Marek “Slush” Palatinus, the lead architect and CEO of Trezor and its parent company Satoshi Labs, revealed that he started Slush Pool, the oldest mining pool within the bitcoin mining industry, with a $45/month virtual machine. Today, Slush Pool along with Satoshi Labs and Trezor have transformed into multi-million dollar businesses, generating stable streams of revenue and high profit margins.
“I started Slush Pool on $45/mo virtual machine few years ago and built a multi-million startup on top of it. Not possible today,” said Slush.
Over the past few years, billions of dollars were invested in bitcoin and blockchain startups by venture capital firms, angel investors, technology conglomerates and financial institutions. Some companies such as Coinbase, Gemini, Bitfinex and Blockchain have become massively successful businesses, with Coinbase becoming the first unicorn startup within the bitcoin industry with its latest $100 million funding round that increased the company’s valuation to $1.6 billion.
However, many innovative and unique companies, applications and platforms such as ChangeTip and Lawnmower failed to secure active userbases, stable revenue streams and record profits for their investors. Startups like ChangeTip were ultimately acqui-hired by multi-billion dollar technology companies including AirBnb and Lawnmower, which once allowed users to save cash change in bitcoin, rebranded to more applicable platforms.
Lawnmower for instance, is now a blockchain assets portfolio management tool, targeting professional traders and portfolio managers looking to expose themselves to a new asset class and invest in bitcoin and Ethereum.
Hence, despite the exponential growth rate of bitcoin and the entire cryptocurrency market and alluring opportunities, it was difficult for companies like Trezor, Slush Pool and Satoshi Labs to make it through the bitcoin industry’s early stages. But, companies that were successful in securing their brand and presence in the industry have now become successful companies. Trezor for instance, has experienced an abrupt surge in demand throughout the past two years that in some months, the company was not able to address the growing demand from its clients.
In February of this year, the Trezor team announced:
“With much regret, Satoshi Labs would like to inform you that due to the exceedingly high and unanticipated demand associated with the increase in bitcoin value, our stock at TREZOR Shop has been depleted. We would like to sincerely apologize for this inadequate foresight related to the development of bitcoin value. Production plans have been fixed and this situation should not occur in the future again.”
An important takeaway from Satoshi Labs and Slush’s journey since 2013 future entrepreneurs and potential investors must acknowledge that it has become virtually impossible to create or establish companies within the bitcoin and cryptocurrency industries with limited resources. Companies like Coinbase and Blockchain are aggressively expanding globally with hundreds of millions of dollars in capital and startups like Trezor and Ledger have already established strong presence in the bitcoin hardware wallet market.
For the majority of investors and entrepreneurs, the abovementioned issue can be considered as an advantage as it means that the bitcoin and cryptocurrency markets have significantly matured within a span of years.
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Last modified: May 21, 2020 9:37 AM UTC