Watch Out!, Inc, the company behind the eponymous safety app, has acquired BitWall, a Bitcoin-focused startup which helps online publishers maximize profits in more efficient ways using Bitcoin.
According to Michael Lucas, the CEO of Watch Out! in the acquisition announcement, “We are excited to convey BitWall into the Watch Out! ecosystem. Our mission is to offer a secure consumer-protection platform while delivering hyper-targeted content when and the place it matters most, whether or not that be a safety alert or a digital reward. BitWall and its staff assist us to do this.”
Although some details of the acquisition have been announced, the financial terms haven’t. However, the CEO and co-founder of BitWall, Nic Meliones, has said that the company’s paywall service may cease to work in the course of this acquisition. The knowledge and resources put into the paywall will be diverted to a new Watch Out! product that has not yet been announced.
Nic Meliones also confirmed to Techcrunch that both companies met in 2014, at the Techcrunch Disrupt SF Hackathon. They have been corporate associates since then and have worked well together.
BitWall was created with the aim of eliminating the need for online publishers to rely entirely on paywalls and ad revenue to turn in profits. It achieved this by enabling micropayments for users in place of subscription fees. Instead of subscribing for publications, knowing that they would not want to read every article, users had the opportunity to only pay fees for the articles they wanted to read. This method would make it easier to patronize different publications without paying subscription fees for all of them.
To make its new model workable, BitWall used Bitcoin because of its low transaction fees, as opposed to the transaction fee amounts that accompany fiat currency. It simply wasn’t feasible for users to pay huge fees on micropayments especially when those payments may be carried out frequently.
In 2014, BitWall became popular when it partnered with the Chicago Sun-Times to try out a new paywall. The paywall allowed users to make micropayments or choose to promote articles on Twitter to gain access. This partnership was considered the company’s biggest win since the other party was a major U.S. publication.
According to Nic Meliones, people who visited a BitWall-integrated site would have seen a “bitwall,” a new type of paywall with several payment options. These options ranged from micropayments via Bitcoin to paying daily subscription fees and prepaid credits. Users could also pay by viewing ads or promoting content on Twitter since publications are paid by impression. The general idea was to enable an exchange that was favorable to all parties involved.
He also said that users had the option of paying in US dollars due to the integration of BitWall with Coinbase. This way, the conversion would have been more straightforward for users who are not enthusiastic about Bitcoin. However, this integration only happened before Watch Out! acquired BitWall. The Paywall system may be shut down, barring any further integration with publications and other sites.
BitWall hoped to fix the inadequacies with current payment models for publishers as well as users and the company ended up helping some publications achieve this goal. However, despite its adoption by some big names including the Chicago Sun-Times, the company and its model never went mainstream.
In its earlier days, BitWall was backed by Boost Bitcoin Fund and its incubator —Boost VC, located in San Mateo, CA— under Adam Draper. Boost focuses mainly on Bitcoin-based companies and provides them with advice, funding, incorporation and other relevant services so it was a great accelerator for BitWall.
About Watch Out!
The Watch Out! platform saves lives by providing users with real-time, critical information to ensure utmost safety. According to the company’s official website, their passion is consumer safety and alerting users about emergency issues like food and product recalls, weather and health-related problems. To achieve this, the company has patented a technology that allows them to create engagement with brands to provide users with benefits, tailored to them.
The Watch Out! app curates information from various sources and finds a way to bring them to users in different locations. The team continues to redefine safety and create a space where businesses can reward their users. Watch Out! also houses a digital vault in which gift cards, frequent flier numbers, warranties, insurance and other information can be stored.
While the safety company may not seem like the most likely to work with cryptocurrency, both companies agree that BitWall will help to improve the funds, payment and loyalty programmes of Watch Out!. Also, with the use cases for cryptocurrency and the various platforms that continue to emerge in the industry, the acquisition is not surprising.
Watch Out! aims to reach users in real time with safety alerts and create secure engagement with businesses through which users can be rewarded. The use of cryptocurrency not only sorts out the issuance of rewards on a network, but it also promotes transparency, speed, and efficiency in the entire process. Depending on how Watch Out! decides to approach their model design, cryptocurrency may have a positive effect on the growth and quality of the company in the long run.
Both companies hope to gain immensely from this deal. According to Michael Lucas, there are so many ways in which the agreement serves the company. Firstly, it ensures the development of a sophisticated payment mechanism using cryptocurrency. Secondly, the acquisition will enable the promotion of blockchain technology and its innovative applications as well as diversify the company’s existing services.
Watch Out! will benefit from BitWall’s existing network of allies and investors in the industry. Some of these allies include AWS, Google Cloud, and Acuity. They will also be able to break into the cryptocurrency industry with an experienced company and expand its reach through the combination of consumer data analytics, transparency, and increased efficiency. BitWall was also in the cryptocurrency industry long before the Bitcoin hype began. This means that they can offer an unbiased view and unique insight into it.
BitWall will provide the structure and expertise needed to successfully incorporate the use of Bitcoin for the Watch out! day-to-day activities. This way, the company will limit users’ chances of receiving random alerts and instead tailor specific alerts to each user, no matter what situation it is—weather, health, food or product safety emergencies. BitWall, on the other hand, will gain more funding and the backing of a larger parent company despite its current investors. The current BitWall investors include AngelPad, Tim Draper, Increase VC and the increase Bitcoin Fund.
The acquisition of BitWall by Watch Out! is a strategic step towards another excellent use case for blockchain technology. It shows how cryptocurrency can be applied in sectors where it is least expected. Although BitWall’s paywall may be shut down, the technology that replaces it may be even better. The details have not been revealed, but the prospects sound good. Watch Out! is dedicated to consumer safety and hopefully, blockchain technology may help the company to refine its payment and service delivery mechanisms. Through BitWall’s industry expertise as well as knowledge of Fintech in general, the deal may prove to be a good one in the long run.