Israeli firm SponDoolies-Tech, which develops Bitcoin mining devices, has raised $5 million in a Series B round of funding. The company said that it will use the money to fund the development of new generations of its application specific integrated circuits (ASIC).
The funding came from both new and existing investors, including VC firms Agile Wings, BRM Group, and Genesis Partners, as well as angel investors Olivier Janssens and Aleph Partner Eden Shochat.
It seems that everyone wants to get on the Bitcoin bandwagon. More and more e merchants are accepting the virtual currency as a form of payment. The American IRS has even said that it will tax the holders of Bitcoin on any prophets that they take when using the currency, in the same way that prophets on commodities are taxed.
A single Bitcoin is currently worth almost $560. But it is not easy to acquire. There is a limited amount of the currency available on line and people need to search for it, or “mine” it using special devices. Such devices have gotten more complex and better at finding Bitcoins. This has created a whole new industry in which companies like Spondoolies might be able to make a lot of money.
The company does, however, face stiff competition from its main rival Bitfury which has already raised $40 million so this year. But Spondoolies” CEO Guy Corem has stated, “We will be the leader in terms of power efficiency.”
As he told CoinDesk, “Our goal is to get to 0.05 W/GHs, 0.03 $/GHs miners by mid-2015 and power more than 30% of the bitcoin network. We don’t want to actively operate the mine.” Corem explained, “We would provide a guidebook with what needs to be done to create a facility in a way that will allow the customer to use our various generations and split profit off it.”
It remains to be seen, however, whether or not Bitcoin is here to stay. There are plenty of experts who say that its value has been kept artificially high by speculators and that Bitcoin will go the way of many a bubble that the world has seen burst. Just remember the Dutch Tulip craze of the 17th Century.