Interest in blockchain and cryptocurrency is at a record high, along with the markets. All of a sudden we are seeing more and more new projects and startups pop up as they look to capitalise on this second wave of activity in the space. However, to get a more nuanced perspective on the current state of the industry we thought it would be valuable to speak with Mark Højgaard, CEO of Danish startup Coinify, originally founded in 2014 and one of the Nordic’s oldest blockchain startups.
What does Coinify do and where does it fit into the blockchain ecosystem?
As we are active in several sectors within the blockchain ecosystem, Coinify fits the universal category:
- Blockchain currency payment processing (B2B – Coinify Merchants, Coinify Enterprise),
- Bitcoin exchange (B2C – Coinify Trade, European customers via partnership with Blockchain.info)
- Although our key focus in converting digital currencies, we take active part in R&D, consulting and advocacy:
We have established Coinify Innovation Lab for financial industry clients (such as Nets) where we develop blockchain Proof-of-Concepts (most recent real estate and micropayments). Over the years, our blockchain experts have acquainted thousands of participants at dozens of major international conferences with the disruptive potential of blockchain technology within payments, banking, finance, remittance and other sectors. As member of several FinTech associations (including Forbes Finance Council) we take an active role in thought leadership, collaborate with the largest consultancy firms as well as offering consulting to SMEs.
You currently support 14 different crypto-coins, how do you decide which to add?
At the moment we enable Coinify Merchants to accept payments in 14 blockchain currencies. These include: Bitcoin, Litecoin, Ether, Startcoin, TetherUSD, Dogecoin, Reddcoin, Peercoin, StorjX, Nubits, Novacoin, Digibyte, Mastercoin and Counterparty. Several aspects are in play when we decide on which coins to support – the regulatory aspect, the popularity and market size. We are currently reassessing this variety.
We all know prices have gone up recently, but have you seen adoption by merchants increase during this time period?
Yes, the entire industry has been hit by a great rise in demand. It feels as if the critical mass has been reached in the cryptocurrency space, especially in terms of individuals wanting to acquire bitcoin. The Blockchain network was also affected by this. A massive increase in transactions waiting to be confirmed during the last several weeks resulted in the mempool issues.
Because the industry is interconnected, the pressure exerted on the network is reflected in delays and in the activity of everyone involved. After partnering up with the largest bitcoin wallet provider Blockchain.info to provide their European customers with the option to buy bitcoin directly in wallet via payment card, we had an immense rise in buy orders. And we were not the only ones. Several of our our competitors experienced delays and even service outages. I would say that the ‘crisis’ is now behind us and everyone is gearing up to adjust to the current market demand.
On the payment processing side, we are signing more PSPs than before, but we cannot see the imminent increase in payments just yet (since the rise of the BTC price is a reducing factor for using BTC for payments). We are still in the ‘building the infrastructure’ period, but progressing faster than before.
Once interest in the space subsided the first time, were you always confident that there would be a ‘second coming’ in the long-term?
I would say that this is more a recurring thing than a one-time event. The recent spike in demand for cryptocurrencies demonstrated to the bitcoin exchanges where their points of weakness are and what they need to address in order to sustain the supply-demand balance. This event is perceived by many as an opportunity for improvement and evolution along with the nascent industry.
Have you seen an increase in investor interest in the last couple of months?
Yes. The efforts necessary for opening a dialogue with potential investors a year ago and now are very contrasting. I flew to NYC during Consensus and had some great discussions with potential investors. The recently announced investment round for Blockchain.info, which was 40 million dollars from Lakestar and Google Ventures is proof of this positive industry development.
What are your thoughts on ICOs as a fundraising model? Is this something you are considering?
ICOs represent an interesting alternative option to traditional fundraising. I will not wipe this option from the table, yet, but it seems unlikely for a company like Coinify to do crowdfunding.
If this is another bubble and we see interest subside again, what does this mean to you as a company?
We can definitely confirm that the emergence of ICOs has influenced the demand for blockchain currency acquisition. It will be too early to see whether this race to own coins will turn into people actually using them as means of payment besides the investment. But in my opinion it will be daring to call it a bubble just yet, as over a long period we have seen relatively steady increase in cryptocurrency interest.
Are there any Blockchain projects or tokens that you are particularly bullish about?
I am not an expert in all the new tokens, but I find the concepts behind Augur fascinating – a decentralised prediction market tool.
Finally, what’s next for Coinify?
We have many changes coming, but I do not want to give the game away just yet….