Bitcoin itself is still in the process of becoming the game-changing digital currency many believe it will ultimately be, it seems somewhat strange to say that there are dozens of startup companies looking to benefit from the emerging cryptocurrency market. And yet, this is exactly the case; as bitcoin emerges, slowly but surely, many entrepreneurs operating in the technology sector are looking to capitalize by providing new services that could become very valuable if and when bitcoin reaches a more influential status in technology and currency.
This past March, Business Insider wrote up a helpful and very interesting list of the 25 most exciting bitcoin startups, and reading through it can help you get a feel for just how many ways new companies are looking to profit off of bitcoin. Here are a few examples:
Blade is a bitcoin-related startup that’s come up with a clever workaround for the issue of using bitcoin in retail stores. One of the factors holding bitcoin back from expansion into mainstream commerce is that most everyday in-person merchants and retailers still can’t, or don’t, accept digital currency as payment. Mainstream bitcoin purses and providers are working on ways to address this issue, but in the meantime, Blade has designed what Business Insider described as “a prepaid debit card that users can top up with bitcoin.” Basically, those who want to use bitcoin as currency can use it to load up a card, which can be used at popular retailers.
Edgelogic is taking an entirely different approach in modeling a new concept after bitcoin’s blockchain technology. For those who don’t have a firm grasp on what exactly the blockchain is, it’s defined here as a “general log of transactions,” where you can “see all transactions that have ever taken place or will ever take place” in the bitcoin market. Basically, every payment or transaction conducted with bitcoin has its details (with the exception of private user security information) broadcasted to the blockchain for all to see. Well, Edgelogic has come up with the idea of essentially using this same concept with regard to the trade and purchase of precious stones. As described by Business Insider, the company will use a technology called “Blocktrace” to register diamonds and track transactions, “making it harder to fence stolen goods or commit insurance fraud.”
Based in Kenya, BitPesa has thrived in its early days by capitalizing on a philanthropic (but for-profit) model that allows bitcoin holders to use their digital capital for good. Specifically, the company allows people to donate money to African causes and recipients in the form of bitcoin. The value is then converted into paper currency for the recipient. Profits come from a 3 percent transfer fee on all transactions, and the perk for donors (in addition to simply being able to put their bitcoin to tangible use) is that the transactions are conducted swiftly and securely, making donations more direct and satisfying. Business Insider noted that the company raised $1.1 million in funding earlier this year, courtesy of the Pantera Capital hedge fund.
This impressive fundraising feat by BitPesa leads us back to the latest major news concerning bitcoin startups, which is that a major new Silicon Valley initiative is going to give massive opportunities to the ones that can demonstrate true potential value. The examples just covered from Business Insider’s list are ultimately only a few of the many companies out there looking to profit from providing ways to use bitcoin or its underlying technologies. With increasing venture capital interest in such companies, we may be seeing bitcoin easing more into mainstream life.
Specifically, Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers has just announced a gigantic seed fund (called Edge Fund) aimed at assisting worthy bitcoin startups. The fund is starting off with $4 million total, to be divided into $250,000 allotments for individual investments. Furthermore, it will be headed up in part by Roneil Rumburg, a bitcoin startup founder brought in to help identify appropriate companies for funding.
It’s very early for the new seed fund, but given the variety of bitcoin-related startups out there and the amount of money initially invested in this new venture, it’s safe to say we’ll be hearing more from new companies looking to profit through bitcoin’s emergence.
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