Despite the hopes of its followers, the crypto-currency remains confidential. The companies that have capitalized on its democratization rotate one after the other.
Seven years after the creation of the bitcoin, the democratization of the virtual currency is delayed. Start-ups that have positioned themselves in the niche by focusing on its development and raising millions of euros are forced to rethink their business model.
Coinbase: from the wallet to the exchange platform
Coinbase is the most widely used wallet (service to receive, store and spend its bitcoins). But the democratization of the bitcoin as a currency of exchange is waiting, the start-up is far from profitable. The American company has therefore decided to evolve. "Coinbase becomes a broker that allows you to buy and sell bitcoin rather than just to keep and use them," says Eric Larchevêque, CEO of Ledger and founder of the Maison du bitcoin. Coinbase also diversifies beyond the bitcoin: since May, it also offers the virtual currency Ether.
Coinbase levies a low commission on each order passed and therefore needs large volumes to become profitable. The company has already raised close to $ 107 million since its inception. "The start-up has a very high burn rate because it needs licenses in the countries it operates in," said Larchevêque. "Compliance costs are enormous and it may be necessary to raise funds again."
Xapo: a card to pay for purchases
The Xapo wallet has a different positioning than most of its competitors. Not only does it store its bitcoins but in addition the wallet offers a payment card to use them easily. The user can pay his everyday purchases with the card but is debited in bitcoins. The trader receives many euros, and it is Xapo who undertakes to make the exchange. "This makes it possible to pay abroad with a very low commission of around 1%," notes Quentin de Beauchesne, founder of cryptoFR. But the company has yet to reveal any figures on the use of its card.
Xapo also offers a solution to secure bitcoins safely in Swiss safes. "The company manages the management and security of virtual currency on large amounts, for family offices for example," explains Eric Larchevêque. A way to further diversify his business model.
Creation date: 2012
Funds raised: $ 40 million
Investors: Blockchain Capital, David Marcus, Greylock Partners, Index Ventures, Max Levchin ...
21: an API for creating bitcoin computers
21 is a UFO on the slot of the bitcoin. The company began by proposing a chip that, integrated into a computer, transformed it into a "bitcoin computer" to mince the bitcoin. But it has since turned from hardware to software and offers an API allowing anyone to create his "21 computer" to make machine-to-machine payment.
"This could be used, for example, to make micro-payments on online information consultation," explains Eric Larchevêque. "You could natively pay a penny to read a news article because the payment would be integrated directly into Instead of creating an account, to fill in their bank information, the reader would pay directly into the browser thanks to the crypto-currency, without friction. An innovation that could also interest e-merchants, always in search of a better payment experience.
The API already exists and 21 is working on cases of use but the company is still very mature. 21 is in any case considered one of the most promising companies in the sector, thanks to its thorough knowledge of the protocol of the blockchain and of the application fields that it could cover over time.
Bitpay allows to pay in bitcoins
Bitpay specializes in payment: the company allows traders to accept payments in bitcoins and then exchange the virtual currency for euros. "It does not work very well because the bitcoin is not used enough as a means of payment, it is above all an investment for its holders," explains Quentin de Beauchesne. Since the success of Bitpay is based on the democratization of the bitcoin, the start-up has invested heavily in marketing to promote virtual currency. "Their model is complicated and they have encountered a lot of problems, they have reduced their teams and survived somehow," says Eric Larchevêque.
BitPay is now looking to diversify. The company announced the launch of a bitcoin debit card, available in 50 states in the United States, which allows it to record its bitcoins and then make payments with a Visa card or make withdrawals, Xapo. A way not to limit itself to the traders of the network of acceptance bitcoin, still restricted.
Circle diversifies with fiduciary currencies and internationally
The Circle wallet, like Coinbase, also gives the opportunity to buy and sell bitcoins. "But the start-up is even more responsive and ready to rotate than Coinbase," says Eric Larchevêque. The peer-to-peer payment company uses not only the bitcoin but also the fiduciary currencies, so as not to be too dependent on the virtual currency. And it has just raised $ 60 million especially from the giant Baidu to deploy in China with solutions based on crypto-currencies and compete with payment solutions like Alipay.
Blockstream relies on the qualities of the blockcoin bitcoin
Blockstream, founded in 2014, develops technologies around the blockcoin bitcoin, to improve it, add scalability, create "side chains" (new blockchains affixed to the bitcoin). "The start-up is characterized by the majority of bitcoin developers," says Larchevêque. "They create open-source technology bricks and have begun their first deployments with companies on non-business applications. Exchange of money.
Blockstream is all the more interesting as the bitcoin arrived at a crucial moment in its history. Every two years, the remuneration resulting from the mining process is halved. In July, the next "halving" will take place and will mean that one will produce half as many bitcoins per block. "The bitcoin will become rarer," says Quentin de Beauchesne. Work on side chains will become all the more important. "Side chains will be able to make" off-chain "transactions faster than the bitcoin, where verification is very slow, and thus allow the use of the bitcoin to make micro-payments."
Blockchain.info, the wallet in decline
Yet first arrived in the wallet market, and with a generic name that gives it a competitive edge, blockchain.info is in trouble. "They are losing momentum," explains Eric Larchevêque. "Their position is to wait for the democracy of the bitcoin so that their business model works but they do not evolve and have experienced safety problems."
Most wallets and companies positioned on the bitcoin have understood that virtual currency will never achieve democratization such as it would replace the current financial system and traditional currencies. "Bitcoin is an alternative to the financial system that will be used more and more without people knowing it through layers created above the blockcoin bitcoin, for example for international transfers," adds Larchevêque. Without adapting its business model to this reality, Blockchain.info will find it difficult to achieve profitability one day.
