Interview with Bram Cohen, creator of BitTorrent, on his new cryptocurrency startup Chia, which aims to be more eco-friendly than Bitcoin and launches next year
an IPO—to get his off the ground. https://www.wired.com/... Chris Collins / @chris3collins : Chia will generate revenue by providing services to banks that facilitate use of its protocol. I suspect more blockchain-focused startups will follow this business model. https://www.wired.com/... @wired : In 2001, a 25-year-old unemployed college dropout named Bram Cohen created BitTorrent. Now, his latest creation is a digital currency, and startup, called Chia aimed at making cryptocurrency acceptable to the financial industry http://www.wired.com/... Stefan Constantine / @whatthebit : “raised $3.4 million this spring, including from Greylock Partners and Andreessen Horowitz” http://twitter.com/...
Context & Ripple Effects
Bram Cohen is betting his post-BitTorrent reputation on fixing crypto's biggest reputational problem: energy use. The interview lays out his pitch — a currency designed to be acceptable to banks, funded by a $3.4M seed round from Greylock Partners and Andreessen Horowitz that would later grow into a $61M raise at a ~$500M valuation, with revenue coming from services sold to financial institutions rather than token speculation.
The move extends a pattern for Cohen: after building BitTorrent, whose architecture shielded it from legal liability while media piracy fueled its growth, he is again designing around an adversarial constraint — this time Bitcoin's environmental cost. His former project followed him into crypto too, announcing its own downloadable-speed tokens months later.
First-order effects
- Banks evaluating blockchain pilots gain a protocol explicitly marketed as eco-friendly and institution-facing, giving them an alternative to Bitcoin's energy profile without abandoning distributed-ledger ambitions.
- Greylock and Andreessen Horowitz's early backing puts two top-tier VC firms publicly behind 'compliance-friendly' crypto infrastructure, legitimizing the category for other institutional investors.
Second-order effects
- When Chia debuts as a storage-based network, its dependence on drives instead of computing power shows up immediately in hardware demand, lifting hard drive and SSD sales — miners chasing whatever resource the next chain consumes.
- Consumer-hardware crypto projects like Helium, selling $495 Hotspots for peer-to-peer networking, compete for the same retail audience of people willing to buy devices to earn tokens, pressuring each new chain to differentiate on what it asks users to plug in.
Third-order effects
- If the pattern holds, consensus design fragments by resource type — compute, storage, wireless coverage — turning cryptocurrency competition into a race over which physical asset miners must buy, with knock-on demand cycles for each hardware class.
- Cohen's bank-services revenue model points toward crypto startups structured like infrastructure vendors to financial institutions rather than token issuers, a shift that would pull the industry toward regulated enterprise sales and away from pure speculation.
The trend: Cryptocurrency design is diversifying away from Bitcoin-style energy-intensive mining toward alternative physical resources like storage and wireless coverage, with VC-backed founders courting banks as paying customers.