Ethereum development startup Ethcore started by one of the blockchain project’s original founders has raised $750,000 in pre-seed funding round led by Silicon Valley-based Blockchain Capital and Shanghai-based Fenbushi Capital.
Ethcore was founded by Ethereum co-founder and former CTO Gavin Wood. Along with Vitalik Buterin, Wood co-designed the Ethereum protocol and took a lead in various parts of the Ethereum ecosystem, including devising the Solidity programming language, refining the Ethereum Virtual Machine (EVM) and writing the acclaimed Yellow Paper, the first formal specification of a blockchain protocol.
Buterin, who is an Ethereum Foundation board member, has stated, “We’re excited to see the progress that Ethcore is making on bringing Ethereum technology to the next level through their full implementation of the Ethereum protocol in Parity, and look forward to seeing what the team will continue to bring.”
With the creation of Ethcore, Blockchain Capital Managing Partner, Brad Stephens draws an analogy between Ethcore and Ethereum’s version of Blockstream, which is a startup focused on developing improvements for the Bitcoin blockchain.
Ethcore to banish Ethereum’s shortcomings
Ethcore aims to come to Ehereum’s rescue by helping it overcome challenges faced by the Ethereum blockchain (and other blockchains) such as privacy and scalability.
In terms of privacy, Wood said, “We have developed high-level designs for tackling scalability and privacy that can help us overcome some of the problems and help in various settings. They’ll be implemented over this year. We’ll expect a much more scalable public blockchain in the next couple of years.”
“Full privacy is still a research area with some interesting ideas that we’ll be watching closely – but semi-trusted architectures on which we are working will do for many cases, particularly in the area of permissioned ledgers,” he added.
Vitalik Buterin also shared his thoughts on the future of privacy and scalability in Ethereum with Bitcoin Magazine:
“In the case of privacy, the basic building blocks (ring signatures, ZKPs, state channels, CT-style value encryption) are fairly understood and established, and it is primarily a matter of turning them into functional tools that can be used in production applications. In the case of scalability, the Ethereum research team is fairly committed to sharing; we feel that it does a good job of combining the benefits of being an on-chain scaling strategy with the decentralization benefits of maintaining a network that can theoretically run off of nothing but consumer laptops.”
Buterin added, “There are details that are still being worked on, but [in my opinion] a lot of them are solidifying rapidly; we have a team that is starting work on a proof of concept in Python incorporating many of our ideas for future versions of the protocol, and we plan to validate them there before beginning development for mainline.”
Ethcore recently released the first version of their premium Ethereum client, Parity. In addition to tackling privacy and scalability issues, Ethcore’s software technology roadmap also includes improvements for light-clients for secure Internet-of-Things (IoT) applications and permissioned blockchains. The startup also intends to create application-level libraries for use by developers and third-party projects.
Ethcore sweeping off high appreciation
Ethcore intends to further pursue the development of the Ethereum blockchain stack and assist partners who wish to innovate using the smart contract platform. The startup was also awarded a grant by the U.K. government’s Innovate UK to create a “next-generation foundational distributed ledger platform for institutional communication, authorization, and consensus.”
“Ethcore is much more focused on building licensed, proprietary tools for large financial institutions, exchanges, and so forth, as opposed to the more open-sourced, Red Hat approach Blockstream is taking … One of Ethcore’s main value propositions is that they know Ethereum better than anyone, and thus the tools they build and deploy should buttress and catalyze Ethereum as a whole,” said Brad Stephens, Blockchain Capital Managing Partner.
Wood disclosed that the startup is currently working with French banking giant BNP Paribas on possible applications of Ethcore’s technology within the world of finance. Many applications within the Etheruem ecosystem, such as Digix, Augur, Grid Singularity, and Slock.it are also looking at Ethcore’s technology.
The company’s success can be reflected from Ethereum gaining rapid momentum in 2016, with the market cap of the Ether cryptocurrency recently topping $1 billion before settling back down around $650 million.