A French startup proves that selling USB sticks is one way to make big money on bitcoin

Back to the silicon mine.

Bitcoin is soaring, but how do you keep those digital coins safe? Reuters estimates that more than 980,000 bitcoins, worth more than $10 billion at current prices, have already been stolen from exchanges. You could stash your secret codes in a Swiss mountain vault. Or more likely—put them on a USB stick.

A Paris-based startup called Ledger said last week that it sold its millionth Nano S hardware wallet—basically a USB stick with a screen that stores the user’s cryptocurrency holdings. It retails for €94.80 ($116), which suggests Ledger could have a product worth more than $100 million in revenue. The Nano S, released in June 2016, also demonstrates the growing number of ways that companies can cash in on the crypto boom.

There’s money to be made from selling the picks and shovels of the gold rush in cryptocurrency. Coinbase, one of the biggest cryptocurrency exchanges in the US, had more than $1 billion of revenue last year, according to Recode. Specialized silicon is another lucrative enterprise: Beijing-based cryptocurrency miner Bitmain spent an estimated $800 million buying bespoke silicon from Taiwan Semiconductor Manufacturing Company, the world’s largest independent chip-maker, over the last six months of 2017.

The French startup is effectively selling extra security for crypto investors. A number of venture capitalists, including London-based Draper Esprit, recently invested $75 million in the firm, according to an announcement last week. “This is where people store money now,” said Tim Draper, founder of DFJ, the Draper Network.

Ledger recorded revenue of $56 million last year, according to Bloomberg (paywall), and around $734,000 in 2016 according to filings in France—far short of the $116 million implied by its Nano S sales. Ledger changed the product’s pricing from €69.60 before taxes to the current €94.80 price, which includes shipping costs. Some units also were sold at wholesale prices, according to Ledger.

Still, for Ledger and companies like it, providing the essential services and infrastructure for the burgeoning cryptocurrency markets is a way to make serious money, without ever having to buy a cryptocoin.

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