If Bitcoins are to gain mainstream acceptance, people will need the ability to transact with them in a way they are familiar with.
The virtual currency is taking a big step towards meeting that goal with BitPay, a startup that looks to do for Bitcoins what PayPal does with traditional money.
BitPay is an attractive idea for three primary reasons: it provides another layer of protection against cyber fraud, it enables widespread online commerce and it brings a familiar idea to a foreign currency.
BitPay adds protection in that it acts as an intermediary between a consumer and a merchant, preventing the need for personal information to be shared. Because Bitcoins are not regulated, it allows for merchants to accept payments through BitPay from anywhere at anytime. And by creating a PayPal-like platform complete with an accompanying mobile app, BitPay could incentivize consumers to use Bitcoins the way they use regular currency. Plus, BitPay provides merchants with standard currency: they just accept Bitcoin as a payment from users.
According to TechCrunch, more people are catching on: BitPay was partnered with 1,300 business in November 2012, but has seen that number jump to 2,100 since, thanks in part to WordPress’ Bitcoin acceptance.
Despite those numbers, Bitcoins are still a relative unknown for most people. But while many have yet to use Bitcoins at this point, BitPay is receiving plenty of attention from investors anyway.
The company earned $510,000 in funding last week, with Shakil Khan, Barry Silbert, Jimmy Furland and Roger Ver leading the round, according to TechCrunch. Khan is best known for his work with Path and Spotify, and offered the following comment to TechCrunch about hit BitPay investment:
“2013 will be the year for critical mass understanding of the importance of friction free international payments and I predict Bitcoin will become a global payment network. With very little resource, BitPay has already taken the place as market leader in the bitcoin payment processing ecosystem, and along with the other investors, I am very excited to help the founding team scale up and take it to the next level.”