Boost VC bets big on Bitcoin
If Adam Draper has his way, servicing the controversial Bitcoin currency--a digital form of money that's not tied to any country or government--will become a mainstream, worldwide industry. "We're a global economy now, but there's no one traditional currency that ties the world together," Draper says. "Bitcoin transcends the others because it crosses borders seamlessly."
Bitcoin's value skyrocketed in 2013, with its use spreading around the world and spawning a $5 billion economy.
Although the lack of jurisdiction over Bitcoin and its links to money laundering and illicit marketplaces have raised more than a few eyebrows, the currency offers a simple way for legitimate businesses such as small retailers and professional service providers to accept payments for international sales without facing onerous credit card fees or exchange-rate surcharges.
To facilitate those transactions, Draper co-founded and serves as CEO of Boost VC, a 12-week accelerator program in San Mateo, Calif., that offers housing, office space and mentoring to early-stage startups with a focus on Bitcoin-related businesses.
Among recent Boost graduates that have attracted investors' attention are Gliph, an app for secure texting and Bitcoin payments, and VerifyBTC, real-time ID software for Bitcoin transactions. Two sexier, consumer-focused Bitcoin startups Draper likes to showcase are BitPagos, a payment processer for hotels in Argentina that lets them keep money in Bitcoins instead of exposing it to the country's crippling inflation rate, and BitWall, which lets digital publishers charge per-article micropayments to readers and avoid costly credit card transaction fees.
Draper caught the Bitcoin bug in 2012 after a conversation with Brian Armstrong, co-founder of Coinbase, a virtual wallet for the currency. Draper also liked that Bitcoin had already bounced back and then some from a computer hack and the following sell-off that almost wiped out the currency in 2011. The value of one Bitcoin soared past the $1,000 mark by December. "People wanted Bitcoin to live so much, they basically willed it back into existence," he says. "That showed me how passionate this community was about it."
With Federal officials testifying to Congress last November that despite its darker uses, the online currency has real-life benefits for lubricating global financial systems, the future appears bright for Bitcoin--and the companies Draper plans to build up around it. "Bitcoin is the best-performing asset in the world right now," he says. "I want to do my part in supporting this huge revolution in currency." --Vanessa Richardson