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Partnerships In The Bitcoin Industry

Strategic partnerships are booming in the Bitcoin community. If handled correctly, they can reap wonderful rewards, if misguided they can be detrimental.

Having an ally on side in the form of a strategic partnership benefits a range of companies company. It can provide access to a broader range of resources and expertise, which in turn can strengthen growth and development. As a result it is no surprise to see the Bitcoin Industry embracing this approach.

Coinzone is a Bitcoin company focusing on key partnerships. The company has been providing merchant solutions for the European market since early 2014.

One of Coinzones key functions has been the ability to hedge against the notorious volatility of bitcoin. Paul Sylling CMO & VP of User Experience at Coinzone explained that even though the price of Bitcoin has stabilized this year, “our merchant customers have zero risk to price volatility.”

Merchants using the platform can also choose to instantly convert some, or all, of their Bitcoin at the time of the transaction.  “By doing so, Bitcoin becomes another payment method they can accept with zero risk,” said Sylling

“Even though the number of people with Bitcoin wallets is in the millions and growing extremely fast, we know from a platform and merchant perspective, we have to make implementing Bitcoin as simple as possible.”
— – Paul Sylling, Coinzone CMO

Coinzone recently announced a partnership with e-commerce provider, X-Cart. “For us it made perfect sense to partner with X-Cart and provide their base of over 33,000 merchants with a market leading Bitcoin solution,” said Sylling.

Alex Mulin, VP of Business Development of X-Cart, shares a similar outlook, “We are very pleased to be partners with Coinzone. X-Cart is always looking to keep pace with the latest payment techniques and technologies and now, thanks to the partnership with Coinzone, we’ve got the opportunity to offer our customers a new way of payment with Bitcoins. I believe that both companies will enjoy long-term benefits from this relationship.”

We have seen both successful and failed partnerships within Bitcoin’s short existence. Mt Gox and CoinLab, both prominent Bitcoin exchanges in 2013, made headlines as the community watched their partnership devolve.

The two exchanges joined forces as Mt Gox was headquartered in Japan and struggled to service their US customer base. CoinLab provided a solution, by taking over the North American trades. On paper, the partnership appeared to be perfect. Mt Gox had years of experience handling millions in trades and CoinLab provided access to the North American market.

"This should be a huge win for everyone — faster deposit and withdrawal times, easier-to-reach customer service, and better access for United States financial markets, market makers and liquidity providers."
— – Mark Karpeles, Managing Director of Mt.Gox

The relationship was short lived though. Within mere months CoinLab filed a $75 million lawsuit against Mt Gox. “Defendants have breached the exclusivity provisions of the Agreement by directly servicing customers in the United States and Canada since the Agreement took effect,” the lawsuit said.

Mt Gox responded with a $5.5 million countersuit, as they claimed CoinLab was wrongfully holding the funds. The lawsuit was put on hold due to Mt Gox filing for bankruptcy, and its inevitable collapse.

The first 501 (c)(3) Bitcoin nonprofit charitable foundation, the BitGive Foundation, leverage the power of Bitcoin’s community to improve public health and the environment. “We focus on charitable giving and demonstrating Bitcoin’s social value on a global scale through supporting charitable organizations with fundraising campaigns, education, and partnerships.” states the foundation.

BitGive partnerships in the past have demonstrated successful partnerships. In 2014 The charity partnered with the Water Project, bringing safe drinking water to a community in Africa.

The Water Project conducted a fundraising campaign, collecting $11,188.98, to install a water well at the Shisango Girls School in the Kakamega District of western Kenya. The entire project was funded by the Bitcoin community. Peter Chase, President of the Water Project, is a fan of cryptocurrencies and there are future plans for more wells.

The Water Promise will combine high tech remote monitoring with local repair teams to help ensure that safe water isn’t just provided… but that it’s reliable over time. We’ll post sensor data online and in real-time for all to see. When things break and every day that water flows! Every Bitcoin donation will be used to fund one of 42 new sensor-enabled water projects in Kenya. And like Bitcoin, this new tech will provide unmatched transparency and accountability in our work.”
— – The Water Project

As can be seen with the BitGive and Water Project partnership, the most successful results are often derived from a partnership where each party provides skills that are different, but beneficial to one another. Partnerships can also have grave consequences when not entered into in a proper fashion, as demonstrated by Mt Gox and CoinLab.

Coinzone and X-Cart appear to be choosing wisely in their partnerships, and will reap the rewards if they adhere to equality and balance in the marketplace. Not every operational detail can be planned for. The success of the partnership will largely depend on the amount of trust and communication between the companies involved.


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