Blockchain & Cryptocurrency in Boston Tech - Part 1: “Something I Learned Today” - Breaking Down and Defining the Basics banner image

Blockchain & Cryptocurrency in Boston Tech - Part 1: “Something I Learned Today” - Breaking Down and Defining the Basics

Picture this; it’s 2010/2011 and there is this new currency on the Internet that seems to be only available through somewhat sketchy means and is used by equally sketchy people. Users are using this type of coin to purchase illegal goods on something called the Silk Road through the Deep Web.

This is what the world of Bitcoin looked like for a period of time.

Fast forward to today, and it looks completely different...especially in the Boston tech scene.

For the next four weeks, VentureFizz is giving our readers an inside look to the blockchain and cryptocurrency scene in Boston. What all the terms mean, who is involved with the technology, what are the investor's points of view, and what the future holds for Boston in the cryptocurrency and blockchain space.

For the first part of this series, it’s a crash course on what the terms in this new frontier mean.

The beginnings of my research started at an event hosted by the MIT Enterprise Forum, that was titled ‘Initial Coin Offerings: The Rise of Crypto Capitalism.’ It was a panel devoted to talking about how initial coin offerings work in the business world, but also an open forum to speak about any and all topics related to cryptocurrency. The panel was a who’s who of people heavily involved within the space, including David Vorick, the Co-Founder of Sia, and Chet Manikantan, Founder and CEO of Tengu.

MIT Enterprise Forum Event
The panelists from left to right: Christian Catalini (Assistant Professor, MIT Sloan; Principal Investigator, MIT Digital Currencies Research Study), Kavita Gupta (Founding Managing Partner, ConsenSys), David Vorick (Co-Founder of Sia), Chet Manikantan (Founder and CEO of Tengu), and David Cotney (Board Member, Cross River Bank; Former Massachusetts Commissioner of Banks)

The audience was a collection of people who wanted to learn more about cryptocurrency and how it works, while others wanted to hear opinions from experts on the subject, and others just came for the free pizza.

However, a common trait amongst the attendees was the excitement and optimism for what this form of innovation has to offer. A recurring phrase said by members of the panel and audience was, ‘It feels like the beginning of the dot-com era all over again.’

And for those involved in the blockchain/cryptocurrency space in Boston, from angel investors to the first-time entrepreneurs to those reporting on it, it’s an accurate statement to make. There’s new developments and ideas being implemented at a seemingly rapid rate, much like how companies were coming to prominence because of the then-new Internet.

Parul Singh
Parul Singh, Principal at Founder Collective

“Everyone knows that we’re early. It’s like Friendster-era social networking,” said Parul Singh, a principal at Founder Collective. “Right now, we in an early adopter, building block stage where we are starting to see what kind of applications emerge for consumers, but mainstream users in the US aren’t affected by this yet.”

Singh adds, “Technology cannot reach mass adoption until it becomes invisible to end users.  But yes, watch this space.”

Singh and her firm Founder Collective represent some of the many investment firms keeping a close eye on this space and any and all the future innovation coming out of it.

For many people on the outside looking in on the world of cryptocurrency, the thought of making “real” money with “magic Internet money” (author’s note: this is a nickname I heard that kind of stuck with me) sounds like a risky endeavor or at least a passing fad.

It goes without saying that Bitcoin is a trending topic. Everyone seems to want a piece of the crypto-pie and some people are reaping the rewards with this highly volatile form of investing. Case in point, the Winklevoss twins broke the news about being the first-ever billionaires with Bitcoin.

But what about the entrepreneurs who are looking to stick around long after those who leave? Who are the companies that are creating products and services in unique ways with this technology and how can it be implemented? What about the business side of things? What’s an investor’s perspective on ICOs or companies they are interested in?

The energy of this sector in Boston is enticing for anyone looking for an opportunity to not only start a company with a unique application or help grow a business but also to learn about a potentially disruptive area of technology.

A Mini-Guide to the Lexicon of the Scene

“Several aspects of the technology are hard to understand for newcomers - although you can say the same for every new technology,” said Singh.  A very few people understood how a silicon circuit board worked or a MySQL query and that doesn’t mean they won’t be impacted by the applications.”

To someone with only a passing interest in the topic, the terms being thrown around can sound like a different language altogether, and the how the technology works can be difficult to follow as well.


The blockchain is the backbone of the majority, if not all, of the companies in the cryptocurrency space. It is a form of decentralized, open-source technology that can work as a public ledger for a variety of transactions.

Since it is open source, it makes it appealing to many developers who are looking to utilize it for various purposes. The biggest appeal of blockchain technology is that it is decentralized, meaning it doesn’t report to one major data center. Instead, it is decentralized and spread across a network. Through this, exchanges (of data, coins, etc.) can be done more directly.

There are four major use cases with blockchain technology: smart contracts, security, record keeping, and of course, digital currency. Although, that said, many startups in Boston’s blockchain/cryptocurrency scene use it for different purposes.

Take, for example, one of the more prominent companies in the space, Sia. The company’s founding team, Dave Vorick and Luke Champine, has created a decentralized data storage network where users can purchase 1TB of data that is encrypted over their network of hosts.

“We have hosts all over the world, so it’s not like there is one big target like a data center,” said Sia’s Head of Operations Zach Herbert. “A hacker would have to gain the encryption key and files from ten different hosts in order to put the data back together.”

At its core, blockchain is a line of data that is created from a starting block, called the genesis block, that is then broken up into linear sections called “blocks.”

The data inside these blocks cannot be changed or modified, which is commonly referred to as an immutable data. These blocks can be built off of each other using similar data, thus creating a chain. Hence the name, “blockchain.” A developer can add other blocks to it, which are called “orphan blocks” that can harness data off of the block they are an offshoot of.

However, an orphan block cannot replace a block of data on the main blockchain. Instead, it can become its own separate chain.

Cryptocurrency and its various forms

Cryptocurrency is a type of digital currency that can be exchanged anonymously through a blockchain. However, since it is not tied to any bank or financial firm, cryptocurrency exchanges and purchases can be done in a much quicker fashion.


Without question, Bitcoin is the most well-known of the cryptocurrency coins. The coin is commonly used for purchases through the blockchain. Bitcoin can be purchased and sold through online vendors, such as Coinbase. Although, Bitcoin mining has become a trend for those looking to obtain some currency without having to go through a marketplace.

Neha Narula, MIT DCI
Neha Narula, Director of the MIT DCI

MIT’s Digital Currency Initiative (DCI) is a research enterprise that employs both undergraduate students at MIT and Bitcoin developers to study and create projects built around this type of cryptocurrency. The DCI is the brainchild of MIT Media Lab Director Joichi Ito, Bitcoin developer Jeremy Rubin, and MIT alum Neha Narula, who serves as the Director for the DCI.

“What’s getting people excited about this space is Bitcoin,” said Narula. “There is a lot more you can do with Bitcoin than you would think. It’s great to have lots of experiments and people to work on them.”

The DCI, as described by Narula, is “a bit of an unusual one,” as it is a very open and collaborative environment that allows members to be flexible and focus on various projects, such as discreet log contracts using Bitcoin.


Ethereum is another form of cryptocurrency; however, it is more than just a coin. The best way to describe it is “cryptocurrency by developers, for developers.” Bitcoin is, as of now, still just a currency, but Ethereum can be used for building applications, like smart contracts. If, for example, a sports organization wants to start giving contracts without having to go through an agency, Ethereum has the ability to do that.

Studies have shown Ethereum to not only be more abundant in amount, but it is also faster to conduct transactions through Ethereum’s GHOST protocol.

However, the adoption rate of Ethereum has been significantly slower due to its complicated, hard-to-learn nature for those who are just coming into the crypto space.


From the surface, a token is not so much different from a cryptocurrency coin. However, the major contrast between the two is the use-case applications. Coins in this space are typically accepted as a form of currency, and they can used for other purposes outside of purchases, but tokens are part of an internal economy within technology platforms. They can be used for purchases, yes, but they also can be exchanged for currency and are vital to a company when they are going through an initial coin offering.

Tokens are usually proprietary, and their value only increases the more it is used in a certain technology setting. If, for example, Amazon began offering tokens, users could purchase and use them for expedited shipping, create extensive wish lists, rent/buy videos on Amazon Instant Video, etc.

Initial Coin Offerings (ICOs)

Initial coin offerings, or ICOs,  might be one of the more controversial parts of the cryptocurrency space. An ICO is a different method to fund your company, without having to exchange equity for an investment. A company will create its own token, which can be purchased by would-be investors. Owning a token with an ICO is similar to owning shares of a company during its IPO. In turn, those tokens can grow in value within the company. In 2017 alone, ICOs totaled to $3.7 billion across various companies in the United States.

In October, AirFox, a startup offering mobile users overseas with affordable data plans, became one of the first venture-backed companies to raise $15 million with an ICO. The company’s CEO Victor Santos, CTO James Seibel, and VP of Business Operations Christine To decided to take time off to work on the ICO in order to raise their funds in a quick fashion.

Christine To, VP of Business Operations at AirFox
Christine To, VP of Business Operations at AirFox

“There is a lot of work that is needed to unlock an ICO,” said To. “Our ICO started in July [2017], and while the first two weeks were rough, especially for a rather low key company.”

“Then something unique happened,” To adds. “We went from explaining to folks what an ICO was, to people coming to us looking to purchase tokens.”

AirFox is one of the many companies to have found success raising funds through an ICO, but as To described, it wasn’t simple. The reason why it’s considered controversial is that the process has become all too appealing for many would-be entrepreneurs who think it’s a walk in the park for quick cash.

“There is an illusion that it is [running an ICO] easy and it’s not. A lot of companies think it’s quick and easy money and it’s not,” said To. “There are a lot of unknowns, and the amount of funding is more than you think. There is so much work to do in such a short period of time.”

“It’s still a little bit like the Wild West for ICOs,” said Singh. “There is a lot of unscrupulous people out there that are using it as a scam, which is a shame since there is potential to fund a different way.”

Another major issue is it can create an abundance of tokens that can only be used within a specific network, rendering them useless in other settings within the space. Where coins can have a variety of uses, tokens are useless outside of their respective network.

Tune in next week...same blockchain time, same blockchannel

Throughout researching what the terms mean in this space, Singh proved to be a helpful source and gave us a little insight into how investors like her view this space. However, she isn’t the only one getting involved.

In our next installment of Cryptocurrency & Blockchain in Boston Tech, we will be getting the investors’ thoughts and perspectives on the scene and, what some of their predictions are for the cryptocurrency and blockchain industry in Boston.

Colin Barry is a contributor to VentureFizz. Follow him on Twitter @ColinKrash.

Images via Founder Collective, MIT DCI, AirFox, BigFish Communications and Osman Rana on Unsplash.