Blockstream Raises $210 Million Through Series B Funding

August 25, 2021 03:10 PM
Crytpo and Bitcoin Market Cap Story of Day

Crytpo and Bitcoin Market Cap Story of Day

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Crypto was down across the board this morning. DOGE and Solana (SOL) are underperforming in the Top 10.

Crypto Story of the Day

Blockstream; a Victoria, Canada-based firm building BTC infrastructure; raised USD 210 million in a Series B funding round which values the firm at USD 3.2 billion. We provide an overview of the firm's business lines and ambitions for the future.

The company was founded in 2014 by Adam Back and a team of early developers with a mandate to support BTC network development. Blockstream’s first material tech release was Sidechain Elements in 2015. The project set out to develop side chains for interoperability to BTC, and further development of new applications. 

In 2017, Blockstream revealed Blockstream Satellite, a satellite receiver that broadcasts BTC network data all over the globe, often used to mine BTC in areas with weak internet connectivity. In early 2018, the company introduced “Lightning Charge” from its Elements initiative, a toolkit for developers to integrate BTC layer 2 scaling solution Lightning Network onto their applications. 

Later that year, the company took “Liquid Network” live, a project described at the time as “an innovative sidechain built on the [BTC] network, facilitating faster [BTC] transactions between businesses and individuals, while enabling extended functionality.” The sidechain aims to scale settlement of BTC transactions and also provides a privacy layer, as transactions are only known to the transacting parties. 

Liquid Network is said to have “[amassed] more than [USD 1.1B] in network value” to date. The network’s native token, L-BTC, is backed 1:1 by BTC through a mechanism known as a “[2-way] peg.” Blockstream promotes that the network is useful for facilitating quick and inexpensive transfers of BTC between exchanges and Liquid wallets, and also supports the development of layer 2 applications such as stablecoins and security tokens. 

The firm also offers 2 wallets, Blockstream Green Wallet— initially rebranded from the company’s acquisition of BTC wallet software GreenAddress— and AQUA, which supports BTC, USDt, and Liquid Network-based tokens. 

In 2019, Blockstream began offering BTC mining colocation services and has since partnered with BlockFi and Galaxy Digital to run its mining facilities. The firm also launched the Blockstream Mining Note on its network, which securitized the hash rate of a mining operation through the issuance of security tokens (BMN). Blockstream raised EUR 6.634 million from 21 investors through its BMN issuance on Luxembourg-based fundraising platform STOKR in July. 

In July, we mentioned that the attention given to DeFi in 2021 and second-layer scaling has been concentrated in networks such as Ethereum and Binance Smart Chain. However, recent events such as BTC’s taproot upgrade, El Salvador’s use of the Lightning Network, and Jack Dorsey’s “TBD” project are all testaments to the potential advancement of blockchain-based applications on the BTC network. The Blockstream financing adds a tailwind to those developments.

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FRNT Financial is a technology and sales layer that offers institutional and accredited investors access to various forms of exposure to crypto-assets. You can subscribe to FRNT Financial Morning Note at https://www.frnt.io/morningnote