Bitcoin and block chain areas have received a lot of attention the past couple of years as investors are starting to see the massive opportunities in the spaces where they can enter into the latest of financial technology . Financial technology, has received attention as banks cut down on branches as they try to bring their services into the 21st century. Bitcoin has caught a lot of attention but there are key things that investors in the space should know. Number one, if you’re thinking about investing in Bitcoin, remain humble. Bitcoin doesn’t actually need your participation. Its deflationary coding will ensure that the idea of Bitcoin proliferates. Many firms in the field celebrate the same innovation they’ve made; they all make Bitcoin easier to use. In reality, Bitcoin and the core wallet is pretty easy to use anyway. For this reason, many Bitcoin startups are redundant. Why is there a need for so many wallets? Competition for competition’s sake? What new features do they bring to the table? Most importantly: how do they profit? Many of these concerns can be solved at Bitcoin exchanges, as well, who, like banks, must endure huge AML and KYC regulations when buying and trading bitcoin at no more than a 5% profit margin, and much more often at 1%. Bitcoin exchanges have become the same regulatory mechanisms Bitcoin participants proclaimed to overcome. Many Bitcoin users prefer privacy over middlemen. Instead of using a startup like Coinbase, they use LocalBitcoins, an early Bitcoin company that allows users to meet in public and trade bitcoins for cash. The biggest need for VC’s to consider in the Bitcoin industry is know your customer and anti-money laundering actions. Due to the semi anonymous nature of bitcoin, there are many questions about how the technology might be […]
