The popularity of Bitcoin is gaining traction in the business world, prompting the likelihood of crypto-currency companies like this startup to get listed on Wall Street…
Imagine if eBay accepted Bitcoin.
It hasn’t happened yet, but the Company’s top brass has been hinting at the possibility.
CEO John Donahoe was recently interviewed by CNBC where he said that “Digital currency is going to play an important role going forward…at PayPal we’re going to have to integrate digital currencies in our wallet.”
If and when they do give a nod to Bitcoin, a massive company like eBay would fully legitimize Bitcoin’s place in the commerce world.
But why would they even consider it in the first place?
There are several reasons for it, which early adopters like Overstock.com (NASDAQ:OSTK) and Tiger Direct, a subsidiary of Systemax Inc. (NYSE:SYX), can vouch for.
For one, businesses pay 1% or less in transaction fees to Bitcoin processors like BitPay and Coinbase compared with the 2% or more that credit card merchant terminals typically charge.
Also, from a security standpoint, Bitcoin payments are anonymous which protects personal information. Yet every transaction that occurs with Bitcoin can be traced back to a universal block chain so as to further minimize any chances of fraud.
Thirdly, Bitcoin users typically spend more…a lot more.
According to Overstock, while Bitcoin only accounts for 0.4% of the online retailer’s total revenue, customers who have been paying with Bitcoin spend an average of 34% more than other shoppers.
What’s more, of those who pay with the crypto-currency, 58% of them are brand new to the Overstock website.
Tiger Direct, which began accepting Bitcoin on January 23rd, also took note of a higher average spend than with traditional payment methods, and that 80% of its Bitcoin customers were new.
The big rationale as to why the amount of sales from Bitcoin users still aren’t very high is…well, the simple fact that there just aren’t that many Bitcoin users at the moment.
But that’s likely to change in very short succession.
Currently, there are approximately 4 million digital wallets storing bitcoins worldwide. Since people can manage multiple wallets, the total number of actual users may be a lot smaller than that.
But by the end of 2014, it’s anticipated that there will be around 7.3 million Bitcoin wallets in existence, according to venture fund Social+Capital Partnership.
One of the ways in which Bitcoin is growing its number of users is through coin mining.
Over 60% of the 21 million available units of Bitcoin have already been mined. But as each year passes, they become exponentially more difficult to extract — the very last Bitcoin won’t be “found” until 2140.
So in order to find new blocks of coins, more powerful mining hardware is needed.
And one company that’s been generating a great deal of success in the Bitcoin mining business is BitFury.
BitFury develops and manufactures mining technology, including ASIC chips, server boards, and semiconductors.
The company’s influence can be seen throughout the mining industry, where its products have played a key role in the proliferation of other major mining operations around the globe.
It also conducts its own mining efforts, with sites in Finland, Iceland, and the Republic of Georgia.
With all that it’s achieved, BitFury’s considered an industry veteran despite being less than 3 years old.
And this past May, its reputation in the Bitcoin space was enough to secure $20 million in financing.
Participants in the round included Binary Financial, Crypto Currency Partners, Georgian Co-Investment Fund, Queensbridge Venture Partners and ZAD Investment Company.
Additional funding was provided by former Google employee and former General Catalyst managing director and Snapchat investor Jonathan Teo, and Glyde and Scribd board member Bill Tai. Tai was also an early investor in Twitter (NYSE:TWTR).
BitFury CEO Valery Vavilov believes that the funding cements his company’s market position. But Vavilov has a bigger goal in mind.
He suggested that the next step for BitFury is to possibly raise additional funds by going public.
“The success of this funding round validates our strategy and brings us closer to our aspiration of becoming the world’s first publicly listed Bitcoin company.”
Very few first-round startups raise any real cash, let alone generate enough investor interest to warrant serious consideration for an IPO. The fact that this is Bitcoin-related business is even more rare.
To date, BitFury’s funding round is one the largest for the crypto-currency sector, coming behind BitPay’s record $30 million Series A and tying the $20 million raised by storage and wallet provider Xapo.
It’s difficult to gauge BitFury’s chances of going public, but if Bitcoin mania keeps on growing like it is…don’t count BitFurry out for a second.