From a two-man operation a year ago, Cryptopia surges on bitcoin

Tuesday, 9 January 2018

Christchurch-based Cryptopia co-founder Rob Dawson.

The Christchurch firm at the centre of some of the frenzied bitcoin trading in recent days evolved from a two-man operation in 2014 to employing more than 50 today.

The bitcoin computer currency was this week trading at a value of between $20,000 and $22,000, down from $28,114 on December 17, but well ahead of its $1200 level a year ago.

In the trading room at Christchurch-based Cryptopia.

Rob (Hex) Dawson and Adam Clark started the cryptocurrency trading platform, Cryptopia, as a hobby nearly three years ago.

They quit their jobs about a year ago and put all their savings into Cryptopia as a full time enterprise, although they were unsure at the time how much future it had.

* What is bitcoin, and what can you use it for?**

Fast forward 12 months, and their big challenge is coping with the tsunami of business, largely due to trading in bitcoin.

The massive surge in newcomers registering and trading on Cryptopia caused problems in recent days, requiring Cryptopia to suspend some trading.

This raised security concerns, partly due to the volume of financial activity, and the sharp and even threatening reactions from traders as systems struggled to cope with the unprecedented action.

The figures tell the story – a year ago Cryptopia had 30,000 users, rising to 1 million in December 2017.

After the first week of January, the number of users hit 1.4 million, causing difficulties in managing the site and requiring suspension of some trading and registrations.

Dawson said staff were working overtime to raise levels of service, more people were being hired, and the company was developing processes as quickly as possible to cope with the demand.

'We're in an unprecedented time with adoption and interest in cryptocurrencies and blockchain surging and Cryptopia is dedicated to being a quality service provider in this evolving landscape,' he said in a letter to users.

'Please bear with us, as we know how frustrating it can be for users involved in issues impacting their ability to transact freely, but we're in an unprecedented time.'

Dawson said there were considerable costs for the business even as turnover rose. Cryptopia paid fees for being hosted on more than 100 servers around the world. The company was also making large donations to charities.

Even so, general manager Dave Sanders said it was an amazing milestone for a small regional company to boast higher trading volume than the New Zealand Stock Exchange currently.

Dawson and Clark have extensive backgrounds in software development background in technology firms in Christchurch.