16 Jun Member Spotlight: Bitonic
Member Spotlight: Bitonic
Bitonic started as a bitcoin back in 2012. It allowed its customer to exchange their bitcoins for euro’s, and vice versa, through the secure payment method of iDEAL, the preferred online payment method in the Netherlands. The company has since then grown to offer more services, including BL3P, an exchange platform for third parties to buy and sell bitcoins to each other, bitcoin based consulting, a merchant payments service in cooperation with Mollie and the construction of a bitcoin wallet for the Dutch Public Prosecution (OM). In the eyes of Daan Kleiman, who is responsible for strategic positioning at Bitonic, bitcoin has near unlimited potential in creating a new transaction system, giving financial sovereignty back to the public.
Back in 2012, one of the only ways people could acquire bitcoins was by mining their own or acquiring them through the Japanese based bitcoin exchange Mt. Gox. For Dutch citizens, these features were not very accessible, which let to low rates of adoption, while their enthusiasm for new technological solutions has historically been very high in the country, according to Daan. Dutch citizens have often been among the early adopters when new technologies reach the markets. The decision to make bitcoin more accessible therefore seemed a clear cut business case back in 2012 for Bitonic. They connected the API from Mt. Gox with the iDEAL payments systems, which is still the most popular online payments method in the Netherlands, accounting for 54% of all the transactions in 2014. The second reason for using iDEAL’s payment method was the fact that payments run through the systems are irreversible, just like bitcoin, which is very suitable for currency transactions and reduces risk of withdrawals of payments.
Next to its internal exchange services, Bitonic has also introduced its exchange platform, BL3P, which allows bitcoin users to exchange currencies with one another. Bitonic aims to make BL3P one of the largest bitcoin exchange platform in Europe and is confident that they can achieve their goals. Their entire solutions portfolio currently processes around EUR 2-3 million in bitcoin transactions per day, serving between fifty- to a hundred thousand customers in Europe. Although Bitonic doesn’t actively identify its customers to guarantee their privacy, they believe their customer base is quite diverse, based on the wide range of observed transactions. Bitcoin is being used for payments, but increasingly so as an investment vehicle, possibly substituting gold as a safe haven when unrest hits financial markets. Among one of these customers is the Dutch Public Prosecution (OM). When the Dutch legal system started confiscating bitcoin based funds from criminals using the currency to facilitate their crimes, they needed a place to store and monetize these funds. Bitonic provided the Prosecution with its own wallet for storage and the option to swap bitcoins for euro’s in a later stage. Cooperation between government and new technology providers is seemingly possible.
Although bitonic has also viewed other crypto currencies for their platform, they strongly believe in the strength of bitcoin compared to other options currently available in the market. They observe a strong urge for heavy experimenting with new user cases, wanting to move faster than the current technology allows them to do with a safe and truly independent entity as bitcoin. For Daan, the case for bitcoin goes even further. According to him, bitcoin could be used as a global reserve currency, given its unregulated nature: “a currency based on mathematical formulation should be preferred to one which can be manipulated by the agendas of few stakeholders”. This philosophical view is shared by many insiders in the bitcoin industry, who view central banks are disruptors in financial markets, standing in the way of true financial sovereignty of the citizens they are supposed to serve. Because Daan believes so strongly in bitcoin, joining Holland FinTech is aimed to showcase the potential of bitcoin: “Being a part of the network of Holland FinTech, we want to inspire others to embrace the movement”. The strength of the Dutch fintech sector is also lauded, as the country is a current hotbed for innovation, with cooperation widely available and willingness to adopt new technologies shared by many.