The numbers are in a word, astounding. Almost every fact and figure associated with Bitcoin – the online virtual currency, is jaw-dropping. Consider just the following sampling:
- At the beginning of 2103, Bitcoins would trading at approximately $13 a Bitcoin. They are now trading at a little more than $900 a Bitcoin (after briefly rising to more than $1,200 a Bitcoin);
- Analysts estimate that the market value for Bitcoins (once all possible 21 million Bitcoins are mined) could be more than $400 billion; and
- Canada has begun installing “Bitcoin ATMs” where users can trade Canadian dollars for online Bitcoins.
The Bitcoin craze has of course led to a significant number of new ventures. There are almost daily launches of starts-up pertaining to the banking, security, transactions or trading of “Gold 2.0”. Which made me think, who actually has the appropriate background to serve on all the boards of these Bitcoin-related ventures? After all, it is almost impossible to find a candidate with industry expertise – and nearly every previous online currency has failed for one reason or another. And if the answer is indeed “no one”, then do those who do serve on these boards have a greater risk exposure?
Despite all the unanswered questions and unknowns regarding Bitcoins, I do believe they are here to stay. Over time, of course, there will be candidates who by virtue of their industry-related knowledge will have the sought after experience that will make them ideal candidates to serve on the board of a Bitcoin venture. In the interim, such start-ups will need to do what all ventures in new industries have had to do – find board candidates who by virtue of their particular skill sets and background will add value to the venture. In the world of virtual currency, I believe it is reasonable to turn to the world of online banking for prospective candidates. Although Bitcoins are not controlled by any authority such as a central bank, the concepts pertaining to online banking are transferrable to virtual currency. Therefore, Bitcoin-related ventures should consider looking for candidates from the world of online banking and those whose specialize in disciplines associated with that industry (e.g. accountants and attorneys with expertise in online banking).
As to risk exposure, every start-up is speculative in nature. This is especially true when it comes to a venture in a field as unpredictable as virtual currency. Board members in Bitcoin start-ups are no different than other board members, and in my opinion do not face a greater risk exposure. Like all board members, they simply need to adhere to their fiduciary duties and act all times in the best interests of the shareholders.
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