Startup Raises $20 Million to Build 'YouTube on the Blockchain'
Silicon Valley startup Lino has raised $20 million to take on YouTube with a decentralized, blockchain-based platform.
Silicon Valley startup Lino is preparing to take on YouTube with a decentralized, collectively-owned video content distribution system that purports to cut out the middleman to more fairly compensate content creators.
The company, which faces competition from Streamspace, Flixxo, Viuly and Stream, all of which are developing similar concepts, received a $20 million vote of confidence from prominent Chinese seed investor Zhenfund during a private token sale, it announced today.
Explaining the company's mission, its website says that YouTube holds "enormous power" over creators and focuses on maximizing profit, which can bring it into conflict with its actual creators.
The site continues:
The company's LINO tokens will operate as the system's currency and will be earned by creating and sharing content, as well as from the development of infrastructure and applications on top of the Lino blockchain. In other words, users who run nodes to host content will earn tokens, as will the content creators, according to a Medium post by the group.
"We believe in decentralized, peer-to-peer [content delivery networks (CDN)], but current projects seem not ready for stability and costs," Lino's website states.
Instead, it seeks to provide a decentralized CDN through an auction system, which the founders believe will maintain a high standard of work on the platform, according to TechCrunch.
The value of the content will be determined by human engagement with it, which Lino argues will prevent fraud and bots from manipulating the system. Transactions will be free of charge. The "auction system" is a reflection of that engagement – users with more interesting or novel content will receive more of a reward than those who produce less interesting content.
Lino chief executive Wilson Wei told TechCrunch that he expected content creators to garner three to five times the profits they make on YouTube or its competitor site, Twitch.
While the outcome of Lino's project remains to be seen – the product will launch later this year – Wei expressed confidence in its underlying design. He told TechCrunch:
Image via Shutterstock
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