As payment with Bitcoin gains more traction, some players like GoCoin have gotten creative through the introduction of altcoin support with Litecoin and Dogecoin.
Bongocoin aims to take this to the next level with more flexibility. First, the user has a choice of (currently) up to 10 different coins including Bitcoin and Dogecoin, even Novacoin and Terracoin. In addition, 16 different fiats are supported, including USD, GBP, SEK (Swedish Krona) and ZAR (South African Rand). Finally, the order form setup allows for the entry for any product ordered when shopping online. Although this doesn’t have all the markings of a turnkey solution, there are plans in the future to make the solution more integratable, as will be discussed below.
DC Magnates spoke to Bongocoin co-CEO Felix Foerster on some of the finer details behind their solution:
Any word on Fees?
We have a single-digit percent fee depending on current market volatility, liquidity and order size.
Any plans to add more coins to the mix?
Vertcoin was added just this week and we are definitely open to more additions. The most important things that we look for in new coins are market depth, adoption rate and volatility. It would be a risky gamble to randomly accept all coins.
What was the rationale for the current coin selection?
Most of the coins we selected are leaders in terms of network size, exchange volume and have a well-established community. Of course there is the occasional outlier and some of the coins may not do well in the future, but we will keep them as long as they have a viable market.
How do you feel coin prices are impacted by their acceptance as payment?
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Acceptance is a necessary, but not a sufficient, condition for cryptocurrencies to increase in value. More acceptance means more liquidity and also lower transaction costs for supporters of the currency. Widespread cryptocurrencies such as Litecoin give users the ability to use websites like ours to purchase products almost immediately. If one instead would hold physical silver, which is effectively less accepted, it would take more time and be more expensive to acquire goods with it. Banks and coin dealers tend to take large spreads when buying silver and a private sale requires multiple days to arrange.
Hence, when comparing Litecoin with physical silver it is reasonable to expect a liquidity premium for Litecoin to be included in its price. However, this component is variable and not easy to identify since increased liquidity can catalyze dynamic network effects which show chaotic behavior. A recent example for this would be Auroracoin, where just the announcement of the creator to distribute 50% of all coins to the population of Island, triggered widespread speculation on increased acceptance for this coin.
What’s behind the name “Bongocoin”?
Our name Bongocoin is a combination of bongo drum and coin. In the ’40s and ’50s, bongos emerged as the guiding sound for the beat generation which rejected accepted standards and stood for innovation and creativity. Many users of cryptocurrencies also reject the existing fiat money systems and strive for new innovative ways for control that what we call money. The parallels inspired us to choose the name Bongocoin.
Any security concerns/precautions being taken for coins you handle?
We employ a number of protective measures. For example the systems used for handling the coins are completely separated from our website’s backend, all wallets are properly encrypted and the accounts used for conversion and trading are spread over multiple exchanges. That said, we only keep a few days’ worth of business in coins so that our activities could continue even if the wallets vanished overnight.
Are there any plans or hopes to have the platform somehow integrated with the site the consumer is shopping on, which would give more of a seamless, turnkey feel?
What we are working on right now is partial browser integration where on major shopping sites (like Amazon which offer dedicated APIs for that), after a registration, our users would only need to press a button to send their orders. However, this will still take some time. Besides that, in the long-term other integrations will take place as well to further enhance the customer experience.
How well is business going thus far?
As expected, the transaction volume increased in the first month exponentially. We had already orders from three different continents which proves the global launch to be a good idea. In particular, we had a lot of interest from the Altcoin community. Almost every day there have been requests to add new coins. In the beginning we wanted to be a purely anonymous service like BTC-e but faced some criticism for this. Currently we are in the process of increasing transparency. Moreover, more and more positive reviews about our service are published in different sources, this helps us a lot to build trust.