Blockstream aims to support “massive scaling” of Bitcoin’s secure and distributed infrastructure to include a “broad range of asset types” and to eliminate the fragmentation that varying cryptocurrencies in general suffer from. The startup has raised $21 million in seed funding to work on advancements to the Blockchain through so-called “sidechains” in order to realize this goal.

To date, most Bitcoin-oriented startups have focused on the financial transaction side of the cryptocurrency and cryptocurrencies in general. Startups like Blockchain.info and Coinbase offer users a way to transact with one another using online wallets and payment gateways. Yet some have established their own alternative systems and currencies, called altchains and altcoins, respectively. There is the Dogecoin, Peercoin and dozens of other cryptocurrencies that run their own modified version of the blockchain.

Blockstream wants to focus on the next evolution of Bitcoin, which will ensure that improvements are both re-incorporated into, and extended from, the base system rather than forked off as independent systems altogether. In gist, Blockstream wants to scale up the use of the Blockchain, the so-called “public ledger” of the Bitcoin ecosystem, the transaction database shared across all of the ecosystem’s participants where each transaction is recorded securely and semi-anonymously.

One potential application is the use of the Blockchain to transact and exchange more than just Bitcoin (or fractions, thereof). In the future, Blockstream aims to build on its concept of sidechains, which will enable exchange of digital assets between the main Blockchain and alternates. These can include documents and data and even other content that will require de-centralized encryption and security.

“Blockstream is the first startup focused on advancements to the core technology underpinning Bitcoin,” writes co-founder Austin Hill on the Blockstream blog. He stressed how Blockstream and its sidechain concept “will help make Bitcoin the kind of open, highly adaptive platform upon which a vast array of complementary products and services can be built.”

For his part, LinkedIn founder Reid Hoffman, one of the investors in the Series A, says Blockstream will be at the forefront of the innovations to Bitcoin’s core technology. “The blockchain protocol doesn’t just enable the trustless exchange of bitcoins,” he writes on LinkedIn Pulse. “It enables the trustless exchange of any kind of digital asset – domain name signatures, digital contracts, digital titles to physical assets like cars and houses. It’s also possible to attach various conditions and potential actions to digital assets stored in the blockchain.”

Apart from Hoffman, Khosla Ventures and Real Ventures also led this Series A funding round. Other participants include Nicolas Berggruen, Crypto Currency Partners, FuturePerfect Ventures, Danny Hillis, Eric Schmidt’s Innovation Endeavors, Jerry Yang’s AME Cloud Ventures, PayPal luminary Max Levchin, Mosaic Ventures, Microsoft former Microsoft CEO Ray Ozzie and Ribbit Capital, among others.

Hill says the sidechain concept is proof that Bitcoin’s importance is bigger than its ability to facilitate cashless transactions. “Blockstream is the first company extending the capabilities at the protocol level to support massive scaling of bitcoin and blockchain technology to a broad range of asset types. Put another way, the extension mechanism of sidechains, the company’s initial area of focus, allows any number of so far unthought of developments to happen in an open and interoperable way.”

With Blockstream gaining resources to realize its goals, the focus is likely to move away from simple top-layer products and services that facilitate already-present transaction mechanisms. Rather, Blockstream and other companies like it will be the ones to truly prove Bitcoin’s worth as an innovative and disruptive technology.

The post With $21M Seed Round, Blockstream Wants to Evolve Bitcoin appeared first on VR World.

The market for transport apps is heating up around the globe. For one, startups like Lyft and Uber are battling each other for both drivers and customers in US and European markets. In some jurisdictions, transport startups are being targeted by regulators and franchise-granting bodies for not complying with local rules. In yet some, highly protectionist taxi companies are feeling the crowding-out effect from convenient and cheap black car services.

In Asia, there are essentially two types of transport app services. One involves companies like Uber, which offers unmarked black car services either from established car rental companies or qualifying private owners (through UberX). The other involves conventional taxi cabs that you can flag down through a smartphone app. Major players in the region include Rocket Internet’s EasyTaxi, as well as Malaysian GrabTaxi, which has started expanding to other countries like the Malaysia, the Philippines, Singapore, Thailand and Vietnam.

Earlier this week, the GrabTaxi Group — known in Malaysia as MyTeksi — announced that it has raised a third major financing round, with $65 million led by US venture capital firm Tiger Global Manage, along with GGV Capital, Vertex Venture Holdings and Qunar, which had previously joined earlier funding rounds. For this series C, Hillhouse Capital Management also joined in as a new investor.

According to Adelene Foo, MyTeksi general manager, this brings the company’s total capitalization to $90 million within the past 12 months, with the startup’s previous investment rounds totalling about $25 million. She says the new investment is meant to further improve its technology and customer service, as well as aid in the company’s planned expansion into other markets. “With this funding, we hope to further establish our footprint in the existing markets that we are operating in,” she said in a press briefing in Malaysia.

In a media briefing in Singapore, GrabTaxi founder and CEO Anthony Tan says that the “smartphone is the new rice bowl,” referring to how mobile technologies are contributing greatly to productivity, business growth and even job creation in the region. He cites how taxi drivers in the company’s coverage areas have turned to mobile apps to help increase the number of fares they make in a day.

GrabTaxi has reported 2.1 million downloads with 400,000 active users across different mobile platforms. According to Tan, the GrabTaxi apps for Android and iOS generate about two bookings per second or about 5.1 million rides per month throughout the 16 Southeast Asian cities it operates in. The company has about 25,000 taxi drives in its network, who get an average of seven rides per day through the app. Taking the standard Malaysian per-ride commission of $0.64, this means a revenue of about $37 million per month.

Apart from partnering with taxi companies and operators for mobile-based booking, the company has also entered into black-car booking service through GrabCar in some markets like Manila, Kuala Lumpur and Singapore. The service targets the more upscale market and follows a similar surge-pricing model that Uber users are familiar with.

Challenges Ahead

Competition is fierce in this space, with participants willing to do cutthroat pricing in order to gain traction and increase their foothold on the market. In western markets, for instance, one might hear about how transport startups Uber and Lyft pirate each other’s drivers and offer cash incentives for switching. In Southeast Asia, e-hailing apps like EasyTaxi have even gone as far as drop their booking fees altogether, in order to attract customers. Meanwhile, GrabTaxi itself has provided customers free rides through its cartoon character-inspired cars in certain markets. GrabTaxi had also earlier entered into partnerships with telecom companies in the region to offer carrier billing for both taxi rides and driver commission fees.

The challenges go beyond market-related concerns, however. There are also regulatory and franchise-related issues that some startups face. In the Philippines, for example, the country’s Land Transportation Franchise and Regulatory Board has sought dialogue with transport startups regarding the legal implications of car hire booking apps like Uber and even GrabCar. Given that the country requires for-hire vehicles to have a franchise in order to operate, companies that use smartphone apps to book rides from non-public vehicles might be facing some legal impediment.

In this regard, the companies’ standard responses are that they are not public utility transport companies, but rather technology companies that only facilitate rides through their platform. This phenomenon is characterized by entrepreneurs and developers as technology fast outpacing laws.

The post With $65M Series C, GrabTaxi Eyes Asia’s Top Taxi App Spot appeared first on VR World.

While Bitcoin has captured the interest of the tech-savvy crowd, it is only gaining momentum among mainstream users, thanks to services that offer mobile and electronic wallets, as well as merchant payment gateways. BlockChain, for one, has recently raised a $30.5 million series A funding round, which it intends to use for making Bitcoin more accessible to the masses.

Institutional investors consider investments into companies that cater to Bitcoin’s periphery, such as wallet and merchant services, as more sound than speculation in Bitcoin itself, which is volatile due to its de-centralized nature. High-profile investments in Bitcoin-related startups, therefore, bring credibility to the cryptocurrency as a viable business. However, Bitcoin and other virtual currencies will need two basic things to ensure more widespread and mainstream acceptance: ease-of-use and stability.

Read the full story on VR World’s sister site, Bright Side of News*.

The post 2 Things That Will Help Bitcoin Gain Mainstream Interest appeared first on VR World.

Growth and stability in Bitcoin and other cryptocurrencies are only as good as the companies that support these technologies. While Bitcoin, for example, has been lauded as a largely decentralized virtual currency that does not involve a central exchange, the truth is that users will inevitably have to rely on a few companies that offer ancillary services, such as online wallets, payment gateways for merchants, and the like.

Recently, BlockChain.info, a startup that specializes in Bitcoin wallet services, has announced raising a $30.5 million Series A funding round, led by Lightspeed Venture Partners and Wicklow Capital. With 2.3 million consumer wallets, BlockChain is the most popular Bitcoin wallet around, and it promises to make using the cryptocurrency as easy as possible.

This is a good sign for developers, users, miners, and basically the cryptocurrency community in general. Institutional investors tend to prefer investing in ventures that benefit in leveraging a technology, rather than speculating on the value of the instruments being exchanged. While it’s true that several individuals and institutions have seen their net worth grow due to the rapid rise in value of Bitcoin, the cryptocurrency is still very much volatile. Businesses that have potential in earning from Bitcoin transactions, however, show a more stable path to growth.

In the case of BlockChain, having a secure and stable company for handling online Bitcoin wallets will ensure continuity, standardization and ease of access for users, and a foot in the door for merchants who want to partake in the benefits of cryptocurrencies.

Investment in Bitcoin companies — a growing trend?

BlockChain’s series A is the biggest investment in a Bitcoin-related startup, so far, surpassing an earlier funding round raised by BitPay, which raised a $30 million Series A round from a group of investors that include Asian magnate Li Ka Shing, PayPal founder Peter Thiel, Yahoo founder Jerry Yang and Virgin’s Richard Branson. It’s these peripheral investments that tend to generate more value for stakeholders, said John Greenwood of London-based think-tank Invesco, in a statement to the South China Morning Post. He went as far as compare that particular financing round to how “investors in days gone by made more money out of selling shovels and picks to gold-diggers than anyone ever made out of the gold mine.”

To date, about $250 million have been invested in Bitcoin and cryptocurrency related startups. Many of these involve online wallets and exchange systems, while some focus on acting as payment gateways for merchants. Angel List includes 527 Bitcoin startups with an average valuation of $3.8 million, as well as 1,948 investors putting their money into these fledgling companies.

Challenges ahead

It’s not all rosy for Bitcoin startups, however, as many of these companies have to face several technical, regulatory and market challenges to succeed and even survive. Earlier this year, for instance, the New York Department of Financial Services has proposed a set of regulations for companies that deal in Bitcoin. The rules for the so-called “BitLicense” are quite stringent, such as requiring companies to keep funds in trust, share founders’ biometrics and financial information, as well as keep records of clients’ physical addresses.

In some jurisdictions, the use of Bitcoin and cryptocurrency itself has been deemed a criminal act. In China, you can legally use Bitcoin to pay for transactions, although it is illegal to exchange Bitcoin for fiat money, which leads to difficulty in individuals and businesses cashing out the cyber currency. In yet others, laws are being proposed to legalize some form of e-currency, although banning decentralized ones in the process, such as in Ecuador.

These regulations, of course, stem from the negative image that illicit use has brought upon cryptocurrencies. After the dark web Silk Road closure in 2013 and the fall of Mt. Gox (and the attendant story about how its the company allegedly fraudulently acted to jack up the price of Bitcoin), government financial bodies have been cautious in their acceptance of cybercurrencies as valid means of exchange. While some monetary authorities, such as those in the US, the Philippines, admit that cryptocurrencies merit further study, some would outright warn citizens against the dangers of virtual currencues, mostly because of connections with money laundering.

What can help Bitcoin grow?

Bitcoin presents potential among merchants, payment processors and wallet companies, as well as those directly benefiting from mining coins, including miners and device makers. However, those who are into mining and speculation are likely to benefit only in the short run. Bitcoins in circulation are estimated to hit a ceiling sometime 2025, and specialized rigs for mining Bitcoins are becoming ever expensive to procure and build. Firms that produce Bitcoin-mining computers are also on a constant race for faster processors and cheaper production. And with the algorithm becoming exponentially difficult to solve through time, device makers are not able to catch up.

Two things will help Bitcoin gain more mainstream use and acceptance: stability and ease of use.

In its present state, Bitcoin is severly volatile and is easily affected not only by forces of supply and demand, but also externalities like bad publicity (such as country-wide bans and involvement in crime). It would be problematic for ordinary users to hold currency that might suddenly lose value in a short span of time. However, the democratized nature of Bitcoin mining and transaction logging is the very essence of Bitcoin and may be difficult to separate from the currency. The same laws of supply and demand do govern fiat currencies through interest rates, discount rates, inflation and purchasing power, although the effects take much more longer than the sudden rise-and-drop dynamics of Bitcoin’s value.

Meanwhile, startups like BitPay and BlockChain provide services that allow easier access to Bitcoin for both consumers and merchants. Bitcoin wallets are no longer simply proofs-of-concept. Rather, with millions now able to exchange money through purely digital means (and sometimes even through scannable QR codes on paper), it’s a good sign that the community around cryptocurrencies is a healthy one.

Perhaps with these two factors, governments and regulators will be able to take a more accepting stance of Bitcoin and its kin.

The post Wallets and Merchant Services: The Hope of a Bright Future for Bitcoin? appeared first on VR World.

Google Capital, the strategic venture capital fund run by search giant Google (NASDAQ:GOOG), has co-led a $32 million Series C funding round for InnoLight Technology Corp, along with Chinese venture firm Lightspeed China Partners. With its first investment in a Chinese startup, Google Capital joins the ranks of major Chinese firms like Tencent (HKG:0700), Baidu (NASDAQ:BIDU) and Alibaba (NASDAQ:BABA) in backing early- and growth-stage technology companies in the country. Suzhou Ventures and Acorn Ventures have co-invested in this funding round.

InnoLight designs, builds and markets high-speed optical transceivers meant for datacenter use. These devices convert electrical signals into optical signals, which are then transported from server to server through fiber-optic cables, where the light is converted back into electrical signals. At present, InnoLight specializes in 40Gbps transceivers, but has since ventured into 100Gbps transceivers, which it aims to bolster with this investment.

“InnoLight has experienced dramatic growth during the last three years, nearly doubling revenue every year. We are now a leader in 40Gbps optical transceivers and a first mover in 100Gbps solutions. With the Series C investment, we will continue to strengthen our technology leadership and expand productive capacity to support the rapid growth of the cloud computing industry,” says InnoLight CEO Dr. Sheng Liu in a statement.

“InnoLight’s technology is uniquely suited for next generation data center environments,” says Gene Frantz, general partner at Google Capital. According to James Mi, managing director at Lightspeed China Partners, the chipmaker will gain “operational expertise and deep insight into core computer center technology,” with Google Capital’s involvement.

Founded in 2008 and headquartered in Suzhou, China, InnoLight has sales and R&D offices in mainland China, Taiwan and the US. The firm earlier raised its Series A and B funding rounds worth $20 million. The investors will hold about two-thirds stake in the company, with the remaining shares owned by management and staff.

Google Capital was launched in 2013, with focus on growth-stage startups, as compared to Google Ventures, which funds early-stage startups. This year, Google Capital raised $300 million in fresh capital for funding growth- to late-stage startups, and has backed ten companies to date. These include peer-to-peer loan service LendingClub, market intelligence firm SurveyMonkey, and educational software maker Renaissance Learning.

The post InnoLight Raises $32M to Build Faster Optical Transceivers for Servers appeared first on VR World.