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Virtual money with real value

Virtual money with real value

The world's first and only licensed and regulated Bitcoin exchange, the first cryptocurrency backed with gold, one of the first deflationary currencies, and a solution that may “uberize” the business of fund management. These pioneering solutions have two things in common. The first is obvious, as they are related to the emerging world of cryptocurrencies and digital assets. The second is less apparent, and is that they all came from Slovenia. No wonder then that Forbes, the US business magazine, described the country’s capital, Ljubljana, as a “nerve-hub of blockchain innovation”. 

 

In 2016 Bitstamp became the world’s first nationally licensed Bitcoin exchange. The license was obtained in Luxembourg, yet it applies in all EU members. “I believe this announcement marks a milestone for Bitcoin and digital finance in Europe,” noted Luxembourg’s Minister of Finance, Pierre Gramegna. The company spent two years implementing the necessary procedures and has installed levels of security that meet the highest standards required by the Luxembourg regulators. 

Bitstamp was launched by Slovenian founders and developers back in 2011. With its sound financial management practices and high level of security, it rapidly became – at least according to Reuters - the “world’s dominant dollar-bitcoin exchange”. In 2014, Bitstamp received 10 million US dollars of funding from Pantera Capital Management, one of the largest single investments in a Bitcoin venture up to that point in time. 

Another potential breakthrough company coming from Slovenia is Iconomi: a digital asset platform which promises “to give everyone a chance to enter the world of digital assets”. Iconomi offers a number of digital asset arrays – cryptocurrency funds and indices with varying levels of expected yields and risk profiles. This tokenized portfolio of digital assets actually works as a kind of a mutual fund, and offers a hedge against the volatility of the cryptocurrencies market. In August, Iconomi partnered with the London-based Columbus Capital financial management company, with the Slovenian firm’s founders stating that this would provide a “missing link between traditional investment management expertise and the technological breakthrough represented by this new asset class”. In the near future, Iconomi will enable the creation of funds by other traders, thus “uberizing” the blockchain economy. 

The founders describe Iconomi as a tool which could revolutionize the multibillion dollar fund management industry. The platform was launched in August 2016, and only one month later raised 6 million US dollars through crowdfunding: the third largest financial tech crowdfunded investment ever. Moreover, in just one month Iconomi became the 20th most highly capitalized crowdfunded project. The book value of Iconomi reached 108 million dollars in the second quarter of 2017, an increase of a stunning 402 percent in just one quarter. This month the market capitalization of Iconomi reached 151 million US dollars, which puts it at 39th place on the list of cryptocurrencies. 

While the success of many cryptocurrencies appears to be based on speculation alone, this is not the case for the four currencies launched by Slovenian companies. The first is Xaurum, the world’s first cryptocurrency backed with physical gold. Xaurum’s market capitalization in September 2017 is 22 million US dollars. Viberate was launched this September, and is “the world’s first ever blockchain based live music marketplace”. Quantum is of the world’s first real deflationary currencies, and was launched earlier this year by a number of key developers of Bitstamp, Xaurum and other Slovenian blockchain ventures. Cryptocurrencies are normally based on a process called mining, which creates downward pressure on their prices. In contrast, rather than being mined, Quantum tokens are bought back and destroyed on a monthly basis. In theory, their value should thus increase. Quantum received over 4 million US dollars in a spring pre-sale of its tokens. Finally, Cofound is a spin-off of Iconomi, and aims to become a “blockchain to create blockchain start-ups”. 

A few other examples of what is really an incredible wave of innovation coming from such a small place. Blockr created software which translates blockchains into human readable form, and the company was acquired by one of the largest bitcoin exchanges, Coinbase, in 2014. The world’s first bitcoin ATM was set-up in Vancouver, Canada, in 2013. Slovenia then obtained its own network of blockchain ATMs operated by a local company, Bitnik, less than a year later. Last but not least, Slovenia is – as far as we know - the only place in the world where you can exchange euros to cryptocurrencies at fuel stations. Your choice: Xaurums or Bitcoin coupons issued by the UK-based company Bitins. 

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