

Blockstream closes $21M round - yurisagalov
http://blockstream.com/2014/11/17/blockstream-closes-21m-seed-round/

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zaroth
Congratulations. That is a killer round and a major development. This is a $0
revenue company?

I know gmaxwell at least is ridiculously smart. I get the feeling this is a
powerhouse founding team, huge group of talent, huge pile of cash. Part of me
wants to be in on that team.

The part about AirBnB I really enjoyed. Because at first I thought, I bet they
are all working remote and doing whatever on their individual projects. It
sounds like a large diverse team which really needed to get co-located if they
wanted to get real... and they did. Ultimately, there is no current
replacement to actually physically moving everyone to someplace.

I have no idea why SF, but I imagine someone(s) in the early group were
already reasonably near there. But I would be surprised if blockstream.com
needed the SF tech force. They may have just the right number of people right
now. That approach would give them some incredible runway, but so many
investors need faster ROI. $21M is a huge, massive _commitment_.

I guess the missing piece is valuation. What percentage, or implied percentage
range, or whatever, of the company do you get for $21M? How do you even put
together a model for a $21M seed round? Maybe a Seed Round this large is
basically a long-term bet on this group to make great things. I assume there
are no-strings-attached, and this is people with Bitcoin who want Bitcoin to
the valuable. It takes a lot of work to keep a currency running!

What's Blockstream's revenue model Do the the investors hold any BTC? Is their
goal to increase the value of BTC, or is it BTC price neutral? Blockstream
succeeds with Bitcoin succeeding (the Bitcoin P2P Protocol, its infra). But
the 'payment' and 'asset' portion of Bitcoin could be excess baggage which
governments hate too much. There could be better uses of Blockstream's time
beyond currency applications. I mean, there are many features you can build
that wouldn't increase demand for units of 'satoshi'. Then again, it's a
common refrain, if you own many BTC then invest in Bitcoin. Better software
should result in broader adoption. But there's nothing inherent about a
cryptocurrency that the bits should cost anything. So I'd assume there's some
revenue model.

Another perspective: Ultimately the price of a Bitcoin will fall to the amount
necessary to anti-DDoS. There can be no price beyond anti-DDoS because there
is no more utility than exactly that. Bitcoin as a _currency_ will be a
ridiculously failed experiment, because why would you hold $$$ inside some
bits? The scarce bits are just to prevent DDoS and properly distribute access.
You shouldn't need to pay money for something like that, unless you are
speculation. Speculation can exist, fine, put it on its own chain.

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ThomPete
They are building infrastructure. My guess is that there is valuation based on
what they think it might be worth but what it will cost for them to get it up
and running.

If it works 21million is going to be seen as nothing.

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bdr
In what is surely a coincidence, 21M is also the total number of Bitcoins that
can be mined.

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bdcs
Wow you usually don't see $21M and "seed" in the same phrase.

~~~
dwynings
Nor do you see 11 cofounders.

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alphonse23
Somebody announces a Bitcoin 2.0 idea just about every other month --
ethereum, counterparty, opentransaction, and so on -- so why does this one
deserve $21M?

~~~
maaku
All of these projects have been underway for quite some time. Indeed, Open-
Transactions is almost as old as bitcoin itself.

Nevertheless, my (highly biased) opinion is that Blockstream is worth paying
attention to because unlike the above mentioned projects we are adding new
functionality by extending bitcoin itself, thereby decreasing fragmentation
and lowering startup costs for new ventures.

~~~
samstave
Making the world a better place!

Are you going to use some of that 21MM$$ to buy some of the coins currently
setup for auction by the US Marshall?

~~~
maaku
> Are you going to use some of that 21MM$$ to buy some of the coins currently
> setup for auction by the US Marshall?

I wish! Nah, only if we had reason to buy that many coins anyway. We got
funded to make infrastructure and develop products, not to buy and hold
bitcoin (except as operational needs demand).

In all seriousness, one of the problems of this space is that it has been
historically difficult for ROI on bitcoin companies to outperform bitcoin
itself. We'll see if we're able to buck that trend ;)

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dang
Also
[https://news.ycombinator.com/item?id=8619284](https://news.ycombinator.com/item?id=8619284).

