In another case of billionaires betting big on Bitcoin and the blockchain technology, a number of technology entrepreneurs have come together to work on a Bitcoin project.
The group of entrepreneurs who have previously worked with companies such as LinkedIn, Sun Microsystems and Yahoo have so far contributed a total of US$ 21 million to Blockstream.
Blockstream aims to enhance the blockchain and turn it into a platform that can be used to develop multiple applications that go far beyond cryptocurrency. The investors hope that they will be able to use the blockchain to enable people engage in trustless transactions without having to pay fees to middlemen such as trustees, registrars and others.
According Reid Hoffman, a co-founder of LinkedIn, and a funder of Blockstream, the blockchain is “extremely difficult to corrupt” and it therefore possesses the potential to become an efficient platform on which anything of value can be transacted. He believes that Blockstream will facilitate the development of the blockchain so as to enable this.
Blockstream has as yet, no clear plan on how it will achieve its objectives about blockchain technology. Investors in the company describe it as a “leap of faith” that is mostly based on the reputation of the investors themselves. The company’s investors read like a who is who list in technology. In addition to Reid Hoffman, they also include Vinod Khosla, Eric Schmidt, who is the chairman of Google and Jerry Yang, who founded Yahoo.
The initiative to develop Blockstream came from Adam Back, who is a cryptography specialist based in Malta. He has developed hashcash and proof-of-work innovations that were critical to the development of bitcoin. In the global bitcoin community he is viewed by some as being the number 2 after Satoshi Nakamoto, inventor of the Bitcoin. To create Blockstream, Mr Back recruited other cryptography enthusiasts such as Austin Hill, Pieter Wuille, Gregory Maxwell and Matt Corallo to create a team of software developers who would maintain and update bitcoin’s core software code.
The software development team will be charged with developing parallel blockchains that would enable Bitcoin 2.0 applications which would run without endangering the core bitcoin code. Some of the ideas that the team is working on include developing smart contracts whose obligations would be executed through software, stock markets that would require no brokers, and decentralized registries that could be used to transfer assets without the use of agents and or notaries.
The founders are not looking to make a quick return with Blockstream. They however view their role with Blockstream as helping to create a future blockchain ecosystem similar to the apps that the Apple iPhone helped to bring about. Co-founder Vinod Khosla foresees his pay-off as coming from the ability to conduct due diligence later on, on the money-earning applications that will come via the Blockstream platform known as the Sidechain.
Many other investors however are still in a wait-and-see mode. Blockstream’s cloudy long-term prospects have made it difficult to determine returns on their investment in the start-up. However, the initial response to Blockstream’s Sidechains indicate interest from the Bitcoin community. In the course of the first few days after posting, the Sidechain’s white paper had garnered more than 10,000 downloads.
It is this kind of interest that keeps Reid Hoffman upbeat. In a post on his blog, he said,
“As Bitcoin evolves, Blockstream will play a huge role in helping it maintain its momentum, by making it easy to add new capabilities to the platform. And Blockstream’s success will in turn generate new waves of technical and entrepreneurial innovation – it will help make Bitcoin the kind of open, highly adaptive platform upon which a vast array of complementary products and services can be built.”
What do you think of the Blockstream funding and innovation plans? Comment below!
Images from Shutterstock.
Last modified: March 4, 2021 4:41 PM