In the sleepy coastal town of Agnes Water in Queensland, keen fishermen can buy bait with bitcoin.
In fact, visitors and locals alike can pay for everything in the town using cryptocurrency, since the council made a “crypto push” to draw tourists away from mainstream destinations.
Caleb Yeoh is the founder of TravelbyBit, the Brisbane-based start-up responsible for installing the crypto point-of-sale units throughout Agnes Water and elsewhere across Australia.
“Blockchain without the decentralised social movement is boring – it’s just a computer database,” says Yeoh of the industry that grabbed headlines with such force 18 months ago.
“We know tourism can help shift economic value from rich areas to other regional areas that need it, and that’s where the innovation lies – in the messy, passionate community driving the new internet of money.”
This practical use of Bitcoin, and its underlying technology, the blockchain, is just one example of how Australian entrepreneurship has managed to emerge relatively unscathed from the violence of the bitcoin bubble crash which has left many investors licking their wounds.
Following the eye-watering price highs of $25,000 at the end of 2017, headlines gleefully lauded the end of cryptocurrency as it sank below $5000, and saw thousands of investors wiped out.
But despite the grief speculative investors felt at the cryptocurrency price collapse, some argue it was a necessary development which has sorted the genuinely innovative businesses from the pump-and-dump schemes.
“The crypto winter has allowed the weeds to die off and good projects to get a bit more attention,” Yeoh says.
Many companies which raised funds through ICOs have found it difficult to deliver on promises in a short amount of time.
— Asher Tan, CEO, CoinJar
He recently rolled out the TravelbyBit units at Brisbane Airport and has built a travel booking platform for hotels and flights. “We’ve seen a fair few blockchain companies come and go, and I think it comes back to the core purpose and what those companies stood for in the first place.”
The ICO slowdown
The mania surrounding Bitcoin and its meteoric rise certainly prompted a wave of unsubstantiated enterprise.
The lack of understanding and guidance around initial coin offerings – a mechanism by which people raised money by issuing crypto-tokens – meant money was changing hands at an incredible rate.
To date, there are around 5400 token projects, which have raised an estimated $US25 billion altogether, according to ICO Bench, a research firm. The average project managed to secure funding of over $US15 million.
Australia has punched well above its weight, becoming the fifth most eager market for ICOs, raising over $US207 million between 2017 and 2018.
These eye-watering amounts prompted serious concerns that some Aussies will have bought coins that go nowhere, the companies behind them had no contractual obligations to deliver a product, meaning there is a danger that founders could just do nothing after raising the funds.
Since last year ICOs have lost their shine, with the market down 97 per cent on a year-on-year basis, according to research by cryptocurrency exchange BitMEX.
“Many companies which raised funds through ICOs have found it difficult to deliver on promises in a short amount of time,” says Asher Tan, co-founder and CEO of CoinJar, Australia’s longest-running digital currency exchange.
“And if they raised their funds in cryptocurrency and didn’t adequately hedge it, these start-ups would have struggled to maintain progress with volatile treasury balances.”
That said, despite ICO money drying up somewhat, other Australian businesses are enjoying solid growth and have found the local industry supportive.
“That we never tried to raise money in an ICO has given us a great deal of credibility,” says Emma Weston, founder and CEO of AgriDigital, a blockchain-based tradeflow platform with offices in Sydney and in Orange, in rural New South Wales.
“The market has looked favourably on us solving our problems through a full technology stack, where blockchain is included.”
AgriDigital, backed by Square Peg Capital, has enjoyed rapid expansion across Australia and North America, and have made their protocol open source with participants building their own uses on top of it in 35 other countries.
Weston is also deputy chair of Fintech Australia, where she champions blockchain use among other technologies on behalf of Australia’s expanding industry.
“I understand people’s wariness around crypto and participating in the industry, following the explosion of interest a few years back, it absolutely makes sense,” Weston says.
“But the tokenisation of real world assets and making these digital assets programmable is definitely the way of the future.
“This was a necessary hump that we needed to get through so the really great projects could evolve, and as a global community we’ve gotten through hump really well.”
Despite the harrowing headlines, the Australian government has maintained its commitment to supporting fledgling cryptocurrency businesses as they attempt to navigate the shifting regulatory landscape.
If it had won the federal election, the Australian Labor party had planned to open a $3 million blockchain academy in Perth, and there are noises within the Coalition suggesting a program to encourage and support development is imminent.
The continued growth of the Australian crypto scene is evident across industry sectors.
Energy trading platform Power Ledger recently announced a multi-government partnership for a “blockchain village” in Western Australia, where houses will generate their own solar power and use its blockchain platform to sell excess electricity via crypto tokens.
The Australian Stock Exchange has launched its distributed ledger technology test site last month, one of the world’s largest deployments of a private blockchain in financial markets.
Data61 and the Australian Computer Society will soon launch a reportdetailing the potential for blockchain to reform the Australian ICT landscape. The report, Blockchain 2030: A look at the future of Blockchain in Australia, will look at scenarios for blockchain adoption in Australia and how industries can move past the hype.
“We’ve been pleased by the open stance that Australian regulators have shown in introducing oversight that helps protect consumers without stifling innovation in a young and very dynamic industry,” Adrian Przelozny, founder of Independent Reserve, Australia’s largest cryptocurrency exchange says.
This year, Mr Przelozny established the Sydney-based blockchain accelerator IR Ventures, which offers guidance and funding for fledgling cryptocurrency businesses and has rolled out capacity for SMSFs to include cryptocurrency in their diversification strategies.
“Australia has been lucky in that the vast majority of cryptocurrency businesses have held themselves to a high standard,” he says.
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