Users of bitcoin tipping platform ChangeTip can now send tips in US dollars, a move aimed at capturing users who may be wary of digital currency.
Currently, ChangeTip's service – used across 12 social media platforms – denominates tips in bitcoin, or 'bits' (each worth 0.000001 of a bitcoin). However, in a statement today, the company said it is revamping its platform to support US dollar tips, a move that follows credit card support announced in July.
Nick Sullivan, founder and CEO of ChangeTip parent company ChangeCoin, said in a statement:
"While electronic payments are well-established for online purchases, the concept of empowering everyone on the Internet to express gratitude and appreciation for great people, content, causes and contributions using the change in their digital pocket, is unique to social media tipping."
In its release, ChangeTip cited survey results that indicate up to 76% of people won't use its service because of the digital currency. The remainder (24%) who do try it, it said, "don't feel safe or confident" sending it to friends. It did not disclose the methodology of its survey, nor its scale.
"People believe it's not real money, that it's volatile, and that they won’t feel safe using it," the statement reads.
To counteract this, the firm expressed its belief that US dollar users could be introduced to bitcoin as they tip. The release continued:
"When tips are sent internationally, we will be converting USD to bitcoin, showing people the benefits of it as a global currency. When people go to withdraw, they will see that bitcoin is far less expensive than USD to use on our platform as a form of value transfer."
Users wishing to send dollar-denominated tips on the platform will need to first load their account with $25 via debit card. A further explanation of how users transact on the service can be found on Zendesk.
A search on the FinCEN database indicates the company has registered as a money transmitter in all US states, though it said regulatory challenges have been a barrier to its US dollar launch.
"Being very transparent, we've been through some serious challenges to get USD to work. The regulatory and banking system challenges have been...an exercise in patience," it said.
Together with the announcement, ChangeTip also revealed it will launch a new product designed to support content creators.
While ChangeTip already offers a tipping widget available on blogging platforms such as WordPress, Tipworthy aims to be a content curation offering where users can post links to content they believe warrants additional compensation.
In statements, the company likened the product to social media giant Pinterest.
Users are then prompted to tip in denominations of $0.25, $1, $2, $5 and $10. The company said it will also seek to reward users who post content, though no details on this initiative were provided.
ChangeTip did not indicate whether tips to the service would be sent to the content creators or the publishing media outlet.
Bridges to bitcoin
In its public messaging, ChangeTip sought to emphasize to existing bitcoin users that the new feature was not intended to move the company away from the technology.
Rather, the startup framed the transition as one that would perhaps help it better attack "consumer perception problems" bitcoin and digital currencies still face.
ChangeTip indicated it is currently working on a "decentralized" version of its platform, where users are in control of funds. Currently, ChangeTip processes all bitcoin transactions off of the main bitcoin blockchain.
"We are moving small amounts of money, it's not feasible to have a 1/10th of a penny tip or micropayment to a publisher be an on-chain transaction," the company said.
Proposals are currently being considered by the company regarding how it could leverage payment channels on the proposed Lightning Network and other alternatives to further its support for bitcoin.
The company said it is also working on plans that would allow it to circumvent the traditional banking system, while still offering its full suite of current services.
The company did not immediately respond to comment on this story, though it said CEO Nick Sullivan would seek to answer community questions on Reddit starting at 10:00 EST, 15:00 BST.
Dollar image via Shutterstock