bitcoins

13.5 million Bitcoins in circulation – but not widely used

Bit Coins
Bit Coins

Blockstream was given $21 million by leading Silicon Valley investors including Sun Microsystems founder Vinod Khosla  and Linkedin founder Reid Hoffman – who aims to extend Bitcoin’s functionality so it can power much more than just payments.

Bitcoin, is a digital currency built upon software that uses cryptographic transactions to prevent counterfeiting without the need for any central authority.

Blockstream is working on technology that will use the code that reinforces Bitcoin to secure other kinds of assets, such as contracts or ownership of stock.

Although, Bitcoin startups have received hundreds of millions from investors in the past few years, and were the architect in getting 13.5 million bitcoins in circulation, which are worth £3billion, sadly the currency has yet to be widely used. The failure stems from a band of unpaid coders, developers and maintainers of technology, who failed to improve the bitcoin design according to Adam Back a cryptographer and cofounder of Blockstream.

Blockstream’s founders and investors say there should be a lot more technical enhancements so that the new bitcoins can be used widely. In the event that Blockstream is successful in helping Bitcoin becoming more popular, other Bitcoin companies that Hoffman and his fellow investors have may prove more popular.

Of course, there is a sidechain which can also record Bitcoin transactions, but it can have different functions as well. Blockstream has developed a way to safely move bitcoins back and forth between the blockchain and sidechains in order to add new functionality to Bitcoin transactions. Sidechains can also be used to apply the math-backed mechanisms that protect Bitcoin against counterfeiting to other assets.

Last October, the CIO of UBS said that he believed that blockchain-style technology could be used to simplify financial trading, and the settlement of funds between banks. The chief executive of the U.K.’s financial regulator, the Financial Conduct Authority, is currently exploring similar alternative ideas.