A new public blockchain that would seek to merge popular design aspects of both the bitcoin and ethereum blockchains has raised $1m in funding.
By marrying bitcoin’s transaction model with a similar consensus system to the one in development at ethereum, Singapore-based Qtum is seeking to appeal to distributed application developers who may be experiencing difficulties with one or both systems.
Investors in the company include a host of notable blockchain entrepreneurs, including ethereum founder Anthony Di Iorio, OKCoin CEO Star Xu, BitFund founder Xiaolai Li and Fenbushi partner Bo Shen.
Speaking to CoinDesk, Di Iorio lauded the team’s leadership as one of its main strengths.
“All in all, I believe them to be the best team out of China and Asia,” he said. “This has led them to see where improvements are needed in smart contract platforms, learn from mistakes of ethereum, focus on the region they know best.”
As explained by Qtum’s founders, the open-source technology borrows key elements from each project, and is thus more of a union of both networks, even though it would have its own blockchain and investable token. (Technically, Qtum is a fork of Bitcoin Core version 0.13, running with the ethereum virtual machine – the element that executes that platform’s smart contracts).
Such an idea is also being explored by the team behind the startup Rootstock, which raised $1m in March to bring smart contracts to the bitcoin blockchain.
Patrick Dai, founder of the Qtum Foundation, indicated that the $1m will now help his team to prepare the infrastructure necessary to sell the tokens in a public initial coin offering (ICO), or a public sale of unique cryptographic tokens to investors.
Dai told CoinDesk:
“We raised the money to prove that our approach is right. We used the money to do the minimum viable product. The testnet is live now, but it is private, it is already working.”
Dai said that the Qtum Foundation could seek to raise up to $10m in the token offering. In Q3 of 2016, nearly $200m was raised in ICOs, according to CoinDesk Research data.
Qtum also claims to be partnering with PwC Asia, which both its team members and investors said will be providing accounting services for the project.
Capitalizing on concerns
While Rootstock aims to improve the bitcoin network, a key aspect of Qtum’s pitch is that existing public blockchain developers have become so dissatisfied with their current choices that they will seek a new alternative.
Dai believes that bitcoin and ethereum both have design flaws that would inhibit certain uses, which would enable room for Qtum to become a notable alternative.
For instance, Dai posited that enterprise developers may be dissuaded from launching a private bitcoin network due to its use of proof-of-work for its consensus model.
“The consensus part is not scalable. You cannot deploy permissioned blockchain and maintain the network,” Dai said.
Additionally, the early interest in such an idea from the Hyperledger team is further evidence that the new blockchain should be further explored, he suggested.
Notably, the design would incorporate support for so-called “blockchain oracles” – smart contracts that would serve to facilitate interaction between the blockchain and exterior data feeds.
On Qtum, these contracts would be called “master contracts”, a feature that Dai believes will be attractive to enterprise firms like Microsoft that are exploring similar concepts.
Microsoft’s Project Bletchley, for instance, envisions how corporates may be able to monetize a form of oracle it calls a “cryptlet” as a way to boost revenue from data streams.
Of course, the proof will be in how Qtum is ultimately able to attract developer interest – a tall task, Dai admitted.
“That, of course, is going to be one of the most difficult things, but I think that we have a good strategy for getting people online and starting to make contracts.”