Chinese Taps Blockchain Startups for Testing Platform

Blockchain technology is of great interest to many companies. Hundreds of startups are focusing on this business model as we speak., a major Chinese e-commerce company, unveiled a new accelerator program designed specifically for blockchain and AI startups. Known as AI Catapult, six companies are already on board for the first class.

An Interesting Move by

Few people would expect the Chinese e-commerce giant to focus on blockchain and AI. Even so, the company has kept a close eye on these nascent industries over the years. The company wants to continue to innovate and be part of the next big trend in the technology sector accordingly. With their new AI Catapult accelerator, the e-commerce giant focuses on blockchain and artificial intelligence startups.

The first six participants have been made public already. They include Bluzelle and CanYa as two of the blockchain startups. The focus on this new accelerator lies in testing real-world applications of these technologies at scale. It is possible we will see some form of integration with the logistics unit at some point.

It is also worth noting operates a sponsored AI Research lab. Additionally, it appears the Chinese e-commerce giant has big plans for artificial intelligence moving forward. Whether or not this means we will see major real-world use cases soon, remains to be determined.  Additionally, the company also uses blockchain technology as part of its supply chain procedure. Further focusing on developments in both of these industries makes a lot of sense for the company.

Blockchain Continues to Turn Heads

It is not entirely surprising to see this focus on blockchain. There are different use cases for this technology moving forward. Considering how already has real-world use cases for this technology right now, they want to see what other startups can bring to the table in this regard. CanYa is an intriguing addition, due to its peer-to-peer marketplace solution. How that will impact the Japanese e-commerce industry, has yet to be determined.

Bluzelle provides scalable data storage and management services for decentralized apps. In the world of e-commerce, dApps can be quite an innovative development. For now, we have to wait and see how plans to explore this avenue. Their choice for Republic protocol is also pretty interesting. This Australian startup provides a decentralized dark pool service for atomic cross-chain trading. The project’s main focus is on Ether, ERC20 tokens, and Bitcoin, for the time being.

All of this goes to show is a big fan of blockchain technology first and foremost. There is only one AI-oriented company as part of this new accelerator. Bankorus uses AI for private wealth management. Unsurprisingly, this venture also makes use of blockchain technology for added transparency.  With six startups as part of the accelerator, the next few months will be quite interesting. A lot of use cases are waiting to be explored where these technologies are concerned.

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Last summer, 24-year-old Kingsley Advani set his sights on becoming a cryptocurrency king after seeing the once-in-a-lifetime returns the coins were bringing in. Inspired, Advani invested everything he had, $34,000, in cryptocurrencies like Bitcoin and startups working on related technologies. In six months, he watched his net worth balloon to seven figures.

At a time when many people his age are trying to climb the ranks at their given employers, Advani has carved out his own prospects: Now working as an advisor to cryptocurrency startups. He travels between London, New York, and San Francisco, meeting with industry leaders and scouting startups working on what may be the next big application of blockchain technology.

“I think at no point in human history have people in their twenties had such an opportunity to invest in such high-growth assets,” Advani told Business Insider in an interview.

Created in 2008, Bitcoin is a payment system that allows people to make purchases and send money with anonymity. There are no banks or middlemen, and transactions are recorded on a digital ledger called a blockchain, which stores the information with full transparency. It was the blockchain that first drew Advani to cryptocurrencies. In 2012, after a friend had introduced him to Bitcoin, he began to see the potential of the technology.

“It’s like a rebellion to traditional finance,” Advani said. He believes its creation in 2008 — at the height of the worst financial crisis since the Great Depression — was no coincidence. “You don’t need centralized banks to send money, you have these great pieces of tech send money for you through cryptography. So unlike banks, it’s faster, cheaper, and more secure,” he said.

Advani started reading white papers on cryptocurrencies and watching the market more closely last summer. He decided he would not miss a second chance to take part. He invested all of his savings and part of his income from his job as a data scientist at a small software company. “Every month I was waiting for that paycheck and I put it straight in,” he said.

So far, his gamble has paid off. When Advani invested in Bitcoin, it was worth about $4,000 per coin: As of this February, the cryptocurrency has more than doubled in value. At its peak, Advani’s investment had grown to low seven figures, though it fluctuates with the swing of the market. Advani invests mostly in startups spun out of top universities, like Stanford, Cornell, and Massachusetts Institute of Technology, that are working on high-speed blockchain technology.

High profile Australian investors will soon be able to get exposure to cryptocurrency in a way more familiar to them than currently available. This comes thanks to a new fund founded by Dominent Venture Partners’ Domenic Carosa and Holger Arians, and Herik Andersson, himself an experienced Wall Street trader. Apollo Capital, as they’re known, are attempting to raise a $30 million for use in the blockchain space. They aim to focus on cryptocurrencies, blockchain-based projects, and initial coin offerings. The fund will be Australia’s first to manage crypto assets and will be reserved for investors with a minimum of $50,000AUD available.

For Carosa such funds are inevitable and are all part of providing the necessary legitimacy for the space to flourish. He told the Australian Financial Review:

“It’s still very embryonic, but for us this is part of the market maturing and bringing more credibility to the space… You hear that people like Bill Gates, Richard Branson and funds like Andreessen Horowitz taking long-term bullish views on bitcoin and blockchain … this also adds further credibility.”

Meanwhile, the blockchain development fund is also expanding to Australia. Jason Lee, their global director of partnerships and strategic alliances aims to invest around $14 million in Australian fintech ventures. The $80 million fund are also looking for opportunities to bring innovation to their own blockchain XEM through their financing of startups. So far, have invested in CopyrightBank, a service aiming to protect digital assets based in Melbourne.

Lee is hoping that the ease with which developers familiar with Javascript should find transitioning to the XEM platform should help with its adoption. This is compared to platforms such as Ethereum which use more obscure programming languages.

The XEM development fund has a unique approach to allocating funds. At least 3% of their network of 20,000 users must agree to a project. Lee explained this community approach:

It came together as a group of people believing in the concept of blockchain. We wanted this to be available for the community as well, which is why we’re a community fund, not a VC or private equity fund.

However, not every Australian venture capital fund have fully warmed up to the idea of cryptocurrency and blockchain just yet – well, not enough to allocate funds to it. Paul Naphtali of Rampersand explained why he remained cautious of the space:

“I worked through the past two boom-and-bust tech cycles. The almost feverish excitement around blockchain and cryptocurrencies reminds me of the heady days of mobile ten years ago, or the web 20 years ago – new tech changed the world, but with the hype also came some spurious companies.”


Image: PixaBay


A lot of people were surprised by the ICO ban in South Korea. That it not abnormal, considering the country has been warming up to Bitcoin as of late. This new form of raising money attracts a lot of attention, though. Both for good and bad reasons, people flock to ICOs without doing much research. A few startups in the country will fight the government’s ICO ban in the coming weeks.

South Korea has quickly become one of the larger Bitcoin markets to contend with. Ever since China borked its regulations, Japan and South Korea have stepped in to fill this power vacuum. Unfortunately, things are not entirely going as planned in the country. Instead, there is an ICO ban to contend with, which makes life a bit more difficult. While China has also banned ICOs, the decision in South Korea will not be accepted all that easily.

Fighting the ban on ICOs in South Korea

Instead, a few startups are planning to fight this decision by the government. More specifically, a lot of companies saw this decision in South Korea coming from a few miles away. Taking a stance against the government is a risky move, to say the very least. Then again, it is also more than warranted, as a petition is the least startups can put together. A law firm has also been hired to prove ICOs can’t be penalized under existing laws. It is this latter part which will have some major consequences in every region where initial coin offerings are in the hot seat.

Additionally, the country is home to quite a few successful startups. Multiple companies raised a few million dollars worth of Korean Won. The concept of raising money through this alternative method is quickly picking up steam. Several coin offerings are already scheduled to take place later this year and in early 2018. This will be done despite government opposition, mind you, which is a remarkable concept. Local startups feel this ban was “rushed” and regulators shouldn’t look at cryptocurrencies as if they are pyramid schemes.

For the time being, it remains to be seen how this situation plays out. It is commendable South Korean startups want to go on the offensive. Whether or not that is a smart decision, remains to be determined, though. Things are not at a standstill in the world of initial coin offerings. It is good to see these companies focus on what they feel is the future of fundraising. Additionally, other Asian countries have – for now – taken more kindly toward ICOs. An interesting situation to keep an eye on, that much is certain.

Cryptocurrencies are now finding an attractive use case in the startup ecosystems., But this time it doesn’t concern Bitcoin or other cryptocurrency related products and services. Many technology startups across the world are gradually shifting to cryptocurrency crowdsales and ICOs for raising the much-required funds.

The ICOs and crowdsale, where individuals and institutions opt to buy cryptotokens issued by a startup or a project makes fundraising much simpler for entrepreneurs and reduces the risk burden associated with investments into startups for venture capital and angel investors. The shifting trend also has a name, “Token Economy”.

In most cases, a majority of the funds raised by the companies opting for an ICO comes from thousands of individual investors, summing up to millions of dollars in the form of various cryptocurrencies. In return, these investors receive cryptotokens, which can be traded for other cryptocurrencies or exchanged to fiat in the future. Some startups also offer additional perks to early participants, as an incentive and a symbol of appreciation for their belief in the product/startup.

A leading financial news media outlet has quoted Balaji Srinivasan, the founder of 21 Inc., and partner at venture capital firm Andreessen Horowitz saying,

“[token-based systems] may eventually create and capture more value than the last generation of Internet companies.”

The extent of influence exerted by cryptocurrencies on mainstream tech businesses is made evident by Kik Interactive. The company behind Kik multiplatform chat application recently announced its plans to introduce Kin cryptocurrency that can be used for in-app fund transfer and purchases. The platform will be soon launching an ICO for its tokens. The ICO will not only help the platform launch a new feature but also raise the required funds to establish and maintain liquidity.

The reduced regulatory headaches associated with ICOs and crowdsales also make it an attractive option for startups as they don’t have to navigate through the legal red tape and other issues just to raise funds required for sustained operations. However, the article also warns about few exceptions, where certain ICOs and crowdsales may be subject to regulations if the tokens are seen as an equivalent to equity/shares of the company.

To prevent any confusion, startups opting for an ICO are suggested to create carefully tailored campaigns which state the intentions and mode of usage of tokens thus procured by the investors.

The adoption of cryptotokens by entrepreneurs and startups as an alternative to conventional fundraising techniques not only helps them take a decentralized approach. It also encourages increased adoption of altcoins and blockchain technology across industries.

Ref: Fortune | Image: NewsBTC

The connection between startups and investors go way back in time. Entrepreneurs have always been approaching investors to raise the required capital to run their business in exchange for a certain percentage of equity. On a later stage, they go public with an IPO, issuing shares that can be bought, sold and traded over exchanges. But such an investment model is gradually being phased out by the new-age technology startups.

Cryptocurrencies and blockchain technology are now some of the hottest technology segments, and startups working in these sectors are making use of the very technology to raise funds from the public.

The concept of Initial Coin Offering (ICO) or crowdsale has become famous in the recent years. The easy of creating, transacting and exchanging crypto-tokens. And the use of smart contracts to assign various functions to the token holders has further encouraged these businesses to rely upon the community to raise the much-required funds for product and business development.

The ICOs, which are similar to crowdfunding involves people (investors) buying tokens with either fiat or other well-established digital currencies. These tokens will act as shares, entitling the token holders to certain rights/control over the platform’s future. Meanwhile, the token holders are free to trade these tokens with others and exit their “relationship” with the company at any point of time.

The ICOs have a greater reach, appeal to a larger audience, and those who contribute to the crowdsale tend to become some of the early customers of these startups. The ICO stage, just like crowdfunding campaigns on Kickstarter and other platforms also act as a validation tool. Also, setting up an ICO is much simpler than going through all the hassles of going public with an IPO.

The changing fundraising habits haven’t escaped seasoned investors. Many have already invested in blockchain and cryptocurrency companies, mostly through conventional means. However, recently Tim Draper announced that he would be participating in an ICO, which is an indicator of the trend shift, which more investors are sure to follow in the coming days.

Ref: Yahoo | Image: NewsBTC

The Indian cryptocurrency and fintech ecosystem has garnered a lot of interest since the “Demonetization” drive was set in motion. The increased demand for Bitcoin in the country is now complemented by the launch of a Blockchain incubator.

According to reports on Indian news media, the Indian Bitcoin company, GBMiners has laid the foundation for South Asia’s first Blockchain incubator, Satoshi Studios. GBMiners is the first Indian Bitcoin mining pool which reportedly has a 5% share of Bitcoin network’s hashing power. The fastest growing mining pool has been operational for a few months now, mining its first block in August 2016.

The Satoshi Studios Blockchain Incubator, started by GBMiners has started offering a three-month long intensive residency program in New Delhi. With the applications currently open, the selected teams are set to receive a seed funding of $50,000 which is roughly around 66.5 BTC against an equity of anywhere between 8 to 15 percent.

Amit Bhardwaj, co-founder of GBMiners was quoted by a leading Indian daily saying,

“Our vision is to build New Delhi as the blockchain knowledge hub of Southeast Asia.”

Referring the current monetary situation and the country’s position as the world’s largest remittance market,

“The times could not be better for bitcoin adoption especially with Indian economy’s biggest currency notes being demonetized recently,” he added.

Indian companies are increasingly adopting blockchain technology. Few leading banking institutions in the country have already expressed interest in blockchain based fund transfer platforms. Also, one of the country’s largest conglomerate Mahindra has entered into a partnership with IBM to develop blockchain based solutions for supply chain management.

The Big Four cryptocurrency platforms in the country — BTCX India, Coinsecure, Unocoin and ZebPay are currently trading Bitcoin at prices greater than that of the international market due to increased demand. The GBMiners’ Satoshi Studios initiative is expected to rope in some of the leading personalities from these platforms in advisory and mentoring roles.

Ref: The Hindu | Image: Satoshi Studios

Cryptocurrency platforms have been the hackers’ favorite. Bitcoin exchanges and trading platforms figure on top of their list. Hacking incidents including the latest Bitfinex hack stands proof of that. But with established Bitcoin platforms opting for high-security standards, hackers are now settling for the next best thing, cryptocurrency startups.

A recent report published by BBC describes a security incident faced by one of the small Florida-based digital currency startups to prove the point. The article describes a hacking attack on Krypton, which left the startup short of $6,000 despite the best efforts of the team to thwart waves of attacks in the midst of Hurricane Hermine. However, the damage was limited to a ‘small’ sum due to their sustained effort to secure the platform, which otherwise would have left them much poorer.

The attack faced by Krypton was not a one-off incident as another cryptocurrency startup Swift was also said to have come under a similar attack. Attacking cryptocurrency platforms usually offer high rewards at a considerably lesser risk compared to hacking banking institutions. The main reason being the nature of cryptocurrency and its legal and regulatory standing. Also, most cryptocurrencies offer a certain level of anonymity which makes it easier to spend the digital currencies on a later date.

According to Garrick Hileman, an economic historian at the University of Cambridge, there have been at least 600 different cryptocurrencies created since the emergence of Bitcoin in 2009.  Most of these cryptocurrencies have been targets of hacking attacks, eventually pushing them out of the cryptocurrency ecosystem.

Startups, especially those using specific blockchain platforms are more vulnerable to attacks mainly because of the weaker security as they may not have enough computers and servers on the network to verify transactions. Such platforms with lesser processing power become easy targets for hackers with superior processing power. The attacks on Krypton and Swift are attributed to their use of Ethereum, which has been under sustained attack for weeks.

Bitcoin network, due to the sheer hashing power involved has proven itself to be the most secure blockchain platform so far.  With many financial institutions opting for private blockchains, instead of public Bitcoin blockchain, they may also end up facing similar troubles as Krypton and Swift but at a different scale.

It is now imperative for digital currency and blockchain startups to choose the most secure and robust distributed ledger network. In addition, they should better invest in state-of-the -art security features to ensure the safety of funds on the platform.

Ref: BBC | IBS Intelligence | Image: Shutterstock

Bitcoin and Blockchain technology based startups may soon find their fundraising avenues drying up. A recent analysis into the cryptocurrency and blockchain industry has shown a significant dip in the inflow of investments.

The analysis conducted by CB Insights has shown a 16% shortfall in the capital flow into the cryptocurrency industry for the first time since 2012. According to the report, the amount of seed funding received by cryptocurrency based startups has reduced by 60%. The huge fall in seed funding is however compensated by over 100% increase in the total series A funds raised since 2012.

While this report looks a bit shocking at first, it may not be as bad as it looks. The reason for a drop in the amount of seed funding received by cryptocurrency companies may be attributed to the growth of the industry itself. The companies which were in the seed funding stage until now have grown to raise Series A and B investments. This explains the doubling of series A funds this year. It also means that the number of startups emerging in the sector has drastically reduced as well. The fall in a number of new companies entering the cryptocurrency domain will lead to a reduction in the competition, which will allow incumbents to take the technology further at their own pace. This may not be a healthy situation for the digital currency and blockchain technology industry at the moment.

With more mainstream banking, financial and technology companies entering the blockchain domain, the venture capital requirements have gone down in the segment. These companies already have the much-required capital and in-house development teams. The global banking consortium led by R3, Hyperledger project and other individual initiatives by banks and financial institutions are good examples of the changing landscape.

In the current situation, we can expect a continued growth in the development of new cryptocurrency based technologies, which will come from well-established companies and not from startups as it used to until now.

Ref: CB Insights | Bank Innovation | Image: Shutterstock


The Bitcoin and blockchain sector heavily relies on investments from VCs. But as it turns out, the venture capital approach can cause quite a few issues for companies as well. There is a right and wrong approach to dealing with VC funding when push comes to shove. Enterprises taking the wrong approach will find themselves at a significant disadvantage.

In the end, it all boils down to whether or not the entrepreneurs in question can be efficient at their job. It’s hard to grasp the concept of efficient entrepreneurship, and securing funding plays a key role in the process. That said, it is not the only driving factor by any means.

VCs Are Optional To Achieve Success

In fact, dealing with VC funding can be more of a curse than a blessing. Raising a lot of money is needed in the early stages, but it can also create a false sense of security. In fact, a company raising US$50m won’t necessarily do better than a startup securing US$1m. Companies who raise a lot of money at an early stage deal with high expectations, and they usually struggle to deliver.

TechCrunch put together a comprehensive list of companies who are overly successful – and less successful – at raising VC funding. While publicly-traded startups seem to be doing quite well if they can survive for an extended period, some of them may have already fallen apart by then. The number of Bitcoin companies going public is very limited, for now, but it is a trend to keep in mind as well.

Given the recent list of ICOs which raised a lot of money in the cryptocurrency industry, it looks like steering away from VCs is becoming the new norm. That being said, crowdfunding such projects is always the best course of action. Companies who focus on doing one thing well will usually require one or several VC investors.

It is impossible to deny the financial returns VC-backed companies can achieve in a few years. Companies who run an ICO in the Bitcoin world usually see far fewer returns, but the tokens are tradeable across exchanges. That does not mean one is more or less successful than the other, by any means. But it does go to show that relying on VCs is not the only option, and purposefully moving away from that ideology could pay big dividends in the long run.

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