Coinduit are based in Cambridge and offer a similar service to Bittylicious, allowing trusted traders to sell bitcoins to their customers. Customers are given the choice to purchase bitcoins at a “Fixed” or “Variable” rate. The variable rate is cheaper but is linked to the exchange rate at the time of payment, whereas the fixed rate is guaranteed.
Coinduit are also keen to encourage merchant adoption and offer a zero fees solution for retailers looking to convert their bitcoins directly into pounds to avoid any volatility risk.
BittyBot was fortunate enough to get an interview with co-founder of Coinduit, Daniel Murrell.
How long have you been interested in Bitcoin, and what event was it which made you take the technology seriously?
The price rise in November 2013 was enough to get my attention after I overheard a respected colleague mention something about a bubble. I didn’t even know what a bubble was back then. I’ve got a computer science background including some cryptography.
After reading the white paper it was down the rabbit hole like everyone else who finds Bitcoin. Not the best time to get into Bitcoin financially as my first coin cost me just over $1000. I’m only slightly in the red, so I can’t complain too much.
What made you decide to start Coinduit and what makes it different to other Bitcoin merchants such as Bittylicious or QuickBitcoin?
Since reading the white paper, I became unhealthily bullish on Bitcoin to the point where most of my fiat savings had been dumped into it (they still are). To hedge slightly against total collapse and to make a small margin at the same time, I started selling on Bittylicious.
Bittylicous is a great platform and I still sell there, but I figured that I could keep the same margin while selling 1% cheaper if I created my own platform. I would say that Coinduit is more similar to QuickBitcoin (but hopefully cheaper most of the time) as it has only a few trusted sellers, and chooses the markup based on general Bitcoin volatility, instead of letting it fluctuate at the discretion of the sellers.
Coinduit has some introductory material that points those new to Bitcoin to videos and utilities that will help them start using it and give them a deeper understanding of how it works. I’m a firm believer in holding your own keys so Coinduit will never hold any customer bitcoins and also encourages the use of personal cold storage techniques.
Tell us a bit about Coinduit, who’s on the team and what are your professional backgrounds?
I founded the company with my business partner, Michele. He’s an expert web developer with a PhD in neuroscience who is currently working as a consultant. I approached him because he was already a good friend (we play poker together) and he had some entrepreneurial experience.
After his last adventure, helping with the availability of local food by increasing the connections between local producers and local consumers, he quite liked the idea of gold with built in teleportation. Recently, we have had the help of Yasmina, a professional marketer.
We are forever hearing horror stories about start-ups losing their bank accounts, or worse still not being able to open one for their Bitcoin business. How did Coinduit overcome these challenges?
We haven’t. We sell in the same way that sellers on Bittylicious sell, using our personal accounts. Coinduit keeps a percentage of the margin in bitcoin. We have looked long and hard for a bank willing to give us a business account to accept customer deposits but have come up short every time. Hopefully this hostility doesn’t last forever.
What technologies did you employ in developing the Coinduit website, and what security measures has Coinduit implemented to ensure the security of customers’ accounts and Bitcoin storage?
We’ve used Django/Python for webdev with Celery for background tasks. Communications with Coinduit are done over HTTPS so no man in the middle attack is possible. Since we don’t hold customer’s bitcoins, the only bitcoins at risk are the small amount that we have in stock on the server. All KYC identity documents are kept on a server that is different from the web-server so that should the web-server be breached, people’s personal information is kept safe.
What has the feedback been like so far from Coinduit customers and traders?
We’ve had pretty positive feedback so far. People think it’s easy to use and we try to keep buyers and seller paired up as much as possible so that the payment reference remains the same and the bank account to send to changes extremely infrequently.
The Devonshire Arms was one of the first pubs in the UK to introduce Bitcoin payments, how is merchant adoption going in Cambridge and what does Coinduit do to encourage this?
Merchant adoption is very slow in Cambridge. There have been two pubs here that have been accepting bitcoin before I became aware of Bitcoin. They have the same owner and he’s set up his own system for taking payments. I’ve been trying to encourage merchant adoption here but it’s been a painful process.
Most merchants have never heard of bitcoin so it’s like introducing them to using shells as a form of money and then asking them to use that, they just don’t see the benefit without being previously exposed to it a few times. We are currently working with one merchant (the butcher in Mill Road) and things have been going quite smoothly. We charge no fees and repay exactly the pound value that is quoted to the customer. You can read more about it here.
Cambridge has a long history of technology and innovation, are there any other start-ups embracing Bitcoin and how is the general Bitcoin meet-up scene in Cambridge?
Two noteworthy start-ups here are Freya’s Bitcoin UK podcast which interviews prominent Bitcoin personalities and Don’s Coinvulcan project which aims to provide a trusted unbiased searchable interface for new users to find out about Bitcoin and other blockchain technologies.
What’s your view of Altcoins and is Coinduit looking to expand into other digital currencies in the future?
I find altcoins very interesting. In my opinion, the ones that aim to provide a similar use case to Bitcoin are an important test bed for algorithmic developments but I fear that only one will win the raw value proposition war. The reason for this is that, without significant technical improvement in another, they all compete for dominance in the store of value war, and those who already have a stake in the leader will have a preference to contribute to the ecosystem of that coin. Currently this is Bitcoin. Additionally, the higher the market cap of a coin the lower the volatility.
Since low volatility is a desirable currency trait, the value should flow to the coin with the highest market cap as that one should remain the most trusted store of value. The ones that aim to do something that Bitcoin cannot do (Namecoin and others), depending on their application, might be able to gain mainstream use alongside bitcoin. Coinduit make it easier to turn fiat money into bitcoin. The problem Coinduit solves is that it is costly to send small amounts of money to an exchange.
Once you have bitcoin, your problems turning that bitcoin into alternate currencies vanish as there are essentially no costs involved in moving your bitcoins to an altcoin exchange and buying whatever you feel like at a fair market price. Be very careful though, once you send your bitcoins to a third party like an altcoin exchange you are trusting them to play nice and return them to you at some point.
Finally, are there any other Bitcoin related startups or projects which you are currently working on or involved with?
I’ve been working on a cryptocurrency research review site. I’m hoping that it will act as an aggregator for tagged and easily searchable cryptocurrency related research and provide a central place for people to critically discuss this research without the content being lost in the depths of reddit or bitcointalk. A simple use case would be for someone who is interested in mining to click on the mining tag which would take you here where you can view all the papers related to mining.
Thanks for your time, Daniel.
Why not give Coinduit a try next time you want to buy bitcoins and give them a review on Trustpilot?