Slovenia has already started developing a programme to build houses on Krk using digital currency.
Bitcoin, a worldwide cryptocurrency and digital payment system, is becoming more and more popular, and issuing it is simpler than ever, Jutarnji list reports on September 7, 2017. International coin offering (ICO) has made things simpler and cheaper because financing costs are lower. Similar to inital public offering, ICOs also enable entrepreneurs to collect money more easily.
“If you have a good idea, it is easier and faster than ever to get funds using ICO smart contracts. Additionally, if you use bitcoin or ethereum, you can become an investor in five minutes,” says Tomislav Vajić, co-owner of BitKonan, Croatian bitcoin stock exchange.
According to Mr Vajić, the advanced technology of smart contracts has outperformed traditional methods of raising capital in startups when it comes to their volume. In the first six months of 2017, there was a $ 1.27 billion profit worldwide from selling bitcoin and other cryptocurrencies, as the CNBC recently announced. Although this form of financing has not yet been fully accepted in Croatia, it does not mean that it never will.
On the other hand, people from Slovenia are already working on an ICO project called Xaurum for building houses on the island of Krk.
Detailed rules
However, some countries are concerned because there are no detailed rules regarding funding. The Chinese Central Bank banned companies from raising funds using ICO on Monday, creating panic among investors and causing a sudden decrease in the price of almost all cryptocurrencies. However, Mr Vajić says that China will not ban the ICO completely because we are talking about advanced technology, but it will regulate the sector.
“It is necessary to regulate it because there are many ICO scams and sometimes there isn’t enough information to enable a potential investor to make a proper decision,” explains Mr Vajić.
The price of the most widely used cryptocurrency, bitcoin, has grown from $ 1,000 in early 2017 to $ 4,800, a few days ago. It seemed that the invasion of investors will not stop. The sudden decision of the Chinese authorities was a cold shower and the price of bitcoin dropped to about $ 4,300. Although it is not at record levels anymore, investors are still feeling optimistic.
In focus
“We had a similar situation three years ago. Bitcoin came into focus so everybody wanted it and the price suddenly grew and then fell down again. Then, there was a two-year consolidation process. Now it’s back in focus. Everyone wants to buy it,” Mr Vajić said.
The bitcoin craze is happening in Croatia as well. In Croatia, it is used as a method for investment, and not as a means of payment. Croats, Mr Vejić explains, invest in bitcoin because they hope to see an increase in prices, and some of them count on bitcoin preserving its value.
“We have more than 15 thousand users in Croatia and a turnover of up to $ 50,000 a day,” Vajić said.
Cryptocurrencies have turned into a serious form of investment, which can be seen from the fact that big market players, such as funds and banks, have also shown interest in it. Global political instability has only contributed to the overall euphoria.
“The sudden growth recently has been triggered by the involvement of investment banks and funds in cryptocurrency markets and by political instability. From that perspective, bitcoin and other cryptocurrencies are replacing gold as a refuge people turn to in unstable times,” Mr Vajić concludes.
Translated from Jutarnji list.
