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Commit $ 14.1 million to purchase your morning coffee with Bitcoin.
New York-based payments start-up Flexa has just increased this amount in a chip-based private sale between Pantera Capital, 1kx, Nima Capital, Access Ventures and others.
The startup token, Flexacoin, is an ERC-20 token that will be used by developers and businesses to leverage Flexa's network for merchant payment processing.
Tyler Spalding, co-founder of Flexa, declined to specify which merchants would accept bitcoin via this app, but video tests show that users who buy Starbucks with it. (A Starbucks spokesperson told CoinDesk that it did not work with Flexa.)
Spalding pointed out that Flexa is a business-to-business startup. Buyers will not need to hold or interact with Flexacoins. Flexa co-founder Trevor Filter said the details of this governance and participation were still under development.
"The long-term goal is to yield the network to the merchants," added Filter. "A kind of consortium that allows them to accept cryptography."
Return of the sale of chips
Back down, Flexa is one of many companies to raise funds in the last six months through a private symbolic sale without stock options. The startup of the forecast market Numerai announced a similar increase in March.
Access Ventures' partner, TJ Abood, told CoinDesk that his company would also have been interested in a share offering. But he is also satisfied with Flexacoin because it allows his company to participate in the growth of the network.
Businesses, from Access Ventures to merchants, can network Flexacoin and earn token rewards based on a model that is comparable to proof-of-fact systems such as Cosmos or Tezos. Flexa plans to launch a crypto custodial wallet app for its network, users can switch from crypto to point of sale with a type of QR code badysis, similar to Apple Pay.
"We wanted the total Flexacoin offer to be the amount of money that can be channeled through the system now," Spalding told CoinDesk, adding that the network would be launched on May 13. "All participants earn money."
Unlike the Numerai platform powered by tokens, the Flexa network is not based on a blockchain. Flexa's approach to Ethereum compatibility, without relying entirely on this network, is part of Abood's investment strategy.
"We subscribe to the idea of being a user owner. Any company in which we invest is immediately considered a user, "said Abood. "Using the development tools and all the existing system tools to deliver a superior product is what motivates us."
Lbade Clausen, co-founder of 1kx, told CoinDesk that his company was also considering becoming a staker because he thought for-profit for-profit networks were inherently better than traditional businesses. Clausen added about Flexa's symbiotic acquisition strategy:
"If Flexa was a traditional, for-profit business, how could traders be able to make them believe that they will not end up raising fees once they have reached enough of an income?" effects on the network? "
Bridges not blocks
Instead of creating a blockchain-based network, Spalding described the Flexa protocol as an "elegant pipe" that processes payments from various cryptocurrency networks, including Bitcoin, Ethereum, Bitcoin Cash, and Litecoin, to merchant payment processing system for direct bank transfers.
"We wanted to essentially build the Stripe for this type of transaction," said Filter.
Abood said that this merchant-oriented structure could appeal to crypto-curious mainstream brands by offering the opportunity to accept bitcoin without risk. According to Spalding, Flexa will work in partnership with liquidity platforms on the back end. In addition, the Flexacoin guarantee could be used to compensate for chain settlement problems.
"Flexa plays a vital role in blockchain adoption as a whole, as it links this digital payment landscape to a physical environment," said Abood. "It opens up the idea of spending cryptocurrency on a much larger audience."
Filter described the Flexa protocol as a way to connect traditional merchant infrastructure with a crypto-friendly bridge, rather than relying on debit cards or credit cards. Since the process uses cryptographic portfolios, there is no personal information exposed as would a credit card payment.
"I do not think blockchains are good for a lot of things," added Spalding. "But, they are incredibly powerful for fraudless payments."
In the future, Flexa plans to add support for various trading and encryption coins issued on the stock market. So far, the focus is on partnering with stock exchanges and merchants to customize access and disconnect ramps via the Flexa protocol.
"A source of conduct in [mainstream] the adoption will be the availability to accept cryptocurrency and it is a decision of the trader, "concluded Abood.
Coffeeshop image via Shutterstock
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