Bitcoin in the Headlines: 21 Inc Hits Media Jackpot

Yessi Bello Perez
Mar 13, 2015 at 14:10 UTC
Updated Sep 24, 2015 at 15:01 UTC
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Bitcoin in the Headlines is a weekly look at global bitcoin news, analysing media coverage and its impact.

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Complete with staggering funding rounds and mysterious bitcoin startups, this week’s news served up an unusually high dose of intrigue. It’s safe to say both bitcoin aficionados and naysayers were taken by surprise.

However, the calibre of the headlines wasn’t the only notable development.

Beneath the surface, the news was just as captivating and worthy of dissection, with signs that general media outlets are increasingly exploring the notion of bitcoin as a technology, as opposed to just a digital currency. A sign, perhaps, that mainstream conversation may finally be maturing beyond crime and prices.

Mystery startup announces funding

Perhaps the biggest news of the week was the Wall Street Journal’s scoop that stealth startup 21 Inc has raised $116m in funding. The impressive feat was all the more head turning as it included some of the biggest names in venture capital – and the media took notice.

At the time of publication, a quick Google search brought up over 40 articles on the funding news.

What was often lost in the press was that the figure was raised over multiple funding rounds, likely dating back as far as 2013. Further, the San Francisco company, while boasting an impressive cast of supporters, is still not yet publicising what it aims to do in the space.

The result was that, in the rush to convey the information (often with brevity), valuable context for how the startup’s success compares to others in the ecosystem may been lost.

To some, 21 Inc’s big reveal left much to be desired, raising almost as many questions as eyebrows.

Still, the news is positive for the ecosystem as a whole, prompting articles such as one in Fortune entitled, Why March 10 was a big day for bitcoin.

The author went so far to say that 10th March, the day that the secretive startup announced the funding round, should be known as “Fat Tuesday”, painting the event as a strong contrast to the “Bloody Sunday” when major USD bitcoin exchange Bitstamp suffered a serious hack.

Whatever the long-term impact, 21 Inc will surely have the attention of the community as it seeks to justify its validation from investors.

Unlocking net neutrality with bitcoin

Elsewhere, bitcoin was finally getting some good press in the mainstream media.

Peter Van Valkenburgh, director of research at Coin Centertook on the mighty task of exploring just how bitcoin could potentially unlock net neutrality in a Wired article. How could this be?

Well, the opinion piece cites venture capitalist Marc Andreessen, who recently told The Washington Post:

“The ultimate answer would be if you had three or four or five broadband providers to every house. Net neutrality is a much less central issue, because if you’ve got competition, if one of your providers started to screw with you, you’d just switch to another one of your providers.”

This begs the question of how it is actually possible to obtain more ‘last-mile’ competitors.

The piece notes that last-mile bandwidth remains mostly unused because people only consider two possibilities: opening the connection to everyone, resulting in a potential loss of privacy and the expense, or alternatively, securing it so that only one party can use it.

This is where bitcoin comes in. “Micropayments and encryption could provide a way out from this trade-off. Efficient micropayments, however, have not been possible before the invention” of the digital currency, the article notes.

Van Valkenburgh said that those with strong Internet connections will earn more in micropayments as their peers seek to connect through their routers. This would mean that these participants could use part of that revenue to pay for larger data plans or faster web access.

He concluded:

“The money you earn is your revenue for being a valuable part of the mesh. You are free to pocket some bitcoins, and use others to pay for the connection to the wider Internet or to invest in an even faster connection and better routing hardware.”

“Eventually, if you’re dealing with a wholesale provider or a particularly progressive telecom, payment for your uplink could also be metered and denominated in bitcoins, and traffic traveling through you from the mesh network could directly pay your provider through an intelligent, bitcoin-accepting modem,” Van Valkenburgh said.

The director of research finished off by saying:

“Bitcoin and the low transaction costs that automated micropayments can provide are the keys to building these better markets, which will ultimately unlock net neutrality itself.”

Pete Rizzo contributed reporting.

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