Two California Startups Create BitDazzle to Take Bitcoin Mainstream

10/15/13Follow @bvbigelow

Cashie Commerce, a San Diego startup that provides a purchasing platform for online merchants, has partnered with San Francisco-based Coinbase to create BitDazzle, a new online marketplace that accepts the digital currency Bitcoin.

The move comes just weeks after the feds shut down the illicit trafficking website Silk Road—where all transactions were conducted using Bitcoins—and arrested owner Ross William Ulbright on federal charges of money laundering, conspiracy to commit drug trafficking, and other crimes. On Friday, the payment processing company Dwolla unexpectedly disclosed plans to phase out its own Bitcoin-related businesses.

Yet Cashie Commerce CEO Hieu Bui said he does not view the development of BitDazzle.com as a higher-than-normal business risk. He welcomed government efforts to shut down the online black market for Bitcoin-based sales of drugs, guns, and other illicit products.

“We’re trying to make Bitcoin more mainstream, and one of the ways to do that is to have more products and merchants who are mainstream,” Bui told me by phone this morning. He said PayPal also was used in dubious ways at the beginning, and gained broader acceptance as the payment system cut ties with porn sites.

“I’m optimistic Bitcoin is here to stay,” says Dave McClure, the founder of 500 Startups and a Cashie Commerce investor, in a statement announcing the Bitcoin marketplace today. “Bringing together a Bitcoin market leader like Coinbase and an e-commerce leader like Cashie Commerce to create BitDazzle is a great step forward in offering Bitcoin to the masses.”

Coinbase, a Y Combinator startup, was founded in 2012 to make it easy for the average person and business to use Bitcoins in secure online transactions. Coinbase says … Next Page »

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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