Israel is at the ‘Leading Edge’ for Bitcoin Startups

According to mathematician Meni Rosenfeld, Israel is a Bitcoin “forerunner.” With large numbers of users in the country, the number of startups and merchants continues to grow. Rosenfeld says:

“I think the Bitcoin community in Israel is more coherent than in many other places in the world, which can be attributed to the small size of the country. Everyone is in driving distance from anyone else, so its much easier to breed communities that actually meet up and cooperate.”

Among the list of Israel-based startups, Bits of Gold — in which Rosenfeld is an investor — GetGems and Polycoin lead adoption.

Bitcoin Service Provider Bits of Gold

Bits of Gold LTD initially started out as an exchange, and now allows users to purchase or sell BTC via wire transfers, cash transfers and credit cards on the day an order is created. For users without bitcoin wallets, the startup has their own wallet service, Bits of Gold Mycelium Wallet on Android, where users can easily link their account to the exchange.

Following the successful launch of the exchange, Bits of Gold began to operate the first ever bitcoin ATM in Israel. The ATM is located in Tel Aviv’s Bitcoin Embassy, a co-working space where enthusiasts openly discuss cryptocurrencies and related events.

Currently, Bits of Gold also provides a “check out with bitcoin” service for merchants that wish to accept the currency. However, applications are only reviewed after a merchant reaches out to the company directly.

Cointelegraph asked the Founder of Bits of Gold Jonathan Rouach to share more details:

Cointelegraph: What are your personal opinions about the bitcoin industry and ecosystem in Israel?

Jonathan Rouach: Israel is predominant in the international Bitcoin scene. We boast many experienced technologists and entrepreneurs in cryptography, security, payment, networking, hardware, finance.

The industry is becoming specialized, with teams building essential infrastructure: Spondoolies-Tech for high efficiency mining, SimplexCC for fraud-safe credit-card processing with Bitcoin, Colu and Coinspark for issuing digital assets on the blockchain (colored coins), Bitrated for consumer protection and reputation while using Bitcoin, LedgerLock (Bits of Gold's technology branch) for securing digital assets against internal theft. 

CT: How many merchants are currently using the checkout with bitcoin service? Do you expect the numbers of bitcoin merchants to increase over the next few months?

JR: With the help of Meni Rosenfeld, our advisor and the chairman of the Israeli Bitcoin Association, we’re now building our merchant solution, and are in talks with large commercial venues to bring Bitcoin to many stores at once. We’ve already had a pilot with 300 restaurants in Israel (through OpenRest [an online menu and order management system for resturants]), and we’re thinking of ways to put bitcoins in more hands for daily use.

Rouach added:

“Bits of Gold is Israel’s bridge to Bitcoin, focused on high-quality service and adherence to regulations, which we’re helping to establish. We recently closed a seed round of $400K, to help foster digital assets in Israel.”

GetGems Messaging App

GetGems, a social messaging app launched in October 2014 at Inside Bitcoins Tel Aviv is similar to Whatsapp, except for two additional features. One’s username can be used as an alias for the in-app wallet bitcoin address, and users can earn gems tokens for growing the network. The token can then be converted to bitcoins.

Based on the Counterparty protocol, Gems accounts are connected with Counterwallet, and the username is an alias to the wallet address as a domain name is an alias to website IP, making sending and receiving Gems and bitcoins between users as easy as possible.

On April 28, GetGems finally received approval from Apple and launched their iOS platform in the App Store. Co-Founder and CEO Daniel Peled stated:

”We are now able to devote our efforts to the attention economy and referral system, within the GetGems app.”

Cointelegraph asked Peled to share more.

Cointelegraph: Gems allows users to send bitcoins to each other like they can send messages. Are all accounts connected to Counterwallet? Or can users link their existing bitcoin wallets?

Daniel Peled: Yes, all GetGems users automatically get their own wallet, protected by the passphrase chosen on registration, which can also be used at www.counterwallet.io. The social network username is an alias to the GetGems address, making sending & receiving bitcoins between users as easy as possible.

Additional technical information: The Android and iOS bitcoin clients [use] SPV (simplified payment verification), and the wallets are connected directly to the bitcoin network, removing the need for trusted servers, while maintaining much faster performance on mobile devices. Unlike other well-known iOS bitcoin wallets, GetGems SPV wallets insure trustless decentralization of bitcoin payments.

CT: What is the estimated number of users in the GetGems Android and iOS applications?

DP: During the beta testing phase, over 3,000 users of Android devices have been testing each update, including the referral functions and providing extremely valuable feedback to the development team.

When the iOS version was released on the Apple app store last week, there were close to 1,500 users who downloaded the iOS app for iPhone and iPad, and now we are anticipating dramatic growth in the number of users, as new features are added and it becomes apparent that the users are making money on their referrals to new users.

CT: Are conferences and meetups in Israel really as active as people say? What are some of your personal opinions on the bitcoin industry and ecosystem in Israel?

DP: Yes, activity around the technology and use of bitcoin and bitcoin-related businesses is continuing to grow at a rapid pace. The Bitcoin emɃassy is a key player, hosting public meetups and activities such as: Satoshi Square — a weekly face-to-face event to sell and buy bitcoins, weekly live instructions — “How to open your first Bitcoin E-wallet” and other social gatherings to help new users enter the Bitcoin ecosystem. This is the gap GetGems is aiming to bridge.

Interest in technologies such as the type we are developing, as well as other Israeli Bitcoin startups, is the leading edge and has attracted interest and investment from the venture capital community. This atmosphere is very conducive to both investment and mobile digital currency development.

Payment Processor Polycoin

Polycoin is a bitcoin payment processing company founded in 2014 by Alfred Shaffir and Sergei Kovalov. The platform is similar to that of other global bitcoin processing platforms such as Bitpay, GoCoin and Coinbase. However, Polycoin has a feature that has not been introduced yet by others: bi-directional transactions.

With bi-directional transactions, merchants can both deposit and withdraw funds in bitcoin and other cryptocurrencies. Co-Founder and CEO Alfred Shaffir believes that this feature will be favorable to businesses in the gaming industry and for online financial brokers.

Merchants

Israel has hundreds of bitcoin-accepting merchants, according to a report from the Israeli Bitcoin Association. However, at this time only 65 are listed on Coinmap.org, including local coffee shops, restaurants, design and photography studios, bars, schools and a university. Bits of Gold is hopng to change that.

Rosenfield explained further:

“The Israeli character is very entrepreneurial. Israelis are always looking for innovation and are generally interested in technology. Bitcoin, of course, is a very innovative technology, so it is a perfect fit.”