Times are busy in the Bitcoin world lately. The controversy surrounding the cryptocoin reached new heights recently with the spectacular collapse of leading Bitcoin exchange Mt. Gox. The event raised fresh questions about the viability of the volatile currency and its susceptibility to fraud and theft because of a lack of security and transparency.
This whole flood of concerning news couldn’t stop start-up Vungle from adding Bitcoin as a payment option for their services. Vungle provides a mobile ad network spanning little over 4.000 apps. The platform allows advertisers to run 15-second videos within apps. On top of that, Vungle delivers in-house production tools for creating HD-quality videos that serve as trailers for games and other apps. Developers in Vungle’s network include Wooga, “Fruit Ninja” creator Halfbrick Studios, ZeptoLab, maker of “Cut the Rope”, and Sega.
Through the offering of ad revenue-sharing payments in Bitcoin, Vungle claims it can give publishers more flexibility and, on top of that, allow them to make higher profits because of the virtual currency’s low transaction costs. Since Bitcoin isn’t bound to any financial institution, payments made through the virtual coin would also allow faster access to funds.
“We have a long view on this new currency, and we’re betting that, as Bitcoin gains more widespread traction, increased demand will follow. We are excited to offer it as an option to our publishing partners,” stated Vungle CEO Zain Jaffer.
Vungle isn’t the first major company that decided to accept Bitcoin as a valid payment system. The cryptocurrency is already being accepted for purchase by a number of other businesses, including but not limited to Overstock.com, Khan Academy, Reddit, TigerDirect and Zynga.
While acceptance among mainstream customers still isn’t where it should be, Bitcoin is gaining adoption more quickly for business-to-business payments. This doesn’t come as a surprise when one looks at the benefits of such deals. Payments can be made on-demand and settle within minutes. These are timeframes that can never be met when using bank transfers.
“The speed and low cost of crypto-currency payments may more than offset the costs associated with properly securing Bitcoin transactions,” according to a study by Forrester analysts Denee Carrington and Sucharita Mulpuru. A separate Goldman Sachs report on Tuesday similarly concluded that Bitcoin had more potential as a payment system than as a widely used alternative currency.
Andrea Sharfin, vice president of marketing at Vungle said Bitcoin’s lower transaction costs could especially benefit independent developers. “For these small independent development houses…that extra 1% or 2% transaction fee a financial institution might charge really matters. So they’re willing to try something new for better payment terms,” she said.
When asked about the high risk concerning investing in Bitcoin, mainly because of the coin’s volatility, Sharfin responded that she believed the volatility will smooth out over time. “We can’t control the ups and downs of the marketplace.”, said Sharfin.
Whether or not Bitcoin’s volatility will disappear in the future, it’s clear that companies like Vungle are attracting lots of media attention by accepting the cryptocoin. Bitcoin is hot news and because of that, it makes good publicity when a company takes a positive stance towards it. On the other side, Bitcoin needs good news like this to reach common people. It’s a win-win situation for both parties.