HolyTransaction Bets Big on Universal Cryptocurrency Wallet
Published on July 1, 2014 at 19:00 GMT
Even with bitcoin prices surging in recent days, not everyone in the cryptocurrency industry is focusing solely on the success of its most popular digital currency.
HolyTransaction is a new cryptocurrency company that wants to be the market leader in the often speculative world of alternative digital currencies, and believes it stands to make big gains in the market by doing so. During a recent investor event at Plug and Play, Andrey Zamovskiy, CEO of HolyTransaction, told an audience the altcoin market is worth $30bn today by transaction volume, and that this number could be as high as $90bn by 2016.
To reach this market, HolyTransaction has built a wallet that allows users to exchange various altcoins in one place. But the company insists that it is not an exchange in the traditional way. Holy Transaction promotes an ethos of being the easiest way to store, and convert, a variety of altcoins.
Zamovskiy has been working on bitcoin-related technologies for many years, and finally came to the conclusion that building a wallet that can accept many cryptocurrencies is something the industry needs. Zamovskiy told CoinDesk:
“People essentially need a Coinbase for every cryptocurrency.”
However, the road to this realization was not an easy one for Zamovskiy. His first commercial bitcoin product came in 2011. Called BitMerch, it allowed businesses to accept BTC on websites.
Zamovskiy is from Ukraine, so most of his customer base for BitMerch was in Europe. And while he was able to sign up over 1,000 customers for BitMerch, the amount of bitcoin sales was very low. It quickly became clear to the entrepreneur that people were not spending bitcoin – because they didn’t even know what it was.
"We realized the real problem of bitcoin is not acceptance but distribution within customers."
Developing an altcoin wallet
Armed with this information, Zamovskiy attempted to start another business in Ukraine that would get people to buy bitcoin with credit cards, but even that presented a number of problems.
One was that the Ukrainian payment processor declined most international credit cards. Another was that obtaining bitcoin via cards presented a number of fraud issues – stolen cards could be used to obtain bitcoin, and then be fairly hard to track down.
It was made clear, due to these issues and others, that another business idea would be required. Zamovskiy realized he would need to move to America in order to grow a cryptocurrency business. After some more trial and error, he eventually started HolyTransaction and was accepted as a startup at the Plug and Play Accelerator in Sunnyvale, CA.
HolyTransaction currently makes money by charging its users 1% each time coins are exchanged within its wallet, and it plans to grow revenue as the altcoin market expands.
Wallets help a coin thrive
According to Coinmarketcap, there are currently 37 cryptocurrencies that have a market capitalization of more than $1m. To make decisions on what coins to include in its wallet, Holy Transactions relies on feedback from its userbase. The startup also monitors a site called CoinGecko, which measures market cap, social media shares, developer repository activity and other metrics to give coins a ranking score.
HolyTransaction thinks servicing top altcoins is important because many of them do not have sufficient wallet alternatives outside of a main client. Zamovskiy said:
“We are talking constantly with people in the community, and there are not enough wallet options.”
A lack of wallets can hurt an otherwise worthwhile coin, according to Zamovskiy. He pointed to namecoin and NXT in particular as alternative cryptocurrencies that struggle because of a lack of wallet choices. “NXT, for example, only has a client wallet. There’s no hosted wallet,” said Zamovskiy.
A wallet, not an exchange
Many altcoin investors use sites like Cryptsy to trade altcoins, and in theory, HolyTransaction is a potential competitor for those operating in this market. But when pressed, the company insisted it doesn't want to be an exchange, but more like a traditional bank that offers a number of currency options. Zamovskiy explained:
“It’s like when you go to the bank and wish to convert a currency. Banks don’t ask for your ask price, bid price. They just provide you with a flat rate.”
HolyTransaction wants to be known as a trusted wallet partner within the cryptocurrency community.
Instead of having to trust a shifting market flooded with coin (and wallet) options, investors can use the HolyTransaction platform to maintain safe storage, moving value in and out as needed.
The altcoin market is almost always wavering on the whims of a brand-new coin reaching some new, lofty status, which often pushes some older coin down the ladder. Auroracoin is a notable example – there was a lot of hype surrounding this Icelandic-originated coin earlier this year, only for its price and subsequent interest to drop significantly.
Because of this, HolyTransaction will have to remain vigilant about keeping the most relevant coins part of its wallet. Right now, the company has six coins in its hosted wallet – bitcoin, blackcoin, dogecoin, darkcoin, litecoin and peercoin, and four more are to be added at some point in the future.
But, what will happen when a coin needs to be moved out of the top 10, effectively removing it from the wallet? The company has a solution for that, said Zamovskiy:
“[We] can’t expect the same 10 to always be at the top. We can use several strategies, but we would probably just send the encrypted private key to the user.”
Western banking and altcoin investors
Through Zamovskiy's knowledge of the intricacies of regulation, HolyTransaction has been able to land a partnership with Interac in compliance-friendly Canada, a feat also recently achieved by California-based expresscoin. The company has also completed its time at the Plug and Play incubator, and will set up its headquarters in the Bay Area, while maintaining an engineering office in Ukraine.
From this new location, HolyTransaction will provide a service it believes people need, because investors will continue to place faith (and money) behind alternative cryptocurrencies. Developers will keep making them, and money will flow into these coins.
“I believe that the majority of these [alternative] cryptocurrencies are by Russian developers," said Zamovskiy. "[But] owners of theses currencies are usually based in the States, western countries.”
Coins image via Bitcoingarden
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