San Francisco based Bitcoin microtransactions startup ChangeTip announced the launch of a new service called ChangeTip Wallet today. ChangeTip Wallet is being launched as a decentralized version of ChangeTip’s social tipping service ChangeTip. ChangeTip Wallet will offer the same services as ChangeTip but it is decentralized and has fewer restrictions in terms of account size, transaction amount and user locations. Users will also be able to manage their own private keys.
Founded by Nick Sullivan in 2013, ChangeTip enables users to send micropayments or “tips” in Bitcoin across various social media websites, such as Twitter, YouTube, Reddit and Facebook, as well as handling email and text messaging. The Silicon-Valley based company has raised $3.5 million in funding and is backed by investors such as Gil Penchina, Pantera Capital and 500 Startups.
In November 2014, only one year after being launched, ChangeTip signed up around 34,000 users and had 47,000 connected social media accounts. But its growing popularity also raised a few concerns. People criticized ChangeTip’s centralized practices and off-chain transactions. ChangeTip’s control of the private keys for all Bitcoin addresses associated with the service and collection of personal and social data raised privacy concerns.
The company has worked on addressing the issues of decentralization and privacy since last year. In a blog post during that period, ChangeTip VP of community development Victoria van Eyk responded to a user whose account had become inaccessible due to geopolitical factors by saying, "Changetip has been looking to decentralize for four months now. If we want to keep ChangeTip functionality — money on social media, Bitcoin on social media — we need to...not hold custody of funds, so this never happens again. We are working on it." The user in question was able to retrieve funds through his main wallet, but not without a processing delay.
According to Nick Sullivan, Founder and CEO of ChangeTip, today’s launch of ChangeTip Wallet addresses all earlier concerns about decentralization and privacy by giving users more control over their accounts.
“We’re really excited to launch something that’s pure Bitcoin. Many in our community like ChangeTip, but shy away from the service because it is centralized. We talked for a while about creating this [new decentralized] product, and ultimately, we decided it was something we really wanted to build.”
In addition to the orginal tipping functionality, ChangeTip Wallet will give users control over their own private keys. Sending and approving of payments can done via a web and mobile app. Restrictions on account size, transaction amounts and user locations have been removed.
The first release of ChangeTip Wallet will be demonstrated in person to limited and selected parties February 27, 2016 at a resort somewhere in North America. ChangeTip Wallet is currently in closed beta and will be available by invitation only. Interested parties can join the list by entering their entering their e-mail addresseshere.