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Today we learnt that blockchain technology company, Blockstream, had closed on a $55 million financing round that sees its total raised capital reach $76 million – a great achievement for a company in such a nascent (in the grand scheme of things) space. Three organizations led the round, Horizons Ventures, AXA Strategic Ventures, and Digital Garage, a number of the company’s current investors upped their exposure with additional allocation, including AME Cloud Ventures, Blockchain Capital and Seven Seas Venture Partners.
For those not familiar with the company, Blockstream’s remit revolves around sidechains; alternative blockchains that are able to interact both ways with the bitcoin blockchain, and in doing so, allow interoperability between the bitcoin blockchain and networks of other sidechains.
While it hasn’t been without its critics, and here at NewsBTC we are by no means blind to these criticisms (opinions differ across the team!), the application of sidechains has been heralded as the step required to bring bitcoin and the blockchain to the masses – it affords other organizations a way to apply blockchain technology to their current operations without having to develop and maintain a completely separate blockchain. There have been talks of sidechains underpinning the financial network of entire economies. For now, at least, this kind of mass scale remains theoretical, but not entirely unrealistic. At the moment, the sidechain space is starting of (comparatively) small-scale.
A specific example, and the first commercial application of this concept to come out of the Blockstream organization, is Liquid. Liquid allows users of a network of digital currency exchanges to transact much quicker than they would otherwise be able to because it reduces settlement times on transfers. This opens up the possibility to make faster trades across the exchanges. You can read more about Liquid here.
Blockstream raised $21 million at the end of 2014 – a round during which it again managed to attract the top tier of tech investors – and whatever its critics might think, it looks as though the company is going to play a critical role in the advancing of bitcoin and blockchain technology going forward.
Here’s what some of the people involved with the latest round had to say about its closing:
Frances Kang, Horizons Ventures:
Blockchain technology is redefining what is possible within the fintech ecosystem and beyond… The transition to this new world – one that is decentralized, interoperable, secure, and trustworthy – is going to be illuminating.
François Robinet, Managing Partner, AXA Strategic Ventures:
We are convinced that blockchain technology has the ability to transform not only financial services but also other industries… We value Blockstream’s open source approach and its sidechain technology, which will allow interoperability between different chains and provide critical long-term success in this sector.
For those familiar with the space, Digital Currency Group holds an ownership stake in Blockstram (DCG is Barry Silbert’s digital currency investment group). The first application of Blockstream’s Liquid has rolled out across a number of exchanges across the Digital Currency Group network: BTCC, Kraken, Unocoin, and Xapo.
Just what the future holds for sidechains remains unclear, but it’s starting to look like their role in the space going forward is inevitable.
