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More Startups Move Towards ‘Blockchain’ From Bitcoin

More startups are moving towards 'blockchain' from Bitcoin, new data from Y Combinator shows.

Interest in Bitcoin by Silicon Valley startups peaked around late 2014-early 2015 and has waned since, while interest in ‘blockchain’ continues to rise in 2016, new data from the world’s most popular and exclusive startup accelerator Y Combinator shows. The data only covers new startups applying to Y Combinator and therefore understates the scope of the change. This is because several startups that started off with Bitcoin as their primary focus have since pivoted into the blockchain space, such as Chain and Gem. In addition, several startups, especially in the financial world, are being started with funding not from traditional venture capital industry but from existing banks and other financial institutions, like Blythe Master’s Digital Asset Holdings.

Bitcoin Blockchain YC

The data doesn’t track the broader cryptocurrency market, and there is no indication of the recent increase in the number of Ethereum-based startups, that are bound to pick up over the next 2-3 year time-frame. The post goes on to claim that among the new startups applying to YC, blockchain is set to overtake Bitcoin –

Bitcoin-related ideas were briefly very popular, but fell off rapidly. These days, building things on top of the underlying blockchain is on the rise, and seems set to surpass bitcoin itself.

There has been an especially strong interest in blockchain, the underlying data structure first used in Bitcoin in the financial industry, and a few startups have seemed to raise tens of millions of dollars working in this space.

However, the data could also mean that a lot of layers being built upon Bitcoin are just using the term ‘blockchain’ to make it easier to raise money from the venture capital industry. Many products in the space call themselves as ‘blockchain-agnostic’ i.e. their products could be ported over to any type of blockchain, be it public ones like Bitcoin and Ethereum or private ones like Hyperledger. The trend may be more semantic than actual, and the use of the word blockchain doesn’t answer the question of whether these are being built on public blockchains like Bitcoin or private ones for the financial industry.

Still, as the community already suspects, there is an accelerating interest towards private blockchains and ‘distributed ledger technology’ mainly from the financial industry from also from other sectors of the economy.