BankTech

How $459 Billion is being Disrupted by Bitcoin, 20 Illustrative Companies

What is a currency? Currency is a form of money regulated by a given government in your country. It is considered to be centralized and secure. The big question to ask ourselves is do we trust in our Governments? According to Edelman Trust Barometer only 38% of us trust in Government officials or regulators.

With the creation of Bitcoin, Satoshi Nakomoto essentially opened up a pandora box. Creating something which could start challenging the fiat currencies. We have written a lot about how Bitcoin economy is shaking up the world. It was termed at a Ted talk to be the world’s best performing currency. We all know how Bitcoin has taken off in the last year – with the extensive publicity and meteoric rise (and fall) in value; big names such as Richard Branson & Andreessen-Horowitz getting on board; and retailers such as TigerDirect.com, shopify, Zynga,  & Overstock.com began accepting the currency - the writing was already on the wall, Bitcoin is not going anywhere even though naysayers think otherwise.

According to statistics from a new White Paper published by Coindesk, Bitcoin is Aiming to Disrupt over $459 Billon Total Market Cap. This is the market cap of all the major payment and Fintech companies in the world. There are several companies doing amazing work with regards to the virtual currency, and many of them have received investments from VCs as well as Private investors. Some of them have been discussed here.

20 Illustrative Bitcoin Based Companies:

itBit:  

itBit is a Bitcoin trading exchange that allows for trade between U.S Dollars, Euros, Singapore Dollars and Bitcoin. It utilizes NASDAQ technology to support millions of trade per second. The platform is built to handle more volume than the amount of Bitcoin being traded today. itBit also uses multi factor authentication and has identity verification built in to monitor for any suspicious activity.

itBit acquired a funding of $3.25 Mn in a funding round co-led by Canaan Partners and RRE Ventures. Liberty City Ventures, as well angel investors such as Jay W. Jordan II and Ben Davenport were the other participants. itBit is headquartered in Singapore and employs 13 people. It is available to Bitcoin retail investors in all markets barring the U.S.

Total Funding Received: $5.5 Million

CoinLab:

  • On 24th April 2014, CoinLab announced the procurement of $500,000 investment via Draper Associates and other prominent members of the community including Geoff Entress, Jack Jolley and roger Ver.
  • This is the first official venture capital raise for a direct investment in Bitcoin, according to Forbes.
  • CoinLab’s main agenda is the concept of MMORPG mining. Basically, the intention is to leverage Bitcoin to monetize players for hugely popular MMOs such as EVE Online and World of Warcraft (WoW).
  • Two companies have already agreed to participate in a beta for the CoinLab mining concept — Wurm Online and graFighters.
  • Wurm is an independent, Online Wilderness MMORPG that enables players to explore over 512 Sq Km of land, Craft over 1000 items, Train 133 Skills, Mine, and Hunt.
  • graFighters is the first online fighting game for your hand drawn characters.

Kraken:

Kraken, a virtual currency exchange, is the brainchild of Jesse Powell, the CEO of San Francisco-based company Payward. Powell is a founding member of DATA, the self-regulatory organisation created to develop finest practices for the transfer of digital assets. The management team also consists of Michael Gronager (COO), Constance Choi  (General Counsel) and Walter Stanish (Founder/Architect). Kraken had raised $260,000 initially in the first round of funding. This was followed by a $3 Mn fund as equity in the second round. The main investor in the second round is roger Ver.

Kraken has been designed to bring digital currency traders some of the same features enjoyed by forex traders such as stop orders and margin trading. It is an upcoming exchange for crypto currencies. Kraken is headquartered in San Francisco, California. It let’s individual traders and institutions in the US and abroad trade fiat currencies like the US Dollar and the Euro against digital currencies like Bitcoin, Litecoin, Ripple, and Ven. The beta version of Kraken was released in May 2013. Thereafter it moved out of the beta phase and launched a live trading platform in September 9, 2013.

Total Funding received: $3.2 Million

Circle: 

Circle Internet Financial was recently launched with the aim of increasing the adoption of digital currencies such as Bitcoin by enabling consumers and merchants with a payment platform. The company was started by Jeremy Allaire, who previously founded Brightcove, an online video platform. Circle received $9Mn of Series A funding through investors  Jim Breyer, Accel Partners and General Catalyst Partners.

Circle says that it will provide a secure system that will enhance protection and privacy of consumer and enable them to make payments, receive and send this digital currency. For charities and businesses, the company says that it is working on tools and services which would enable them to accept both in store and online payments without any transaction fees.

“Bitcoin and digital currency represent a once-in-a-lifetime opportunity to shape the future of theInternet and global commerce. There’s a tremendous opportunity to make payments easier, more secure and less costly for consumers and businesses. Digital currency can dramatically reduce the friction and costs currently experienced in the world by consumers and merchants” said Jeremy Allaire. Widening the presence of Bitcoin among merchants is the key to expanding its use according to him.

BTC China: 

BTC China was launched in June 2011. It is China’s first and most established Bitcoin trading platform. The company has received a funding of $5 Mn through investors Lightspeed China Partners and Lighspeed Venture Partners.

Bitcoin Trading in China however, recently suffered some big blows. On 5th December 2013, China’s central bank had regulated the Bitcoin by banning financial institutions and payment providers for conducting transactions in the virtual currency. According to China Business News (affiliated with Shanghai government), third part service providers were told by the Chinese Central Bank to stop offering clearing services to online Bitcoin exchanges. The announcement was made on 17th December. “The PBOC statement on Dec. 5 was somewhat vague and there is more clarity now,” said Zennon Kapron, MD of Financial Consultancy, Kapronasia. “The way it’s reading now is that after the Chinese New Year, you won’t be able to get your money off the platforms.”

After the announcement by PBOC (People’s Bank of China), third party providers in the country have taken quick steps to stop funding Chinese Bitcoin exchanges. BTC China, the world’s largest exchange, was the first to suffer from this development. The company announced that it had received a notice on 18th December, 2013 and had stopped accepting new Yuan deposits onto its marketplace.

“Dear BTC China valued customer: Due to new government regulations, BTC China will temporarily suspend CNY deposits. BTC deposits/withdrawals and CNY withdrawals are not affected, and will continue to operate in the interim. Rest assured that BTC China will continue to operate normally. Please pay attention to our notices for updates, as we find other ways to allow for CNY deposits. We deeply apologize for any inconvenience. BTC China, December 18, 2013.”

Total Funding Received: $9 Million

Coinbase:

Marc Andreessen recently revealed that the firm (Andreessen Horowitz) had been meeting with lawyers to discuss the possibilities of investments in the Bitcoin area. Earlier Marc had said that Bitcoin feels like the early days of Internet showing enthusiasm about the potential of the currency which has been widely misunderstood as an investment tool. On 12th December 2013, Andreessen Horowitz led a $25 Mn Series B investment in Coinbase, the San Francisco based platform/app that enables buying, selling and trading of Bitcoins. This could be the biggest investment by any firm in a Bitcoin based company.

Coinbase was co-founded in June, 2012 by Brian Armstrong (CEO) and Fred Ehrsam with Mark Peter Davis as an investor. The company has received a total funding of $31.9 Mn from investors Alexis Ohanian, Y Combinator, Greg Kidd, Garry Tan, FundersClub, Union Square Ventures, Ribbit Capital, SV Angel, Red Swan, Interplay Ventures and Andreessen Horowitz. With the latest round of funding, Andreessen Horowitz’s Chris Dixon along with Union Square Ventures’ Fred Wilson will join Coinbase’s board.

On August 1st 2013, Coinbase reached a milestone of 200,000 users. That was quickly followed in mid-October by the news that they had reached 300,000 users. In December 2013, there are more than 600,000 consumer Bitcoin wallets on Coinbase. The company says that they are averaging 10,000 new customer sign-ups a day, and are now working with over 16,000 merchants including Khan Academy, OkCupid and Reddit, who use Coinbase to accept Bitcoin.

Total Funding Received: $31.9 Million

GoCoin: 

GoCoin was co-founded in July 2013 by Steve Beauregard (CEO), Brock Pierce (Chairman), William Quigley and Kevin Beauregard (V.P, Engineering). The company has received a funding of $550k through investors Prolific Venture CapitalOwen Van Natta (former Facebook and Amazon Executive),Andrew Frame (Founder, Ooma), Bit AngelsMikael PawloJonathan CongdonRuventoRonnie Wee,Gary Stiffelman and David Neuman. GoCoin is headquartered in Singapore, with an office in Santa Monica, California.

GoCoin says it will initially focus on providing Bitcoin payment processing for e-commerce, digital content and interactive/social gaming companies. Online content, gaming & E-commerce, are sectors that will be a primary focus for GoCoin. The platform is currently in a private beta with a small group of merchants processing on their platform with Bitcoin payments to begin with.

Total Funding Received: $550K

Huntercoin: 

With the creation of Bitcoin, Satoshi Nakomoto essentially opened up a new stream of innovation. We have seen a number of alternate crypto-currencies or Alt-Coins emerge over the last year – Litecoin, Namecoin, Peercoin, Dodgecoin, Mastercoin and many more. Frankly it was getting suffocating to hear of all those Bitcoin clones. In February 2014 however, a very interesting and innovative new P2P crypto currency was introduced – Huntercoin.

Huntercoin is defined as a human Mine-able P2P Decentralized Crypto Currency & Game. It is a fork of Namecoin that makes use of Namecoin’s protocol to host a decentralized game that is played on top of the blockchain. Namecoin on the other hand uses the protocol to resolve domain names.

What is it exactly?

  • Huntercoin is the Worlds first peer to peer (P2P) decentralized Massively Multiplayer Online Game(MMOG). It definitely has appeal to both gamers as well as crypto-currency enthusiasts.
  • Here, players control Hunters which harvest coins in a 2D virtual environment.
  • The Hunters return to a spawn area after harvesting, where the coins are effectively ‘banked’.
  • Participants collect Huntercoins (HUCs) inside a virtual environment through the application of strategy, teamwork and human effort.
  • HUCs have a real world financial value and unlike other crypto-currencies.
  • Huntercoin is affordably accessible to the majority because dedicated and expensive ‘mining’ hardware isn’t a necessity according to them.
  • These coins can then be converted into Bitcoins and real world currency.
  • Basically, you get Paid to Play! And not the other way round as it usually is.

Huntercoin reached $1m within the first three days of trading. It also has a rapidly-growing community, having accumulated over 5,000 players so far.

Bitcoin Investment Trust (BIT):

A hot new startup? Not quite. It is Barry Silbert’s new Bitcoin Investment Trust (BIT). The trust is open only to accredited investors, and the minimum investment is $25,000. The value of the BIT derives entirely from the price of Bitcoin.

Barry’s name may sound familiar he started Second Market in 2004. SecondMarket is the world’s biggest broker of venture-backed private-company stock by the value of shares traded.

Barry has established that there is millions of dollars that would like to invest in the future of Bitcoin but for a number of reasons can not buy and hold Bitcoin directly. Since establishing the Trust it has already surpassed $70 million dollars in assets.

The shear force of intuitional investors buying into the Bitcoin economy will have a huge impact of the price of Bitcoin. It will certainly raise but it will certainly fall, just not as far as it raises over time.

“Once Wall Street starts putting money into Bitcoin — we’re talking about hundreds of millions, billions of dollars moving in — it’s going to have a pretty dramatic effect on the price,” he stated.

BitAngels: 

BitAngels was co founded by David A. Johnston ( founder of Engine.co) and Michael Terpin (founder of SocialRadius CEO/Marketwire). It is the first multi-city angel network and incubator dedicated to digital currency startups. In May, 2013 BitAngels was formed out of interactions between the co-founders and potential investors. Since then, BitAngles serves as an online place where Bitcoin startups and investors could connect.

Over 60 angel investors pumped in $6.7 Mn to establish BitAngels. The founders planned to invest this amount as $20K chunks or increments. Their website says startups that are ‘using digital currency to disrupt an existing industry’ can apply. If a startup is accepted it receives $25,000 along with 1,000 hours of monthly support from designers, developers and advisers in the community.

The network functions like a distributed version of Y-Combinator, focused just on Bitcoin Startups. Bitcoin startups will also be able to work out of three on-site locations in San Francisco, New York and Texas along with funding and mentorship.“The idea is to be very Y-Combinator-ish. Meaning invest enough money to allow a hacker or two to focus 80 hours a week on a new startup they have been developing during weekend and evenings” said David A. Johnston.

Total Capital Reserves: Around $18 Million

HighKart.com

On 24th December 2013, RBI issued a notice outlining the risks involved for people utilizing Bitcoins. Two days later, the Enforcement Directorate (ED) undertook the first Bitcoin raid in India.  Buysellbitco.in – stopped all operations on its platform. And so did other exchanges and portals as well. This however, does not seem to deter HighKart.com, India’s first online retailer to accept Bitcoin payments.

About HighKart.com:

  • HighKart calls itself “the bitcoin store.”
  • The website list crypto-mining gear, men’s fashion, home appliances, fitness gear & other electronics.
  • HighKart only accepts bitcoin, and only ships within India. The company utilizes Bitcoin Payment Solutions (BIPS) for payment processing.
  • BIPS operates as a Payment Service Provider (PSP) specializing in the technical aspects of accepting cryptocurrencies – such as Bitcoin.

A transaction fees of only 0.99% is charged.

The Indian Government’s stance on Bitcoin and related virtual currencies is still unclear. RBI’s warning on cryptocurrencies such as Bitcoin and its potential use for criminal purposes had scared away a lot of early supporters. The raid on Buysellbitco.in CEO Mahim Gupta was yet another blow for the virtual currency.

Coinplug:

Korea based Bitcoin startup, Coinplug, was founded in June2013. The company provides a Bitcoin exchange and wallet service as well as payment processor targeting the Korean and Asian markets. In April 2014, Coinplug in partnership with Nautilus Hyosung (the largest ATM hardware manufacturer outside the US) launched its own two-way bitcoin ATM in Gangnam, Seoul.

Why is South Korea significant in terms of Bitcoin and Virtual Currencies in general? “Because of South Korea’s early experiences with virtual currencies (based on its early pioneering history with MMORPG/free-to-play), we believe that Korea will become the early-adopter market that massively embraces Bitcoin, perhaps becoming the tipping-point market of Bitcoin,” John Nahm, Co-Founder of Strong Ventures, told Coindesk.”

Coinplug is targeting this very market including MMORPGs, general social and e-commerce as well as K – Pop and K – Drama online payment solutions. In previous posts I have expressed how interlinked the worlds of MMORPG (Massively Multiplayer Online Role Playing Game), Payments and Bitcoins really are.

Coinplug has received a total investment of $800,000 through investors including SilverBlue and Tim Draper of DFJ Venture.

Dragon’s Tale: 

Dragon’s Tale uses Bitcoins in the place of casino “chips”. Players can either import their personal bitcoin balance into the game or they can gather small amounts of Bitcoins that are given for free within Dragon’s Tale.Bitcoins are defined on their website as a digital commodity that can be utilized for bartering and commerce.

  • Players can gather tiny amounts Bitcoins that are given free with Dragon’s Tale, or they can import their personal Bitcoin balance into the game.
  • There are a few ways to obtain Bitcoins:
  • Generate them for free, when your computer is idle (not really the preferred method now)
  • Buy from Bitcoin exchanges such as Bitstamp, Coinbase or LocalBitcoins.
  • The user has to select “Buy Bitcoins” in the menu after clicking his character and the game client can suggest a place to buy some Bitcoins.

Xapo Wallet & Debit Card: 

Last month, we saw the launch of a new Bitcoin vault and wallet called Xapo Bitcoin Wallet by Wences Casares, CEO and Co-Founder of Lemon Wallet (which was later sold to LifeLock for $42.6 Mn). Users could open a free account , as well as get some bitcoins for free almost immediately. It seems that was just the beginning. On 24th April 2014, the company announced the launch of Xapo Debit Card, which enables users to spend Bitcoins as they would any other currency.

Xapo is a Bitcoin wallet & vault. It consists of a team of financial and security experts with a proven track record o building trusted financial products, including their last venture – Lemont Wallet. By offering both a Bitcoin wallet and vault in one secure place, Xapo is marrying the ease-of-use Bitcoin users want for everyday needs with the security they require for confident Bitcoin savings. Xapo has received a funding of $20 Million through Series A Round led by Benchmark. Other participants include Ribbit Capital and Fortress Investment Group.

  • Xapo Debit works in a similar manner to the traditional debit card.
  • With this, users have the ability to utilize Bitcoins for payment at any offline or online merchant that accepts credit or debit cards.
  • After payment has been made by the user via Bitcoin, the merchant will receive the funds in their local currency.
  • This quite an improvement over cards already on the market, which are essentially “prepaid” cards that require the user to manually convert their Bitcoins into their local currency before buyinh anything, says the company.

Xapo Vault is a service to keep all your bitcoins highly secure. Their vault keeps your bitcoins offline, in cold storage, and protects them from hacking and similar attacks. Their Vault service costs 0.12%, or 12 basis point anually. That means, if you store BTC 100, it costs BTC 0.12 per year.

LeetCoin: 

It is obvious that we are moving towards an era where professional gaming has to be taken seriously. With the addition of Bitcoins to the scheme of things, it looks like this progression is being hastened.

LeetCoin provides a competitive gaming platform wherein gamers can battle each other for Bitcoins. It currently supports Counter Strike: Source, but the company says that other popular games (maybe Dota or League of Legends?) are in development. LeetCoin is legal in 36 out of the 50 US States, Canada, most of Europe, Asia, and South America.

“Players can login and join any time, we have servers that usually have 15-20 players at any time, and every sever has a wager set per kill and per death. It’s about 70 cents usually,” Leetcoin Founder and CEO, Kingsley Edwards, told Blowstamps. “For me personally I’d be playing on that server all the time just like you would for fun but you are also earning some Bitcoin in the process!”

Robocoin:

The first Bitcoin ATM was installed in Vancouver, Canada on 29th October 2013. Robocoin first unveiled the ATM at a conference in San Jose, California during last year’s springtime. On 7th January 2014, Robocoin announced that they would be deploying the world’s second Bitcoin ATM in Hong Kong. According to Robocoin, they have sold nearly 50 ATM machines to operators worldwide but they are not yet in operation.

About the Robocoin ATM:

  • It enables users to buy and sell Bitcoins.
  • The ATM machine from Robocoin is equipped with biometric time locks and privacy-shielded touchscreen and has features like Wi-Fi and 3G enabled.
  • The machine also accepts and dispenses cash and is international denomination ready.
  • To avoid cases like money laundering and making multiple deposits, the ATM machine allows operation only after scanning a user’s palm.
  • A user has a limit for depositing.

Whatever said and done, Bitcoin has definitely created some waves last year. It will be interesting to see what is in store in 2014 for companies of all types trying to monopolize the virtual currency. If Bitcoin ATM’s end up gaining mainstream adoption (which I believe is a high possibility), Robocoin would benefit tremendously with its advantage as the first player in the arena.

Cryptex Card:

In November 2013, I had discussed the Coin Card – a new hardware that enables users to store all their cards on a single card and manage it with the smartphone through BLE. A pre-order campaign had been planned by Coin for November 15th. The plan was to top out at $50,000. That limit was crossed within barely 40 minutes. The card basically went viral, and opinions from various parts of the industry seemed to point out that maybe consumers are not ready for a mobile wallet yet. In a similar move – and what could be a tremendous boost for the virtual currency – on 8th April 2014, Hong Kong based startup Cryptex launched the Cryptex Card.

Cryptex is the first debit card in the world that will enable users to convert cryptocurrency into cash at millions of ATMs and merchant’s POS terminals across the globe. This is regardless of whether the merchants or banks in question accept cryptocurrency or not.

A vast many of my friends that are interested in buying Bitcoins and even Litecoins for that matter give up due to all the hassles that they encounter. This debit card simplifies things extraordinarily from a consumer point of view and could be a gigantic development for Bitcoin as well as all other cryptocurrencies in many ways. Imagine – now you can go out and buy pretty much buy any sorts of goods or services globally in your local currency – utilizing the local ATMs and merchant systems that are already in place.

  • The Cryptex card system establishes a method of bypassing the need for a bank account altogether.
  • All the user has to do is deposit his Bitcoins in a Cryptex account and withdraw the equivalent in cash from an ATM. He can also buy stuff at the POS terminals in store.
  • The debit cards will work at ATMs in over 80 countries around the world, including 90% of cash machines in the US, according to the company.
  • Users can buy the cards in four denominations: $10, $25,  $50 and $100. Each card is loaded with the corresponding amount of Bitcoin.
  • Where is the Smoking Gun? In stark contrast to traditional debit or ATM cards, the Cryptex Card will be obtainable and accessible to human beings in any country on the planet.
  • Cryptex says that they will begin shipping personalized cards within six weeks to approved applicants.

Cryptex Inc. is a new cryptocurrency financial services company founded by payment veterans based in Singapore and Hong Kong. The company’s seed investors include Tero Ojanperä (managing partner, Vision+ Fund and ex CTO and past member of the executive board of Nokia), Ken Hertz (senior partner at Hertz Lichtenstein Young Media Law and early investor in Spotify), Uber and Basis; and Michael Terpin – the co-founder of BitAngels and founder of Marketwire. Cryptex also has plans to launch other cryptocurrency card offerings and payment solutions.

BTCjam:

BTCjam was founded in 2012 by Celso Pitta (CEO) to solve the oldest problem of the world, financial shortages and loans. The company provides the user with a peer to peer platform that facilitates the customers with bitcoin loans. BTCjam team also includes Carolina Andrade (Marketing and Strategy) and Paulo Henrique Lellis Goncalves (CTO).

The company has received funding from investors such as Dave McClure and Meyer Malka. BTCjam’s platform which provides a customer with Bitcoin loans is unique in comparison to other bitcoin companies - wherein loan givers investors ) can earn higher returns and borrowers can choose rates they can afford. There are a few steps that a customer needs to follow in order to get a Bitcoin Loan:

  • The customer must compose his loan listings and define his own choices (rates, parameters, optional soft credit check)
  • Watch investors review, consider, discuss and fund his loan
  • Get his Bitcoins
  • Make the payments
  • Similarly BTC Jam helps investors earn solid returns by:
  • High rate of return
  • Peer to peer reputation system and soft credit checks provide safety.
  • verification process handled by BTCjam

Coinalytics: 

  • Coinalytics was founded by Petter Samuelsen and Fabio Federici. It enables users to Get a 360-degree view of the Bitcoin ecosystem and take the right decisions.
  • Their platform enables users to access all the relevant data in one place as well as obtain instant notifications.
  • Users can explore the drivers of the Bitcoin value and analyze how their investments are affected.
  • Users can also assess their own forecasts via Coinalytic’s analytical framework.
  • Coinalytics basically makes sense of big-data via a real-time analytics tool for Bitcoin.
  • They aggregate heterogeneous data from different sources such as social media, news, forums or market data and combine it to support you in taking the right decisions.

Coinalytics has received seed funding of $100,000 via San Francisco accelerator 500 Startups.The company has moved their management to Mountain View, CA for the next 4 months to help with development of the product as well as establish industry connections.

BitFantasy: 

BitFantasy is a Bitcoin driven MMORPG in its early Beta development phase. Players within the game can trade with each other using Bitcoins. Players can complete quests, fight of enemies trying to destroy the homeland of Bitlandia as well as discover new villages, resources and items.

  • Bit Fantasy does not have hidden costs or “pay to win” style content, says the company.
  • Also, utilizing Bitcoins in game is entirely optional, and players can enjoy the entirety of the game’s content without having to pay a single dime (Satoshi in this case I suppose) extra.
  • Even if users want to spend Bitcoins, they cannot purchase items or gold from Bit Fantasy, but only via fellow players.
  • On the other hand, if users find trading lucrative after the first year then they just need to refresh their account with 0.04BTC per year to continue using the escrow facility provided by BitFantasy.

Chiraag Patel

Chiraag Patel is a Senior Reporting Analyst and the Editor of Bitcoin and Virtual Currency channels at Lets Talk Payments. He is an engineer with deep interest in MMORPG, Virtual Banking, Game Currency and Virtual Cash. Chiraag enjoys Reading& Blogging with focus on New Innovation, Technology & Startups in the Payments Space.

Apply to Become a Contributor