This year has seen a flurry of activity and interest in the blockchain and cryptocurrency space, with both local and international startups raising millions in initial coin offerings (ICOs) to build companies on the emerging tech.
But Melbourne-based startup Blockbid is looking to facilitate the investors and traders that made blockchain technology popular in the first place through the launch of a new Australian cryptocurrency exchange.
Currently, the Australian cryptocurrency trading landscape is sparse, as only a handful of local exchanges offer trading options outside of the “big two” cryptocurrencies — Bitcoin and Ethereum. However, there are more than 1200 tradable cryptocurrencies and few exchanges allow users to trade between more than around 20-30 of them.
Blockbid director Gabriel Govinda is hoping to break that wide open, with his exchange aiming to offer more trading pairs than any other exchange globally. Speaking to StartupSmart, Govinda — a full-time trader on the Australian Securities Exchange for the past four years — says his experience trading cryptocurrency over the past 12 months formed the inspiration for Blockbid.
“In the crypto world there are really only two types of exchanges: ones that convert dollars into currencies like Bitcoin and Ethereum, and ones that convert Bitcoin and Ethereum into various ‘altcoins’,” he says.
“Even then, these altcoins are only tradable on one or two exchanges at once. I have nine different cryptocurrency exchange accounts, it’s just absurd.”
Blockbid’s goal is to centralise many of the available tradeable currencies on one exchange, allowing users to execute trades, for example, between dollars and Ethereum, Ethereum and other larger coins like Litecoin, and even between smaller-cap coins that are often rejected by bigger exchanges.
“There are so many coins with tiny market caps under $500,000, and that’s where investors can find the undervalued ones,” Govinda says.
“Most exchanges charge a large fee for these coins to get listed and won’t list them until the teams ask them to. We’re going to list new coins automatically, and all coins have to do to get listed on Blockbid is just email us.”
Much of the inspiration behind Blockbid was born from Govinda’s frustration at the difference in “quality and convenience” between crypto exchanges and typical stock brokerage platforms, saying he saw a “massive improvement” that needed to be made.
“Not one platform I’ve used has the ability to amend an order after you make it, you can only cancel them. That feature is just common sense on stock market platforms,” he says.
Govinda hopes Blockbid’s official launch in early 2018 will attract a number of traditional investors into cryptocurrency markets, wanting to make the switch from the ASX to BTC “really simple”
“A lot of investors want to get into it but have no idea how; the setup’s daunting and complicated. A lot of obscure coins are all priced against Bitcoin or Ethereum which gets really messy,” he says.
“We just want to make it really simple.”
Blockbid’s ICO underway but traditional investment still on the cards
Govinda is bringing his trading and stock-market know how to the table, but the Blockbid team also has a number of successful technologists and company founders, with the team’s chief security officer Matt Youill previously working as the chief technology officer with global gaming company Betfair.
And not wanting to be left out of the recent ICO frenzy, Blockbid has also been running its own token sale over the past two weeks, aiming to raise a minimum of $1 million.
However, unlike tokens for blockchain services such as Power Ledger, Govinda says the main function of Blockbid’s token sale is to raise money for development, with the token itself having minimal use on the company’s platform.
“Token holders will be able to trade with zero fees for the first year and the token itself will have value on the exchange, but the main reasoning behind the ICO was to provide funding,” Govinda says.
“The other founders and I raised $150,000 in equity amongst ourselves, but if we’re going to build a really world-class exchange it’s going to cost a few million dollars.”
With the ICO having four weeks remaining and the amount raised sitting at just under $19,000, the team is a ways off its goal of $1 million, but that doesn’t faze Govinda.
“We’ll still go ahead if we don’t raise our minimum, we’ll probably just launch another ICO down the track when we’re a bit further developed,” he says.
The company hasn’t ruled out taking on traditional investors either and will look to venture capitalists if the ICO fails to raise the required amount, with numerous investors already showing interest in the platform, says Govinda.