by Mark Walsh @markfwal, March 13, 2014

The controversy surrounding crypto-currency Bitcoin reached new heights recently with the spectacular bankruptcy of leading Bitcoin exchange Mt. Gox. The event raised fresh questions about the viability of the volatile currency and its susceptibility to fraud and theft because of a lack of security and transparency.

None of that has stopped start-up Vungle from adding Bitcoin as a payment option for developers in its mobile ad network spanning some 4,000 apps. The platform allows advertisers to run 15-second promotional spots within apps and provides in-house production tools for creating HD-quality videos that serve as trailers for games and other apps.

By offering ad revenue-sharing payments in Bitcoin, Vungle said it wants to give publishers more flexibility and allow them to keep more of what they earn because of the virtual currency’s lower transaction costs. Bitcoin would also provide faster access to funds because they don’t have to go through a financial institution.

“We have a long view on this new currency, and we’re betting that as Bitcoin gains more widespread traction, increased demand will follow. We are excited to offer it as an option to our publishing partners,” stated Vungle CEO Zain Jaffer.

Developers in Vungle’s network include Wooga, “Fruit Ninja” creator Halfbrick Studios, ZeptoLab, maker of “Cut the Rope” and Sega.

Although it has come under increasing scrutiny since the collapse of Mt. Gox, Bitcoin is already being accepted for purchases by a limited number of businesses, including Overstock.com, Khan Academy, Reddit, Fancy, TigerDirect and Zynga, according to a Forrester report last week.

While the research firm is skeptical of Bitcoin’s prospects with mainstream consumers, it suggests it could gain adoption more quickly for business-to-business payments. The report noted that Bitcoin business payments can be made on-demand and settle within minutes versus days for a bank transfer.

“The speed and low cost of crypto-currency payments may more than offset the costs associated with properly securing Bitcoin transactions,” according to a study by Forrester analysts Denee Carrington and Sucharita Mulpuru. A separate Goldman Sachs report on Tuesday similarly concluded that Bitcoin had more potential as a payments system than as a widely used alternative currency.

Andrea Sharfin, vice president of marketing, at Vungle said Bitcoin’s lower cost would especially benefit independent developers trying to carve out a living from their apps. “For these small independent development houses...that extra 1% or 2% transaction fee a financial institution might charge really matters. So they’re wiling to try something new for better payment terms,” she said.

What about the highly publicized risks associated with Bitcoin, which has a public image as a hobby for wealthy investors and a tool of money launderers and drug dealers? The value of the unregulated currency has also been on a roller coaster, hitting a high of $1,240 before falling below $500 in late February after the Mt. Gox problems.

“Over time, we believe that all this volatility will smooth out,” said Sharfin. “We can’t control the ups and downs of the marketplace.”

On the theory that any publicity is good publicity, a start-up like Vungle may also not mind being linked with the volume of attention Bitcoin is getting. The company last month raised $17 million in a second-round funding led by Thomvest Ventures and including prior investors, such as Google Ventures and AOL Ventures. That brought its total funding to date to $25.5 million.