Bitcoin Satellite Project Shelved, Developer Jeff Garzik Creates New Project Bloq

According to Bloomberg, Jeff Garzik has been pitching his startup idea to investors over the past few months. He proposed connecting computer services to satellites, loading the bitcoin transaction data generated every day, and then sending these satellites into space. Since Jeff Garzik is one of the core developers of Bitcoin, he has also attracted the attention of venture capitalists. Unfortunately, however, previous fundraising efforts for the project ultimately ended in failure.

On October 13, Garzik sent an email to customers and partners announcing his decision to put his company, Dunvegan Space Systems, into deep freeze. "The company has not been able to meet the necessary fundraising goals, so we will be ceasing space-related marketing and operations," Garzik wrote. "But we look forward to the day when Dunvegan Space Systems can be successfully frozen, so that we can once again launch satellites into space."

The investment chill has not only affected Jeff Garzik's space project. According to CoinDesk data, in the first half of 2015, venture capitalists invested $373 million in bitcoin startups, but in the third quarter, it slowed down. In the third quarter, the bitcoin industry received a total of $85 million in investment, an increase of 15% over the same period last year, but a drop of about 41% in the second quarter of this year.

Bitcoin evangelist Barry Silbert predicts that the total amount of venture capital invested in Bitcoin companies is expected to exceed 10亿美元by the end of October. Recently, SecondMarket, co-founded by him, was acquired by Nasdaq Group. However, the next investment milestone may be slow to come, and investors have become more cautious. "It is natural for venture capitalists to see whether their previous investments have worked before continuing to bet," said Gil Luria, an analyst at Wedbush Securities. Some early bets did not succeed. For example, Buttercoin, a Bitcoin market that received investment from several venture capital firms including Y Combinator, chose to shut down this year. Many survivors in the industry have chosen to merge to stay afloat. BitPay, a Bitcoin payment processor backed by Founders Fund and other venture capital firms, laid off nearly 30 employees and contractors in September.

There are also many Bitcoin believers among venture capitalists. Adam Draper's Boost VC has invested in a large number of Bitcoin startups. His father, Tim Draper, the founding partner of Draper Fisher Jurvetson, is an out-and-out Bitcoin believer. He said: "Our Bitcoin company is booming. Now there are many Bitcoin buyers, but not many sellers. This is the turning point."

Andreessen Horowitz, a well-known American venture capital firm, backed 21, which has launched its first Bitcoin computer. But Horowitz declined to comment on its investment in Bitcoin, and Adam Draper did not respond to a request for comment.

For bitcoin startups, a major problem in financing stems from bitcoin itself. Compared with the beginning of the year, the price of bitcoin has fallen by about 9.5%, and investors have now focused more on the underlying technology of bitcoin, the blockchain.

"There are a lot of companies exploring blockchain technology and wanting to do some applications," said Bitcoin investor Michael Terpin, but his confidence has not been shaken. "The growth rate of Bitcoin investment is slowing down, which is obviously not a surprise," Terpin said. "In most cases, we will see a mild hiccup." He compared Bitcoin to the Internet bubble, but he said we are not on the verge of bursting, at least not yet. "There is no such thing as a permanent rise," Terpin said. "I don't think Bitcoin is in the Internet bubble period of 2001. We are at the inflection point of 1997."

Garzik is also working on Bitcoin. Although his satellite plan has been shelved, he is not discouraged. Now Garzik is creating a new startup called Bloq to explore ways to "professionalize the entire Bitcoin ecosystem." He described it as a "Bitcoin company that is closer to the earth."

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Original article: http://www.bloomberg.com/news/articles/2015-10-26/the-bitcoin-startup-boom-comes-back-down-to-earth
By Olga Kharif
Compiled by: Satuoxi
Editor: Satuoxi
Source (translation): Babbitt Information