Circle acquisition of Poloniex is just the beginning of likely consolidation in crypto

By: Evelyn Cheng

News Monday that digital payments company Circle has bought cryptocurrency exchange Poloniex is stirring speculation of more acquisitions in the young digital currency world.

“I think this is a really good sign for the industry. It shows that a lot of companies are going to start consolidating and that will bring [out] the best talent,” said Erik Voorhees, an early investor in bitcoin who is now CEO of digital asset exchange ShapeShift. “I think you’re going to see a lot of that in 2018. These companies have so much capital at this point.”

Venture capitalists and other early stage investors put $1.06 billion into the crypto-economy in 2017, according to Lex Sokolin, global director of fintech strategy at financial research firm Autonomous Next. For the year so far, such investments stand at $323 million.

Investment in crypto-economy ($ millions)

Source: Autonomous Next

The entire cryptocurrency market capitalization has also grown from around $20 billion at the start of last year to around $500 billion in the last few weeks, according to CoinMarketCap.com. Bitcoin, the largest cryptocurrency by market cap, is up several hundred percent over the last 12 months and was trading near $10,000 Monday.

“These markets are still in their infancy but they hold enormous promise,” Circle co-founder and CEO Jeremy Allaire told CNBC in a phone interview Monday. “There’s going to be a huge amount of value creation.”

“Maybe the first $1 trillion company in the world will be created in this space,” he said.

Goldman Sachs and China-focused investment firm IDG Capital Partners are investors in Circle, which has raised a total of $136 million and has a valuation of at least $420 million, according to PitchBook.

More: https://www.cnbc.com/2018/02/26/circle-acquisition-of-poloniex-is-just-the-beginning-of-likely-consolidation-in-crypto.html

Switzerland Wants to Be the World Capital of Cryptocurrency

By: Brian Blackstone

Four of the 10 biggest initial coin offerings last year were in Switzerland, more than any other country

ZUG, Switzerland—When 24-year-old Ian Worrall launched his crypto-investment startup MyBit last year, he chose this Swiss lakeside city.

It was an odd fit: the no-holds-barred corner of the financial markets meeting button-down Switzerland.

Yet this nation, as closely tied to its ultrasafe Swiss franc as it is to the Alps, is entranced by volatile digital currencies. Buildings in Zug and in Zurich, Switzerland’s financial center, are blossoming into crypto-finance hubs.

Four of the 10 biggest initial coin offerings last year were in Switzerland, according to PwC, more than any other country.

The hope is the country’s banking prowess, low taxes, elite universities and the Swiss brand itself will do for Switzerland what Silicon Valley did for the U.S.

Efforts to expand the so-called Crypto Valley into what Switzerland’s economics minister has called Crypto Nation have seen some success and may offset the country’s shrinking banking sector. The number of banks here has fallen 20% in the past decade, according to the Swiss Bankers Association.

Switzerland “is the best from a tax, legal and operational standpoint,” Mr. Worrall said from the MyBit headquarters in a startup hub called Crypto Valley Labs, where the “California Republic” state flag hangs in his office.

MyBit is an investment platform to fund Internet of Things devices like self-driving automobiles. It raised the equivalent of some $3 million in an initial coin offering last summer.

The space once housed an energy-technology company. There’s a circus school next door.

The number of companies at Crypto Valley Labs and another location jumped from 15 early last year to over 100, said Mathias Ruch, managing partner at Lakeside Partners, which developed the site. “I’m signing contracts on a daily basis,” he said.

The canton of Zug, population around 120,000, has emerged as the heart of Switzerland’s Crypto Valley. Its population grew at the fastest rate of all Swiss cantons in 2017, and its jobless rate is 2.3%, below Switzerland’s 2.9% average and down 0.2 percentage points from a year ago. Its corporate tax rate is 14.6%.

MORE: https://www.wsj.com/articles/switzerland-wants-to-be-the-world-capital-of-cryptocurrency-1524942058

If you’ve amassed a cryptocurrency fortune, SikurPhone might be the phone for you.

By: Stan Schroeder

If you’ve amassed a fortune in cryptocurrencies, you probably don’t keep it all (or any of it) on your mobile phone. But a company called Sikur wants you to reconsider that.

On Tuesday, the company has launched a security-oriented smartphone called the SikurPhone. One of its main features is a built-in cryptocurrency wallet which, ideally, would allow you to keep cryptocoins on your phone without having to worry about losing them.

The phone itself is based on a highly customized version of Android 7.0, Sikur’s COO Alexandre Vasconcelos told me at the company’s booth at the Mobile World Congress in Barcelona. It’s not for the common user: It doesn’t have access to Google’s Play Store, it won’t run any apps that haven’t been vetted by Sikur, and its interface is far more spartan and corporate-looking than that of your typical, everyday Android.

The specs won’t wow you either, thought they’re probably good enough for most users: a 5.5-inch Full HD screen, a MediaTek MT6750 processor, 4GB of RAM, 64GB of storage, a 2,800mAh battery and a 13-megapixel rear camera, as well as a 5-megapixel selfie shooter.

But this phone isn’t about playing Android games — in fact, I bet that most users won’t even use it as their main device. “It’s sort of like the Ledger,” said Vasconcelos, referring to a hardware wallet that’s a popular choice for securely storing cryptocurrency. “If you lose your phone, we can remotely wipe it for you. You can get a new one, log in, and your funds will be safe, as your private keys are stored in our cloud.”

There’s a potential problem there: What Vasconcelos is describing is nothing like the Ledger, which keeps the private keys solely on the device itself. Keeping cryptocurrency private keys — which are basically the only thing you need to access your coins — in the cloud has potential drawbacks: The company’s servers could get hacked. It’s not exactly a rare ocurrence; two months into 2018 and we’ve already seen several major exchanges losing hundreds of millions of dollars in crypto due to hackers.

More: https://mashable.com/2018/02/27/sikurphone/#9b6Zq_8ub5qc