Dwolla could be going away soon

[Raize]

Dwolla may be going away soon or drastically increasing their fees. My guess is that their #1 source of business was Bitcoin, and the state venture capital funding is in default:
http://www.desmoinesregister.com/article/20121210/BUSINESS/312100016/Register-Exclusive-Fund-s-bailout-costs-Iowans-26-million?odyssey=tab

It looks like Iowan taxpayers are about to foot the bill for expenses that got wildly out-of-hand. Dwolla may share some of the responsibility for this.

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[benjamindees]

Good.  Dwolla is a pack of incompetent morons.

[RodeoX]

Anyone with money in a Dwolla account may want to take it out. If they go down hard and quickly who knows what will happen to the money.

[firefop]

Anyone with money in a Dwolla account may want to take it out. If they go down hard and quickly who knows what will happen to the money.

Well the good thing is, Dwolla has an immediate cashout option... anything that lands in mine is immediately wired to bank.

[n8rwJeTt8TrrLKPa55eU]

If their management has a clue, they'll figure out that their only reason for existing is as an intermediary for Bitcoin purchases, and thus reinvent themselves to become a place where people can buy Bitcoins directly, in the mould of a BitInstant or a MtGox.  But most management teams and their backers are usually too hardheaded to face reality until the exact moment the cash runs out.

[Spekulatius]

The article doesnt mention that Dwolla has any financial problems, only that it was financed by the fund's funds ( ) in the past.
I dont see how they would be affected by the fund's default.

[Yankee (BitInstant)]

If their management has a clue, they'll figure out that their only reason for existing is as an intermediary for Bitcoin purchases, and thus reinvent themselves to become a place where people can buy Bitcoins directly, in the mould of a BitInstant or a MtGox.  But most management teams and their backers are usually too hardheaded to face reality until the exact moment the cash runs out.

That is true, and both MtGox and our company have already figured out ways to cut Dwolla out of the picture. Features that will be launched soon.

CoinBase.com already does ACH inbound as well! I believe a few other exchanges do it.

The article doesnt mention that Dwolla has any financial problems, only that it was financed by the fund's funds ( ) in the past.
I dont see how they would be affected by the fund's default.

You are correct. It just means the fund is losing money very very fast aka Dwolla is not making any money

[tvbcof]

Dwolla may be going away soon or drastically increasing their fees. My guess is that their #1 source of business was Bitcoin, and the state venture capital funding is in default:
http://www.desmoinesregister.com/article/20121210/BUSINESS/312100016/Register-Exclusive-Fund-s-bailout-costs-Iowans-26-million?odyssey=tab

It looks like Iowan taxpayers are about to foot the bill for expenses that got wildly out-of-hand. Dwolla may share some of the responsibility for this.

Ha.  They should have asked me...I could have told them that start-ups can squander money as fast as dumb-ass venture capitalist can take it out of their wallets.

I guess some pimple-faced code monkey gots his-self a new Audi on the state's dime.  At least the taxpayer money isn't going to poor people who need their houses warm-ish or sick people who need medical care or anything silly like that.

edit: grammar-ish stuff

[toffoo]

Keep in mind that Dwolla was founded by "some guy" who was selling "speakers or something" online from his couch:

As a high school student, Ben Milne sat on his couch till he wore a deep groove in it and sold speakers online. He says his promotion strategy in the early days was answer audiophiles’ questions on message boards and link them to his online speaker store, Elemental Designs.

Not exactly the horse that I'd be betting on to shake up the zillion-dollar banking and e-payments industry, especially when that horse is sitting in the middle of Iowa.

Granted, I give them credit for finding a niche in processing payments for Bitcoin and for milking the state-backed VC funds that presented themselves, but I will certainly not be the least bit surprised when I see the whole thing implode.

If anything, if and when this implodes it should be yet another lesson for good-intentioned state legislators to keep their evil fingers from meddling in the "free marketplace".

[kokojie]

That is true, and both MtGox and our company have already figured out ways to cut Dwolla out of the picture. Features that will be launched soon.

CoinBase.com already does ACH inbound as well! I believe a few other exchanges do it.

Both Bitinstant and Coinbase are more expensive than Dwolla in terms of total cost, if I'm not in a hurry to fund my account, I'd stick with Dwolla.

[sunnankar]

Both Bitinstant and Coinbase are more expensive than Dwolla in terms of total cost, if I'm not in a hurry to fund my account, I'd stick with Dwolla.

Good, cheap or fast; pick two.

[Roger_Murdock]

Both Bitinstant and Coinbase are more expensive than Dwolla in terms of total cost, if I'm not in a hurry to fund my account, I'd stick with Dwolla.

Good, cheap or fast; pick two.

Bitcoin is good, cheap, and fast. But then again, most things aren't Bitcoin.

[cunicula]

If their management has a clue, they'll figure out that their only reason for existing is as an intermediary for Bitcoin purchases, and thus reinvent themselves to become a place where people can buy Bitcoins directly, in the mould of a BitInstant or a MtGox.  But most management teams and their backers are usually too hardheaded to face reality until the exact moment the cash runs out.

That is true, and both MtGox and our company have already figured out ways to cut Dwolla out of the picture. Features that will be launched soon.

CoinBase.com already does ACH inbound as well! I believe a few other exchanges do it.

The article doesnt mention that Dwolla has any financial problems, only that it was financed by the fund's funds ( ) in the past.
I dont see how they would be affected by the fund's default.

You are correct. It just means the fund is losing money very very fast aka Dwolla is not making any money

But how could Dwolla possibly be making money right now? They charge $0.25 per txn. I always saw this as a land grab. They hope to displace paypal and then raise fees once they have market share. Right now, they are supposed to be losing money.

[cypherdoc]

Yeah, $0.25 is way too cheap.

[weex]

Right now, they are supposed to be losing money.

Sure, but it's not supposed to be their core competency.

[evoorhees]

Keep in mind that Dwolla was founded by "some guy" who was selling "speakers or something" online from his couch:

As a high school student, Ben Milne sat on his couch till he wore a deep groove in it and sold speakers online. He says his promotion strategy in the early days was answer audiophiles’ questions on message boards and link them to his online speaker store, Elemental Designs.

Not exactly the horse that I'd be betting on to shake up the zillion-dollar banking and e-payments industry, especially when that horse is sitting in the middle of Iowa.

Granted, I give them credit for finding a niche in processing payments for Bitcoin and for milking the state-backed VC funds that presented themselves, but I will certainly not be the least bit surprised when I see the whole thing implode.

If anything, if and when this implodes it should be yet another lesson for good-intentioned state legislators to keep their evil fingers from meddling in the "free marketplace".

That's not really a fair criticism. Many great business people had humble beginnings (not saying Milne is great).

And indeed, I guarantee many of the people who get rich with bitcoin will fit a similar description.

[Bitcopia]

Even if Dwolla fails, I highly doubt they'll steal everybody's money. As far as I know, they aren't using account funds for investments or anything other than payment processing. Correct me if I'm wrong. They have a very large chunk of my money.  

[cunicula]

Right now, they are supposed to be losing money.

Sure, but it's not supposed to be their core competency.

Their core competency should be growing their customer base without increasing their marginal losses per customer. If they are losing more and more money that is fine, they just have to be growing steadily in size for the project to be viable.

[Raize]

Even if Dwolla fails, I highly doubt they'll steal everybody's money. As far as I know, they aren't using account funds for investments or anything other than payment processing. Correct me if I'm wrong. They have a very large chunk of my money.  

No, this won't happen, they are in too deep with a well-funded credit union (Veridian) to actually fail. But they aren't going to survive this public scrutiny, IMHO. Iowans don't like getting bilked. I always knew something was off.

I guess some pimple-faced code monkey gots his-self a new Audi on the state's dime.

This is definitely true. Only it wasn't an Audi, it was a Suburban or something like that. I saw Ben driving it many a time, smug look on his face at the start of the year when I was walking downtown. I thought to myself, "this ain't gonna last, so enjoy it while you got it, bub." There's no doubt in my mind that the vast majority of their success is due to Bitcoin. They aren't making much on money, but they use the Bitcoin turnover to sell their success to investors.

Not exactly the horse that I'd be betting on to shake up the zillion-dollar banking and e-payments industry, especially when that horse is sitting in the middle of Iowa.

I'm from here in Iowa, too. Milne actually had a good idea -- even without Bitcoin, Paypal is too big for the online payments market -- but he let hubris consume him. There's a crapload of honest and hardworking talent coming out of Iowa State University that he saw, but the best folks here are getting hired to live out-of-state. When I was at ISU some of the biggest recruiters were Sprint/Nextel, Yellow, & Microsoft. Also, tons of hedge funds were stealing kids from the CompEng and CompSci departments. The truth is, Iowa is a great place to "be from". It's not a great place to live if you are in the cutting-edge tech industry. The Pinterest team mostly came out of Iowa as just one example, but the Silicon Prairie has no legs without workable ideas, venture capital, and actual programmers behind that support. Cost of living is definitely better than the coasts, though. You can do very well on a $50k/year job here, surprisingly.

That said, I still use Dwolla occasionally, but probably not for much longer.