Fox Business published a list of 30 top fintech startups to watch in the Bay Area. The list includes two Bitcoin companies that offer simple and effective solutions for important real-world problems.
BTCjam allows users to invest their bitcoin and earn a high rate of return. This process is secure and allows investors to participate in peer-to-peer lending. BTCjam is also a great place for those seeking loans, and especially for the residents of developing countries without a national credit scoring system who are subject to aggressive predatory lending practices when they need to borrow money from traditional lenders.
Using cryptocurrencies such as bitcoin, and tapping foreign lenders, helps BTCjam avoid regulatory issues, TechCrunchreported in 2014.
“We are one of the first real use cases for bitcoin,” said founder Celso Cardoso Pitta Jr. “Today people circle around buying and selling of bitcoin, but I don’t think bitcoin increases in value because it’s a commodity or a currency. It needs to be useful.”
BTCjam is a marketplace where people from around the world connect to borrow and lend using bitcoin. By the end of 2014, the company had facilitated bitcoin loans in excess of $10 million dollars in value with more than 100,000 users worldwide. BTCjam created an online credit scoring system to qualify borrowers from all over the world and allow them to build a transparent credit profile on the platform.
“Our disruptive credit model is providing a new path to financial freedom for users from over 200 countries around the world,” states the BTCjam website. The investors, who loan their money to qualified borrowers, can earn interest up to 19.3 percent. Therefore, the BTCjam solution seems a win-win for both borrowers and investors – provided, of course, the borrowers repay their loans.
Credit ratings on BTCJam are determined by many variables. Borrowers can improve their score by having their identity, address, credit score and social accounts verified, and developing a good credit history on BTCJam. The company recently announced its new feature AutoInvest, which automatically diversifies an investment budget into select loans that meet an investor’s selected portfolio criteria and risk preferences.
Epiphyte (a name that will be familiar to readers of Neal Stephenson’s Cryptonomicon) provides enterprise software solutions for financial service providers to securely integrate with cryptofinancial networks. The company’s software allows financial service providers to convert the currency of one nation to bitcoin, make an international transfer, and change the bitcoin into the currency of the destination country. Epiphyte, a winner of the Innotribe Startup Challenge in October 2015, claims that its software operates well with crypto-financial networks and bridges the traditional financial services with the latest in bitcoin technology.
Epiphyte’s solution avoids traditional money movement avenues and instead converts currency to bitcoin, moves the coins, then cashes them out on the other end in the local tender. The bitcoin are moved for a fraction of the cost of traditional money transfers using exchanges such as Coinbase and BitPay, which take on the currency risk.
Banks, for example, will be able to integrate with cryptocurrencies over traditional protocols such as SWIFT. Epiphyte’s first product provides banks with a low-risk way to provide services to their customers. The company is rolling out a pilot implementation of this product.
The value proposition of the company is to help banks to provide lower-cost international remittance services by leveraging the innovative solutions provided by Bitcoin startups, which, again, is a win-win for banks and Bitcoin companies, and, of course, for consumers.