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The team at Bitcoin infrastructure company Blockstream reflects its exceptional growth in 2021, which reflects the growth of Bitcoin.
2021 was a great year for Blockstream and the Bitcoin ecosystem in general. Thanks to our talented and dedicated Bitcoin team, we continue to be at the forefront of many of the industry’s most influential and cutting edge projects.
Celebrating the spirit of the new year, we wanted to reflect on some of our most ambitious projects in 2021 that have impacted, and where they stand currently.
Growing with Bitcoin
This year, bitcoin hit new heights, became legal tender at the nation-state level and reached another level in its quest for worldwide adoption. At Blockstream, we had a similar breakthrough year, with the successful closing of $210 million as part of our $3.2 billion Series B funding, and we have officially reached rhino status.
The acquisition of Adamant Capital and Spondoolies has helped advance our mission of building the financial infrastructure on Bitcoin by launching several new initiatives, including a new ASICs division that will launch the industry’s first enterprise-grade miner and the introduction of Blockstream Finance serving as a source-ramp For Bitcoin-focused financial products such as Blockstream Mining Note.
We continue to integrate Bitcoin Layer 2 solutions such as Lightning Network and Liquid sidechain, far into our suite of Blockstream products and services (eg Elements, Green, AQUA, Jade, Satellite, c-lightning), all free and open to developers.
Solve Energy Inefficiency with Proof of Work
During the first half of 2021, our Blockstream Mining division expanded at an astonishing pace, signing high-profile clients for shared hosting services and announcing a slew of partnerships focused on alternative energy solutions. Most notable was the collaboration with Macquarie to pilot a carbon-neutral Bitcoin mining facility and with Square (now Block) to develop a $5 million solar-powered open source Bitcoin miner in the US
Ultimately, Macquarie and Block mining facilities will demonstrate how we can catalyze the creation of more zero-emission energy infrastructure by demonstrating innovative Bitcoin work and helping drive the transition to cleaner energy. Contrary to the prevailing narrative surrounding Bitcoin and energy use, we believe it can provide a market-oriented solution to many of today’s energy sector problems. For example, hundreds of thousands of megawatts of electricity go unused and wasted in West Texas alone. Bitcoin fixes this.
We believe in being part of the solution, so we launched a new service, Blockstream Energy, which leverages modular mining units (MMUs) with Blockstream Satellite to provide a scalable energy demand for energy producers. The service is able to take advantage of stranded and otherwise wasted energy to increase the efficiency of energy production, thus improving the economics of renewable projects around the world.
Advocating for Lightning Network Scaling and Decentralization
Layered functionality and complexity above the lower base layer allow Bitcoin to remain a decentralized form of hard money. In 2021, the capacity of BTC and the number of payment channels on the Lightning Network more than tripled year on year, laying the groundwork for the widespread use of P2P payments on the second layer of Bitcoin. We expect the rapid adoption of Lightning and other Layer 2 protocols to double in the near future, particularly 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 an essential role in meeting the scaling and qualifying requirements for hypercoin. Greenlight, in particular, allows private citizens and small businesses to easily access the Lightning Network without having to run a node themselves and to do so without handing over custodianship to their private keys and money.
Low-cost, on-demand node management will also help simplify the development and innovation of Lightning-enabled applications by removing technical barriers. Apps like Sphinx and Lastbit are already running Greenlight, and we expect to roll out more to the general public in 2022.
c-lightning has remained an innovator and industry leader, from opening the first dual funded channel to decentralizing the liquidity supply landscape to simplifying payment routing for Lightning application developers. One of the distinguishing features of c-lighting is its rich set of features and add-ons, many of which are BOLT12 specifications, which allow users and developers to experiment with new Lightning tools not available or widely used in the ecosystem. And with the recent introduction of PeerSwap, an atomic-swap plug-in for nodes that allows for on-chain channel rebalancing for a faster, cheaper and more reliable network, the Lightning Network is preparing for another step next year.
Building the financial layer of the Bitcoin economy on the liquid network
In the past year, Liquid Network has seen impressive growth in the ecosystem with a wide variety of exchange venues, wallet providers, and integrations that have taken advantage of the side chain, including Hodl Hodl, SideSwap, TDEX, WooCommerce, Specter Wallet, and many more.
2021 was also the year Liquid became the platform of choice for businesses and, yes, even nation-states seeking a secure issuance of assets on Bitcoin.
In September, El Salvador submitted a legal tender for bitcoin and launched a nationally sponsored Lightning Network wallet to bring in its citizens. A few months later, on stage at Feel The Bit, El Salvador President Neb Bukele, along with Blockstream CSO Samson Mow, proposed a $1 billion Bitcoin-backed bond (EBB1) on the liquid network to expand the country’s energy and bitcoin mining infrastructure. .
Like its Bitcoin law, El Salvador’s planned digital securities law will pave the way for additional Bitcoin-backed financial instruments and create new markets and exchanges for investors to trade security tokens.
Our Blockstream Mining Note, which was launched in July, is a Luxembourg-regulated insurance that offers investors exposure to the Bitcoin hash rate at our mining facilities. Through seven tranches, it raised a total of 33.5 million euros (about $38 million) and mined approximately 2.5 bitcoins per BMN in 170 days.
As a tradable security token issued on Liquid and managed using the Blockstream AMP asset platform, investors can easily adjust their exposure by trading the BMN on the secondary or peer-to-peer markets. From a Bitcoiner’s perspective, BMN creates a win-win situation for investors and the broader ecosystem by expanding investor participation in Bitcoin’s proof-of-work.
Going forward, we are bullish on the mainstream adoption of security tokens, their increased regulatory visibility and their subsequent reshaping of the capital markets. BMN, EXO, and other liquid security tokens are scheduled to be launched on new STO platforms Bitfinex Securities and MERJ Exchange, with EBB1 expected to be released in the first quarter of 2022.
Note: As the El Salvador Bitcoin Bond (EBB1) offering matures and improves, Blockstream will remain a technology advisor, with Bitfinex as the betting firm handling the primary tasks of distribution and issuance.
Thank you all
We have now spent nearly 13 years of the Bitcoin origination block and over four years of SegWit activation. Looking back over the years is a humble reminder of how far Bitcoin has come and the dizzying pace at which we are approaching hyperbitcoinization.
We would like to sincerely thank the community and every Bitcoiner for their firm belief in a better future.
With your support, we look forward to continuing our company’s mission to create an innovative Bitcoin infrastructure, with Layer 2 Lightning and Liquid solutions as the cornerstones of the new Bitcoin economy.
Do not trust, check.
This is a guest post by Fernando Nikolic. The opinions expressed are their own and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.