Did Bitcoin Create more Jobs than the US Federal Government Did in 2014?

admin Bitcoin, Bitcoin ATMs, Bitcoin Entrepreneur, Bitcoin News, Bitcoin Services, Bitcoin Startups, Companies, Exchanges, Funding 0 Comments

Introduction:

Ever since Bitcoin’s Genesis Block was mined back in 2009, Bitcoin has been growing exponentially to the extent that its value increased from less than one cent to $1124.76 in November, 2013. Claimed to be the best financial innovation throughout the last 500 years, bitcoin is continuously macadamizing the path for creation of unique business ideas, projects and startups that can conceive thousands of jobs and opportunities for bitcoin enthusiasts all over the world.

Bitcoin – A Whole New World:

Although Bitcoin had been around since 2009, it only gained considerable attention in late 2010 following the release of the WikiLeaks by Julian Assange who faced an organized financial blockade by the US Federal government as Paypal, Bank of America, Western Union, Mastercard and Visa refrained from transmitting donations to WikiLeaks. Accordingly, Assange started accepting donations via Bitcoin which boosted its price during the early months of 2011. Furthermore, the launch of Silk Road, an online market for illicit drugs that only accepted bitcoin for payments, early in 2011 was responsible for another bitcoin bullish rally during that period which pushed the price up to $31.91 as of the 8th of June, 2011.

Not only computer geeks and hackers gained interest in bitcoin, but also anarchists and libertarians who believed in a “decentralized” currency that could be a mighty weapon to fight monopoly and corrupt governments all over the world. As the virtual currency was rapidly gaining acceptance all around the world, Bitcoin Central was the first bitcoin exchange ever to be licensed as a bank by the European financial regulatory framework in the 6th of December, 2012.

On the 6th of August, 2013, Amos Mazzant, a judge from the Eastern District of Texas, ruled that bitcoin is a form of money or currency in Trendon Shavers’ Bitcoin Savings & Trust trial. This was one of the triggers that ignited bitcoin’s rise to $1124.76 in November, 2013 when the demand for the cryptocurrency had reached a climax and over 100k bitcoins were trading per day in BTC China, the largest bitcoin exchange in the world.

Bitcoin has been acting as a magnet attracting entrepreneurs and venture capitalists from all over the world who chipped in $36 million worth of investment in 2012. Even more, in 2013, over $88 million were invested in various bitcoin startups and projects. The atmosphere was in favor of massive growth of bitcoin which seemed to spread all over the world like a house on fire, as more people believed that bitcoin could change the shape of the world once and for ever. Even when bitcoin price declined, the amount of cash invested in bitcoin was going in only one direction; upwards.

bitcoin jobs 2

Bitcoin Created Jobs and Business Opportunities That Never Existed in the Pre-Cryptocurrency Era:

Interestingly enough, bitcoin created jobs that never existed before the birth of cryptocurrencies. These jobs include:

  • Script and Multisig developers
  • Java cryptocurrency developers
  • Microtransaction Engineers
  • UX/UI crypto designers of user-only security protocols that represent setups where only the user can access the private keys of his/her wallet.
  • Bitcoin and cryptocurrency crowdfunding planners and consultants
  • Cryptocurrency journalists
  • Cryptocurrency traders
  • Cryptocurrency technical analysts
  • ASIC chip designers
  • Bitcoin gambling website operators
  • Mining pool administrators
  • TOR e-commerce consultants
  • Cryptocurrency lawyers
  • Cryptocurrency escrow agents
  • Cryptocurrency Exchange-Traded Fund (ETF) operators
  • Bitcoin Fraud detection consultants
  • Cryptocurrency ATM designers
  • Virtual currency exchange arbitrators
  • Federated open transactions’ server operators

On the other hand, bitcoin led to the rise of a variety of business opportunities and investment plans which included:

  • Bitcoin ATM providers
  • Bitcoin fraud detection services
  • Cloud mining services
  • Cryptocurrency asset rating services
  • Decentralized identity verification services
  • Cryptocurrency gambling sites
  • Bitcoin binary brokers
  • Bitcoin exchanges
  • Cryptocurrency news services
  • Cryptocurrency contract verification services
  • DAC specific derivative trading services
  • Cryptocurrency and blockchain technology development agencies

In view of the aforementioned data, it is clear that bitcoin has been creating hundreds of thousands of job opportunities throughout the past few years which signify the importance of investing in bitcoin in alleviating the world’s unemployment crisis.

Reviewing the most important Venture Capital Funding Rounds for bitcoin startups in 2014:

According to data from Coindesk.com, more than $314 million were invested in various bitcoin related businesses in 2014, which represents more than triple the number of bitcoin investments in 2013. Even more, 2014’s investments account for more than 75% of all venture capital raised for various bitcoin startups since early 2012. By the end of 2014, $410 had been already invested in various bitcoin related businesses (figure 1).

startupchart

Figure 1

Cumulative venture capital funding for bitcoin startups

The following represent the most important venture capital funding rounds for bitcoin startups in 2014:

  • Blockchain data and online wallet provider raised $30.5 million via Mosaic Ventures, Lightspeed Ventures and others. This funding round is by far the largest investment done in a bitcoin related company.
  • Xapo online wallet provider raised around $20 million via Banchmark, Fortress and Ribbit Capital.
  • Bitcoin mining company BitFury raised $20 million via Bill Tai and others.
  • Circle Internet Financial raised $17 million via a group of companies including Accel Partners, General Catalyst and Pantera Capital.
  • BitNet is a payment processor that raised $14.5 million from High and Capital Partner and a Japanese e-commerce service known as “Rakuten”.
  • OKCoin, Chinese based bitcoin exchange, raised $10 million via Ceyuan, Mandra Capital and others.
  • Bitcoin exchanger Kraken raised $5 million via Hummingbird Ventures.
  • Mining hardware manufacturer Spondoolies-Tech raised $5 million.
  • Bitcoin exchange SolidX raised $3 million.
  • Korean universal Coinplug raised $2.5 million.
  • LazyCoins a young UK start up which is privately funded is also contributing to the Bitcoin economy by creating exciting new services such as LazyPay for merchants and a Bitcoin educational site LazyTV

Given that $314 million were invested in various bitcoin related businesses in 2014, it is roughly estimated that these bitcoin investments have created more than 250,000 jobs during 2014 within various sectors related to cryptocurrencies.

The Current USA Employment Situation Summary:

According to January’s Employment Situation Summary which was released by the US Department of Labor on the 6th of February, 2015, the nonfarm payroll employment figure increased by 257,000 in January; accordingly, the US unemployment rate is currently at 5.7%.

Throughout the last quarter of 2014, about 336,000 jobs were created each month in various sectors including construction, retail trade, financial activities, health care and manufacturing.

Conclusion:

As per our research and analysis, it is quite clear that bitcoin related startups are contributing well to today’s job market. Although bitcoin related businesses didn’t create more jobs than the US Federal government did in 2014, the magnitude of job opportunities created by bitcoin startups is significant enough to reduce unemployment rates, not only in the USA, but also in other parts of the world. Despite the fact that bitcoin price has been declining throughout most of 2014, the real bitcoin value hasn’t been dropping as shown by the steady rise in various bitcoin related businesses and projects.

References:

Leave a Reply

Your email address will not be published. Required fields are marked *