Buttercoin

Buttercoin was a financial technology company that operated in the cryptocurrency space, specifically as a Bitcoin exchange. Founded in 2013 by Cedric Dahl and Bennett Hoffman, the Palo Alto-based startup aimed to provide a secure and scalable infrastructure for digital currency trading. The company emerged from the Y Combinator accelerator program in the summer of 2013, positioning itself as a high-performance, open-source trading engine designed to handle high transaction volumes, a direct response to the performance issues plaguing other exchanges at the time, such as Mt. Gox.

The core of Buttercoin's offering was its white-label bitcoin exchange and a high-volume digital trading engine that utilized an order book to arrange trades. A primary strategic focus for the company was the global remittances market, with plans to establish local bitcoin exchanges in various countries to facilitate cheaper international money transfers. This was intended to allow users to bypass the high fees often associated with traditional remittance services. The platform allowed users to buy, sell, and place advanced orders, such as setting buy orders to execute at a lower price or sell orders when the price increased. The business model was predicated on becoming a reliable and compliant money transmitter, particularly in the U.S. market.

Buttercoin secured approximately $1.6 million in total funding from a notable list of investors, including Google Ventures, Y Combinator, Initialized Capital, Floodgate, and prominent angel investors like Reddit co-founder Alexis Ohanian and Kevin Rose. Despite this initial backing and its technological foundation, the company faced significant headwinds. In April 2015, Buttercoin announced it would be shutting down its services. The founders cited a decline in venture capital interest in Bitcoin-focused companies as the primary reason for the closure, stating they were unable to secure the necessary follow-on funding to continue operations. The company assured its users that it remained solvent and all customer funds were secure, with balances being returned to their owners.

Keywords: Bitcoin exchange, cryptocurrency trading, digital currency, Y Combinator, remittance market, venture capital, Cedric Dahl, Bennett Hoffman, open source trading engine, Bitcoin infrastructure, money transmitter, Google Ventures, Alexis Ohanian, cryptocurrency startup, Palo Alto, digital trading, order book, international remittances, fintech, deadpooled