The second cryptocurrency accelerator has opened in north America this week, this time in Toronto, targeting entrepreneurs working in “second generation cryptocurrencies”.

Bitcoin Decentral Accelerate will begin with a $250,000 fund, but hopes to score at least $1.5m in investment to sustain its first eight months of operation, according to its organizers.

The accelerator, launched by Bitcoin Alliance of Canada founder Anthony Di Iorio, is a spinoff of Bitcoin Decentral, the coworking space that has been operating since 1st January.

The venture will target both bitcoin entrepreneurs, and also those working on what Di Iorio calls the next wave of cryptocurrencies, such as Ethereum (with which he is also involved).

What are second generation cryptocurrencies? “Ones like Mastercoin, Open Transactions, and Ethereum, that aren’t just about bitcoins sending and receiving money,” he explained. But as the name suggests, the accelerator will be welcoming bitcoin entrepreneurs too.

Di Iorio has not yet approached VCs about the accelerator, but is confident they will invest, because of existing conversations that he has shared with them about Ethereum, the cryptocurrency framework that will launch officially sometime next month.

Three cohorts

For now, the accelerator plans an initial three cohorts, running for around three months each. Each of these will contain nine companies, Di Iorio said. The first cohort will be announced at the bitcoin expo that he has organized for 11th – 13th April.

The accelerator will take a 7% equity stake in participating companies, which may be paid in cryptocurrency in addition to fiat. The amount that it pays for that equity stake is likely to vary from firm to firm. Once they graduate, they’ll get an additional investment commitment that will seed their follow-on round.

The criteria for acceptance include a prototype, and either market traction, or feedback from a significant test base. The accelerator also requires a team that has worked together and executed successfully.

“The focus is also bitcoin, or something disruptive, in finance fields, payments fields, things like that,” Di Iorio said.

Hackathons will also come into play, he added, hopefully producing some promising candidates for the cohort. One such hackathon is currently running at the Bitcoin conference in Austin.

Expert Panel

Ultimately, cohort selections will be made by a panel of participants including the three founders, along with a potential collection of mentors from the broader network.

Also involved in the project is A. Traviss Corry, who founded the InCubes accelerator.

William Mougayar, founder of Startup Management, will act as special advisor to the accelerator, and will also be part of a network of mentors.

The mentor network is a who’s who of bitcoin players, including BitPay’s Tony Gallippi, Bitcoin entrepreneur Erik Voorhees, and Charles Hoskinson, who along with Di Iorio is one of the driving forces behind Ethereum.

Di Iorio is also hoping for additional funding from Ethereum in addition to the $1.5m he’s going to be asking for from other private funders.

Billed as a coworking space, Bitcoin Decentral doesn’t yet house paying coworking customers. Instead, it houses people working with Di Iorio’s Bitcoin Alliance of Canada. The top two floors will be devoted to the accelerator, and will also house the ongoing CoinTalk podcast.

This is a big week for cryptocurrency accelerators. Ripple also funded CrossCoin Ventures, an accelerator based in its San Francisco building. That venture requires entrepreneurs to use the Ripple protocol.

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