Buttercoin

» see buttercoin.com as it lived, on the wayback machine

~ the last words ~

Buttercoin started in 2013 with an ambition larger than trading. The pitch was remittances: the World Bank was counting something like half a trillion dollars a year in cross-border transfers to developing countries, most of it moving through intermediaries taking a percentage at every step, and bitcoin looked like a way to route around that. The plan was local exchanges in a range of countries, with the currency as plumbing rather than as a speculative asset.

The company got the backing that plan deserved. Y Combinator took it in, Google Ventures put money behind it through Kevin Rose and Chris Hutchins, Reddit co-founder Alexis Ohanian joined the round, and Floodgate, Initialized Capital, Rothenberg Ventures and Switzerland's Centralway filled it out. Roughly $1.6 million in total, led by Cedric Dahl.

What it ended up shipping was an exchange, in a year when exchanges became an unpromising business to be small in. Coinbase and BitPay were taking the oxygen, Mt. Gox had collapsed in 2014 and poisoned the category's reputation with it, and the price spent 2014 falling. By early 2015 the funding conversation was over before it started. The company's own description of the problem was a dip in bitcoin interest among Silicon Valley investors. Translated out of the diplomacy, nobody would lead a round.

~ the record ~

~ four days of warning ~

The announcement went out on 6 April 2015 and it carried a precise deadline: Buttercoin would be turning off the service on April 10th at 11pm Pacific. Four days, a stated hour, and no ambiguity about what customers needed to do before it.

~ the part that makes it unusual ~

Almost every exchange in this graveyard died badly. Mt. Gox lost hundreds of thousands of coins and took its customers down with it. Cryptopia was hacked. The pattern is so consistent that "bitcoin exchange shuts down" reads as a euphemism for money that is not coming back.

Buttercoin closed solvent. It was not hacked, nothing was missing, and every user was given their balance in full before the service stopped. The company ran out of investor patience rather than out of customer funds, and it managed the distinction properly on the way out. That is an unremarkable thing for a normal business to do and a rare one here.

~ what happened to the domain ~

buttercoin.com stopped serving fairly quickly. By August 2015 the apex was returning Cloudflare's 522, the error that means the edge is up and the origin behind it is not answering, and it kept returning that into 2016. Today there is no DNS answer for it on either scheme. The homepage the Archive did manage to catch is of no help as a document, because the site was a JavaScript application and every capture of it says "Loading..." and nothing else.

~ too early by a decade ~

Turkey ended up with one of the most active retail crypto populations anywhere, but that happened later and for reasons Buttercoin would not have recognized. The interest here came out of inflation and a falling lira, which is the remittance argument turned inward, and it arrived after 2017 on exchanges run from Istanbul rather than San Francisco. Buttercoin was gone two years before any of that.

Its original idea was the right one and was simply too early by a decade. Nobody in 2013 was moving their savings out of a currency through a bitcoin exchange, and by the time people in several countries were doing exactly that, the company that wanted to build the rails for it had already handed everyone their money back and switched off at eleven at night.

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