Tech

Bitcoin Gets Its Own PayPal With New Startup

By Michael Mayday , May 19, 2013 10:46 AM EDT

It appears the U.S. Department of Homeland Security's (DHS) recent seizure of a Mt. Gox, the world's largest Bitcoin exchange, account on the mobile payment application Dwolla hasn't driven investors away from the currency.

In fact, Bitcoin may soon get its own PayPal.

The startup is called BitPay, and it's catching on with deep-pocketed founders. The payment service provider announced it has raised $2 million in seed round financing by Founders Fund - a group which includes three of PayPal's founders.

It seems the small seven-person startup is onto something with helping companies buy electronics and precious metals, and others want in on it.

"ECommerce companies see the tremendous value that frictionless international payments bring to their businesses as they expand into emerging markets," Founders Fund member Brian Singerman said in a press release. "BitPay's ambitions have been global from the outset, and at Founders Fund we have been impressed with the company's tremendous growth as they sign up hundreds of new customers a day, turning the potential for opportunity into a reality."

The Atlanta-based startup has placed a great deal of faith in the success of Bitcoin, convinced the virtual currency will take off just as email did, only quicker.

The system, funneling roughly $5 million worth of Bitcoins for various services, is spreading in use, adding 1,900 merchants during April. The company also claims it adds about 100 new businesses a day.

Companies like services like PayPal and BitPay thanks to the ability to easily transfer money across the world. BitPay is particularly well set as it lets companies accept Bitcoin with virtually no risk.

"We think that Bitcoin adoption will follow email, which started in corporate enterprise," BitPay's co-founder and CEO, Anthony Gallippi said in an interview with TechCrunch. "With Bitcoin there won't be a 10 year lag, but a lag, and businesses will lead the charge in Bitcoins."

BitPay isn't the only Bitcoin payment service on the market, nor is it the only one getting infused with cash. Its main rival, Coinbase, attracted $5 million from Union Square Ventures.

So what will BitPay do with its new $2 million? The company announced it's looking to hire node.js developers and a UX designer as well as investing more in BitPay.

Bitcoin itself has had a wild ride: the currency's value went from $140 in early April, skyrocketed to $266 then plunged to $86. The virtual currency is currently priced at $122, as of this post.

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