A new alternative digital currency called NeuCoin announced it raised $2.5 million.
The funding will help the firm build its own consumer-aimed crypto currency.
The company revealed that it wishes to launch a digital currency which is easy to use and also well-marketed. It claimed repeatedly that these are features which bitcoin lacks.
It is true that the list of online and offline retailers who accept bitcoin is growing, but the digital currency still has some significant usability problems.
It is often difficult to gain access to the bitcoin space, especially for those who do not know much about the crypto currency.
Many people think that using a credit card over the internet is as easy as using bitcoins for payments.
Founders of NeuCoin, Daniel Kaufman and Johan Sandstrom, have experience in consumer marketing. Kaufman said, “I’m not a techie person.
We’ve started a number of tech companies … but we’ve always had CTOs.”
The founding team has built companies in music, games and shopping that each reached many millions of consumers. NeuCoin is also supported by all-star groups of strategic advisers and strategic angel investors.
The founders want to create a crypto currency especially designed to be easy to attain, spend and store. NeuCoin will also have a wallet service.
Kaufman mentioned that he is planning on giving coins away initially to get a good following.
After launch, NeuCoin will be available on media site Mongo and music streaming service Jango.
Users can tip the musicians on Jango and media creators at Mondo with NeuCoin. NeuCoin will give 25 NeuCoins to consumers who agree to tip someone.
The concept is very similar to bitcoin tipping company ChangeTip and Kaufman accepted that ChangeTip was an inspiration.
He thinks that micropayments are one of the best use cases for digital currency.
Kaufman plans to create two foundations: a utility foundation and a growth foundation. NeuCoin is mined like bitcoin but proof-of-work is not required.
The NeuCoin foundations are funded by a 2.5 billion coin pre-mine and $2.25 million of pre-launch funding, and are controlled by coin holders (1 coin = 1 vote).
Over 10 years, the supply of NeuCoin will grow from 3 billion to 100 billion, primarily from PoS rewards.
These high PoS rates create high security by motivating miners to operate many nodes and stake large numbers of coins. It also rewards early NeuCoin adopters for acquiring and holding coins.
The company will use a body of democratically elected foundation members to check the miners’ work.
Some people complain that this process makes NeuCoin centralized as it will be operated by one body instead of a community.
NeuCoin will pose against a long list of competitors including Bitcoin, Stellar, Dogecoin and Litecoin within the crypto currency space.
However, Bitcoin firms raised total $314.7 million last year. The bitcoin ecosystem is considered the most developed one, and even if the prices dropped last year, its $3bn liquidity pool is by far the largest. The competition will be hard.
NeuCoin will be launched towards the end of next month.