Story by:Matt Clinch
New alternative to bitcoin was launched in London Wednesday with official trading for the technology beginning next week on a global exchange based in Hong Kong.
U.K.-based Learning Enterprises Organisation (LEO) is the company behind the new cryptocurrency. Traditionally it has been providing learning services to the business community, which has even stretched to the odd yoga session for company executives, but has now turned its attention to LEOCoin.
Similar to the more established bitcoin, it has already promoted the product to its current client base. The company therefore claims it has 131,176 registered businesses ready to use LEOCoin, potentially making it the “second largest digital currency” in the world. Its own exchange LEOxChange will kick into life on April 2 but the coin will also be recognized by existing exchanges.
“This industry (so far) has been like the Wild West,” Dan Andersson, the co-founder of LEOcoin said at an event Wednesday morning, which took place at the Tower of London. His colleague and co-founder Atif Kamran called digital currencies the “evolution of money” and extolled its benefits for the e-commerce community.
The more popular bitcoin is a “virtual” currency that allows users to exchange online credits for goods and services. While there is no central bank that issues them, bitcoins can be created online by using a computer to complete difficult tasks, a process known as mining.
The cryptocurrency has sparked interest among venture capitalists on both sides of the Atlantic but has also run into regulatory issues in many countries. Currency analysts have also warned of its unstable nature and the Bank of England has also provided reach of the hypothetical risks that it poses to financial system.
LEOCoin boasts that its currency based on newer technology than its rival but Andersson admits that the two will essentially co-exist. He also said that it would have greater usability and accessibility than other cryptocurrencies. It provides instant transactions and no commission fee on purchases, according to the press release, although sales will be subject to a transaction fee.
Bitcoin daily transaction volumes are still dwarfed significantly by credit card transactions, according to industry website coinmetrics.com, and are also lower than more established payment systems like Western Union and Paypal. A number of so-called “altcoins,” or alternative coins, have sprung up alongside bitcoin. Dogecoin, which was initially started as a joke in 2013 and is based on an internet meme, is still the sixth largest digital currency in terms of market capitalization, according to coinmarketcap.com.
Jon Matonis, a founding director of the Bitcoin Foundation, an organization aimed at promoting the cryptocurrency, is lukewarm on the addition of a new “altcoin”, telling CNBC via email that there are too many of them.
“What matters is the computational power and strength of the network,” he said. “Bitcoin’s lead via the network effect is very strong.”
In a survey designed to highlight the borderless nature of cryptocurrencies, LEOCoin commissioned a poll of 1,000 senior decision-makers from small- to medium sized businesses. It revealed that 50 percent of respondents thought transaction fees were a key concern when doing business. Of those surveyed, 43 percent who transacted using debit or credit cards were worried about the associated costs, the survey said.
Perhaps more worrying is that the same poll showed that around 70 percent of respondents were “not at all likely” to accept a digital currency in the future. Andersson called this an “opportunity” rather than a challenge and underlined that it wasn’t trying to win over current bitcoin users but was trying tap into the global SME sector using its basis as a business solutions and learning provider.