoid Dwolla.

I expect that Dwolla will do fine if it can position itself out in front of it's like competition, though it probably never will make a profit on it's exchange and payment business and probably won't really care that much.

Bitcoin also provides a rich tapestry of relationship information.  The difference that I can see, to the extent that I understand it, is that it is much more possible to work around the edges if one cares to, and it would be much more difficult for the authorities to manage should enough people take and interest in and succeed in doing so.


And I, for one, hope it continues for as long as it's mutually beneficial.  Or actually, I should say for the sake of honesty, for as long as it is beneficial to Bitcoin.

It will be hard for Dwolla to be "the big winner in the end" when they are just transferring worthless green toilet paper. Bitcoin is a different currency entirely, and you can bet that the open-source enthusiast community of Bitcoin will develop effective, efficient tools faster than Dwolla could ever hope to do.

But regardless, Dwolla and Bitcoin have been very helpful for each other thus far.

You're just making the argument for widespread adoption of Bitcoin.

I've heard speculation that the opposite will happen - that Bitcoin will fail but Dwolla will be the big winner in the end. Certainly right now they offer better value; if both you and the person you're sending to are using Dwolla, you can pay MtGox's 0.6% fee to convert to Bitcoins, plus any Bitcoin transaction fees, and then they can pay another 0.6% MtGox fee, or you can just skip Bitcoin and the associated fees and exchange rate risk and use Dwolla directly. (When MtGox's fees return to normal it'll be even more.)

yea, give it to them as a survival strategy,
that way bicoin will no longer be a threat to them.

only good things can come out of that symbiosis

Good idea.  You should contact Dwolla about doing this.

It's definitely BitCoin.  It seems most of the exchanges use Dwolla for transactions.  Because, seriously, who would use Dwolla if it wasn't used for getting BitCoins?

Dwolla should perhaps set up a USD<->BTC exchange within their own site... bam! That would be successful me thinks.

Think their primarily goal would be to establish themselves as the payment solution for mobile devices, not necessary based around bitcoin. That's where they are headed I think with such small transaction fees.

I sent an email thanking Dwolla for providing a bridge for people to buy bitcoins. I can be cruel at times.

Robbery, politics, involuntary prostitution, banking and other forms of business where the pure consent of the customer is not acquired.

maybe not exactly, error:


[emphasis mine]

http://www.bitcoinmoney.com/post/7895143775/dwolla-milestone-one-million-a-day

what if dwolla didn't compete?  what if they... oh, i dunno... facilitated?  merged?  bet on Bitcoin in a big way?  i mean, they know where their money's coming from, right?

it's a very interesting quote.

My hope is that Bitcoin attains legitimacy in Washington after every possible avenue of opposition has been tried and failed.  Bill Gate's "embrace and extend" strategy for destroying open source competitors was shockingly effective for killing java. The Federal government could do more harm to bitcoin by regulating it than by banning it altogether.