Buttercoin
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Buttercoin was a Palo Alto-based US bitcoin marketplace founded in 2013 and led by CEO Cedric Dahl. Backed by Y Combinator, Google Ventures and Centralway Ventures (about $1.3-2.1 million raised), it aimed to build local exchange rails around remittance - letting customers reliably exchange bitcoin and fiat at both ends of a remittance - with no trading fees, a liquid order book, a robust API and sub-millisecond order matching. Unlike most failed bitcoin companies of the era, it stressed that it was '100% secure and solvent' and returned customers' balances in full when it shut down on 10 April 2015.
02 / Buttercoin FAILURE REASONS
Failure factors supported by the current evidence
Buttercoin’s own statement, reported by Mashable, said it shut down because it could not raise enough new venture capital after a dip in Silicon Valley investor interest in bitcoin.
Company said it could not generate enough venture capital interest to continue funding operations.
It attributed the funding shortfall to a dip in bitcoin interest among Silicon Valley investors.
03 / EVENT HISTORY
Events in the structured record
- Founded
Buttercoin was founded in 2013 in Palo Alto, backed by Y Combinator and Google Ventures, aiming at remittance-related local bitcoin exchange rails.
- Shutdown
On 6 April 2015 Buttercoin announced it would turn off its service on 10 April 2015 at 11PM Pacific, after failing to raise new investment amid a dip in bitcoin interest among Silicon Valley investors. The wind-down was solvent: unclaimed funds were returned to originating accounts and customers received balances in full. CEO Cedric Dahl later called relying on venture funding a 'tactical mistake': 'you cannot rely on venture, you have to make a product that is self sustaining.'
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Buttercoin was founded in 2013 in Palo Alto as a US bitcoin marketplace, led by CEO Cedric Dahl and backed by Y Combinator, Google Ventures and Centralway Ventures (about $1.3-2.1 million raised).
- 02
It aimed to build local exchange rails around remittance, with no trading fees, a liquid order book, a robust API and sub-millisecond order matching.
- 03
On 6 April 2015 it announced the service would go offline on 10 April 2015 at 11PM Pacific, after failing to raise new investment amid a dip in bitcoin interest among Silicon Valley investors.
- 04
The wind-down was solvent and orderly: the company stressed it was '100% secure and solvent', unclaimed funds were returned to originating accounts, and customers received balances in full.
- 05
CEO Cedric Dahl's post-mortem lesson: raising venture money for the exchange was a 'tactical mistake' - 'you cannot rely on venture, you have to make a product that is self sustaining.'
- 06
No reliable realized loss figure with clear subject, period and basis has been disclosed; funding raised is not a loss.