The Bitfury Group, a technology company specialising in Bitcoin mining and blockchain services, plans a new funding round this year as it seeks to more than quadruple its revenues compared with last year, its founder and chief executive said.
"We are seeing high demand for blockchain-based services across many areas and industries, from banking and insurance to government and others," Valery Vavilov told The National in an interview in Dubai.
“[Blockchain] has the potential to be even bigger than the Internet,” he added.
The company, which plans to open its first Middle Eastern office in Dubai in the coming weeks, expects to achieve annual revenues of $450 million in fiscal 2018, which ends on March 31, compared with $100m in 2017, Mr Vavilov said.
Blockchain is an electronic transaction-processing and archive system that allows parties to track information in a secure network without the need for third-party verification.
It is the underlying software enabling transactions of cryptocurrencies including Bitcoin, but can also be used to track more conventional transactions, such as remittances and real estate sales.
Governments and companies in the region are increasingly looking to adopt emerging technologies such as blockchain to cut the costs of doing business.
Spending on blockchain in the Middle East and Africa is projected to double this year to $80.8m, up 107 per cent from $38.9m in 2017, according to figures published in February by IDC.
Bitfury, which is based in Amsterdam but has offices in San Francisco, Washington DC, Riga, Latvia and Hong Kong, provides both the software and hardware components needed to operate blockchains, including a string of data centres.
The company has held talks with prospective clients in Dubai and Abu Dhabi over the past week as it seeks to expand in the UAE, and, eventually, the wider Middle East.
It expects to receive a licence to open its first regional office in Dubai "within the next three weeks", Mr Vavilov told The National, in response to perceived high demand in the country.
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“The UAE developed because of a strong overarching vision for what it wanted to be,” he said. “If we apply that sense of vision to how blockchain could be adopted here, then the country could become an incredible window [of opportunity] for blockchain firms.”
The Middle East is one of the target regions for a new fundraising round expected to launch later this year, the founder said, without revealing specifics.
“We have raised more than $100m in capital in recent years. We are committed to the Middle East and will be pursuing investment in the region as well,” Mr Vavilov said.
During his trip to the UAE, Mr Vavilov showcased Bifury’s new blockchain solutions, including Emercoin, Exonum and LightningPeach.
Among the products planned for the region is the Lightning Network app, still in the testing phase, which will enable blockchain-based micro-transactions including movie streaming payments and remittances from low-income workers – both for which the chief executive sees strong demand due to the large expat population.
The app is expected to go live globally “this spring”, said Mr Vavilov. However, it could take longer to launch in the UAE because regulations for blockchain and other ‘FinTech’ applications are still to be finalised, he said.
Despite widespread concerns about a ‘Bitcoin bubble’- the cryptocurrency has shed more than half its value since its December peak – Mr Vavilov said he held no similar fears of a ‘blockchain bubble’.
“Unlike Bitcoin, blockchain is a service that is provided, and people are really starting to understand how it can help them do digital transactions more effectively and safely,” he said.