Public, private or permissioned?
The argument over which type of blockchain technology platform will gain market share continues to be a point of analysis for industry observers.
However, with Blockstream’s latest $55m Series A, the startup is emerging as a well-capitalized counterpoint to these companies, promoting the commercialization of blockchain tech not through proprietary bitcoin alternatives but through products and services that aim to build on what it describes as the battle-tested bitcoin code base.
Comments from participating venture capital firms suggest the message that the bitcoin blockchain will be able to compete against alternatives for commercial applications is resonating.
Manish Agarwal, general partner at AXA Strategic Ventures, for example, said he believes that there is a future in commercial use cases for public blockchains.
Agarwal told CoinDesk:
The comments were echoed by Rocky Eda, head of communications at Digital Garage, which had previously only discussed bitcoin publicly as part of a conference held in Japan.
"Linux dominates operating systems compared to proprietary [versions]. I think the same thing will happen with blockchain," he said. "The open-source community is very tested."
The comments echoed remarks by Blockstream CEO Austin Hill, who indicated in a blog post that the round aims to give his startup the resources to continue building an open-source infrastructure that would "re-architect the very dynamics underpinning trust globally".
Investors in the round were keen to express their belief that both permissioned and public blockchains will exist side-by-side, but that the bitcoin blockchain is a key part of this future.
Brad Stephens, managing partner at Blockchain Capital, said he believes the round will enable the "sustained development of the bitcoin protocol" as a component to this larger vision.
"While we envision a multi-chain future, the bitcoin blockchain is the most secure, most robust blockchain with network effect benefits," he remarked.
Others see Blockstream’s sidechains product as being able to replicate the functionality of permissioned blockchains, albeit with the benefits of bitcoin's open-source code base as a foundation.
Eda said that he believes there is opportunity for sidechains technology to be used by companies developing applications for rewards points schemes or smart contracts in Japan.
"Sidechains are the best solution to develop applications of blockchain technology, compared to the private blockchain that’s very proprietary and closed," he said.
Agarwal further suggested that he sees sidechains as having a value proposition that is closer to the original intent of the bitcoin blockchain, and that he believes this will be more appealing to entities seeking to leverage blockchain tech.
Room for competition
Yet another signal that Blockstream’s blockchain-first approach to bitcoin development may be resonating with a wider audience is that its code is set to be leveraged by Digital Asset Holdings and the Linux Foundation as part of the Open Ledger Project.
Future\Perfect Ventures founding partner Jalak Jobanputra said that she sees such collaborations as evidence the blockchain-focused groups have complementary expertise, and that open-source code development will be key to all manner of blockchain efforts.
"Digital Asset was founded to focus on the financial market. It had a very clear mandate, they know the vertical extremely well. I view Blockstream as more of an infrastructure provider, as Digital Asset is using the tech they are producing," she said.
Jobanputra voiced the common refrain that any attention paid to the nascent bitcoin and blockchain market can be seen as a positive given that there are so many varied use cases for the technology.
"These large rounds you’re seeing are because people are grasping the potential more, and want to participate in the upside," she continued.
Stephens agreed, saying that "all blockchain companies" benefit from the open-source development and volunteer work on the bitcoin blockchain.
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