The new year has opened with some significant breakthroughs for those preparing for bitcoin to hit the mainstream, with major international game developer Zynga announcing a partnership with BitPay that will enable people to use bitcoins while playing games such as the phenomenally successful Farmville series.
The trial has been heralded as a breakthrough for BitPay, but also bitcoin more generally.
Closer to home, two Australian start-ups are exploring the potential of bitcoin payments for smaller and more common payments such as parking and bills.
Parkhound, a start-up that enables the leasing and sharing of parking permits and spaces took its first payment in bitcoin last month. Co-founder Robert Crocitti says the innovative step was an unanticipated step forward for his team.
“The first bitcoin payment wasn’t actually our decision. We’re just a start-up so we’re happy to try and accommodate any customer that comes our way. Many are more innovative than us, so we took our first payment in bitcoin when one of them asked us if we could,” Crocitti says.
He adds it was lucky they were using the Shopify payment system, which already had the built-in capacity to take digital currency payments.
As part of the growing group of companies beginning to translate bitcoin from the first adopters to more mainstream consumers, Crocitti says 2014 is likely to be the breakthrough year.
“Bitcoin has gained a lot of prominence in the last two years, but I think the big clincher will be when it’s available for people to pay using their mobile phones through NFC or some other kind of chip technology so you can use bitcoin via your phone at bricks-and-mortar store. This is likely to happen this year with a range of apps,” Crocitti says.
One Melbourne-based start-up is already bridging the gap directly, enabling Australians to pay their electricity and water bills with bitcoin.
BitBillPay.com.au has processed over $7,000 worth of bills already. The payments are made via CoinJar, an exchange and payment system that recently received $500,000 in investment funding from Blackbird Ventures.
Ryan Zhou, co-founder of CoinJar and founder of BitBillPay.com.au explains on the latter’s website he isn’t making any money from the service, and outlines the potential he sees for Bitcoin.
“I deeply believe that the true potential of Bitcoin lies on its intrinsic ability to provide a solid digital-native financial foundation to incrementally improve how people use money. It has never been easier to positively change the status quo of payments today with the power of a widely accepted decentralised currency,” Zhou says.
Bitcoin is set to be one of the biggest start-up stories of 2014, with over 140 bitcoin start-ups listed on investment information aggregator AngelList and several local start-ups beginning to gather momentum.
A range of Australian start-ups are working out ways to ride the bitcoin wave, including booming BTC.sx which announced in November it had processed over $14 million in transactions in six months, and Slingshot accelerator graduate World BX.
Bitcoin exchange World BX founder Nick Trkulja told StartupSmart in October that the digital currency’s growing respectability boded well for its future uptake.
“This is an exciting space to be in right now. Over the next year in particular, there will be a big shift in the ecosystem as it moves beyond the early adopters,” Trkulja said.
“The Bitcoin revolution was started online, and online retailers will increasingly accept it. This has helped to fuel its growth and spike the price, and we’re beginning to see bricks and mortar retailers follow.”
Evan Lucas, a market strategist at IG Markets, an investment and trading company that trades in a variety of assets including bitcoin, told StartupSmart in August that regulation will be essential for the digital currency to become mainstream.
“If it wants to become mainstream, it is going to have to subject itself to regulation. That will be a very interesting situation for those involved to subject themselves to that kind of scrutiny,” Lucas says.
“It’ll certainly be growing in its reach more and more as people start to look at it, but it’s still a very infant currency and the concern that a lot of analysts have about bitcoin is its regulation.”