Bitcoin brokerage Coin Republic to be acquired?

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Bitcoin statistical coin. Credit: Flickr/Antana
Bitcoin statistical coin. Credit: Flickr/Antana

Singapore-based Bitcoin trading platform and consultancy Coin Republic might be acquired by a foreign buyer, says an executive familiar with the cryptocurrency sector.

Founded by David Moskowitz in July 2013 as a platform for brokering Bitcoin for Singapore clients, as well as creating digital content to promote awareness of Bitcoin locally, regionally and internationally, Moskowitz also conducts seminars and provides consulting services for firms seeking to educate themselves about Bitcoin.

When queried, Moskowitz responded, “I’ve been in discussions with several firms and have received offers, but can’t comment at this point.”

Bitcoin

Unlike fiat currency, Bitcoin is a decentralised virtual currency with a bi-directional flow, meaning it can be traded for fiat currencies like the US Dollar, Euro and Singapore Dollar. A major criticism of bitcoin’s viability as a currency is has been its volatility, thought whether its value will ever be stable is questionable.

Uncontrolled by any central government or organisation, it enables pseudo-anonymous international transactions (e.g. virtual payments) and is held in electronic wallets. Bitcoins can be transacted and transferred between accounts with a bitcoin address, which are integrated into wallet applications.

Bitcoin transactions are recorded onto the blockchain, a public ledger system containing a record of all bitcoin transactions on the entire network and a form of encrypted triple-entry bookkeeping and momentum accounting.

The digital currency has been used as a payment method, speculative investment and functional medium for payment processing, remittances, smart contracts and text messaging. Currently, bitcoin is currently the most popular and liquid digital currency globally, though alternative cryptocurrencies exist, such as Ripple and Litecoin.

Bitcoin prices are determined by the free market, usually according to major exchanges that buy and sell bitcoin at high frequencies and volumes, with new bitcoins generating through bitcoin mining.

This involves adding transaction records to the public ledger of prior transactions, as well as securing the network by verifying transactions in exchange for new bitcoins. This requires high levels of computational power, which contributes to the security of the network and also opens up the prospect of machine learning, artificial intelligence and decentralised autonomous corporations (DACs).

Current market

This exit comes amidst a surge in investor confidence in the bitcoin space. Bitcoin and space travel are currently two of the most rapidly growing industries, with the bitcoin sector enjoying an annualised growth of 151 per cent since 2012, according to Tomasz Tunguza partner at international venture capital (VC) firm Redpoint Ventures.

Bitcoin market capitalisation has been recovering from the bubble, which stretched from 4Q 2013 to 1H 2014, and saw a flood of capital from speculators and investors eager to capitalise on the introduction of bitcoin. The sector has also been recovering from the negative publicity caused by the collapse of Mt Gox, a defunct Tokyo-based exchange.

Major financial service firms have also been continuing investments into the digital currency space as of May 2015. This group of corporate investors includes the likes of Goldman Sachs, Google Ventures, Seagate and NYSE Euronext. With VC investments in Bitcoin exceeding 2014 levels, more merger & acquisition activity in the cryptocurrency space is likely as the cryptocurrency ecosystem matures.

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