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Linked-In, Sun Microsystems Founders Lead Big Bet On Bitcoin Innovation - MoneyBeat - WSJ

Linked In Sun Microsystems Founders Lead Big Bet On Bitcoin Innovation MoneyBeat WSJ


Billionaire entrepreneurs who helped lead LinkedIn Corp., Sun Microsystems Inc., Google Inc. and Yahoo Inc. are among a group of investors who’ve contributed $21 million to an unorthodox bitcoin project that has no clear plan for turning a profit. Their bet: that the project’s A-list of cryptography experts and bitcoin coders will unleash a new wave of Internet disruption that decentralizes the entire economy.

The company, known as Blockstream, aims to enhance bitcoin’s “blockchain” — the distributed, public ledger that is the defining technological feature — and turn it into a universal platform for multiple new applications that go far beyond the digital-currency payments for which bitcoin is best known.  The co-founders hope to turbo-charge the development of so-called Bitcoin 2.0 applications, which will allow people to engage in “trustless” transactions without having to pay fees to middlemen such as trustees, registrars and escrow managers.

The decentralized blockchain is “extremely difficult to corrupt” and so has the potential to be “an efficient platform for trading pretty much anything of value,” said Reid Hoffman, a co-founder of LinkedIn who was one of three lead investors in the funding round. Blockstream, he said, is “developing the bitcoin ecosystem” to facilitate these prospects.

The other two leads were Sun Microsystems founder Vinod Khosla’s Khosla Ventures and Canadian firm Real Ventures. Other contributors among the list of nearly 40 in total included Google Chairman Eric Schmidt’s Innovation Endeavors and Yahoo founderJerry Yang’s AME Ventures.

Blockstream has no clear roadmap on how it will turn an open-source software engineering project into a corporate money-maker. Instead, investors took a leap of faith, mostly based on the reputations of the company’s co-founders, who Tally Capital partner and co-contributor Matthew Roszak described as the “highest caliber of human capital in the blockchain planet.”

Stashed in: @reidhoffman, @vkhosla, @ericschmidt, Bitcoin

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Wow, never has an open source project gotten so much outside investment from so many prominent people. It's kind of amazing, when you think about it.

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