Coinapult Intros Service to Anchor Bitcoin's Price for Wary Users
For most of the digital currency's existence, the price of a bitcoin has swung wildly. Coinapult is looking to remove this risk with the launch of Coinapult Locks, which pins the value of a user's bitcoin balance to a stable asset.
"Our thesis is that 99% of normal people aren't currency speculators, and won't deal with a service that exposes them to volatility in daily transactions, said Gabe Sukenik, executive director at Coinapult. We created Locks as a bridge to overcome this barrier to entry, and allow users to exist in the Bitcoin ecosystem without have to worry about the price.
If a user locks $1,000 in bitcoins, the user will still have $1,000 in bitcoins no matter how much the price fluctuates over time. Though this reduces the risk when bitcoins' price plummets, it also means that if the price increases, the consumer won't receive the benefits of that deflation.
The company predicts its Locks feature will be especially useful for savings, employee wages and rent payments. Users can lock bitcoin balances to gold, silver and a range of national currencies.
Users are limited to locking $3,000 worth of bitcoins. Locks can be held indefinitely if the user is active, and users can unlock their bitcoins at any time. If a customer has been inactive for four years, Coinapult will try to return the funds in the user's account.
The Coinapult wallet allows people to send and receive bitcoins by email or text message. Consumers can set up a wallet account by providing only a username and password.
The wallet and its features will not be available to U.S. or Panamanian consumers because of regulatory uncertainty, Sukenik said.
Coinapult was one of the early companies in the Bitcoin space, co-founded by entrepreneur Erik Voorhees, who recently paid more than $50,000 to settle charges by the Securities and Exchange Commission that he failed to register a stock offering for SatoshiDice, a gambling site, and FeedZeBirds, a social media marketing startup.
Ira Miller co-founded Coinapult with Voorhees, who recently exited the company, leaving Miller as CEO.
In early 2013, the company moved its operations to Panama to focus on non-U.S. customers without facing the constraints of U.S. regulation.
Vera&John, a licensed and regulated online casino, started working with Coinapult in January to accept Bitcoin for its more than 200 slot games, but has since suspended its Bitcoin operations after speaking with the Lotteries and Gambling Authority in Malta, where the casino is based.
Sukenik says whenever Vera&John reinstate Bitcoin as a payment method, Coinapult will continue to provide processing services.
Voorhees and Miller, along with "Bitcoin Jesus" Roger Ver, invested in Safello, a Swedish Bitcoin exchange, earlier this year. In May, Safello integrated NetVerify, a mobile identity scanning technology from Jumio, for faster verification of customers.