Arlington, Va.-based Bitcoin Shop (BTCS), a publicly traded virtual currency company that enables transaction verification services, plans to merge with Israeli Bitcoin startup, Spondoolies-Tech, creators of digital currency servers. BTCS announced the deal Tuesday in a signed letter of intent. The news follows a WBJ report that Bitcoin Shop raised $2.3 million round led by a mix of hedge funds and unnamed private investors.
The move is important for BTCS as they hope to expand their Bitcoin ecosystem platform to cover both service verification and distribution channels. Spondoolies is one of only five companies globally to manufacture these Bitcoin network servers.
“Once completed, our merger with Spondoolies would be a significant leap forward in making this ecosystem a reality. We believe this merger once completed would create significant value for BTCS and Spondoolies shareholders, customers, and employees and serve to accelerate the strategic plans in which both companies have invested. As a collective, our next objective will be to complete the development and production of a next generation chip to drive our transaction verification services business and to generate revenue from the combination,” said Charles Allen, CEO of BTCS, in a statement.
It seems that BTCS and Spondoolies believe the merger will position them to capitalize on the growing demand for a legitimate Bitcoin transaction option that is both highly secure and market stable. The merger represents the creation of the first ever publicly traded company to produce Bitcoin transaction equipment while also employing Bitcoin “mining” resources.
Only six years old, Bitcoin is still a very confusing and incredulous currency product for most consumers to grasp. Because Bitcoin exists purely as entries in an accounting system, the servers and ATMs that transfer this digital information are fundamentally structured to uphold its monetary feasibility.
Owning Bitcoin isn’t like owning dollars—instead, it means having a claim to a data “address,” accessed with a secret password, and then owning the right to transfer said monetary balance to someone else. Transactions are posted via an open sourced ledger that records every time a transfer of bitcoin is made — it is the only tangible form Bitcoin ever takes and can only be accessed by “miners.” This verification process is known as “mining” and it represents a necessary auxiliary for any potential mainstream use of Bitcoin. Bitcoin Shop mines the bitcoin network in return for a fee — paid in more Bitcoin.
“The synergy between the teams is amazing. I have the utmost of confidence that together we will build a very successful and prosperous company by growing and expanding our business beyond bitcoin mining equipment,” said Guy Corem, CEO of Spondoolies, in a statement.
Spondoolies-Tech Intro from Spondoolies-Tech on Vimeo.
