SolidX, a NYC-based startup bringing bitcoin financial instruments to institutional investors, just raised $3 million. They are working on cool things, which is why they got the headline. (Because no one else will give it to them today…see below.) Read more about SolidX here:
http://www.coindesk.com/solidx-raises-3-million-give-institutional-investors-better-access-bitcoin/
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The real news today has to do with the much larger Series A investment that Blockchain just announced — $30.5 million led by Wicklow Capital and Lightspeed Ventures (also investors in NYC-based LedgerX and leading Chinese bitcoin exchange BTC China).
Blockchain has actually had this deal closed for a while, but the formal announcement could not have come at a better time. As we’ve seen bitcoin’s price continue to decline, the funding is a welcome reminder that we’re still in the infrastructure and VC phase of this industry’s evolution. Blockchain’s president, Peter Smith, said (somewhat predictably) that Blockchain would use the proceeds of the fundraise to grow the company’s team and invest in developing markets.
The company is undoubtedly the only “true Bitcoin” pure-play of any real scale right now. It may be the only large business that has actively shied away from integration with the existing financial system to date, instead focusing on (surprise!) exclusively blockchain-based services. And while it would appear to some that the company operates outside of the law or outside of any one regulatory regime, it might be more accurate to refer to them as the best-positioned company from a regulatory perspective because they have shied away from this integration. Contrary to popular belief, they consistently engage with regulators to explain their role (as a software company - not a money transmitter) in the ecosystem on a regular basis.
As Roger Ver somewhat presciently told me during an interview earlier this year: “If we don’t and can’t even touch our users’ bitcoins, how can the regulators regulate anything that we are doing?”
The limited regulatory distractions should prove invaluable as the company redoubles its international efforts. If Bitcoin is about “the other six billion”, then reaching the users who need Bitcoin the most in developing countries should prove easier without the cautious approach to integrating with individual regimes financial systems. It’s a smart, differentiated play compared to most others in the industry, and it has clearly paid off.
That said, it’s not all sunshine and rainbows. Blockchain’s mobile user experience lags behind other wallets. Its revenue model is still largely undefined. Founder Ben Reeves needs more help on the development front. They need to beef up their security team. And they need to start marketing themselves again; it has been easy to forget about Blockchain with the frequent hype surrounding the other funded ventures in the ecosystem.
A record-setting Series A will help on all fronts.
Congrats to the deal team.
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Another interesting note, according to my back of the envelope math and loose estimates, is that Roger Ver may very well be (for now) bitcoin’s wealthiest investor not named Satoshi. At one point, Ver owned a majority position in the company and even with dilution, now sits on tens of millions of dollars worth of Blockchain equity in addition to his early bitcoin positions. Bitcoin Jesus is just a tad bit wealthier now than Jesus Jesus was…
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Today’s Tid Bits
Overstock.com Assembles Coders to Create a Bitcoin-Like Stock Market
http://www.wired.com/2014/10/overstock-com-assembles-coders-build-bitcoin-like-stock-market/
Overstock has hired two developers that will help the company build “cybersecurity” software that any company could potentially use to issue financial securities over the internet. The Salt Lake City-based company plans to sidestep traditional stock exchanges, and create a security controlled by cryptographic algorithms, like bitcoin, not a central stock exchange. The project, code-named “Medici” aims to decentralize Wall Street, but will undoubtedly face strict regulation.
Binary Financial Unveils BTC-01 for Financial Professionals
http://blogs.wsj.com/moneybeat/2014/10/06/bitbeat-bitcoin-finds-willing-buyers-even-with-prices-plunging/
Even with bitcoin’s price plummeting, high-net-worth individuals, hedge funds, and financial professionals are eager to trade the volatile commodity. Binary Financial, a digital currency-focused investment management company, has unveiled BTC-01 a new product aimed at giving these type of users control over their secure digital asset portfolio. BitGo, a wallet security firm, will work with Binary Financial to ensure wallet security.
Dark Markets Grow Bigger and Bolder in Year Since Silk Road Bust
http://www.coindesk.com/dark-markets-grow-bigger-bolder-year-since-silk-road-bust/
Listings for illicit goods and services on dark web markets, which transact almost exclusively in bitcoin, have actually grown following the Silk Road bust, according to academics and researchers. In an in depth report, Coindesk looks in to Silk Road’s impact on bitcoin, dark markets, and illicit e-commerce in general. According to the FBI, Silk Road made annual revenues of $1.2bn. Today, several dark market e-commerce sites are working to fill the Silk Road void.
Bank of Russia and Media Ministry to ‘Block Information’ on Cryptocurrencies
http://cointelegraph.com/news/112689/bank-of-russia-and-media-ministry-to-block-information-on-cryptocurrencies
Last week, Russia’s Ministry of Finance (MFIN) issued the text of its ban on digital currency, denouncing the “distribution of software” and “surrogate currencies.” Now the Russian government plans to “block information resources used for creation and circulation of surrogate currencies.” Russian is basically planning to ban bitcoin mining as well as any media publication surrounding the currency.
Bitex.la Exchange Acquires User-Friendly Bitcoin Buying Service
http://www.coindesk.com/bitex-la-exchange-launches-user-friendly-bitcoin-buying-service/
Bitex.la, Argentina-based bitcoin exchange is acquiring and relaunching Conectabitcoin.com, a bitcoin-buying service aimed at novice bitcoin users in Latin America. The rebranded Connectabitcoin will be available to users in Argentina, Brazil, Chile, Colombia, Mexico, Peru and Uruguay. Bitex.la was launched in May as the first regional bitcoin exchange for all Latin American countries.
Russia Seizes Bitcoin Mining Equipment in Incident at China Border
http://www.coindesk.com/russia-seizes-bitcoin-mining-equipment-china-border/
Russian authorities confiscated four bitcoin mining machines at a security checkpoint on its southern border with China last week from an unidentified citizen. The mining machines were identified to be ROCKMINER R4 units. The bitcoin miner failed to provide necessary documentation or pay the required fees for the machines. The confiscation appears to be unrelated to the country’s proposed ban of “monetary surrogates.”
SNAPCARD Has Raised $1.5 Million From Tim Draper, and Others
http://newsbtc.com/2014/10/06/snapcard-raised-1-5-million-tim-draper-others/
SNAPCARD, an online browser plugin, which allows users to spend bitcoin virtually anywhere, has raised $1.5 million in seed funding. Timothy Draper and Insikt Capital are leading the funding. SNAPCARD is also announcing the launch of a digital currency payment-processing POS product, which will allow merchants to process payments in bitcoin, litecoin, dogecoin, and ripple.
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