While critics are still dubious of the future viability of the digital currency bitcoin, at least one group isn’t: venture capitalists. VCs pumped more investment into bitcoin and blockchain-related startups last year than in any previous year—nearly $1 billion.
The investors are keeping this industry hot, even if we haven’t yet seen any so-called “killer app," a mainstream use case for bitcoin that would compel the average person to care. And it isn’t just investors leading the charge—it’s a handful of key executives, thinkers and even policy people.
Of course, investors are just as keen on companies exploring the blockchain, which is the decentralized ledger technology on which bitcoin runs. (For a full explainer on blockchain, watch this video.) The hype around the idea of banks using a form of blockchain (without bitcoin) is high, even though a PwC survey this month found that 57% of financial executives say they're “unsure” about implementing blockchain tech in banking.
So, who are the big believers? They are some of the biggest names in bitcoin and blockchain right now. Some are executives at the most well-funded companies, some are investors in those companies. All of them bring clout and connections to bitcoin and the blockchain. Here are 11 of them, curated by Yahoo Finance with input from a number of industry insiders. This is not a list of the hottest bitcoin companies, nor is it a ranking. It’s an unofficial look at the individuals bringing mainstream attention to this still-nascent, still-controversial corner of tech. Call them the "bitcoin celebrities" if you like.
This list is unranked (alphabetical order). Feel free to debate, dispute and make your own suggestions in the comment section.
Everyone in tech knows Andreessen. He is the co-founder of Netscape, a board member at Facebook, eBay and others, and co-founder of the Silicon Valley powerhouse venture capital firm Andreessen Horowitz. The firm’s portfolio includes investments in bitcoin wallet company Coinbase (see No. 6), 21 Inc (see No. 9), and TradeBlock. In 2014, he wrote an op-ed in the New York Times boldly titled, “Why bitcoin matters.” He liberally shares bitcoin and blockchain-related news to his 500,000 Twitter followers—a considerable benefit to bitcoiners.
When Coinbase, one of the earliest bitcoin startups, raised $75 million in funding in January of last year, it was at the time the biggest fundraising round ever for a bitcoin company. (The figure has since been shattered by 21 Inc.) And Coinbase, which has raised $107 million total, remains arguably the best-known name among all bitcoin startups—it is often where people go to get a bitcoin wallet and to buy their first bitcoins. It was first to market with a bitcoin exchange platform in the U.S. (others waited longer in order to get certain licensing) and Armstrong, its leader, is one of the most sensible thinkers in the industry. (His post explaining the debate over block size distills the issue clearly.)
Bitcoin is partially based on a previous system called hashcash, an algorithm that cut down on email spam by requiring proof of work, an early form of what is now bitcoin “mining.” Back created hashcash. Now the cryptographer, as president of blockchain startup Blockstream, has become one of the loudest voices in the debate over whether, and how, to increase the size limit of transaction bundles (or “blocks”) on the bitcoin blockchain. His experience in business (he's worked as a consultant to Nokia) and in academia (he has a PhD in distributed systems) have made him a unique authority in the space. Reid Hoffman, the influential co-founder of LinkedIn (LNKD), made a personal investment of $21 million in Blockstream, and the company has raised $76 million overall.
Ethereum is a bitcoin alternative that some believe has more potential than bitcoin. The platform runs on a decentralized blockchain, like bitcoin’s, that allows for any peer-to-peer exchange of value, and it uses its own currency, Ether. And the company is a non-profit. Buterin developed the concept in 2013, and in 2014 sold about 60 million ether in a pre-sale, which worked out to $18.4 million at the time. The Ethereum chain went live last summer. Buterin, who is only 22, is seen as a wunderkind; he also helped launch Bitcoin Magazine.
Reid Hoffman has called Wences Casares the “Patient Zero for bitcoin in Silicon Valley.” His startup Xapo was one of the earliest bitcoin wallet companies, though it's embroiled in a legal dispute with LifeLock, the company that acquired Casares’s previous startup, Lemon. (LifeLock alleges Casares and others created Xapo while still working at Lemon, within LifeLock; he has filed a counter-suit.) Most importantly, PayPal created a new seat on its board of directors for Casares in January. The appointment was seen as big news for bitcoin—a bitcoin entrepreneur on the board of PayPal was quite a milestone. And Xapo has raised $40 million in funding.
Masters is one of a kind in the bitcoin world. She spent nearly 30 years as a JPMorgan (JPM) executive, including as head of global commodities, before leaving to run Digital Asset Holdings, a startup that seeks to apply blockchain tech to Wall Street. Its first big client: her former employer. JPMorgan is working with Digital Asset Holdings to test out a use of blockchain to settle transactions faster. DAH has raised $60 million in funding. Because Masters is a known name on Wall Street, her move brought big legitimacy to the space. (And Masters isn't the only female leader in bitcoin: Catheryne Nicholson is CEO of small blockchain startup BlockCypher, which has raised $3.5 million, and Elizabeth Rossiello is CEO of BitPesa, which is working on bitcoin payments in Africa.)
Kraken is a bitcoin exchange headquartered in San Francisco, but with most of its activity in Europe. Here’s why that’s relevant: Last year, when the New York State Department of Financial Services (NYDFS) released its controversial regulatory framework for bitcoin companies, the Bitlicense, Kraken led a charge of bitcoin startups out of New York. The company won’t do business in the state, which is a financial risk but a compelling stance against what Powell and others see as restrictive legislation. Kraken, which has raised $6.5 million in funding, has stuck to that vow even as it has ramped up acquisitions lately, buying out Coinsetter, a U.S. exchange that itself had bought out Cavirtex, a Canadian exchange. Kraken's purchase of Coinsetter was the biggest ever M&A deal in the bitcoin space; Coinsetter did operate in New York, but now it won't—that's how rigid Powell is in his stance. Kraken is continuing to get bigger, but without New York, the very place where so much of the activity around blockchain is centered.
R3 CEV is the private firm that rolled out a consortium (the Distributed Ledger Group) for banks interested in exploring blockchain technology. More than 40 of them have signed on, including Bank of America (BAC), Citi (C), Deutsche Bank (DB) and Wells Fargo (WFC). And this month R3 announced an extensive test of online distributed ledgers for banks, with help from Chain, Ethereum (see No. 10) and IBM. It is R3 that has attracted institutions whose involvement can turn the abstract notion of "blockchain for banks” into a reality.
In 2004, Barry Silbert founded SecondMarket, which allows people to buy stock in non-public companies. He sold the company to Nasdaq last year and has since launched Digital Currency Group, the biggest investment firm in bitcoin and blockchain companies. (It has invested in more than 75.) Most recently, DCG bought the leading bitcoin news site, Coindesk, acquiring the annual bitcoin industry conference Consensus along with it. Almost every time a bitcoin startup announces a new fundraising round, Silbert and DCG are involved. Silbert also launched the Bitcoin Investment Trust (GBTC), which trades over-the-counter and is designed to track the price of bitcoin.
Srinivasan, the cofounder and CEO of 21 Inc, is also a board partner at Andreessen Horowitz. When 21 first launched publicly, it remained mysterious. It wasn’t clear what 21 would be doing, but observers had high expectations: The company raised more than any other bitcoin startup, $121 million in funding. Last year, 21 finally unveiled its first product —a small bitcoin personal computer for building apps on top of the bitcoin blockchain.
The Olympic rowers made their name when they sued Facebook (FB) cofounder Mark Zuckerberg and got $65 million. Since then, they’ve been eager to prove themselves as entrepreneurs, and they have made bitcoin the space in which to prove it. They launched a bitcoin pricing index, Winkdex, in 2014—the site is cleanly designed and tracks the price of bitcoin over time. This year, they launched Gemini, a bitcoin trading exchange. Like their pricing index, the design is appealing, but the user base is small. (Gemini is only doing an average $338,000 in trade volume per day, according to data from TradeBlock; by comparison, Kraken sees about $1.3 million in daily volume.) Their bigger ambition: the Winklevoss Bitcoin Trust, a bitcoin ETF, which will trade on the Nasdaq under the symbol COIN but still awaits regulatory approval. There are signs that the bitcoin community doesn’t love the Winklevoss brothers yet—one prominent bitcoin executive told Fortune, “Our industry would prefer that if there’s a celebrity spokesperson, it not be them.” But the jetsetting duo certainly bring mainstream star power to bitcoin.
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This is the third in a three-part Yahoo Finance series focused on blockchain technology. The first part was about why big banks are expressing interest in the blockchain; the second part was about how you could invest in the blockchain.
Daniel Roberts is a writer at Yahoo Finance, covering sports business and technology.
Read more:
Bitcoin advocacy group scores funding from biggest names in industry
Bitcoin industry consolidates: Why Kraken bought Coinsetter
Bitcoin's biggest investor bought its biggest news site
Here's a sign that PayPal is embracing Bitcoin
