Craig Wright's New Company is Building a Bitcoin Core Competitor

A secretive startup called nChain is gearing up to launch an alternative implementation of the bitcoin software for use by developers.

AccessTimeIconMay 2, 2017 at 7:20 p.m. UTC
Updated Sep 11, 2021 at 1:17 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Former Bitcoin Foundation director Jon Matonis doesn't waste any time asserting that his new employer is seeking to disrupt bitcoin's established development process.

Matonis, who joined the secretive startup nChain today, is quick to state that this is the ambition of the London and Vancouver-based operation he now claims has 60 full-time employees, including infamous developer Craig Wright.

As reported by Reuters, nChain was started by Wright, the 46-year-old computer scientist who claims to be bitcoin's pseudonymous creator Satoshi Nakamoto (though he hasn't offered much evidence). To date, nChain hasn't offered much to support its assertions that it's now the industry's best-funded startup either, hinting only that it has received more than $100m from Malta-based high-tech private equity fund SICAV plc as part of an acquisition.

Yet, it's a different company that Matonis has in mind in conversation – San Francisco-based blockchain services firm Blockstream.

Long the subject of criticism for the significant financial support it provides to developers working on bitcoin's open-source protocol and its primary implementation Bitcoin Core, Blockstream has been villainized for that group's roadmap for scaling bitcoin, specifically its decision to prioritize innovations that don't alter a hard-coded limit on block size.

Matonis told CoinDesk:

"I immediately recognized nChain would be an effective challenger to Blockstream, which is definitely needed in the space."

In conversation, Matonis echoes a familiar refrain, that Blockstream and Bitcoin Core are too intertwined, and that Core's roadmap doesn't have broad community support.

In Matonis's view, bitcoin can once again return to the days when its blockchain was able to quickly clear its backlog of transactions with virtually no fees, while providing more advanced scripting languages – if only other software implementations gain transaction.

Yet, in conversation, Matonis backed away from the idea that nChain was "taking aim" at Blockstream, despite his frequent barbs aimed at the company.

Rather, Matonis spoke broadly of what he clarified is nChain's broader attempt to introduce choice into a bitcoin software market he described as in need of competition.

"There's a lot of resistance to the Blockstream model of pushing everything to a second layer, pushing SegWit and Lightning as the only solutions," he said:

"We don't have to settle for just one approach."

Product strategy

Such comments come at time when alternative blockchain networks have come to show progress on flashier, more publicly popular updates to their technology, a development that stands in contrast to bitcoin's now years-long scaling debate and offers some weight to critiques of Core's model.

For example, ethereum is hard at work on innovations that would find it redefining how large blockchain networks reach consensus, while litecoin has more quickly adopted innovations originally intended for increasing bitcoin's transaction capacity. (Though it would be wrong to say Core developers aren't progressing).

However, ethereum, which lacks a reference implementation, is seen as more welcoming to alternatives, as its parity and geth clients allow developers a choice between competing softwares. (The benefit, proponents say, is that in instances of attack, should one fail, the other could emerge unaffected).

Former Bitcoin Core developers Gavin Andresen and Jeff Garzik, for instance, are two voices that have supported the idea, the latter calling multiple implementations "healthier than a homogeneous monoculture" with one reference implementation.

Against this backdrop, phase one of the nChain's action plan is to release a software development kit (SDK) that Matonis said will likely be given away for free as a means of proliferating alternatives to Bitcoin Core, used today by 85% of network nodes.


Matonis said the SDK will offer users the ability to boot up "specialized nodes" that would enable faster block propagation, a feature he contends would make scaling the bitcoin blockchain through a block size increase easier while appealing to node operators.

"The SDK is going to enable on-chain scaling for bitcoin without degrading decentralization," Matonis said.

Already, he said nChain has been in talks with miners about the idea. But, how does this work within bitcoin's existing architecture?

According to Matonis, nChain's SDK will be different from newer Bitcoin Core competitors including Bitcoin Unlimited and Bcoin, which he framed as being more compatible with Core. Bitcoin Unlimited, for example, is a version of Bitcoin Core with new features added. Likewise, BCoin was built from scratch, but to be compatible with Bitcoin Core.

"nChain allows for other developers to build their own implementations using the techniques and innovations that we've tested here," Matonis continued.

In this way, Matonis suggested that nChain believes it could gain enough traction on the network to become a popular implementation for other developers, thereby getting rid of the notion that one implementation is big enough to be called a reference at all.

He added:

"Our mission is to separate the protocol from its one true reference."

Hard fork coming?

Asked how the strategy would impact the bitcoin network, Matonis said that nChain's software will enable network stakeholders to choose between the two implementations, a development that he projects could spur a network split if successful.

Should nChain launch its implementation to widespread adoption, Matonis suggested that miners and node operators could be forced to choose between two competing versions of bitcoin's blockchain history – one kept by Bitcoin Core and the other by nChain.

"This is the governance model for bitcoin, there’s no other governance model. If you can't get traction with pull requests, you launch software propagation battles, and when one reference implementation has greater than 50% or 75%, you can attempt a fork of the network," Matonis explained.

Such a scenario has long been the subject of fears in the bitcoin development community. For example, the idea that a hard fork could possibly disrupt the validity of the bitcoin blockchain was factor cited by Bitcoin Core developers in their support for their proposed scaling solutions.

But, given the risk of creating two separate bitcoin assets in the process, why not build a competing blockchain network? According to Matonis, the answer is hashing power.

While cryptocurrency markets such as ethereum and litecoin have recently hit notable highs, it's bitcoin's miners that Matonis believes makes it more valuable.


Still, Matonis reports nChain is working on larger goals to make bitcoin useful beyond just being a store of value, one he suggested would have greater societal benefits.

"I want to elevate the sector beyond fintech to a more general computation market for enterprise computing," he said, concluding:

"We're still a small group fighting in the weeds. I’m looking beyond, there’s a much larger market across many verticals."

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstream and Purse, the creators of Bcoin.

Robots fighting via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.