The Mt. Gox’ collapse was not just a setback to the customers who lost their valuable investments but also loss of credibility for many Bitcoin exchanges as thereafter many people started suspecting such companies. Also, a void was created after the failure of Mt. Gox as it was the biggest Bitcoin exchange when it collapsed.
However, it did not take much time for Yuzo Kano, the 38 year old derivatives and convertible bonds trader at Goldman Sachs to set up a Bitcoin exchange and fill the void created by the failed Mt. Gox. He left the plumb job and developed bitFlyer, a website that allows anyone with a Japanese bank account to buy and sell the Bitcoins.
His company is providing the much needed satisfying and secure services for the customers who were feeling it difficult to visit the Tokyo’s only Bitcoin ATM machine or arranging a person-to-person deal after the collapse of Mt. Gox. His company started its services in April and eschews the trading options used by other exchanges in favor of a simple interface.
Yuzo Kano admits that though the collapse of Mt. Gox means one less competitor for his company, it also left many Japanese with a very negative impression of Bitcoin. He said that he already had a company then and felt it was up to him to rebuild the trust which was damaged a lot as Mt. Gox collapse had scared off Japanese individuals significantly.
Bitcoin Ecosystem Cannot Afford another Mt. Gox Kind of Fiasco
There are some features that are unavailable with the competitors of bitFlyer; for instance, according to Yuzo Kano unlike most of the rivals which link buyers and sellers together, bitFlyer is the counterparty for either transaction. He tells that bitFlyer allows for deals to be concluded instantaneously and without complicated price-setting mechanisms.
According to him complicated price-setting mechanism can be off-putting to newcomers; however, as bitFlyer has easy one, it is at advantageous position. He says that despite the inherent risk, his firm has this feature; however, controlling that risk is something someone can’t do without experience.
Yuzo Kano put a lot of efforts for fund raising and raised 160 million yen ($1.6 million) from a Japanese venture capital firm which according to him is the country’s biggest investment in Bitcoin to date. He wants to learn from the collapse of Mt. Gox as according to him if there is another fiasco like Mt. Gox, the game is over for the digital currency.
To contact the reporter of this story: Deepak Tiwari at firstname.lastname@example.org