A Seattle-based cooperative raised more than $5 million in a single day this week to build a new blockchain technology that it says will be faster, more scalable and far less resource intensive than the most popular blockchain systems today.
RChain is the brainchild of Greg Meredith, a mathematician and software engineer who has previously worked at companies including Microsoft. RChain claims that it will provide “content delivery at the scale of Facebook and support transactions at the speed of Visa.”
Although blockchains have largely been used to power digital cryptocurrencies like Bitcoin or Ethereum, they could also enable new kinds of decentralized social networks, smart financial technologies, or ultra-secure medical record systems. However, today’s blockchains are simply not designed for the kind of speed or scale needed for mainstream use.
“The most that Bitcoin can do on a good day is 10 transactions a second,” says Greg Heuss, an adviser helping RChain with its fundraising. “Visa can do 40,000 transactions in the same time.”
As well as being slow, completing a single Bitcoin transaction currently costs the equivalent of a few dollars. That’s fine for speculators trading coins for profit but prevents the kind of ubiquitous digital micro-transactions that many entrepreneurs envision for blockchain. “We’re thinking about transaction fees in the fractions of a penny,” says Heuss.
On Tuesday, RChain started a private sale of digital tokens, called Rhocs, to fund the development of the blockchain’s underlying software. Despite requiring a minimum investment of $50,000, the cooperative had sold $5 million worth of Rhocs, priced at 20 cents each, by the end of the day. It plans to end the sale in a month, or earlier if it hits its goal of $15 million.
Purchasers will have to commit to joining the cooperative and supporting the development process. “We’re forcing buyers to say yes, I’ll do something to help, whether it’s look at our financial models, stand up a node, or be a validator on the code,” says Heuss. “It’s not an investment – it’s a purchase and a promise to do something.”
RChain plans to release its first software, called Mercury, towards the end of next year, at which point today’s buyers could use their Rhocs to access the platform. RChain should support both public blockchains, such as cryptocurrencies, and private blockchains, such as medical records, and have them interact securely. The cooperative is also developing a protocol to allow developers in multiple languages to “literally press a button” and have their code run on the RChain blockchain.
“If we pull off what we say we’re going to pull off, it will be a change that nobody has ever seen before,” says Heuss.
However, not everyone is convinced that Greg Meredith has what it takes. Last year, Meredith was CTO at Synereo, a start-up that aims to monetise the attention economy. You can already use Synereo’s cryptocurrency, Amps, to reward content creators on YouTube, and the company wants to eventually power a fully decentralized social network.
The original plan was for Synereo’s social-oriented distributed applications to run on the RChain blockchain, but in December, shareholders voted to remove Meredith from the project. “For the past two years [Greg Meredith] has not shown that he’s able to deliver any piece of functioning code,” Synereo CEO Dor Konforty reportedly told a staff meeting.
“Greg and the founder had a difference of opinion on where the blockchain and tech was going so they parted ways, in a friendly fashion,” says Heuss.
Meredith then decided to develop RChain independently, and formed the RChain cooperative, which is now up to a dozen people, compensated in a mix of dollars and Rhocs. RChain plans to spend over half of the proceeds of the token sale on a contract development team.
Heuss says that RChain is not interested in Rhocs themselves becoming a cryptocurrency to rival Bitcoin or Ethereum. “The coop will not put their Rhocs on an exchange. But somebody purchasing them absolutely will and there will be a market,” he says. “The value is going to go up.”
If you agree – or just want to be part of the next generation of blockchain technology – there are Rhocs available to buy until the end of the month.