Messaging company Line is continuing to burrow deep into the crypto space after it announced the launch of a $10 million investment fund. The fund will be operated by Line’s Korea-based blockchain subsidiary Unblock Corporation, which is tasked with research, education and other blockchain-related services. The fund will be called Unblock Ventures and it’ll initially have […]
Messaging company Line is continuing to burrow deep into the crypto space after it announced the launch of a $10 million investment fund.
The fund will be operated by Line’s Korea-based blockchain subsidiary Unblock Corporation, which is tasked with research, education and other blockchain-related services. The fund will be called Unblock Ventures and it’ll initially have a capital pool of $10 million but Line said that is likely to increase over time.
The company said the fund will be focused on early-stage startup investments, but it didn’t provide further details.
Line is listed in Tokyo and on the NYSE. This fund makes it one of the first publicly traded companies to create a dedicated crypto investment vehicle. The objective, it said, is “to boost the development and adoption of cryptocurrencies and blockchain technology.”
Line claims nearly 200 million users of its messaging app, which is particularly popular in Japan, Taiwan, Thailand and Indonesia. The company also offers a range of connected services that include payment, social games, ride-hailing, food delivery and more.
This marks Line’s second major crypto move this year following the launch of its BitBox exchange last month. It isn’t available in the U.S. or Japan right now but Line envisages closes ties with its messaging service and other features further down the line.
These moves into crypto come despite some serious downturn in the valuation of the space this year following record highs in January which saw the value of one Bitcoin touch nearly $20,000 and Ethereum, among others, surged. In the months since then, however, many cryptocurrencies have seen their valuations decline. This week, Ethereum dropped below $300 in what is its first major price crisis. Bitcoin has, for many years, risen and fallen although January’s valuations took the extremes to a new level.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.
Coinbase wants to be Facebook Connect for crypto. The blockchain giant plans to develop ‘Login with Coinbase’ or a similar identity platform for decentralized app developers to make it much easier for users to sign up and connect their crypto wallets. To fuel that platform, today Coinbase announced it has acquired Distributed Systems, a startup […]
Coinbase wants to be Facebook Connect for crypto. The blockchain giant plans to develop ‘Login with Coinbase’ or a similar identity platform for decentralized app developers to make it much easier for users to sign up and connect their crypto wallets. To fuel that platform, today Coinbase announced it has acquiredDistributed Systems, a startup founded last year that was building identity standard for dApps called the Clear Protocol.
The five-person Distributed Systems team and its technology will join Coinbase. Three of the team members will work with Coinbase’s Toshi decentralized mobile browser team, while CEO Nikhil Srinivasan and one other co-founder are forming the new decentralized identity team that will work on the ‘Login with Coinbase’ product. They’ll be building it atop the “know your customer” anti-money laundering data Coinbase has on its 20 million customers. Srinivasan tells me the goal is to figure out “How can we allow that really rich identity data to enable a new class of applications?”
Distributed Systems had raised a $1.7 million seed round last year led by Floodgate and was considering raising a $4 million to $8 million round this summer. But Srinivasan says “No one really understood what we’re building”, and it wanted a partner with KYC data. It began talking to Coinbase Ventures about an investment, but after they saw Distributed Systems’ progress and vision, “they quickly tried to move to find a way to acquire us.”
Distributed Systems began to hold acquisition talks with multiple major players in the blockchain space, and the CEO tells me it was deciding between going to “Facebook, or Robinhood, or Binance, or Coinbase”, having been in formal talks with at least one of the first three. Coinbase “were able to convince us they were making big bets, weaving identity across their products.” The financial terms of the deal weren’t disclosed.
Coinbase’s plan to roll out the ‘Login with Coinbase’ platform is an SDK that others apps could integrate. That mimics the way Facebook colonized the web with its SDK and login buttons that splashed its brand in front of tons of new and existing users. This made turned Facebook into a fundamental identity utility beyond its social network.
Developers eager to improve conversions on their sign up flow could turn to Coinbase instead of requiring users to set up whole new accounts and deal with crypto-specific headaches of complicated keys and procedures for connecting their wallet to make payments. One prominent dApp developer told me yesterday that forcing users to set up the MetaMask browser extension for identity was the part of their signup flow where they’re losing the most people.
This morning Coinbase CEO Brian Armstrong confirmed these plans to work on an identity SDK. When Coinbase investor Garry Tan of Initialized Capital wrote that “The main issue preventing dApp adoption is lack of native SDK so you can just download a mobile app and a clean fiat to crypto in one clean UX. Still have to download a browser plugin and transfer Eth to Metamask for now Too much friction”, Armstrong replied “On it :)”
In effect, Coinbase and Distributed Systems could build a safer version of identity than we get offline. As soon as you give your social security number to someone or it gets stolen, it can be used anywhere without your consent and that leads to identity theft. Coinbase wants to build a vision of identity where you can connect to decentralized apps while retaining control. “Decentralized identity will let you prove that you own an identity, or that you have a relationship with the Social Security Administration, without making a copy of that identity” writes Coinbase’s PM for identity. “If you stretch your imagination a little further, you can imagine this applying to your photos, social media posts, and maybe one day your passport too.”
We are in the early days of blockchain technology, and if you take the initiative to learn how to program on the blockchain, you stand to have a very lucrative career in the future. The situation is not unlike the early days of the internet, where programmers who had the foresight to learn web programming, found new and growing opportunities to earn impressive incomes into the future. What do you need to learn to position yourself for that future, and where can you get started learning? The Potential of the Blockchain When most people think of the “blockchain”, they immediately…
We are in the early days of blockchain technology, and if you take the initiative to learn how to program on the blockchain, you stand to have a very lucrative career in the future.
The situation is not unlike the early days of the internet, where programmers who had the foresight to learn web programming, found new and growing opportunities to earn impressive incomes into the future.
What do you need to learn to position yourself for that future, and where can you get started learning?
The Potential of the Blockchain
When most people think of the “blockchain”, they immediately think of Bitcoin. However, there’s a big difference, as the following Google Trend graphs reveal.
The following is the search trend over the last two years for “bitcoin”.
This next chart is the search trend for “blockchain” over the same period.
You can see that both saw a tremendous spike in interest over the last half of 2017. After the novelty of Bitcoin’s tremendous rise in price wore off, interest in Bitcoin waned back to and slightly below the end of 2017.
Interest in the blockchain remains higher than the end of 2017 and will likely continue to rise as new innovations are built on top of it.
The difference between Bitcoin and the blockchain is significant. Bitcoin is only an initial application of blockchain technology. But the real star of the show, regardless what happens to Bitcoin, is the blockchain.
The Massive Demand for Blockchain Programmers
Blockchain technology is so new that universities haven’t quite caught up to it with their curricula. For this reason, companies seeking to develop blockchain technologies are turning to freelance developer talent.
“Its growth exceeded 2,000% for three quarters in a row on Upwork.com, and in Q1 it experienced more than 6,000% year-over-year growth, making it the fastest-growing skill out of more than 5,000 skills on the site.”
Gartner predicts the business “value-add” of blockchain will exceed $3.1 trillion in the next twelve years.
IBM has been on the cutting edge of blockchain development initiatives, operating various pilot projects. In early 2017, the company conducted a poll of 200 government leaders across 16 countries and found that 9 out of 10 of those leaders said they planned to invest in some aspect of blockchain use across government functions.
According to Coindesk, the surge in interest in blockchain is directly resulting in a steady growth of new jobs.
This means that pay rates for this skill are enormous. Glassdoor reports that the average salary for a principle blockchain engineer is between $138,000 to $152,000 as of May 2017.
Blockchain Programming Skills
If you’re hoping to break into this booming field, the next obvious question is what skills you need to land one of these lucrative jobs?
Your next steps depend on where you already are with your skillset. Blockchain programming isn’t a place where you can start learning. You’ll need to know a number of core computer science fundamentals—and know it well—to achieve success as a blockchain developer.
If you think about it, Bitcoin itself was programmed with C++. Ethereum uses C++ and Python. Other popular blockchain applications support Java, Python, NodeJS, and C#. All of these are core programming languages that will make you a much-desired developer throughout every tech industry, not only blockchain.
The progression of skill development looks something like this.
Learn core computer science and programming competencies
Focus on understanding networking and security skills
Start diving into learning how the blockchain works (see resources below)
Start developing your own blockchain programming skills through online or college based courses (see resources below).
Conceptually, it can be difficult to understand how a technology doesn’t have a specific set of programming languages you need to learn to utilize it.
But the beauty of the blockchain is that it’s more of a framework than it is an actual technology. It’s how transactions are communicated over a distributed, decentralized network rather than over a centralized one.
One of the best videos I’ve seen that really helps hammer this concept home is this YouTube video on how to build a blockchain in under 15 minutes:
You can see after watching this that it isn’t the programming language you use that matters, but the method you use to build and utilize a blockchain.
University Blockchain Learning Resources
If you already have a Computer Science degree, or you’re an experienced programmer, then you’re ready to start advancing your blockchain programming skills.
There are numerous resources available that will help you understand blockchain programming concepts, and start to develop your own blockchain applications.
If you’re going into college soon, you may see blockchain sources start showing up in the curriculum. Major universities are also now opening up special labs and project to explore blockchain applications.
A clear sign that a disruptive technology is making inroads into major industries is when you see universities like these increasing research funding in those areas.
Interested in a career in blockchain technology and shopping around for a college to attend? Make sure to ask whether the school you’re considering offers courses on the topic, and whether they have research labs devoted to it as well.
Those research labs could become a great place for you to develop your own blockchain programming skills.
Blockchain Programming Online Learning
For skilled programmers looking for a career change, university resource are limited. If local universities near you don’t offer blockchain curricula, then you’re limited to using online blockchain resources.
That isn’t a terrible thing, because there are already a lot of great resources online to learn blockchain programming. There should be even more as interest and development in blockchain advances and becomes more mainstream.
The following are some of the best resources online to learn more about blockchain programming.
Online Blockchain Courses
To develop your own blockchain apps in any programming language, you’ll want to work your way through one or more courses. Most free courses are introductory. So, if you want to get to an advanced level, plan to invest money into a few really solid blockchain courses.
The following are online sites that offer some valuable courses for learning about blockchain and application development on the blockchain.
Blockgeeks Crash Course
This crash course is a full guide that’ll teach you the basic code to develop your own very simple blockchain application.
You’ll find a frequently updated list of courses to learn blockchain programming here. There are even certification programs offered by Berkeley and the Linux Foundation.
This growing list of blockchain courses are mostly highly-effective courses that’ll help you go from beginner to advanced level. They’re not free, but if you want to land a blockchain developer job, these are a good investment.
If your budget is tight, Class Central tracks and lists free blockchain courses across the web.
This well-known resource of online courses is starting to develop a collection of blockchain courses.
B9Lab Blockhain Academy
This is collection of courses intended to help you develop the skills and certifications you need to launch your career as a blockchain developer.
Online Blockchain Practice
If you are a software developer and you already have all of the foundational programming skills described above, you can dive right into learning blockchain programming today. The following resources provide online platforms and environments to help you practice developing your own blockchain applications.
IBM Blockchain for Developers
IBM has been leading the charge in blockchain development. In early 2018, IBM and Walmart collaborated on a supply chain blockchain pilot. IBM recognizes the need for more blockchain expertise and offers an entire platform to help developers learn and practice blockchain programming. Under Learn, in the Developer section, you can sign up for a starter plan to test your own blockchain application. It isn’t free but you get $500 is starting credits.
This introductory course will introduce you to blockchain. Specifically, you’ll learn about the programming language built by the Ethereum developers called Solidity. By learning this language and practicing it through game-development simulations like Space Doggos and CryptoZombies, you’ll become a Solidy expert in no time. This is a great place to start if you want to work toward developing smart contracts.
Since the entire blockchain development community is all about using open source software and resources, you don’t necessarily have to use any of the above platforms. You could just start using your own favorite programming language to being developing a blockchain application right now.
Blockchain programming isn’t a simple concept by any stretch of the imagination. However, if you’re already a programmer, then you have the foundation required to learn blockchain programming.
If you’re still not certain that you’re interested in this new technology, take some time to learn a little more about these decentralized apps and what they can do. If the technology described there sounds exciting to you, then a blockchain career may be in your future.
Hello And Welcome Back To The Latest Edition Of All The Cryptos Are Getting Rekt Right Now. Crypto bloodbaths have become fairly common in 2018 — mainly because of the insane growth in 2017 — but we’ve not covered them all because they are so numerous and often include so-called ‘flash crashes’ or small drops, but […]
Hello And Welcome Back To The Latest Edition Of All The Cryptos Are Getting Rekt Right Now.
Crypto bloodbaths have become fairly common in 2018 — mainly because of the insane growth in 2017 — but we’ve not covered them all because they are so numerous and often include so-called ‘flash crashes’ or small drops, but the fall happening today is worth noting for several wider reasons.
Primarily that’s because this is a major test for Ether — the token associated with the Ethereum Foundation that is the second largest cryptocurrency by volume — has been on a downward spiral with little sign of change.
Ether, which is the preferred platform of choice for most developers building on the blockchain, is down nearly 17 percent over the past day. That’s erased billions of dollars in paper (crypto) value as the bear market for cryptocurrencies continues to pull markets south.
The drop also marks the first time ever that the price of an Ether has fallen below its valuation over one year: one Ether is worth $266 right now at the time of writing, versus $304 on August 14 2017. The token has been steadily falling since early May, when its peak value was $808, and as the lynchpin for many ICO project tokens, its demise has sent the value of most other tokens down, too.
Just looking at Coinmarketcap.com this morning, all but two of the top 100 tokens are down over the last 24 hours with many losing 10-25 percent of their value over the past day. Bitcoin, too, has dropped below $6,000, having topped $8,000 for a time last month.
Ether’s plummet below $300 has sparked a mixed debate among those in the crypto community. The token had been held as visionary, an improvement on Bitcoin that gives developers a platform to build on — whether it be decentralized apps, decentralized systems or more — but that hasn’t been reflected in in this months-long price retreat.
Certainly, two founders who spoke TechCrunch and have held ICOs expressed a belief that Ether “needs to find some price stability” to allow the focus to become about product and not just ‘get rich’ speculation. Of course, it helps that the two founders and many of those who held token sales have long since sold the Ether or Bitcoin they raised in exchange for fiat currency. Indeed, if their token sale was last year, the chances are they got a lot more real-world cash than they initially bargained for or would get now.
In an interview last week, Drijkoningen told TechCrunch that raising a fund and doing deals in a ‘low tide’ market like now beats attempting to do the same amid a frothy period with hype and peak valuations — one Ether was worth nearly $1,400 in January, for example. A number of others VCs have long said that, ultimately, stability is good for the ecosystem.
Vitalik Buterin is the creator of Ethereum
But, on the other side, there are more pessimistic voices.
Among some investors canvassed by TechCrunch, the sense is that with the downturn of the ICO funding boom that fueled much of Ethereum’s rise, there may be less incentive to hold as the broader market’s interest in the cryptocurrency wanes.
For one Bitcoin bull, the intrinsic value of Bitcoin as an immutable, decentralized ledger acts as a more powerful draw than the perceived mutability and centralization that the Ethereum platform offers.
“People are also beginning to understand the unique value of an immutable, decentralized ledger, and recognize that Ethereum is not that,” the investor wrote in an email.
Another long-term problem that Ethereum faces, according to this investor, is that the promise of decentralized apps backed by the token is yet to be released. Crypto Kitties, a smash hit earlier this year, has faded and now there’s competition as Bitcoin’s Lightning Network is adding nodes and apps — referred to as LApps — which can operate in a similar but leverage the Bitcoin ledger.
It’s still early days, of course, and markets will always rise and fall, but this is the first big test for Ether and Ethereum. Beyond the sport of price speculation, it’ll be worth watching to see where this heads next.
Note: One of the authors of this post — Jon Russell — owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.
Facebook is invading the blockchain, but how? Back in May Facebook formed a cryptocurrency team to explore the possibilities, and today it removed a roadblock to revealing its secret plans. Former head of Messenger David Marcus who leads the Facebook Crypto team today announced he was stepping down from the board of Coinbase, the biggest crypto […]
Facebook is invading the blockchain, but how? Back in May Facebook formed a cryptocurrency team to explore the possibilities, and today it removed a roadblock to revealing its secret plans.
Former head of Messenger David Marcus who leads the Facebook Crypto team today announced he was stepping down from the board of Coinbase, the biggest crypto startup. Marcus was formerly the president of PayPal and helped Facebook Messenger adopt chatbot commerce and peer-to-peer payments, so he was both a natural choice for Coinbase’s board and Facebook’s blockchain skunklabs.
Facebook told CoinDesk this was to avoid the appearance of a conflict of interest, which is exactly what it was. Marcus provided a statement to TechCrunch explaining he was stepping down “because of the new group I’m setting up at Facebook around blockchain” noting that “Getting to know Brian [Armstrong, CEO of Coinbase], who’s become a friend, and the whole Coinbase leadership team and board has been an immense privilege. I’ve been thoroughly impressed by the talent and execution the team has demonstrated during my tenure, and I wish the team all the success it deserves going forward.”
Now Facebook is cleared to start publicly talking about its plans, though it hasn’t yet. So what could Facebook be building? I see three main opportunities:
3% Off With FaceCoin
Facebook could build a cryptocurrency wallet with its own token that people could use to pay for things with partnered businesses or that they discover through Facebook ads. Since blockchain can make transactions free or very cheap, Facebook and its partners could sidestep the typical credit card processing fees. That would potentially allow Facebook to offer users “3% off purchases made with FaceCoin” or a similar promotion.
Discounts like this could draw users into Facebook’s cryptocurrency feature. It’s well positioned to run such the scheme thanks to its extensive connections with over six million advertisers and 65 million businesses that have Facebook Pages. The social network could eat the costs of running the program, passing the transaction fee savings on to the users, while touting partnerships with Facebook Crypto as ways to boost sales for businesses. That could in turn get clients to spend more money on Facebook ads, as the discounts would enhance conversion rates and drive sales.
P2P and Micropayments
Facebook already lets you send friends money through Messenger for free, but only with a connected debit card or PayPal account. Facebook could offer cryptocurrency-based payments between friends to let a wider range of users settle debts for shared dinners or taxis through Messenger. Users might fund their Facebook Crypto wallet once with a payment, possibly with a one-time transaction fee, and then they could send and receive the tokens for free from then on. Blockchain becoming the backbone of peer-to-peer payments could further increase engagement with Messenger for its 1.3 billion users.
Meanwhile, Facebook could also potentially use cryptocurrency to let fans send micropayments to their favorite creators, like video stars and game streamers. Facebook recently debuted its own virtual (not crypto) currency called Facebook Stars that users can buy and send to creators, who can then cash them out for one cent each. Facebook takes an undisclosed cut but gives the majority of what users spend on Stars to the creator.
Facebook could potentially undergird this system with cryptocurrency to alleviate transaction fees and let people tip creators smaller amounts of cash for exclusive content or just to show their appreciation. Facebook started with a minimum of $3 tips at a time so that transaction fees wouldn’t be too high of a percentage of the total purchase. A cryptocurrency solution could let users efficiently tip much smaller amounts, which could lure people towards the behavior. The more money Facebook can deliver to internet celebrities, the more popular ones it can recruit to live on its platform and the more content they’ll produce.
A top problem in the world of decentralized blockchain apps is how you bring your identity with you. Securely connecting your wallet, blockchain-based virtual goods, and biographical info to new dApps can be a laborious process. Users typically have to type in long, complicated alphanumeric keys that are tough to remember and annoying to input. User experience design around identity in the blockchain space lags far behind what we’re used to with mainstream social apps like Facebook Connect, which uses a OAuth single sign-on to let you instantly join apps without creating a new username and password, or filling out a profile and uploading a photo.
Facebook could use its expertise in operating a popular identity platform to ease login to dApps. While the company has faced plenty of privacy issues and attacks on election integrity, Facebook has a strong record of not being traditionally hacked. It hasn’t suffered a massive user data breach like LinkedIn, Twitter, and other social networks. Using an overtly centralized identity system to connect with decentralized apps might be counterintuitive, but Facebook could deliver the UX convenience necessary to unlock a new wave of blockchain utility.
For now it’s unclear if Facebook will end up directly competing with Coinbase in the exchange and wallet space, or if it might instead partner with the blockchain mainstay to accelerate its efforts. But with deep pockets, tons of tech talent, and ubiquity amongsts social networkers and businesses, Facebook Crypto’s primary limits are its ambitions and the extent of user trust.
During a gold rush, Silicon Valley’s line is to always invest in picks and shovels instead of mining. Sometimes it pays just to do both. TechCrunch has learned through a company fundraise overview that Beijing-based mining equipment seller Bitmain hit a quarterly revenue of approximately $2 billion in Q1 of this year. Despite a slump […]
During a gold rush, Silicon Valley’s line is to always invest in picks and shovels instead of mining. Sometimes it pays just to do both.
TechCrunch has learned through a company fundraise overview that Beijing-based mining equipment seller Bitmain hit a quarterly revenue of approximately $2 billion in Q1 of this year. Despite a slump in bitcoin prices since the beginning of the year, the company is on track to become the first blockchain-focused company to achieve $10 billion in annual revenue, assuming that the cryptocurrency market doesn’t drop further.
Fortune previously reported that the company had $1.1 billion in profits in the same quarter, a number in line with these revenue numbers, given a net margin of around 50 percent.
That growth is extraordinary. From the same source seen by TechCrunch, Bitmain’s revenues last year were $2.5 billion, and around $300 million just the year before that. The company reportedly raised a major venture round of $300-400 million from investors, including Sequoia China, at a valuation of $12 billion.
The same overview also shows that Bitmain is exploring an IPO with a valuation between $40-50 billion. That would represent a significant uptick from its most recent valuation, and is almost certainly dependent on the vitality of the broader blockchain ecosystem.
Several of Bitmain’s competitors have filed for IPO since the beginning of 2018, but most of them are significantly smaller in size. For example, Hong Kong-based Canaan Creative filed for an IPO in May, and the latest was that it was aiming for $1 billion to $2 billion in fundraising with 2017 revenue of US$204 million.
When contacted for this story, Bitmain declined to comment on the specific numbers TechCrunch has acquired.
A brief overview of Bitmain
Bitmain is the world’s dominant producer of cryptocurrency mining chips known as ASICs, or Application-Specific Integrated Circuit. It was founded by Jihan Wu and Micree Zhang in 2013, and the company is currently headquartered in Beijing.
As the story goes, back in 2011, when Wu read Satoshi Nakamoto’s whitepaper on Bitcoin, he emptied his bank account to buy them. Back then, one bitcoin could be purchased for less than a dollar. And by 2013, Wu and Zhang decided to build an ASIC chip specifically for bitcoin mining and founded Bitmain. Wu was just 28 at the time.
Cryptocurrency mining is the process of checking and adding new transactions to bitcoin’s immutable ledger, called the blockchain. The blockchain is formed by digital blocks, where transactions are recorded. The act of mining is essentially using math to solve for a cryptographic hash, or a unique signature if you will, to identify new blocks.
The general mining process requires massive processing power and incurs hefty energy costs. In exchange for those expenses, miners are rewarded with a number of bitcoins for each block they add onto the blockchain. Currently, in the case of Bitcoin, the reward for every block discovered is 12.5 bitcoins. At the current average trailing bitcoin price of approximately $6,500, that’s $81,250 up for grabs every 10 minutes, or $11.7 million dollars a day.
Bitmain has several business segments. The first and primary one is selling mining machines outfitted with Bitmain’s chips that are usually a few hundred to a few thousand dollars each. For example, the latest Antminer S9 model is listed as $3,319. Secondly, you can rent Bitmain’s mining machines to mine cryptocurrencies.
Third, you can participate to mine bitcoin as part of Bitmain’s mining pool. A mining pool is a joint group of cryptocurrency miners who combine their computational resources over a network. Bitmain’s two mining pools, Bitmain’s AntPool and BTC.com, collectively control more than 38 percent of the world’s Bitcoin mining power per BTC.com at the moment.
The future of Bitmain is closely tied with the crypto market
Bitcoin mining is a massive business with influence over energy prices across the world. (LARS HAGBERG/AFP/Getty Images)
Despite its rapid rise to success, Bitmain is ultimately dependent on the price of cryptocurrencies and overall crypto market fluctuations. When there is a bull crypto market, investors would be willing to give a different valuation multiple to the company than if it were in a bear market. In a bear market, the margins are reduced for both the company as well as for its customers, as the economics of mining cryptocurrencies are no longer as compelling. For example, at the end of 2014, Mt. Gox, a famous Bitcoin exchange at the time, was hacked, spurring a crash in cryptocurrency prices.
Subsequently, Bitmain went through a bitcoin drought as Bitcoin prices hit low points, and its ASIC chips did not see much demand. It was not appealing to miners to pay for expensive electricity bills to mine a digital currency that was falling in value. But fast-forward to now; we have gone through several bull and bear crypto market cycles. According to Frost & Sullivan, in 2017, Bitmain is estimated to have ~67 percent of the market share in bitcoin mining hardware, and generated 60 percent of computing power.
Canaan Creative IPO filing. Company A is Bitmain.
One of the fundamental challenges facing any cryptocurrency mining manufacturer such as Bitmain is that the valuation of the company is largely based off the price of cryptocurrencies. The market in the first half of 2018 has shown that no one really knows when bitcoin prices and the cryptocurrency market will start picking up again. Additionally, according to Frost & Sullivan, the ASIC-based blockchain hardware market, which is the market segment that includes Bitmain and Canaan, will see its compound annual growth rate (CAGR) slow to around 57.7 percent annually between 2017 to 2020, down from 247.6 percent between 2013 and 2017.
Nonetheless, it seems that Bitmain has planned well ahead to prepare for these macro risks and exposures. The company has raised significant private funding and has been expanding its business into mining new coins and creating new chips outside of cryptocurrency applications.
First, with it’s existing mining rigs, Bitmain can essentially broaden into all SHA256-related coins. So coins such as Bitcoin, Bitcoin Cash and Litecoin can all be mined on Bitmain’s equipment. The limitation here is largely how fast they can build up more mining equipment and mining centers. The company has broadened its geographic reach by developing new mining centers. Most recently, Bitmain revealed that it will build a $500 million blockchain data center and mining facility in Texas as part of its expansion into the U.S. market, aiming for operations to begin by early 2019.
Secondly, Bitmain is also looking to launch their own AI chips by the end of 2018. Interestingly, the AI chips are called Sophons, originated from the key alien technology in the famous trilogy, the Three-Body Problem, by Liu Cixin. If things go as planned, Bitmain’s Sophon units could be training neural networks in data centers around the world. Bitmain’s CEO Wu once said that in five years, 40 percent of revenues could come from AI chips.
Lastly, Bitmain has been equipping itself with cash. Lots of it, from a number of the top and largest investors in Asia. Two months ago, China Money Network reported that Bitmain raised a Series B round, led by Sequoia Capital China, DST, GIC and Coatue in a $400 million raise, putting the company at a value of $12 billion. Just last week, Chinese tech conglomerate Tencent and Japan’s SoftBank, another tech giant whose 15 percent stake in Uber makes it the drive-hailing app’s largest shareholder, also joined the investor base.
For Bitmain, there are many reasons to stay private as a company, including keeping its quarterly financials private as well as dealing with market fluctuations and the ongoing volatility and uncertainty in the cryptocurrency world. However, the con is that early employees may not get liquidity in their stock options until much later.
Wu has said that a Bitmain IPO would be a “landmark” for both the company and the cryptocurrency space. However, with the current rich crypto private market financing, it’s not so bad of an idea to continue to raise private money and stay out of the public eye. Once Bitmain’s financials become more diversified and cryptocurrency becomes more widely adopted worldwide, the world may then be ready for this $10 billion revenue blockchain company.
VCs around the world are trying to wrap their head around crypto, and the new investment paradigm it brings. Some have made one-off deals but a few have jumped in off the deep end with dedicated crypto funds, with A16z in the U.S. the most prominent example. Now Singapore has its first from the traditional […]
VCs around the world are trying to wrap their head around crypto, and the new investment paradigm it brings. Some have made one-off deals but a few have jumped in off the deep end with dedicated crypto funds, with A16z in the U.S. the most prominent example. Now Singapore has its first from the traditional world after prominent firm Golden Gate Ventures announced a spinoff fund called LuneX Ventures.
Notably, LuneX will be the first crypto fund from a traditional investor in Southeast Asia, although Wavemaker Partners — which is backed by early Bitcoin proponent Tim Draper — does have a U.S.-based fund.
LuneX will be run by founding partner Kenrick Drijkoningen, who was previously head of growth for Golden Gate, with associate Tushar Aggarwal, who hosts the Decrypt Asia podcast. The two are assembling a small support team which will also be assisted by Golden Gate’s back office team.
Drijkoningen told TechCrunch in an interview that he believes the time is right for the fund, even though the price of Bitcoin, Ether and other major tokens is way below the peaks seen in January.
“Despite the fact that public markets are down, the amount of talent that’s moving into this space is exciting. There are young entrepreneurs who are passionate about this space and want to build an ecosystem,” he said, adding that stability on price is a good thing.
“There’s a lot of crypto funds but most of them are hedge funds,” Drijkoningen added. He explained that LuneX intends to take a longer-term approach to investments by helping its portfolio and generally doing more than shorting and quick trades.
Drijkoningen explained the capital will be divided equally for token sales, purchasing existing tokens and equity-based investments in crypto projects. That means getting into private sales and pre-sales for ICOs, and seeing what tokens already on the market have long-term return potential. On the equity investment side, Drijkoningen is looking for what he calls “infrastructure” businesses, such as solutions for token custody, banking and more. The fund’s capital is being raised in fiat, but it is considering allowing Bitcoin, Ether and other tokens.
Although Singapore is seen by many as a ‘crypto haven’ the legal status of crypto and tokens is unclear since the Monetary Authority of Singapore (MAS) has deferred on making these decisions. That’s in contrast to places like Malta, Gibraltar and Bermuda, which are actively wooing crypto companies with incentives and legalization frameworks, but Singapore’s status as a global financial hub and a destination for Southeast Asia’s investor capital has helped make it a destination for crypto companies all the same.
MAS is known for engaging with crypto stakeholders, and Drijkoningen said there had been discussions although he did not elaborate further other than to say that the regulator is “quite well informed.” He clarified that the new fund is structured so that it is legally compliant while it is banking with a “crypto-friendly” bank in the U.S. since Singaporean banks to do provide services to crypto companies.
Drijkoningen said the fund’s LP base is comprised of high net worth individuals who understand crypto or are crypto-curious, as well as hedge fund managers and family offices. He said there’s been interest from projects that raised significant capital from ICOs and want to invest in the ecosystem and grow networks, as well as some long-time Golden Gate LPs.
There’s no doubt LuneX is an early mover in Southeast Asia — well, the world — but Drijkoningen believes it won’t be long before others in the traditional VC space follow suit. He revealed that already a number of other funds are “looking into” the opportunities, and expects that some will make a move “this year or next.”
As for LuneX, the plan is very much to scale this initial fund in the same way that Golden Gate has gone from a small seed fund to a $100 million vehicle in less than eight years.
“We want to get up and running, get a good return and raise a larger fund,” Drijkoningen said. He added that the fund is currently looking over half a dozen or so deals that it hopes to wrap up soon as its first investments.
Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.
IBM and shipping giant Maersk having been working together for the last year developing a blockchain-based shipping solution called TradeLens. Today they moved the project from Beta into limited availability. Marie Wieck, GM for IBM Blockchain says the product provides a way to digitize every step of the global trade workflow, transforming it into a real-time communication […]
IBM and shipping giant Maersk having been working together for the last year developing a blockchain-based shipping solution called TradeLens. Today they moved the project from Beta into limited availability.
Marie Wieck, GM for IBM Blockchain says the product provides a way to digitize every step of the global trade workflow, transforming it into a real-time communication and visual data sharing tool.
TradeLens was developed jointly by the two companies with IBM providing the underlying blockchain technology and Maersk bringing the worldwide shipping expertise. It involves three components: the blockchain, which provides a mechanism for tracking goods from factory or field to delivery, APIs for others to build new applications on top of the platform these two companies have built, and a set of standards to facilitate data sharing among the different entities in the workflow such as customs, ports and shipping companies.
Wieck says the blockchain really changes how companies have traditionally tracked shipped goods. While many of the entities in the system have digitized the process, the data they have has been trapped in siloes and previous attempts at sharing like EDI have been limited. “The challenge is they tend to think of a linear flow and you really only have visibility one [level] up and one down in your value chain,” she said.
The blockchain provides a couple of obvious advantages over previous methods. For starters, she says it’s safer because data is distributed, making it much more secure with digital encryption built in. The greatest advantage though is the visibility it provides. Every participant can check any aspect of the flow in real time, or an auditor or other authority can easily track the entire process from start to finish by clicking on a block in the blockchain instead of requesting data from each entity manually.
While she says it won’t entirely prevent fraud, it does help reduce it by putting more eyeballs onto the process. “If you had fraudulent data at start, blockchain won’t help prevent that. What it does help with is that you have multiple people validating every data set and you get greater visibility when something doesn’t look right,” she said.
As for the APIs, she sees the system becoming a shipping information platform. Developers can build on top of that, taking advantage of the data in the system to build even greater efficiencies. The standards help pull it together and align with APIs, such as providing a standard Bill of Lading. They are starting by incorporating existing industry standards, but are also looking for gaps that slow things down to add new standard approaches that would benefit everyone in the system.
So far, the companies have 94 entities in 300 locations around the world using TradeLens including customs authorities, ports, cargo shippers and logistics companies. They are opening the program to limited availability today with the goal of a full launch by the end of this year.
Wieck ultimately sees TradeLens as a way to facilitate trade by building in trust, the end of goal of any blockchain product. “By virtue of already having an early adopter program, and having coverage of 300 trading locations around the world, it is a very good basis for the global exchange of information. And I personally think visibility creates trust, and that can help in a myriad of ways,” she said.
Audius wants to cut the middlemen out music streaming so artists get paid their fair share. Coming out of stealth today led by serial entrepreneur and DJ Ranidu Lankage, Audius is building a blockchain-based alternative to Spotify or SoundCloud. Users will pay for Audius tokens or earn them by listening to ads. Their wallet will […]
Audius wants to cut the middlemen out music streaming so artists get paid their fair share. Coming out of stealth today led by serial entrepreneur and DJ Ranidu Lankage, Audius is building a blockchain-based alternative to Spotify or SoundCloud.
Users will pay for Audius tokens or earn them by listening to ads. Their wallet will then pay out a fraction of a cent per song to stream from decentralized storage across the network, with artists receiving roughly 85 percent — compared to roughly 70 percent on the leading streaming apps. The rest goes to compensating whoever is hosting that song, as well as developers of listening software clients, one of which will be built by Audius.
Audius plans to launch its open sourced product in beta later this year. But it’s already found some powerful investors who see SoundCloud as vulnerable to the cryptocurrency revolution. Audius has raised a $5.5 million Series A led by General Catalyst and Lightspeed, with participation from Kleiner Perkins, Pantera Capital, 122West and Ascolta Ventures. They’re betting that Audius’ token will grow in value, making the stockpile it keeps worth a fortune. It could then sell chunks of its tokens to earn revenue instead of charging artists directly.
Audius co-founders (from left): Head of product Forrest Browning, CEO Ranidu Lankage, CTO Roneil Rumburg
“The biggest problem in the music industry is that streaming is taking off and artists aren’t necessarily earning a lot of money. And it can take 3 months, or up to 18 months for unsigned artists, to get paid for streams” says Lankage. “That’s what crypto really solves. You can pay artists in near real-time and make it fully transparent.”
The big question will be whether Audius can use the token economy to crack the chicken-and-egg problem of getting its first creators and listeners on a platform that might be less functionally robust than its traditional competitors. There are a lot of moving parts to decentralize, but there are also plenty of disgruntled musicians out there waiting for something better.
From Sri Lankan Hip-Hop Star To Serial Entrepreneur
Most startup guys don’t have Billboard charting singles on their bio, but Lankage does. Born in Sri Lanka, his hip-hop songs in his native tongue of Sinhalese were the first of the language to be played on the BBC and MTV. He got signed to Sony and even went platinum, but left the label seeking greater control over his work. After going to Yale, he applied his music business knowledge to build a Reddit for dance music called The Drop with Twitch’s Justin Kan back in 2015.
“I’ve always been passionate about building tools for creators” says Lankage. But this time, he wanted to focus on helping them turn their art into a profession. He teamed up with CTO Roneil Rumburg, an engineering partner at Kleiner Perkins who’d build a crypto wallet called Backslash, and head of product Forrest Browning, who’d sold his software metering startup StacksWare to Avi Networks.
Their goal is to build a blockchain streaming music service where listeners don’t have to understand blockchains. “A user wouldn’t even know that they have a wallet” says Rumburg. They’ll just hear an ad every once in a while, get a subscription, or pay per stream. Since Audius is open sourced, developers will be able to build their own listening clients on top which could specialize in discovery of certain types of music or offer their own payment schemes.
“I have known Ranidu, Forrest, and Roneil for a long time, and have always been impressed with their ability to blend art, technology and business together” says investor Niko Bonatsos of General Catalyst. “In Audius, they bring together all three skills, with a deep technical heart and a compelling solution for a very big marketplace.”
Tokens, Not Record Labels
For starters, Audius is focusing on signing up independent electronic musicians. These are the types that might be popular on SoundCloud but actually have to pay for hosting there while not getting much back due to the platform’s weak monetization options. Don’t expect U2 and Ariana Grande on Audius, at least not yet. But the startup could differentiate by offering access to content you can’t find elsewhere.
To get artists on board, Lankage tells me Audius plans “to use token incentives”. Those willing to jump on first before there are many listeners could get a bonus allotment of tokens that might be worth more if they help popularize the service. And where artists go, their fans will follow. Audius is hoping artists will share its links first because that’s where they’ll earn the most money.
Audius has also lined up a legion of big-name advisors to help it develop its blockchain product and artist relationships. Those include Augur co-founder Jeremy Gardner, EDM artist 3LAU, EA Co-Founder Bing Gordon, and more it can’t announce just yet.
The linchpin of Audius will be the user experience. If the system feels too complicated, listeners and artists will stay elsewhere. A DJ might earn more per stream from Audius, but if Spotify or SoundCloud offer better ways for fans to subscribe to them and generate more plays long-term, they’ll still direct supporters there. But if Audius can hide the nerdy bits while solving the music industry’s problems, it has the potential to be one of the first mainstream consumer blockchain projects that treats the tech as a utility, not just a new stock market to bet on.
Maybe a year and a half after Russian interference was believed to have a key impact on the election of a U.S. president isn’t the best time to be floating new voting technologies. Not if you’re looking to avoid some major skepticism, at least. But West Virginia is going ahead with plans to allow some […]
Maybe a year and a half after Russian interference was believed to have a key impact on the election of a U.S. president isn’t the best time to be floating new voting technologies. Not if you’re looking to avoid some major skepticism, at least.
But West Virginia is going ahead with plans to allow some limited voting through a smartphone app called Voatz, nonetheless. The plan, spearheaded by West Virginia Secretary of State Mac Warner, will utilize the Boston-based startup’s technology to allow troops stationed abroad to vote in the upcoming November midterm.
Both Voatz and Warner, naturally, tout the security of the app. Indentification requires a user to take a selfie, which is matched with a state I.D. using facial recognition. Ballots are then anonymous and recorded with blockchain tech.
Naturally, not everyone is thrilled about the idea.
“Mobile voting is a horrific idea,” the Center for Democracy and Technology’s Joseph Lorenzo Hall, told CNN. “It’s internet voting on people’s horribly secured devices, over our horrible networks, to servers that are very difficult to secure without a physical paper record of the vote.”
Not a fan, apparently.
The state has been testing the tech, and Warner says that paper will still be an option for those serving abroad, even as it offers access to smartphone voting. The lack of paper trail for electronic voting, however, is generally considered a bit of a nonstarter, and recent events will likely only make security experts more wary of adopting new tech.