Brad Moynes has tried his hand at gold exploration, wine distribution, oil and gas exploration and solar power. Moynes is now launching himself into the still largely uncharted frontier of cryptocurrency.
On June 29, Moynes’ company Bit-X Financial Corp. (OTCCB: BITXF) – not to be confused with the Bitcoin exchanges Bit-x.com or Bitx.co – launched a new Bitcoin exchange, DigaTrade.com, a white label exchange platform developed by Hong Kong’s ANXPro.
That brings to three the number of Bitcoin exchanges based in Vancouver.
He is starting his new venture with a $3.9 million accumulated deficit. Then again, Bitcoin has been likened to the early days of the Internet – an entrepreneurial Wild West where geeks and entrepreneurs can launch Bitcoin businesses with a relatively small amount of capital.
Michael Yeung, CEO, Saftonhouse Consulting Group, a Bitcoin consulting group, said the challenge for Bitcoin entrepreneurs isn’t so much raising capital as having the necessary technical expertise.
Moynes said he studied the “block chain” process used in cryptocurrency for two years before doing a pivot in January and changing the name of the company to Bit-X from Rainchief Energy, and changing its core business which was largely focused on oil and gas.
Before oil and gas prospecting, Rainchief Energy was involved in the renewable energy space with plans to capitalize on European feed-in tariffs and invest in solar power projects.
Even earlier, Rainchief Energy was Black Diamond Brands Corp., which was in the wine distribution business.
Moynes admits those ventures weren’t successful.
“In venture capital, many businesses fail or don’t ultimately become successful,” Moynes said. “And the market always changes.
“I come from a venture capital background, and you have to look at opportunities. If something’s not working, you’ve got to try something else.”
Moynes said the fundamentals of Bitcoin and those of the traditional financial system are not that different.
“My background is in investment banking and financial services and brokerages. I’ve got over 18 years of that under my belt. There’s no real difference. It’s just a clone financial system to the monetary system that we have right now.”
“As for the technical stuff – the programmers, the designers – we outsource that and it’s part of our agreement with the group in Hong Kong and they’ve got 25 employees,” Moynes said. “They handle all that technical side.”
Moynes said DigaTrade.com will have multiple revenue streams, but the main one will be transaction fees, which at 0.5% per transaction, is admittedly “pretty skinny.”
There are currently roughly 60 Bitcoin exchanges in the world. Yeung said Canadian exchanges will have a hard time making a profit because they can’t do the kind of volume that exchanges in Europe or China can do.
“I think it’s a difficult game to be getting into because it’s not really that much money, per transaction,” Yeung said.
“The amount of Bitcoin trading that goes on in Canada is fairly insignificant in comparison to other countries, especially China. China has, right now, about 70% of all global trade of Bitcoin.”
Moynes said an advantage his company has is its arrangement with ANXPro, which has a Bitcoin exchange partner in the U.S., where users will be brought over to DigaTrade.com. Moynes said that represents close to 20,000 users.
“Once we go live, those users will receive an email notification to click through and their accounts will switch over to Digatrade,” Moynes said.
Due to the prolonged bear market for the junior mineral exploration space and, more recently, oil and gas exploration, many junior resource companies have been making the leap from one business into another, like medical marijuana, e-cigarettes and Bitcoin.
Peter Brady, director of corporate finance for the BC Securities Commission notes generally that investors need to understand that companies that engage in successive changes may be high-risk ventures and to do their due diligence.
Brady was not directing his remarks to any particular company.
Due diligence includes looking at a company’s track record and expertise in the business they are pursuing.
“Do the company executives have expertise in that area? You’re a mining executive yesterday, today you’re doing medical marijuana.
“Previously, you were an oil and gas company – and going back to early 2000s – now you’re an Internet company. We see that cycle over and over.”
“Does the company have the people and the knowledge and the expertise to succeed in that industry? And when you’re talking new industries like Bitcoin, does anybody know what it takes to succeed in that industry?” •
