Coinbase scored a huge partnership today, as social discovery and discussion site Reddit has just launched an integration that allows its users to pay for “Reddit Gold” using bitcoin with Coinbase’s system.
Bitcoin is the “underground” digital money system that’s fueling growth and disruption in the online payment space. Coinbase is a “bitcoin wallet and platform” that lets merchants and consumers make transactions easily using bitcoin. By buying Reddit Gold, you can add features to your account like comment highlighting and shutting off ads. Additionally, Reddit will now start collecting credit-card payments in the U.S. and Canada thanks to Stripe to go along with its PayPal and Google Wallet options.
“We’ve gotten some requests for additional payment methods so hopefully this brings us closer to reaching everyone who wants to buy gold,” Reddit’s Brian Simpson said about their reason for the deal.
I spoke with Brian Armstrong, Coinbase’s CEO, and this is what he shared about the launch:
We’re pairing with Reddit to allow them to start accepting bitcoin payments for Reddit Gold. This is a large step forward for Bitcoin and for Coinbase, as Reddit is a top 100 site in the U.S. and top 200 site internationally.
Reddit CEO Yishan Wong stopped by our offices about a month back because he wanted to learn more about how bitcoin worked and how they could start accepting it as a payment method. We had a number of other merchants start using our merchant tools recently, including 4Chan (they have a “pass” which is similar to Reddit Gold), web hosting companies, productivity app, and plenty of sites accepting donations. So this gave him the confidence that we were ready to handle traffic for a site the size of Reddit.
While Reddit isn’t exactly a “mainstream” site yet, it is definitely the most widely used site to start accepting bitcoin that I can think of. The company sees this as just the tip of the iceberg. As people start using bitcoin on Reddit, they’ll want to take their wallets to other merchants. That build of demand will hopefully break bitcoin into the mainstream.
The plusses to bitcoin are many, allowing secure global digital transactions that don’t transmit any personal information whatsoever, as I discovered while covering another player in the space, BitPay.
The transaction fees for bitcoin purchases are also extremely low compared to other services, so it has that going for it, too. Coinbase makes bitcoin integration simple by transferring accepted payments into bank accounts and doing all of the currency conversion for them. The company says it has 30,000 users and is processing 40,000 bitcoin payments a month.
Will Reddit push bitcoin into the mainstream? We will see, but as usual, the Redditors have gotten what they wanted.
[Image Credit: The hilarious web comic Toothpaste For Dinner]
While Reddit is often compared to Digg, the two sites have some key differences. Reddit has a simple interface and little advertising. Many users love this simplicity. Reddit rankings are based on an absolute vote (+1 for hot, -1 for cold), meaning a story can dance up and down Reddit’s top page instead of being buried out of existence by a few power users. To see what’s on top now, there’s also a “hot” list. This type of...