Two new services enabling bitcoin transactions on chat platforms have launched, with one already gaining thousands of users.
TeleBit launched in mid-February and has attracted some 6,400 registered users, according to co-founder Jonathan Harrison. It has nearly 5,000 daily active users and has transacted 41 BTC in total, Harrison said.
The service is built on top of the Telegram chat platform, which had 50 million monthly active users in December. Users can send bitcoin through messages on the chat platform, which prides itself on its end-to-end encryption and other privacy measures.
“Most people are getting comfortable by sending tiny amounts, so we’ve had a huge number of transactions,” Harrison said.
The micropayments craze
Operating in a similar way is the Bitcoin TipBot for Slack which is created by blockchain explorer and wallet firm BlockTrail.
The BlockTrail bot is an open-source programme that works with Slack, a chat platform aimed at businesses. Once installed on a particular company’s Slack account, users there can send and receive bitcoin by issuing commands to the bot.
Slack reported 500,000 daily users this month.
The Slack bot was written in two hours during a January hackathon in Amsterdam, where BlockTrail is based, said the firm’s co-founder Boaz Bechar. The code was published to the open-source code-sharing platform GitHub last week.
Both TeleBit and the BlockTrail tipping bot build on the micropayments trend sparked by market leader ChangeTip, which saw that startup’s transaction volume grow explosively to processing as much as 10,000 transactions in a day, though the daily average is lower.
ChangeTip lets its users transfer bitcoins using social media platforms like Facebook and Twitter, although users can only claim the funds by registering for a ChangeTip account.
ChangeTip’s success even saw off a challenge from Coinbase, the best-funded company in the bitcoin space with $107m raised, which retired its own tipping feature after mounting a brief challenge at the end of last year. As it rolled down the shutter, Coinbase said it would direct the 10,000 users it gained on its tipping platform to ChangeTip.
Tiny payments could bring bitcoin success
But don’t call TeleBit another micropayments service.
Harrison rejects the premise, claiming that transacting bitcoins on messaging platforms represents a different market than doing so on social media platforms.
Harrison said the key difference is the user experience. Whereas ChangeTip routes you to a website to claim a bitcoin deposit, TeleBit lets you move your funds from within the chat platform.
“You can’t withdraw bitcoin directly from Twitter [on ChangeTip] … You can use TeleBit straight away and you never have to leave Telegram to do so,” he said. “Ultimately one day, most IM apps will be bitcoin wallets as well.”
Harrison said he is focused on growing user numbers for TeleBit now, so he isn’t charging any fees. In fact, he even subsidises miner fees incurred by TeleBit users who send funds to a non-TeleBit wallet. Future revenue streams for the service include “non-intrusive” advertising, delivered inside the automated Telegram chats the service generates.
For BlockTrail, its Slack tipping bot isn’t so much a product as an experiment exploring the novelty of bitcoin tipping. The BlockTrail team itself uses the bot internally mainly for “jokes”, Bechar added. But don’t let the outward frivolity of tipping mask its potential for disrupting online transactions, the BlockTrail founder said.
“There are very few channels where you can do [micropayments] – SMS used to be a big option but carriers took a lot in fees, so cryptocurrency makes it so much easier and more efficient,” he said.
Micropayments continue to be held out as a way for bitcoin or other digital currencies to overturn the established financial order. The head of the influential think-tank the Aspen Institute, Walter Isaacson, said in December that bitcoin micropayments could “upend” the current financial system.
ChangeTip itself raised $3.5m in funding from Pantera Capital, 500 Startups and others on the back of rising user-growth in December. It reported 30,000 users at the time of its funding announcement.