Maybe you took a sneak peek at why building a start-up can put your name (and perhaps photo) in the next history books or maybe you’ve been there, done that and now are looking for how past, and probably failed, founders who will help you shoot for the stars. Maybe you are a fintech wizard on a continuous search for forest clearing to perform voodoo on some angel investors. Or maybe you just got lost on the web and ended up reading what 50 shades of grey can teach a start-up founder. Regardless of the sagacity behind your reasoning, you must admit, merely in a glimpse or deliberately, deep down your soul you know that start-ups vetting the b-word are the nightmare on the bankers’ street and the light at the end of the road for Bitcoin enthusiasts.
If you have no clue what the b-word is and how it that work, sit back and enjoy. You are about to merge into the transparent, interconnected and more-than-Kardashians public reality of blockchain technology.
Top five start-ups based on blockchain, the technology underpinnning Bitcoin and waking up at night in sweat governments, are below to be discovered, understood and gently exploited.
- Founded in 2011, when Bitcoin was a thumb-sucking baby and the royal wedding was leading British chit-chats, BitPay is one of the first badasses that offer third party merchant support payment systems. This Atlanta-based payment gateway had the nerve to help merchants protect themselves from currency fluctuations and locks bitcoins into fiat conversion rate. And we know one thing for sure: the abundance of services they offer, from ledge payment tracker to direct bank deposit to URI and QR code invoices, BitPay is here to stay. But not a day passes without bumps on the road. The company had lost $1.8m in a phishing attack last December and recently even filed a suit against an American insurance company. Among other deeds, counts terminating “free and unlimited” Bitcoin processing for new merchants and reducing its stuff by allegedly cutting off 20 full-time employees earlier this September. While these guys claim to be “the largest bitcoin payment processor in the world, serving more than 60,000 merchants on six continents”, a survey has found that dark web leads when it comes to processing bitcoin transactions. Curiosity may have killed the cat, but Kyle Soska and Nicolas Christin from Carnegie Mellon University have revealed in a paper that the daily sales volume of six large-scale dark markets reached up to $650,000 in 2014. Meanwhile, BitPay self-reported a daily average of $435,000. It seems like the dark side has better cookies.
- From a toy-house sized hosted wallet firm in 2012 to leading industry giant, it feels like Coinbase has had a taste of a drink me potion in a very Alice in Wonderland fashion. There is also a chance the San Francisco-based company was merely a please-the-customer oriented blockchain startup and it paid back. From having 13,000 wallets in the beginning of 2013, the company has recently announced that customers from 26 countries can instantly buy Bitcoins starting this month. As we have agreed, with every victory comes a bruise, so watch out for this one. Although it is recognised as THE wallet, Coinbase failed miserably at wallet privacy ranking. According to a Open Bitcoin Privacy Project report, the company scored a total of 11 out of 100 points on overall wallet privacy. But wait, Coinbase has turned these lemons into a perfectly legal lemonade: the low score shows to regulators the company doesn’t encourage dodgy transactions on its platform, it claims.
- If it is to talk about an innovative role-model blockchain start-up, we have to bring up, sooner or later, Bifubao. The Hong-Kong-based company better known as Bitfoo is the first commercial developer to implement proof-of-reserves. What on Earth is that, you might shout. Take your time. Ready? Proof-of-reserves is Merkle tree-based (in computer science, used to efficiently and secure verify contents of large data structures) technique that allows hosted wallet companies, unicorns and Santa Clauses to prove to the masses they have the deep pockets they avow to have. This is not all: at the same time, it does not anyhow expose the privacy of their customers. Sounds like magic, huh? Welcome to blockchainland. If you are still unsure why this is useful, necessary or even talked about at all, please do not hesitate to accustom yourself with the MtGox or Flexcoin cases. Users should and do demand more accountability from their online services, since securely storing your money is as vital as your morning coffee.
- BlockCypher got its place in the spotlight this month and it’s not been even a week into October. After it raised $3.1m in the first round of financing this year, the California-based start-up provides its users the means to host multiple blockchains on a single infrastructure. The benefits? Unwavering network across multiple coins, or how one of its co-founder (and also former US Naval Officer) Catheryne Nicholson puts it, they “do web services for blockchains”. Recently, its team has built a blockchain platform that exposes simple web APIs on which developers can build. If that makes no sense to you, we, the outsiders of high-end nerdily glossy fintech world, would say it improves the companies’ experience of assembling blockchain applications. But let people behind it speak: “Want to learn how blockchains can fundamentally impact finance and Wall Street? How about rebuilding a bank in 2 days without keeping funds in custody? Want a sneak peek at what blockchains and peer-to-peer distributed consensus can do? This session will put you on the right track and create a spark for you to build the next big finance thing.”
- Named after the enormous mythical sea monster seen by our ancestors off the coast of Norway, Kraken is one of largest bitcoin exchanges by investment funding and daily trading volume in euros. Although it refused to apply for BitLicense, the New York state regulation for bitcoin business, the start-up consists of a trading platform self-proclaimed a FOREX interface for digital currencies. Founded in 2011, it offers the choice of trading in Canadian dollars, US dollars, British pounds or Japanese yen. Allegedly, it is one of the most secure Bitcoin exchanges.
Being Europe’s top financial and business centre, it’s worth mentioning the UK as one of the most popular locations for blockchain-based startups. Unlike most countries which do not offer a legal infrastructure for blockchain companies’ growth, UK’s legal processing of bitcoin works on a distributed ledger platform and is not regulated by a payment service provider. According to the recent reports, UK is believed to have taken a second place in terms of funding received for blockchain startups. It is also predicted that it should reach the $3bn mark by the end of 2017. Currently, the top ranking blockchain startups in UK are Electron, Bitstamp, Cashaa, Qadre, Blockverify and Bsave.
Now that you know a little bit more about this Pandora’s box called blockchain technology, “may the force be with you!”. If you are looking for decent software development outsourcing services, learn more about our Trusted Partners.