Categories of Bitcoin Companies

What is a “bitcoin company”? This question came up recently and made me put my disparate thoughts to paper as it were. This information is based on experience over several years intimately following the bitcoin ecosystem. Each definition below isn’t unique by itself, but I have built a uniquely comprehensive view of bitcoin by learning from multiple sources. With that in mind, I don’t think anyone has ever written this stuff down in a cohesive manner, so I’ll attempt to do so.

Generically, a bitcoin company is one that uses “bitcoin” or “blockchain” as a part of their stated competitive advantage, value proposition, or mission statement.  1 That’s a very broad definition, so it’d be helpful to break it down into categories on a spectrum of companies strongly to weakly defined as a “bitcoin company”.

spectrum of bitcoin companies

The above diagram shows the spectrum of bitcoin companies from weakly in bitcoin to strongly in bitcoin. There’s several types here, so I’ll just run through them as I see it, starting from left to right. Keep in mind some of these categories are not mutually exclusive.

But With The Bitcoin

I’m not sure where this tagline originated (Junseth?), but it’s been around for awhile now. A company fits in this category if you can describe their business as another thing plus “but with the bitcoin”. It works the best with well known companies that embody entire sectors, but you could use it with asset classes or common products. Examples are Uber but with the bitcoin, Amazon but with the bitcoin, Coursera but with the bitcoin, land titles but with the bitcoin. These companies don’t do anything unique or worth while. If they did, the company they are emulating would do it better. But-with-the-bitcoin companies’ products or services aren’t defined by their use of bitcoin or blockchain, they are defined by the company or sector they are emulating. They are the furthest to the weak side of our spectrum, and it’s arguable if they are even bitcoin companies at all.


Probably the largest category in our spectrum is vaporware companies that never deliver working code. There’s no shortage of buzzwords or hype from these companies, just lack of any actual product or service. A big red flag that a company is vaporware is when they continually pump out press releases, provide speakers at conferences, and claim great advances, but never produce an alpha or Minimum Viable Product (MVP). They are squarely in the bitcoin ecosystem, because they affect speculation and claim bitcoin or blockchain as their magic power. Vaporware is low on our spectrum.

There is some overlap of vaporware with statups, which I touch on below, just because it’s likely a startup doesn’t have any code at the very beginning. Being able to distinguish vaporware from startups early in their life cycle, just look at how many rounds of funding they have raised without revenue, or if their CEO has spoken at a “blockchain” conference, or if they’ve pivoted before launching their product they’ve been hyping for months. If they’ve done any of those things, it’s very likely to be vaporware.

Blockchain Only

I’ve written about evaluating blockchain claims. If you haven’t read that post I recommend you do so, because it helps you understand what I’m saying about Blockchain Only. These companies, while in the bitcoin ecosystem, don’t understand bitcoin or why it works, yet have spent time and effort building a product on sand. Their MVP has failed to get traction and has only a few users. Most likely they have wild claims about “blockchain” as part of their business model. At worst, they will openly denigrate bitcoin and bitcoin maximalists. These companies can overlap the vaporware category, because they are always adding to their feature list in an attempt to attract users.


Brand new companies are fairly neutral on the spectrum. Many don’t have established products or services yet, but give hints as to what category they will end up in. Some companies jump out of the gate with an MVP and can quickly be included in another category.

Compliance Parasites

This is my term for a company whose business model is enabled by financial regulation and the competition minimization of governmental barriers to entry. These companies are at the whim of the regulators, as are their customers. Customer satisfaction is secondary to their share of a protected market.

Compliance parasites don’t just rely on their own services being compliant, they also help their clients be compliant. An example is Bitgo and it’s ill-fated relationship with Bitfinex. Bitfinex had a cold wallet solution that worked very well, but to be compliant with US regulators’ guidance, they had to relinquish sole custody of the funds. Bitgo offered them a plug-and-play multisig solution, but failed to quality check the implementation.  2 Payment processors would fall in this category, as well. They offer merchants a way to accept bitcoin and remain compliant by not touching the bitcoin itself. I call them parasites, because they drain productive energy from a market that would exist in their absence, but use the inefficient power of the State for protection.

Unregulated Businesses

A nature counterpoint to a parasite is an Unregulated Business. Instead of offering compliant services and helping their customers be compliant, they profit by meeting the under-served demand. They fill the gap between total demand and compliant supply. This is currently the most profitable use case for bitcoin other than simply saving. This category is particularly interesting, because before bitcoin, these under-served customers could not be served. In the past, the unregulated market was restrained by restricting their access to banking. Examples are Darknet Markets (DNM), online gambling, capital flight, among others.

The erosive power of unregulated markets on compliant parasites and government power has a self-reinforcing nature, resulting directly from bitcoin enabling their market activity. Demand can now be met by the market where before it could not. Any attempt to restrict supply by way of regulation, licensing, etc, forces an even larger percentage of the market to be under-served, which promotes yet more Unregulated Businesses. The counterintuitive scenario develops where the market is expanding, but the customer base of the Compliant Parasites must shrink, due to increased regulation. Bitcoin will experience many of these cycles as new industries are eaten by the unregulated market.


The Innovators are companies that are creating whole new products and services enabled by bitcoin. No one knows what these new things will look like, but we have some ideas. Where DNMs are selling old products a new way, Innovators are creating completely new products and services, token based games, digital goods vending machines, beneficial ransomware, Lightning Network route discovery, and more.

The future is now only limited by our creativity and imagination.

  1. There are non-profit bitcoin companies, but I don’t touch on them in this post because they live throughout the spectrum.
  2. I’ve had this discussion with Bitgo employees twitter before, and I understand that they don’t take responsibility for anything that happened. My position remains that without US regulation, Bitgo’s business model fails, because custody is not a pivotal factor that outweighs security.