One of our goals at BitcoinIreland.org is to promote Ireland as a location for Bitcoin-related companies. With that in mind, let’s take a look at how other countries in Europe are attracting foreign companies and fostering home-grown talent. The European Bitcoin giants seem to be the UK, where the London meetup group has over 1500 members & where meetup events are sold out in minutes, as well as Germany, the first country in the world to recognize bitcoin as a currency. As much as I’d like to measure Ireland’s success against the UK and Germany, it makes more sense to compare Ireland with countries that are similar in size and which usually compete with Ireland in terms of fostering innovation.
A recent polled showed that 1 in 10 Finns are interested in investing in Bitcoin, so there is certainly a high level of awareness there. They are also not afraid of the unknown – Finland was the first European country to have a Bitcoin ATM. The Finnish central bank does not classify bitcoin as a legal form of tender, capital gains are taxed while losses are not tax deductable. Finland is home to some great bitcoin startups, such as Local Bitcoins which helps bitcoiners buy and sell bitcoins in person.
The Danish Financial Supervisory Authority recently said that “Companies do not need permission to be able to establish their operation in Denmark if they want to run bitcoin Exchanges”. The Danish Tax Board also clarified that gains and losses through bitcoin trading are not subject to taxation. Despite the clarity in Denmark, the level of awareness is not particularly high, and few bitcoin startups have emerged. However BIPS, a bitcoin payment processor, is one notable exception.
A popular economics show in Israel reports the exchange rate daily and informational pieces are regularly broadcast, reflecting the high level of public interest in Israel. Several local exchanges buckle under the demand for bitcoin, there are regular bitcoin lectures and meetups, and there is even a physical location called the Israeli Bitcoin Embassy where enthusiasts meet to talk bitcoin. There are a number of innovative startups coming out of Israel, although few have made a big splash in the international community.
The contestant punching above its weight in Europe at the moment is Holland. Awareness of bitcoin is high, and as a result acceptance in shops is also impressive. There is a street in The Hague where all 9 restaurants and a bar accept bitcoin. Home delivery, paid with bitcoin, is available from 5000 restaurants countrywide. Startups report that Dutch banks are friendly towards bitcoin businesses, with 3 of the country’s 4 big banks cooperating with Bitcoin businesses (Rabobank is the exception). In fact, the local community has been invited to give presentations and workshops inside the headquarters of these banks. There are rumours of visiting Bitcoin business CEOs being offered office space and bank accounts if they are willing to relocate to Holland. So it came as no surprise that BitPay, the largest bitcoin payment processor, recently decided to open its European headquarters in Amsterdam.
Where does this leave Ireland?
The biggest name to come to Ireland’s shores has been Circle, whose payment processing software and wallet will soon be released. There are also some notable homegrown startups, such as Predictious, CoinPrism, BitWasp, Haskoin (a soon to be released MultiSig platform), and EirCoin. However, surprisingly for an economy with such a large number of tech companies, awareness is low and the media is still asking whether Bitcoin is a Ponzi scheme. There is also very little interaction or understanding between the community and local government agencies & banks.
So while Ireland is competing with the likes of Denmark and Finland, we are playing catch up with Holland and Israel, not to mention the UK and Germany. But the Bitcoin world moves fast, check back in a few months for another health report.