Industry Consolidation Continues: Brawker Closes Down
Bitcoin marketplace Brawker announced on Tuesday the company would be shutting down due to insufficient growth. The service was one of the first Bitcoin companies to decentralize their bitcoin buying service and integrate multi-signature bitcoin transactions.
The announcement follows on the heels of Brawker’s former CEO, Cyril Houri’s, departure from the company earlier this month. The Bitcoin marketplace has been in control of the developers behind the company since.
“[O]ur growth rate did not meet our expectations, and the service does not scale as we would have expected to,” read the company’s farewell blog post.
Brawker is the most recent development in a string of prominent Bitcoin companies shutting down. Just last week, Buttercoin, a B2B bitcoin exchange operating in the United States closed its doors, citing a lack of venture capitalist interest. The exchange raised $1.3 million from investment firms just four months prior to its closure.
In late February, the Canadian Bitcoin exchange, Cavirtex, shut down due to troubled banking relations and security concerns. The exchange was hacked just weeks prior to the announcement, which caused users’ passwords and two-factor authentication secrets to be compromised. Cavirtex previously raised money through a virtual IPO on the Havelock investment platform.
Earlier this month, Cavirtex was bought by New York-based Bitcoin exchange Coinsetter for an undisclosed amount. The Canadian exchange resumed trading early last week.
A Changing Environment
Brawker was founded in late 2013, a time the company holds was very different for buying and selling bitcoin. Back then, merchant adoption was low and buying bitcoin with a credit card was difficult. Brawker was a way to solve both of those problems.
The platform proved to be a quick and reliable way to buy bitcoin with a credit card, as well as a way for people looking to buy products with bitcoin to get large discounts, anywhere from 5 percent to 20 percent. Early on, the platform found lots of success and popularity.
According to the company, the business has not been able to continue that growth. With a large number of Bitcoin startups founded every month, the ability to buy bitcoin with credit cards or find websites that accept the digital currency has grown incredibly – ridding Brawker of their main value proposition.
“The Bitcoin community came up with many great startups and the environment is very different from what it was 18 months ago, when we started working on this project,” read a public statement by Brawker.
The development team behind Brawker has stopped any new orders, but the platform will remain live until April 30th, allowing users to withdraw any funds they might have there.
The future of the company remains unclear. It has stated that it will open-source much of the code it has developed during its existence, including Brawker’s multi-signature framework. But what will become of the rest of the company remains unknown.
“Though Brawker has a lot of happy users, all good things have to come to an end, and now is a good time to move on to our next projects, and build something new that is even more useful to the community,” read the company’s blog.
The development team behind Brawker, as well as the company’s former CEO, stated they are still very much interested in the digital currency and opportunities within the growing industry. Some members of the team have announced they are already working on new digital currency projects, ending their last blog post with, “we won’t be far!”