Technology companies, banks, and real estate brokers have high expectations for the blockchain. The technology underpinning bitcoin could be used to move money, trade stocks, or sell houses more efficiently. One problem is that few programmers have the expertise to work on blockchain projects.
Jeff Garzik, one of about two dozen core bitcoin developers, is capitalizing on the hype by creating a coder-for- hire service specializing in the blockchain. His startup Bloq Inc. charges customers $3,000 to $5,000 a month to develop new features for blockchain software and have access to 24/7 customer support. PricewaterhouseCoopers LLP has agreed to sell Bloq's services to its clients, Garzik said. "That opens up a lot of doors for us early in the company's lifetime," he said. "Companies know who to call at 3 a.m. if the blockchain is melting down."
Garzik modeled his startup on Red Hat Inc., which built an $11 billion company out of helping businesses develop and implement Linux and other open-source software. He used to work at Red Hat, and he said his code can be found in every Android phone and in most data centers around the world. Since then, Garzik has been an important contributor to the technical and promotional benefit of bitcoin. He serves on the board of bitcoin advocacy group Coin Center and on the advisory boards of startups that include BitFury Group Ltd and Netki Inc. He has also tried to launch satellites supporting bitcoin transactions into space. That startup is not off to a good start.
As bitcoin remains volatile, with onetime advocates of the digital currency predicting a doomsday scenario, many businesses have turned their attention to the blockchain. With Bloq, Garzik must compete with other ventures vying for the few programmers well-versed in working with the blockchain, a decentralized online ledger for logging transactions that involve bitcoin or just about anything else. "There are less than 200 people who know the blockchain very well," he said.
International Business Machines Corp. and Samsung Electronics Co. have collaborated on blockchain technology. Others, such as Chain, Factom, Digital Asset Holdings, and Overstock.com, are developing new applications that tie into the blockchain. R3, a consortium of dozens of financial institutions that include Barclays Plc and Wells Fargo & Co., is working on ways for its members to use the blockchain for money transfers and other applications. (Bloq will help clients implement technologies developed by the likes of R3, Garzik said.) "There is a big opportunity for companies building customized blockchains based on open-source code to address various business challenges," said Gil Luria, an analyst at Wedbush Securities.
Bloq has five customers, including bitcoin startups Circle Internet Financial Ltd, ItBit Trust Company LLC, and KnCMiner AB, and expects to soon add Foxconn Technology Group, which assembles iPhones and other electronics. Garzik said Bloq has raised less than $250,000 from his co-founder Matt Roszak's Tally Capital. The company's board of advisors includes bitcoin experts Andrew Filipowski, James Newsome, Nick Szabo, and Gavin Andresen.