It turns out tech companies are buying the blockchain hype despite the numerous flaws plaguing this nascent technology.
It turns out tech companies are buying the blockchain hype despite the numerous flaws plaguing this nascent technology. The latest payment service provider to dip toes in blockchain waters was the one and only PayPal. Well, you should note that while PayPal has finally expressed interest in distributed ledgers, do not expect it to deliver blockchain-powered services anytime soon.
Instead, the fintech giant is investing in Cambridge Blockchain, a startup working in the field of digital identity management. The startup revealed the news on its website stating that the investment could open up opportunities for the two companies to cooperate together on projects utilizing blockchain technologies.
“Our service helps streamline digital identity compliance while giving customers control over their identity data. […] We are honored by PayPal’s vote of confidence, and we look forward to their support and guidance,” said Matthew Commons, CEO at Cambridge Blockchain.
PayPal participated in a Series A funding round joined by the company of Partech Partners, FuturePerfect Ventures, Digital Currency Group, and Foxconn’s HCM Capital. A spokesperson of the company was quoted saying:
“We made an investment in Cambridge Blockchain because it is applying blockchain for digital identity in a way that we believe could benefit financial services companies including [ourselves].”
While the exact sum of the investment was not disclosed, SEC reports that during the past nine months the startup has managed to raise over $3.5 million from a variety of investors. Last May, Cambridge Blockchain closed its Series A funding round after raising some $7 million. In fact, these $3.5 million in question came from eBay, PayPal, and Omidyar Network. Considering the fact that Cambridge Blockchain has already raised $10,5 million, we can safely assume PayPal is not a major investor.
However, this marks the first PayPal investment made in a blockchain business. On the other hand, it is not exactly the first time the payment giant has dealt with blockchain technologies. Last year, PayPal filed a blockchain patent for a “virtual currency transaction system,” which promised to proceed crypto payments faster.
The company has already secured partnerships with Coinbase, GoCoin, and BitPay.