> A lot of the ideas seem (at least to "regular" folks) to be a bit... strange...
I've got the opposite impression really, a lot of the companies are recreating a lot of the old, boring, payments infrastructure and services, but using bitcoin and digital currency rather than building it on old technology like SWIFT, ACH or plastic cards with passwords to money vaults written on them (credit cards) that doesn't really work great in a digital age.
Things like processing payments online for merchants, things like offering a wallet/vault/bank to store money for consumers, remittances for migrant workers, exchanges to trade different currencies for investors and locking in your price (i.e. if you buy $100 of bitcoin and the price of bitcoin changes, you'll always keep $100 of bitcoin because you locked it in. Another boring hedging feature that makes digital currency look more familiar to users because it's denominated in their own fiat currency they're familiar with even though it's built on bitcoin). None of these things are new, many are hundreds of years old, and they're the big focus for bitcoin companies and investors. (e.g. Coinbase, Bitpay, Circle, Bitstamp or Kraken Blockchain.info, all have received (tens) of millions in funding, one even topping $100m and they cover the above areas). The idea of using digital currency may be a bit scary to some, but the underlying products and services from the big companies are quite boring at the moment. For example I've ordered pizza a few times with bitcoin, did a bit of trading, donated to charity, bought two games and a bracelet. Ordinary stuff really.
Then there's indeed Dunvegan Space Systems, but it's not a bitcoin company. It's a space communications network company by way of satellite, and one of their usecases can be bitcoin, but it can also be SpaceX or wikileaks. The company only has $100k of funding afaik, most of it from the founder itself who paused the project for now. The bitcoin-related product they offer isn't a consumer product, it's really for companies or even the industry to invest in. How it works is, short and simplified, that bitcoin is decentralised, it works on the basis of many different nodes that all share blockchain data. The issue is that if all nodes, somehow, would be able to get compromised and send out fake data (say because a government controls the internet), that the bitcoin system falls apart. But this is only the case if all nodes are compromised. So as long as even just a single one has honest data, bitcoin can keep working (because you can't fake your way around evidence of POW!) That's why the notion of having a node in space, in a satellite that broadcasts to everyone and that everyone can pick up on for free, is interesting. It's not essential because the chance that all nodes all over the world are compromised at the same time is extremely unlikely, but putting a few nodes in space would make everything that much more secure. The cost per satellite launch is just $1m, so for an industry that's worth tens of billions at some point, it makes sense to launch a small fleet for global coverage at all times. That's one of the products his company offers, but it's really a bitcoin agnostic, satellite communications company. It's a really tiny player in the space and mostly a (very cool) pet project by Garzik that'll probably become reality if bitcoin is still kicking in like 2020, it's not an essential project because most governments look to bitcoin quite favourably, there's no real other pressure that can knock out all thousands of different nodes running different software on different hardware behind different routers in different countries. Still it'd be cool to see happen someday.
Anyway, return? No, don't count on it. But VCs didn't expect that going in, either. Facebook had 5 years of losses before it turned a profit and that's a ridiculously successful company. Bitcoin is barely 5 years old, let alone its companies. But some probably do have a decent return already. Take Bitstamp for example, averaged volume of about $150m a month, its fees structure starts at a base of 0.25% which applies to both sides (seller/buyer) of the trade, so on any trade it's 0.5%. That puts it at an annual revenue of around $10m. They've traditionally had a small team of less than 10 core people, with probably an equal amount of lower paid in support staff. And they're based in Slovenia where a software engineer on $60k is quite above average and support staff are probably around $15k a year. I wouldn't be surprised if they've got a team of around 20 people that cost on average say $50k each, or about $1m. Add your office (Slovenia), your servers, outsourcing some work (like pentesting, legal support etc), all kinds of employee benefits etc etc, you can easily imagine they're making a few million in profit every year and it's not like they had much to invest in. In fact I'd be surprised if they haven't been profitable since day one back in 2011 when they were basically a 2 or 3 man team, they probably were somewhere nearly that small back in 2013 when they had times where they were doing $750m of volume in a month, and that's when their base fee was 0.5%, or 1% as it applies to both sides of the trade. $7.5m in revenue in a month and I bet they could count the number of team members on the fingers of their two hands, or maybe even one, for what is purely a software company with a bit of SEPA handling every now and then.
Anyway you can run the numbers for various bitcoin companies but most have chosen growth over revenues. Coinbase for example has a massive team, topping 100 people it looks like, all based in SF, they're probably burning $15m a year easily on costs, they waive a lot of their merchant's fees and have a $75 referral programme if you sign up friends who buy a fraction of a coin. They may not be generating a return (although they do look to have decent revenues), but with $100m in funding and revenues easily topping $10m a year, it makes sense to burn a few million every year to grow. If Coinbase played it careful they'd have a few million in profit per year, it's peanuts for $100m VC investment, they can get triple that in a normal investment portfolio. VCs demand rapid growth and are willing to burn money to get it. But with $1b invested, I doubt we'll see much more money flow in this year.