Las Vegas startups seek to capitalize on technology behind bitcoin
Yo Sub Kwon has ended his global travels for now. He has work to do in the Las Vegas area. Calls with potential clients. Interviews with potential programmers.
Less than a year after co-founding the startup Hosho, Kwon and his colleagues find themselves at the forefront of what’s next for bitcoin.
And they’re moving — the 30-year-old and co-founder Hartej Sawhney have their eyes on 7,000 square feet of office space in the Summerlin area. It’s much larger than the converted shipping container they work from in an office park near Rainbow Boulevard and Sunset Road.
“It’s an exciting time,” Kwon said. “This technology is becoming increasingly important.”
The digital currency caught mainstream attention for its rise in investor interest last year, and now startups worldwide and in the Las Vegas area are seeking ways to capitalize on the technology powering bitcoin.
Bitcoin is best known as a replacement for cash and credit, with a limited number of businesses actually accepting the digital coin.
The technology that automates and tracks each bitcoin transaction, however, has caught the interest of professionals in fields from finance to health care to government.
Smart contracts
Transactions with bitcoins and other digital currencies are verified through code and made publicly available for parties to check anytime.
That code can create a smart contract, a program that releases money due once certain terms dictated in code are fulfilled.
Kwon’s company, Hosho, tests these smart contracts to make sure the software does what creators intend.
For now, he’s mostly talked with fellow tech company leaders about how Hosho can help them with smart contracts written for fundraising.
But Kwon also has talked to health care companies about how smart contracts remove confusion when dealing with insurers. He believes smart contracts can eliminate the need for escrow services.
“This technology will go mainstream,” Kwon said. “The developer communities and capital available are growing at a rapid pace.”
Rich Tehrani, chairman for The BlockChain Event conference scheduled for MGM Grand in May, said companies can adopt the so-called blockchain technology behind bitcoin to offer incentives for customers to pay in real time rather than waiting for bills.
“Blockchain has the ability to literally change how all business software runs,” said Tehrani, whose events company Technology Marketing Corp. is based in Norwalk, Connecticut. “Smart contracts allow intelligence to be added to payment – Money is now smart.”
For the everyday crowd
Brett Richey has always worked in the gray.
Richey left behind about 10 years as a professional poker player to found a startup in 2015.
The startup’s app, BlitzPick, would automatically pick the best lineups for fantasy sports bettors.
He became fascinated with the technology behind bitcoin that logs and verifies each transaction when people exchange bitcoins.
Richey and his team of about 10 have built BlitzPredict, a platform where bettors see a variety of sports books and experts’ records. Eventually, he wants BlitzPredict to handle wagers and automatically place bets when betting lines hit certain criteria.
“This gets rid of the fraudsters,” Richey said. “Everyone’s results will be recorded on the blockchain — experts can’t lie or manipulate their record.”
Richey’s poker prize winnings have totaled more than $1 million over the years. But he said it sometimes took years to get money from certain online poker companies.
BlitzPredict removes any distrust in bets getting unfulfilled. That’s the hope, at least.
His team has raised millions of dollars, but has taken money only from screened overseas investors. The dangers of working with Bitcoin technology is the global interest. Sometimes, foreign investors don’t pay up.
Richey says the technology powering bitcoin is entering a place where people don’t have to know or care about what’s behind the curtain. Instead, the users of the technology, such as BlitzPredict, have an interface anyone can understand.
“It’s too intimidating,” he said. “We want the average, everyday guy to get into it.”
Meetups a good step
Jaron Lukasiewicz, a Las Vegas-based consultant for companies that use bitcoin’s technology, entered the local tech scene in 2012. Social events sprung up every now and then, but he found that developers and hobbyists didn’t talk to each other.
“There was no cohesiveness,” he said.
Lukasiewicz left for New York and founded Coinsetter, an exchange where people could trade traditional money for cryptocurrencies like bitcoin. In 2016, he sold the company to Kraken FX.
Lukasiewicz is back in Las Vegas, advising several local companies using the blockchain technology behind bitcoin. He advises BlitzPredict and Hosho.
“I try to get involved in projects I believe in,” he said.
The market for bitcoins will remain volatile. But the startups building products and services with the technology will help it last, he said.
The growth of local bitcoin-centered networking events has encouraged Lukasiewicz that Las Vegas can host enough investors and workers to encourage more startups.
An event for investors and hobbyists alike during CES drew hundreds of people to the Therapy restaurant downtown.
Contact Wade Tyler Millward at wmillward@reviewjournal.com or 702-383-4602. Follo @wademillward on Twitter.
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