(Reuters) - China’s Huobi Group, a global financial services provider, announced on Wednesday it is investing $100 million, or 20 million of its tokens, to build a public blockchain.
Blockchain, the system powering cryptocurrencies like bitcoin BTC=BTSP, is a shared database that is maintained by a network of computers connected to the internet. Bitcoin, Ethereum, and most major alternative coins are examples of public blockchains.
The public blockchain will be called the Huobi Chain and take 21 months to build. Once completed, Huobi will use the online platform for its operations.
“We believe in the decentralized future where some form of autonomous organization will replace corporations today,” Gordon Chen, a Huobi senior executive leading the project, told Reuters in an email.
“Huobi wants to make history and lead this transition. We see this as a grand experiment. We also think this new world needs a new financial infrastructure, which is what we are hoping Huobi Chain will be,” he added.
In a public blockchain, there is no central entity that controls the entry of members to the network so anyone can join and compete to add blocks to the blockchain.
Similarly, in a decentralized autonomous organization, no single entity owns the unit. The traditional management structure is replaced with a code-made organization or company, created out of “smart contracts” or self-executing transactions.
Going forward, a percentage of Huobi’s yearly revenue will also be made available to fund the blockchain project, Chen said.
Huobi launched the sale of its own token in January, raising $300 million.
The group also launched a $1 billion blockchain fund in May that will invest in blockchain companies. The fund will mainly focus on the Chinese market and will finance startups and advance blockchain technology research.
The Huobi group is a crypto conglomerate that has several businesses including digital asset exchanges, mining pool, blockchain incubator, and research, among other ventures.
Reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Lisa Shumaker
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