STOCKHOLM Jan 20 A Nordic venture capital firm
says it has built the world's largest database of businesses
dealing in Bitcoins in an effort to shed light on a virtual
currency which has seen its value rocket in the past year.
Creandum said the database contained more than 300 companies
trading Bitcoins - ranging from exchanges to payment processors
and gambling companies - and was intended to give entrepreneurs
and investors an overview of companies with a significant role
in the Bitcoin system.
Bitcoin is essentially software code that defines units of
value, which users can move back and forth among themselves.
Unlike other virtual money transmitters, its value isn't pegged
to a hard currency like the U.S. dollar or the euro - it is
determined by the demand for Bitcoins.
Since its launch in January 2009, the system has grown
popular with people who lack confidence in the traditional
banking system, though it has also aroused concerns it could be
used for money laundering.
Creandum, which has invested in fast-growing Nordic tech
firms such as online music streaming service Spotify and payment
solutions firm iZettle, said it hoped to encourage Bitcoin
enthusiasts to participate in the development of the currency.
"This year and next year the Bitcoin needs to prove itself
as a payment mechanism, and it could go either way," Creandum
associate Joel Eriksson Enquist told Reuters.
"Our hope is that the database will work like Wikipedia,
with more and more contributors and more comprehensive data," he
said of the open-source site which can be found at bitcoin.knackhq.com/btcdb.
BUBBLE, OR A NEW WORLD?
Creandum has not invested in any Bitcoin-related companies
but is looking at a couple of players and Enquist himself is
holding onto 10 Bitcoins he bought last year for a little over
$100 each - just for the fun of it.
The Bitcoin has recently traded above $1,000, up from $10 at
the start of last year and fuelling concerns of a bubble.
Creandum said it may take another three years before it is
clear whether Bitcoin is a bubble, or whether this is "the
beginning of a new world".
In December, the digital currency was dealt a blow when the
People's Bank of China banned financial institutions, though not
individuals, from trading in Bitcoins.
U.S. prosecutors are also sitting on millions of dollars
worth of the currency which had belonged to Silk Road, an online
market that authorities say was a conduit for purchasing drugs
and computer hacking services.
Creandum's database lists 46 Bitcoin exchanges in North
America, 24 in Europe and 21 in Asia. BTC China and Europe's
btc-e and Bitstamp are the biggest exchanges, with the three
seeing 2.5 million Bitcoins traded on their platforms in the 30
days to Jan. 9.
While there are about 100 virtual currencies, with new ones
appearing every week, Bitcoin is by far the best known.
E-commerce site Overstock.com recently announced its plan to
become the first major U.S. retailer to accept the digital
currency. Dating site OKCupid also allows Bitcoins as a form of
(Editing by Mark Potter)