Name: Brawker
What it is: Brawker is a site that offers discount shopping at all legitimate web retailers. The firm says users can buy “almost anything” online with bitcoin. It also enables people to semi-anonymously purchase bitcoin by shopping for others with their credit/debit cards or PayPal.
Who’s behind it: Co-founder and CEO Cyril Houri previously founded Infosplit, the first company to provide geolocation based on IP address, and Navizon, a firm specialising in wireless geolocation. He designed and patented some of the technology that is now commonly used to geolocate website visitors. He remains chairman of Navizon.
Cost: 1% of transaction for each of the two parties.
Date launched: April 2014.
Summary: Brawker provides a very useful service for those who want to spend their bitcoins online. It’s easy to use, but it is a lengthy process, so not ideal for the time-strapped.
CoinDesk rating: 4/5
The basics
Brawker is an online marketplace that matches people who want to buy bitcoin with others who want to purchase items online with bitcoin and gain a discount for doing so.
To sum it up as simply as possible, Alice, say, has seen a $50 scarf online and wants to buy it using bitcoin, but the site doesn’t accept payment in digital currency.
On Brawker, a user called Bob is willing to buy the scarf for Alice, in return for her bitcoins. And because he can buy bitcoins with a credit/debit card or PayPal without having to register his ID and address with an exchange, he is willing to pay a premium for those coins.
Alice wants a discount of 10% on the price of the scarf, therefore she pays Bob $45 in bitcoin and he pays $50 for the scarf, which is delivered to her.
Both parties have a need fulfilled by the service that can be hard or impossible to find elsewhere.
An overview of how Brawker worksUsing the service
In the interests of ensuring the service works as claimed, I tested it out from start to finish.
Placing an order
I registered with Brawker using a username, an email address and a password. No ID or proof of address was required, since Brawker claims it doesn’t have to observe know-your-customer (KYC) requirements as it is not a financial institution.
Next, I visited an online store that doesn’t currently accept bitcoin and selected an item – a bottle of sloe gin, which cost £29.90 including delivery – and copied the URL of the page the item was listed on.
Note, Brawker sets no official maximum on the price of a purchase, but the service is commonly used to purchase items priced under $1,000 due to limits set by the credit card companies.
Back on Brawker, I pasted the URL, entered the item price (including postage and any taxes) and my delivery address. Using an Amazon wishlist for the purchase comes with the additional feature of hiding personal details from the buyer.
At this point, I was asked to select a discount rate. Discounts generally range from 0–20%, as above that point there is little incentive for bidders to take up the offer. I opted for a relatively low proposed discount of 5% to encourage users to accept my order without delay.
Theoretically, this could have been the start of a bidding war between multiple bitcoin buyers, who can make counter offers until both parties are happy with the discount rate. For the sake of speed, however, I accepted the first offer at my proposed 5% from user ‘gmajoulet’.
Paying with bitcoin
The exchange rate between the buyer’s currency and bitcoin is determined using figures from bitcoinaverage.com.
I sent the equivalent of £28.40 in bitcoin to a multi-signature address that acts as an escrow between gmajoulet and me.
Behind the scenes, there were three keys (in effect, passwords) to the escrow address I was provided with: one held by Brawker, one held by me and the other held by gmajoulet. All three are encrypted and two of the three keys are needed to finalise a transaction.
Brawker holding the third key means the company can release the funds to either party at the resolution of any possible dispute.
Brawker stores neither users’ fiat currency nor bitcoin. The company told CoinDesk that all transactions occur “directly on the blockchain, as opposed to being off-chain transactions on our servers”.
As a result, the company claims users’ funds cannot be hacked through their service, as users are in charge of their own private keys.
Awaiting delivery
In my Brawker dashboard, I could see my bitcoin funds waiting to be released. Soon after, the bidder paid for the order and uploaded the payment confirmation email as proof of purchase.
Once the gin arrived safely, all that remained was to notify Brawker of the delivery, which enabled the bidder’s bitcoins to be released from escrow. The entire process was completed in four days, the bulk of which was taken up with waiting for delivery.
I had no problem with my order, but should that have been the case, there is a ‘File a claim’ button on the site, which starts a dispute process arbitrated by Brawker and based on the information provided by both parties (including payment confirmation, tracking number and so on).
Depending on the outcome of the dispute, Brawker would either refund my bitcoins or pass them on to the bidder.
At the end of the process I was asked to rate gmajoulet and vice versa. These ratings are tracked on the public profile of each Brawker user, similar to eBay’s rating system, and give future users of the service an idea of how reliable the individual is.
Pros
- Setting up an order is a relatively simple affair taking perhaps 20 minutes for someone with a little experience with bitcoin transactions.
- Clean, user-friendly website interface.
- Useful updates sent via email at every stage of the process helped keep track of what needed to be done to keep the transaction moving smoothly along.
- Brawker enables digital currency enthusiasts to pay for items and services previously only available to customers holding fiat currency. Bitcoiners can pay for items ranging from groceries to electricity bills and parking tickets to student loan repayments, bringing the possibility of living solely on bitcoin closer to reality.
Cons
- May not be so simple to use for a complete newcomer to bitcoin due to the slight rigamarole of using QR codes and bitcoin wallets to send and receive funds. However, most users are likely to have some experience.
- Users need to monitor the process regularly so as to be able to accept offers, upload funds to escrow, etc. You can’t just set an order and wait, regardless.
- What if a 15-year-old tried to buy the same item with bitcoin, or a gun? Does this open up inappropriate products up to youngsters? The company says its aim is not to enable the purchase of items that wouldn’t have been available to buyers otherwise and claims its policy is to remove items that have territorial or age restrictions, such as guns and alcohol (it also claims items made available via the Tor network are blocked). However, this obviously isn’t working, as I just purchased a bottle of gin without an age check.
See a video of how to use an Amazon wishlist to place an order:
Competitors
A service very similar to that offered by Brawker is Purse.io, but this is currently limited to shopping on Amazon.
Gift cards are another option for consumers wanting to spend their bitcoins. Companies such as eGifter, Gyft and Pockio let customers purchase digital gift cards with bitcoin (and sometimes other cryptocurrencies) and then spend those cards at sites like Amazon, iTunes, Spotify and many others. However, unlike Brakwer and Purse.io, these services offer no discounts to users – cards are redeemed on the retailer sites at face value.
Conclusion
The successfully delivered productOverall, the ability to use bitcoin at any online store is a huge step forward and the potential discounts offer an extra incentive to shop with bitcoin over credit/debit cards or PayPal.
The service is also useful for those who want to buy bitcoin with their credit card – especially for those that do not want to have to register with ID and proof of address at an exchange. However, they must be prepared to go through the Brawker marketplace process to get their digital currency and put up with the delay encountered with waiting for the item to be delivered.
The multisig technology, while making the service more secure and allowing a fair system for refunds in the event of a dispute, did not make the process noticeably more complex than a user would expect with a standard login procedure.
I should point out, however, that buying bitcoin with a card – something that used to be rare due to the possibility of chargebacks – is becoming increasingly common through companies like Coinbase, Circle and CoinCorner, among others, and the attractive discounts may not be maintainable in the long term.
Even so, Brawker’s service frees up people to spend their bitcoins where they like – a vital step if bitcoin is ever to go mainstream. This is a service that is of benefit to individual bitcoiners and the community as a whole. What’s not to like?
Disclaimer: This article represents the experience of the reviewer. Please do your own extensive research before considering investing any funds.
Shopping basket image via Shutterstock