The world’s first listed Bitcoin mining company DigitalBTC (Digital CC Ltd.) has announced that it’s getting out of the game and instead entering the fintech remittance space.
DigitalBTC listed on the Australian Stock Exchange in March 2014 through a backdoor listing by taking over an existing small mining concern, and promised great things from its proposed mining operations but got one thing seriously wrong: it didn’t allow for the drop in the price of Bitcoin.
Executive chairman Zhenya Tsvetnenko told Fairfax Media that they were getting out of the Bitcoin mining business as the company simply can’t make money from Bitcoin mining.
“As much as we believe that Bitcoin as a financial instrument can be a valuable tool, we basically have the opinion that it is going to take longer than we thought,” Tsvetnenko told Fairfax.
“When we saw the big drop in the value of Bitcoin, just like a traditional miner, we had to look for something else to do. We have been slowly winding down our bitcoin mining operations and we will be progressively moving away from using it as a currency.”
The company is said to have had revenue of $36.6 million for the year ending August 31, with a loss from that of $6.8 million.
Following the growing trend in Blockchain powered fintech remittance services the company is instead moving into that space and is currently test an app called AirPocket which focuses on remittance services for people in Latin American.
The model is similar to services such as those being offered in various territories such as Coins.ph and Abra, Inc. except that the last mile collection isn’t done through an authorized agent but through anyone who runs the app and wants to provide the physical payment to a recipient.
Bad news
The news of DigtalBTC’s exit from Bitcoin mining comes at the same time that rival Australia based Bitcoin miner Bitcoin Group Ltd. prepares for an initial public offering (IPO) on the ASX in November.
Bitcoin Group could be somewhat fortunate though as only one-third of its core business will come from Bitcoin mining itself, but that said given the number of Bitcoin mining operations that have gone bust this year, nearly all citing that it’s too expensive to mine, even at scale, due to the current price of Bitcoin, it without question will cast a shadow over their IPO.
Image credit: moia/Flickr/CC by 2.0
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Duncan Riley
Duncan Riley is a senior writer at SiliconANGLE covering Startups, Bitcoin, and the Internet of Things.
Duncan is a co-founder of VC funded media company B5Media and founder of news site The Inquisitr, and was a senior writer at TechCrunch in its earlier days.
Tips? Press releases? Intersting startup? email: duncan@nichenet.com.au or contact Duncan on Twitter @duncanriley
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