Self-described "political ideologue” Erik Voorhees was one of Bitcoin’s earliest adopters back in 2011. Three years and a couple Bitcoin startups later, the entrepreneur found himself frustrated with the thought of wasting an entire afternoon setting up an account on a Bitcoin exchange to buy cryptocurrency. To make the process easier, he founded instant crypto exchange platform ShapeShift.io in 2014 under a pseudonym. With Tuesday's launch of ShapeShift’s iOS app—the first iOS cryptocurrency trading app in the App Store—users can now exchange Bitcoin and 34 other digital currencies with just a tap of their iPhones.
For now, ShapeShift is only available on iOS, but Voorhees says an Android version is coming soon. His seven-person team decided to start with iOS first because they anticipated more resistance from Apple’s carefully guarded App Store than from the Google Play Store.
“We wanted to do the Apple one first because Apple makes it tricky to get Bitcoin apps approved,” Voorhees said. “It was actually an extremely fluid process. I guess the ghost of Steve Jobs was looking out for us."
Voorhees created ShapeShift for its convenience but quickly realized that security was one of the instant exchange's best features. Because ShapeShift does not store any currency or user information, its users are not at risk for losing their Bitcoin in a Mt. Gox-esque takedown.
“Basically its claim to fame is that there’s no account or sign up at all. It’s sort of like a vending machine where you just visit the website, send one kind of digital currency, and we send you a different kind of digital currency,” Voorhees said. “We don’t ever have to hold customer money like a normal exchange. It’s a definite advance for consumer protection because there’s no risk of hacking or of the operators running away with money.” These same features will make the mobile app secure, Voorhees says.
Voorhees hopes that ShapeShift’s new app will increase the number of transactions that happen on the platform. While Voorhees couldn’t tell me how many users ShapeShift because the exchange doesn’t track its users or require registration, he said the website had 13,000 orders in May, and that number is growing 20% per month. A mobile app was a top request from ShapeShift users who want to trade Bitcoin on the go.
Increasing the number of transactions will be crucial for the success of the startup, which raised £525,000 in seed funding from Roger Ver and Barry Silbert in March. ShapeShift makes a small margin on each transaction but will need many more users before it becomes profitable.
“The margins are really small. Ultimately if we take any small piece of the global exchange market that will be plenty big for us to make money on,” Voorhees said.
Ever since he first discovered the digital currency, working with Bitcoin has been the perfect pairing of ideology and profit for Voorhees. “I was very excited about a currency that was not controlled by a central government, that could be a free market currency," Voorhees said. "That was all the incentive I needed to dedicate my life to it.” In 2012, Voorhees co-founded Coinapult and worked as the Head of Marketing at BitInstant before founding ShapeShift in 2014.
“Bitcoin is very ideologically fulfilling, it’s my form of political activism, but it’s also a huge business opportunity,” he said.
