5 Bitcoin and Blockchain Startups to Watch in 2016

Jad Mubaslat, founder and CEO of Ohio State Bitcoin Group BitQuick.co, has been a Bitcoin user since 2011. BitQuick.co is a peer-to-peer marketplace that allows individuals to buy and sell Bitcoin via cash deposits in the United States. As 2015 draws to a close, many are questioning the future of Bitcoin. It is safe to say that 2016 will be the most crucial 12 months.

First, the technology’s open source community needs to resolve some outstanding issues, most notably increasing the block size, while also combating the influence of “private blockchains” that can take market share.

Ultimately, I am very confident about the future of Bitcoin. While its developments in 2015 have not received as much media attention as they did in 2013, the industry has established a solid foundation for the continued success of the Bitcoin network and the growth of Bitcoin.

With all the applications built now, it’s hard to imagine it disappearing easily. I believe it will only take a few years for Bitcoin to cross the “chasm” and become a ubiquitous technology.

But the big question is: Which case will bring widespread acceptance to Bitcoin first?

With these evidences, I believe the following five companies will have a considerable impact on the future development of the industry.

Blockstream

Blockstream is one of the better-funded startups, but it calls itself the “stealth bitcoin company” and is dedicated to accelerating the development of cryptocurrencies, open assets and smart contract technology.

In 2015, the company, which had been busy behind the scenes launching a beta version of its flagship sidechain project, unveiled its first commercial product, Liquid , which is designed to speed up transfers between bitcoin exchanges .

Blockstream has decided to further explore the Lightning Network — a proposal to remove small bitcoin transactions from the blockchain in order to reduce fees quickly — but the proposal also reproduces the unreliability of the current network design.

The Lightning Network has the ability to reduce the total number of transactions that need to be settled on the Bitcoin blockchain, thereby eliminating its impact on the total required block size.

There are still many technical challenges before the network can go live, such as various integration changes to Bitcoin Core. I believe most of these issues will be resolved and Blockstream, or perhaps a different group, will launch its own version of the Lightning Network in 2016.

tØ

tØ is a blockchain-based trading platform created by online retail giant Overstock and first announced in August. It is part of the company’s Medici platform, which aims to revolutionize securities by using blockchain technology for both trading and settlement.

While the U.S. Securities and Exchange Commission (SEC) did recently approve Overstock’s plan to issue shares via blockchain technology, Overstock CEO Patrick Byrne said in a recent article published in Motherboard that it may not be able to use the Bitcoin blockchain as part of its work.

He said “maybe we’re not going to use the bitcoin blockchain technology… maybe there’s another blockchain with higher throughput capabilities that we want to integrate with.”

The comment concerns the bitcoin block size issue, as the limited number of transactions will also limit the amount of instant settlement that the company can provide.

I believe that in 2016, the block size issue will be resolved in some way, and I also believe that tØ will utilize the Bitcoin blockchain technology rather than a private blockchain due to the decentralized, secure and relatively trustless nature of Bitcoin.

If this is achieved, it would be the first securities settlement product released using Bitcoin and a major milestone in Bitcoin’s history.

OpenBazaar

OpenBazaar is currently one of the most notable developments in decentralized marketplaces for Bitcoin consumer applications.

If successful, OpenBazaar would become an open-source competitor to eBay that reduces fees for all parties due to its decentralized nature.

I think the challenges facing the launch of OpenBazaar are relatively trivial, including the development of a reputation system and the typical causal difficulties of gaining transaction volume in a new market.

However, with a recent $1 million in venture funding raised in June 2015, I believe 2016 will see a much-anticipated IPO and expansion for OpenBazaar.

Zapchain

Zapchain is a social media platform powered by Bitcoin and one of my personal favorite companies.

The startup’s integration of on-chain Bitcoin micropayments is a truly revolutionary idea, facilitating high-quality user connectivity and content creation in a variety of self-created communities.

Zapchain’s biggest hurdle will be its ability to continue to grow while avoiding spammy users.

From what I have seen Zapchain has been able to effectively curb spam and the platform is currently more popular than ever.

In 2016, I predict that Zapchain will continue to grow in non-Bitcoin related communities and become recognized as the top Bitcoin news platform. Zapchain embodies the spirit of Bitcoin and also provides an important alternative to some controversial Bitcoin communities.

BitFury

BitFury, the most well-funded Bitcoin mining company to date, having raised over $60 million, announced on Dec. 16 that it will release a new ASIC chip in the first quarter of 2016.

The launch of its new data center in Georgia could potentially double the Bitcoin network’s hash rate, leaving some concerned about the integrity of Bitcoin mining decentralization.

I think this risk is probably overstated, and the main effect of BitFury's innovation is to increase (perhaps almost double) the security of the network.

Furthermore, as a Bitcoin company, compromising the integrity of Bitcoin’s decentralization would also be contrary to BitFury’s best interest.

BitFury’s CEO, Valery Vavilov, echoed the sentiment, indicating his company’s intention to safeguard the interests of the network as a whole.