Bitcoin Tipping Platform Zapchain Shuts Down On August 31

Zapchain was once touted as a future mainstream Bitcoin use cases. The company had a very simple business model: everyone could submit content and ask questions. Users could then tip valuable answers of posts with Bitcoin payments. Unfortunately, the company announced they would shut down after seeing a significant decline in user activity.

Zapchain Comes At The End of The Line

Monetizing social activity with Bitcoin is a great concept on paper, but it is rather difficult to achieve. Zapchain found that out the hard way, ever since launching back in 2014.  As of August 31st, which is tomorrow, the company will shut down all of its services. A rather surprising turn of events, but not entirely surprising either.

Zapchain would let users ask questions allowing them to reward the most helpful answers. Bitcoin microtipping is an interesting solution for this type of purpose, albeit it was rather easy to abuse as well. Moreover, the incentive for people to reward others isn’t necessarily there, as there is no obligation to reward helpful answers either.

Despite these drawbacks, Zapchain received US$350,000 in funding in 2015. That is quite a significant amount for such a startup with a somewhat unclear business model. At one time, Zapchain saw spectacular growth, but things started going downhill shortly afterwards. Launching a service on the Bitcoin network is not easy, and incentivized concepts need to be thought out properly.

Users who still have funds left on the platform should be able to withdraw funds, albeit there is no clear option to do so right now. Moreover, It is possible Zapchain will look to get acquired by a different company, either to give their staff a new home or to continue their services in a  slightly different manner.

Other platforms are trying a very similar approach to things. Steemit sees an initial success, but it is not unlikely their user activity will start trailing off soon. Moreover, their process of rewarding useful posts or answers can be exploited by getting friends together to create a wave of positive responses. Any company exploring such a business model will need to think it through properly; that much is certain.

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