Thoughts on ITEX’s Virtual Currency System

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ITEX is splashing in to the world of software with their Virtual Currency System. No doubt, they want to appeal to entrepreneurs looking to start a barter exchange or virtual currency like bitcoin that don’t want to buy a franchise.

It’s probably a smart idea too. Probably.

So far they’ve announced they’re now accepting Bitcoin (but they weren’t the first), and now VCS. The link they posted to the VCS website isn’t active yet, so we don’t know how much they’re going to charge for their rented software.

It makes sense for one of the biggest U.S. exchanges to start into the software rental industry. Faced with declining revenues and new competition from decentralized currencies, ITEX decided to reach out and grab on to a piece of the SAAS pie.

But that pie, at least inside the industry, is constantly being fought over by long time players, some stagnant, some growing. In the SAAS for barter world ITEX faces competition from Barter21, doBarter, Nextrade360, Barter-Software (XO Limited), VBarter, and anyone else that decides to enter the foray. Even with that level of competition, it doesn’t seem that this particular play is going to put ITEX over the top and into the mainstream.

Part of ITEX’s bravado is interesting if foolish. They’re clearly trying to capitalize on the PR success of Bitcoin, but what seems to escape their notice is that Bitcoin is getting the press it is specifically because it is decentralized, and in that respect a wild beast of finance. It’s wild cat banks all over again with a new currency. ITEX’s software is just another in a long line of SAAS providers to the industry…and we don’t know how much it costs yet.

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