Down in ‘crypto valley’: Is the Swiss town of Zug blockchain paradise, or just a “bit half-baked”?
Friday, November 24, 2017/
With startupland currently inundated with hype around initial coin offerings, Bitcoin forks, and disruptive new blockchain companies, one startup veteran says the Swiss town of Zug — recently coined as ‘crypto valley’ — might not be all it’s cracked up to be.
Zug is the home of the foundation behind second-largest cryptocurrency Ethereum, which can be thanked for the swirl of new money flooding into the blockchain space due to the ease of developing and issuing company-specific coins via the blockchain.
Jack Hurley is a serial startup founder, early-stage Bitcoin and Ethereum investor, and the founder of regional coworking space Possum Labs. His most recent project is a company called Heart, which is aiming to utilise the blockchain for humanitarian purposes through a tokenised offering called the Human Response Token (HRT).
“My previous experience in the humanitarian space has lead me to discover some of the areas that need work in the sector, including things like having the ability to follow donations all the way through the financial supply chain, which the blockchain can facilitate,” Hurley told StartupSmart.
It’s still early days for Heart and the HRT token, and Hurley aims to release a detailed whitepaper on the project and get a number of non-governmental humanitarian organisations on board before going down the initial coin offering path.
However, looking at the Australian regulation around ICOs — despite recently released guidelines — Hurley and his co-founder Bas van den Bergh decided there would be too many hoops to jump through in getting the foundation established in Australia, and jetted off to both the humanitarian and cryptocurrency capital of the world, Zug, Switzerland.
Zug has come to recent acclaim thanks to its “low taxes and friendly regulations” when it comes to crypto and blockchain-focused companies and is the home to crypto heavyweights such as the Ethereum Foundation, ShapeShift, and Bitcoin Suisse. The area is also touted as having a high number of competent software developers, especially in tricky languages such as Ethereum’s Solidity.
“The first thing we noticed about Zug is that it’s a very pretty place. When researching about where to go, we found a lot of information about startup and blockchain coworking spaces, but actually getting to one was really difficult,” Hurley says.
“It took about half an hour of following Google Maps to get to something that even slightly resembled a startup space, and in the end, we found it a little bit by accident.”
While the recent blockchain boom has stoked a lot of conversation around Zug being a Silicon Valley-esque hub for cryptocurrency and blockchain startups, Hurley reckons the city “still has some way to go”, especially for newcomers looking to establish a foothold in the sector.
“We heard a lot of conversation around how crypto valley is booming, and yes, while there’s a number of ICOs and blockchain companies, it’s not like we were tripping over them everywhere,” he says.
“Right now I think it’s a bit half-baked. Definitely, in the next six to twelve months it will get bigger and better, but right now it’s not quite there yet.”
Australia strong for blockchain developers, but needs strong regulation
Hurley believes Scandinavian countries, in general, have a lot to offer in the blockchain space, praising the easy access to blockchain-savvy lawyers and developers in other places such as the Netherlands.
While Heart’s organisation will be likely set up out of one of these countries, Hurley and his development team will stay based in Australia, given the government can iron things out in terms of regulation.
“In Australia, we’ve already got a number of very good blockchain based resources, and I think there’s plenty of support from the development side,” he says.
“But the government needs to understand it’s coming thick and fast, and they really need to start working out things in terms of regulation.”