Bitpass Shutting the Doors

Posted on January 20, 2007
Filed Under business, technology | 4 Comments

Here’s another startup in the act of biting dust. Micropayment company Bitpass is shutting the doors. The only thing that ever gave me the slightest reason to want to use them is that Scott McCloud’s online comics and Telltale Weekly both used them. In fact, McCloud was involved in the company as an advisor. I guess the closing of Bitpass kind of cuts the legs out from under this argument.

There was a time that I thought micropayments were a pretty good way to go for online content. I’ve since flipped. I know think that rather than aggregating together lots of little payments from most or all of your fans, better to aggregate all your fans into one excited group that occasionally buys bigger ticket items. Rather than having every listener pay $0.10 per show, having 1% of them buy your t-shirt or paper collection of your webcomic or whatever may make you more money overall.

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4 Responses to “Bitpass Shutting the Doors”

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  1. Ewan Spence on January 21st, 2007 5:01 am

    You have to hand it to Linden Lab, one of the unsung successes of Second LIfe is the Linden Dollar – which is one of the few widely used microcurrencies on the internet (roughly 300 L$ to one US dollar). Okay it may be in a closed environment at the moment (ie only in their virtual world) but wouldn’t it be interesting if Paypal (for example) aded it to their roster of currencies?

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  3. Winnie on January 21st, 2007 5:02 am

    Re: I guess the closing of Bitpass kind of cuts the legs out from under this argument.

    As far as I know, Mr. McCloud’s argument still stands. There were many factors contributing to Bitpass’ demise, but at the time of its death, Bitpass was no longer a “micropayments” company.

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  5. dave on January 21st, 2007 12:29 pm

    Winnie, did you work for Bitpass? It seems from your blog like you might have? Seems to me that one way or another, either going out of business or leaving the micropayments business is effectively the same thing. It pains me to agree with Clay Shirky, but it does appear that crossing the threshold to any purchase takes an energy and once you’ve built up that activation energy you are wasting it by only collecting pennies. Like I say, I think giving a few people something big to buy makes more sense than taking a nickel from everyone.

    Ewan, that is really the only interesting thing about SL. In order to do that, there has to be some sort of control that prevents Linden from just minting more money. A floating exchange rate that drops if they flood the market or something must exist.

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  7. Winnie on January 22nd, 2007 1:53 am

    I did indeed work for Bitpass, and they were actually making pretty good money until stakeholders from their rounds of VC funding pressured them to get out of the adult content business, neglect indie content creators and spend all of their resources on going after big media.

    It’s conceivable that a mircopayments company that is allowed to grow organically can succeed, but when investors are knocking at your door offering tens of millions of dollars, it’s very hard to resist selling out.