2021 has been a great year for Blockstream and the Bitcoin ecosystem in general. Thanks to our talented and dedicated team of Bitcoiners, we continue to be at the forefront of many of the most influential and forward thinking projects in the industry.
In the spirit of the new year, we wanted to reflect on some of our most ambitious companies in 2021, their impact and where they are today.
Growing up with Bitcoin
This year, bitcoin has reached new heights, has become legal tender at the nation-state level, and has taken another step forward in its quest for global adoption. At Blockstream, we had a similar breakthrough year, with the successful closing of $ 210 million as part of our Series B funding on a valuation of $ 3.2 billion, officially reaching unicorn status.
The acquisitions of Adamant Capital and Spondoolies have helped continue our mission of building financial infrastructure on Bitcoin by launching several new initiatives, including our new ASIC division which will launch the industry’s first enterprise-level miner and the introduction of Blockstream Finance which serves as an over-ramp for Bitcoin-based financial products like the Blockstream Mining Note.
We continue to integrate Bitcoin Layer 2 solutions such as Lightning Network and Liquid sidechain, further into the Blockstream suite of products and services (i.e., Elements, Green, AQUA, Jade, Satellite, c-lightning ), all free and open to developers.
Solve energy inefficiencies with proof of work
In the first half of 2021, our Blockstream Mining division has grown at an impressive rate, signing leading clients to colocation services and announcing a host of partnerships focused on alternative energy solutions. Most notable have been the collaborations with Macquarie to pilot a carbon neutral Bitcoin mining facility and with Square (now Block) to develop a $ 5 million open source Bitcoin mine in the United States.
Ultimately, the Macquarie and Block mining facilities will demonstrate how we can drive the creation of zero-emission energy infrastructure through Bitcoin’s innovative proof-of-work and help drive the transition to cleaner energy. Contrary to the mainstream discourse surrounding Bitcoin and energy consumption, we believe it can provide a market-oriented solution to many problems in the energy industry today. For example, hundreds of thousands of megawatts of electricity are not being used and wasted in West Texas alone. Bitcoin fixes this.
We believe we are part of the solution. So we launched a new service, Blockstream Energy, which operates our Modular Mining Units (MMUs) with Blockstream Satellite to deliver scalable energy demand to power producers. The service is able to harness stranded and otherwise wasted energy to maximize the efficiency of power generation and, in turn, improve the economics of renewable projects around the world.
Advocate for Lightning Network Scaling and Decentralization
Layering functionality and complexity on top of a minimal base layer allows Bitcoin to remain a decentralized form of hard money. In 2021, BTC capacity and the number of payment channels on the Lightning Network more than tripled year over year, laying the groundwork for large-scale use of P2P payments on the second layer of Bitcoin. We expect the rapid adoption of Lightning and other Layer 2 protocols to worsen in the near future, especially as nation states like El Salvador rely on them to bring their citizens into the new. Bitcoin economy.
We believe that our Greenlight service and other Lightning infrastructure projects will play a critical role in meeting the scaling and integration demands of hyperbitcoinization. Greenlight, in particular, allows ordinary citizens and small businesses to easily access the Lightning Network without having to manage a node themselves and without having custody of their private keys and funds.
Low-cost, on-demand node management will also help streamline the development and innovation of Lightning-enabled apps by removing technical barriers. Apps like Sphinx and Lastbit are already running Greenlight, and we expect a further rollout to the general public in 2022.
c-lightning has remained an innovator and leader in the space, from opening the first dual-funded channel to decentralizing the liquidity supply landscape to simplifying payment routing for Lightning app developers. . One of the hallmarks of c-lighting is its rich set of features and plugins, many of which are BOLT12 specs, which allow users and developers to directly experience new Lightning tools not available or widely used in the world. ‘ecosystem. And with the recent introduction of PeerSwap, an atomic swap plug-in for nodes that enables on-chain channel rebalancing for a faster, cheaper, and more reliable network, the Lightning Network is ready for another step in the year to come.
Building the financial layer of the Bitcoin economy on the liquid network
Over the past year, Liquid Network has seen impressive ecosystem growth thanks to a wide range of trading platforms, portfolio providers and integrations that have leveraged the side chain including Hodl Hodl, SideSwap , TDEX, WooCommerce, Specter Wallet and many more.
2021 was also the year when Liquid emerged as the platform of choice for businesses and, yes, even nation states looking for a secure Bitcoin asset issuance.
In September, El Salvador made bitcoin legal tender and rolled out a nationally sponsored Lightning Network wallet to engage its citizens. Months later, on stage at Feel The Bit, Salvadoran President Nayib Bukele, alongside Blockstream CSO Samson Mow, proposed a $ 1 billion bitcoin-backed bond (EBB1) on the liquid grid to expand energy. country and Bitcoin mining infrastructure.
Like its Bitcoin Law, El Salvador’s planned digital securities law will pave the way for other bitcoin-backed financial instruments and create new markets and exchanges in which investors can trade security tokens.
Our Blockstream Mining Note, launched in July, is a Luxembourg-regulated security that provides investors with exposure to the Bitcoin hash rate at our mining facilities. In seven installments, he raised a total of 33.5 million euros (about $ 38 million) and mined nearly 2.5 BTC through BMN in 170 days.
As a tradable security token issued on Liquid and managed using our Blockstream AMP asset platform, investors can easily adjust their exposure by trading the BMN in secondary markets or peer to peer. From Bitcoiner’s perspective, BMN creates a win-win situation for investors and the wider ecosystem by expanding investor participation in Bitcoin’s proof of work.
Looking ahead, we are optimistic about the widespread adoption of security tokens, their greater regulatory clarity, and their subsequent reform of capital markets. BMN, EXO token and other Liquid security tokens are expected to be published on the new STO Bitfinex Securities and MERJ Exchange platforms, and EBB1 is expected as early as Q1 2022.
Note: As the El Salvador Bitcoin Bond (EBB1) proposal matures and refines, Blockstream will remain a technical consultant, with Bitfinex as bookmaker taking on the main distribution and issuance tasks.
We are now almost 13 years from the genesis block of Bitcoin and over four years from the activation of SegWit. Looking back over the years is a humbling reminder of how far Bitcoin has come and the incredible pace at which we are getting closer to hyperbitcoinization.
We would like to sincerely thank the community and every Bitcoiner for their unwavering faith in a better future.
With your support, we look forward to continuing our company’s mission of creating an innovative Bitcoin infrastructure, with Layer 2 Lightning and Liquid solutions as the cornerstones of the new Bitcoin economy.
Don’t trust, check.
This is a guest post from Fernando Nikolic. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.