BitGo’s Blue Ocean Crusade to Fuel Business and Enterprise
In the bestselling book Blue Ocean Strategy: How to Create Uncontested market Space and Make the Competition Irrelevant, authors W. Chan Kim and Renee Mauborgne assert that leading companies succeed not by going head to head with competitors, but by systematically creating what they call “blue oceans” of uncontested market space ripe for growth. This strategic involves the simultaneous pursuit of product differentiation and low cost, which has the effect of making the competition irrelevant.
One company that appears to be heeding this approach is BitGo, a enterprise-grade multi-user cryptocurrency wallet provider located in San Francisco. Contrary to the high stakes game of developing wallet applications for individual consumers, BitGo is focusing its attention on these solutions for businesses and enterprises – all a part of a rising tide of interest in the institutional market space.
Founded in 2013 by Mike Belshe and Ben Davenport, BitGo offers B2B products for bitcoin, ethereum, Ripple, Litecoin, RMG, and other digital currencies. The company has also established BitGo Offline Vault, an enterprise-grade, secure cold storage tool for both custodial and non-custodial use.
The company’s wallet offerings are “multisig,” which requires each wallet transaction to have two or more signatures before it can be executed. This security layer which significantly mitigates the risk of fraud is one of the reasons why Bitgo is widely considered to be one of the most secure wallet solutions in the crypto world.
In its most recent blue ocean move, BitGo, earlier in 2017, in collaboration with the blockchain firm AlphaPoint, created an open-source blockchain for Britain’s Royal Mint and the Chicago-based CME Group’s gold trading platform. The innovative platform is currently in the midst of live beta testing among major financial institutions which will enable trading of Royal Mint Gold (RMG), a proposed gold-backed cryptocurrency.
BitGo also added know-your-customer (KYC) services through identity verification firm Civic to its new RMG wallets. Civic’s software will scan and verify documents, such as passports and utility bills, provided by investors in RMG tokens. This allows proof of their identities to ensure compliance with anti-money-laundering laws.
BitGo currently supports six digital currencies including bitcoin, ether, ripple, bitcoin cash, litecoin and Royal Mint Gold. Co-founder Mike Belshe says that BitGo plans to expand these options as growing numbers of institutions join the cryptocurrency industry. He notes, however, that these currencies add technical complexity that institutions are eager to avoid.
“BitGo provides institutions and custodians a solid technology base to deliver new digital investment opportunities, products and services. We’ve have been the go-to service for exchanges, hedge-funds, trusts, and businesses for years. Now we are expanding our secure and compliant offerings to build out an advanced financial ecosystem for investors to work with which will simplify the buying, storing, and trading of digital assets.”
BitGo has raised more than $55 million since it was founded in 2013. Recently the company announced that part of that was via a $42.5 million B series funding round led by Valor Equity Partners.
BitGo purportedly processes $8 billion worth of transactions per month, turning a profit for the first time in 2017. Based in Palo Alto, CA., the firm remains firmly committed to building institutional products while other startups in the space are intent on bringing bitcoin to the masses.
“I think the entire industry has been focused on the consumer world for the last couple of years,” BitGo co-founder and CEO, Mike Belshe, told the International Business Times. “Now what we’re seeing is a different area where asset managers or fund managers are helping manage literally millions to billions of dollars in cryptocurrency.”