Bitcoin-only payment processor OpenNode has raised $1.25 million in funding from Tim Draper, a U.S.-based venture capitalist, and staunch bitcoin believer.
In its Tuesday, December 18 announcement, the startup revealed that the funds would be used to expand its legal and compliance teams.
The firm wants to use the platform to bring the crypto into everyday use and thus transform public opinion about bitcoin being a store of value and that it is not suitable as a medium of exchange.
To aid that goal, OpenNode says that the new bitcoin payments platform has been built to offer simple accessibility and use.
The platform’s innovative plug-and-play system allows any given merchant around the world to complete a quick email-enabled sign-up process, which is all they need to start accepting bitcoin payments.
OpenNode says that it offers a payment system that is unlike what established giants like Coinbase Commerce or BitPay offer the market utilizing the Lightning Network, a second-layer solution on top of the main bitcoin network, to enable instant transactions.
Afnan Rahman, the firm’s co-founder, and current CEO said that OpenNode isn’t designed in the mold of a “Coinbase Commerce 2.0 or Bitpay 2.0.” He noted that as a payment solution, and unlike the other two platforms, OpenNode has no limits on its invoices.
The startup’s spokesperson also noted that the platform would continue to venture into new and emerging markets, leveraging Lightning Network’s potential to cut costs, promote creativity in the payments system and improve, overall user experience when making bitcoin payments.
Afnan Rahman co-founded OpenNode in May 2018, teaming up with Brandon Lewis and Joao Almeida to launch the product’s beta version. Almeida joined the team before launch after the trio worked together on project Zap, a Bitcoin Lightning wallet.
Lightning Network capacity has experienced massive growth over the last several months, which OpenNode has noted and says that since they launched their project, the system has grown over 15,000 percent to 482 bitcoins.
Joao Almeida, the CTO at the firm said with the help of Lightning Network, OpenNode hopes it will become “the driving force behind bitcoin’s adoption.”
It is notable that OpenNode has set their eyes on jumpstarting bitcoin adoption as a payment method for merchants. However, the firm may have to look at recent data to know that its not that easy a task.
Research data has suggested that a growing number of merchants are showing reluctance in accepting bitcoin.
According to Chainalysis, a blockchain analytics firm, the transaction value of bitcoins payments has shrunk over 2018. The firm revealed that value had dropped by about 80 percent, shrinking from $427M recorded in December 2017 to a low of $96M in recorded by September 2018.
That has, however, not deterred Rahman. He said that the world continues to get applications that are “only possible because you have bitcoin.” in his view, prospective users of these applications will have no option but to adopt bitcoin when looking to use them (the apps).
At the moment, OpenNode operates in 19 countries, with 300 active users who move about $10k-$20k worth of bitcoins via the platform. The firm generates its revenue from the one percent fee it charges from every transaction.
Draper, through his Draper Associates, has been an active supporter of Bitcoin-focused startups. He led Factom’s 2016 series A funding round that raised $4.2 million for a blockchain data network and also contributed to the $760,000 funding in Bitwage.
Disclaimer: This is not investment advice. Cryptocurrencies are highly volatile assets and are very risky investments. Do your research and consult an investment professional before investing. Never invest more than you can afford to lose. Never borrow money to invest in cryptocurrencies.