Brawker to Open Source Failing Marketplace

In an unexpected announcement on April 15th, Brawker shed light upon its business status alerting the community it will be closing down operations on April 31st, 2015.

“Our growth rate did not meet our expectations, and the service does not scale as we would have expected to. The Bitcoin community came up with many great startups and the environment is very different from what it was 18 months ago, when we started working on this project.”
— – CEO and Founder of Brawker Gabriel Majoulet

Brawker is an online marketplace allowing users to receive a discount on goods – by purchasing with bitcoin. Purchasers would cite an item they want, and how much bitcoin they’re willing to pay, a person wanting Bitcoins would accept the offer. The item would be bought with a credit or debit card, and the card holder would receive bitcoins in return. This allowed people to essentially purchase bitcoin with credit cards.

The marketplace will stay open until 31 April 2015, allowing users to withdraw their remaining bitcoin and resolve any outstanding orders or tickets. Although Brawker increased their security last year with decentralized multi signature wallets, and no longer held any users bitcoins, users with coins in the old system can log in and withdraw them before the site closes down.

“We are dedicated to closing the service properly, and making sure everyone gets their bitcoins back.”
— – Majoulet

The biggest concern regarding Brawker’s business model was the possibility for fraud to occur. When you are dealing with a reversible payment method – credit cards, for an irreversible payment methods – bitcoin, the door for fraud swings wide open. Concerns have been brought up since day one, espcially when a Purse.io user had their house raided when somebody purchased their AppleTV with a stolen credit card.

Speaking with Gabriel Majoulet, CEO and Founder of Brawker, we discussed the prominent issue of fraud and if it had a weighing factor on the marketplaces closure. BNC was told “Not directly. From the beginning, we knew it would be an issue and have been spending a lot of time to prevent fraud from happening. We probably spent too much time on those features, and not enough on the product itself, so you may consider it as related.”

Majoulet explained that the shut-down is due to lack of growth, and not meeting key targets. This development occurs just a few months after an executive management stir up, where ex-CEO Cyril Houri left the company. The website is currently being run by the team of developers.

In the farewell blog post, Brawker states their team has big ideas for their future in the bitcoin space still, as well as announcing that they will be open sourcing their marketplace code for the community.

“We are really looking forward building something new in the bitcoin space. Though we are not quite sure about the project, we are planning to open sourcing our decentralized multisignature framework, to hopefully help the community building more secure systems.”
— – Majoulet

With new endeavours on their bitcoin horizons, Majoulet also told us that they will be cleaning up their code base and removing a few features for ease of use. They will be making their private GitHub repositories public, with no ETA in current sights.

This marks the second bitcoin company to announce its closing this month, following the announcement from $1.3M venture backed YC graduates bitcoin exchange, Buttercoin. Brawker is closing down shop in a proper manner, being very responsive to all support inquiries and making sure its users securely get their bitcoins back before April 31st.