Coinlab appears to be a kind of front company that doesn't actually do anything, despite making headlines as the first venture capital backed bitcoin company over a year ago. Their original business plan was to use bitcoin mining to fund video game purchases, which is a stupid idea that no one would ever invest in.
but who are they fronting...
hm, just read this, might as well post here for informational value:
CoinLab Attracts $500,000 in Venture Capital for Bitcoin Projects
So a new venture captial firm has come up with the /s/c/a/m/ business model to uses players' GPU-heavy PC's to mine bitcoins to underwrite the costs of games.
It's an interetsing idea, but am not sure how fair it is to the players.....
http://www.forbes.com/sites/jonmatonis/2012/04/24/coinlab-attracts-500000-in-venture-capital-for-bitcoin-projects/ In the first official venture capital raise for a direct investment in bitcoin, CoinLab secured $500,000 today from seed stage Silicon Valley firm Draper Associates and others, including Seattle angel investor Geoff Entress, former assistant treasurer at Microsoft Jack Jolley, and familiar bitcoin investor Roger Ver. Jolley will also join the company as its Chief Financial Officer.
Based in Seattle, CoinLab is an emerging umbrella group for cultivating and launching innovative bitcoin projects. Until now, they have been relatively quiet regarding their initiatives but they are credited with releasing a comprehensive Bitcoin Primer in January 2012. The founders are startup entrepreneurs Peter Vessenes, Mike Koss, and Tihan Seale, each with a strong passion for the broad advancements enabled by a decentralized currency.
Apparently, seasoned investors are starting to agree. Draper Associates partner Tim Draper explains the allure of the decentralized bitcoin, “The idea of a private currency has always been appealing to me as a way to diversify away from holding currency in irresponsible governments. It is more relevant now than ever.” Hopefully bitcoin will maintain its current exchange value and appreciate, especially since this investment represents over 1% of the total $45 million worth of existing bitcoin in the world.
CoinLab intends to go into serious hiring mode as they build out their development team and launch new bitcoin projects. Although an SMS bitcoin texting service called Bitsent was announced briefly on their site, a greater focus has been on the concept of MMORPG mining, leveraging bitcoin to monetize players for the online gaming companies like World of Warcraft and EVE Online. Two companies have already agreed to participate in a beta for the CoinLab mining concept — Wurm Online, an independent MMO that allows players to dig, flatten, raise and shape the land and create the frontier world they live in, and graFighters, the first online fighting game for your hand drawn characters.
The business model is clever. A few whales, or big spenders on virtual goods, make up the majority of gaming company revenue while the infrequent casual players constitute the bottom 10%. “CoinLab wants to grab that 80% in the middle,” says Vessenes. They intend to accomplish this by offering a configurable app that players download from the gaming site which would allow bitcoin mining jobs to run on these beefy GPU-outfitted client computers.
Like DropBox, the CoinLab app will reside in the background so that the players are not even aware of the mining that occurs during the gaming session. To the gamer, certain virtual items or level upgrades would be obtained. This is a new revenue stream for online game companies as they monetize the free-to-play gamers via cluster compute work and a win for CoinLab as they convert the mined bitcoin to dollars or euros that are passed on to the companies after a tidy spread of course.
Vessenes doesn’t want to refer to CoinLab as ‘just another mining pool’ because they have a distinctly different type of payout, but you can certainly imagine some non-gaming miner opportunities entering the CoinLab platform. After all, bitcoin miners and the mining pools collectively gain clout by virtue of the fact that a majority of miners is necessary to accept changes and slight variations to the protocol. It is easy to view the bitcoin mining pools as guardians of the free and open monetary system of the future — powerful de-central bankers if you will. CoinLab is poised to earn a seat at that table.
