An emerging technology is making inroads in Orange County with three new local companies introducing offerings.
Blockchain, a database that enables the creation of a digital ledger, was designed to be uber-secure, using encryption as a means of preventing tampering and revision, even by those storing the data. It was originally developed to enable the safe trading of bitcoin, decentralized digital currency, and was introduced to the global market in 2009.
Blockchain now has the potential to change business as usual, having evolved to enable varied applications, from healthcare data storage to cybersecurity to electric vehicle mobility.
Three companies that recently launched in OC span the spectrum of the technology. One is geared to owners of electric vehicles. Another has set up bitcoin ATMs to facilitate the sending and receiving of small amounts of the currency. And the third, which plans to launch soon, is a blockchain technology company.
Aliso-Viejo based Oxygen Initiative, which operates more than 20 electric vehicle charging stations in San Diego, announced recently that it will bring a German initiative known as Share&Charge to the U.S. market, starting with its own stations.
Oxygen Initiative, with 15 people on staff, plans to start the program in California in the next six months, founder and Chief Executive Stephen Davis said.
The only requirements are that the electric vehicle driver have a bitcoin account, known as an electronic wallet, and is already using Oxygen Initiative’s app for charging.
“I think there’s a consumer inertia around blockchain that needs a killer app that gets people to say, ‘I get this, and I now can see the value in this,’” he said. “I think the e-mobility, electric vehicle world will gravitate toward that, since the market has so many micro-transactions. That’s where blockchain really shines, in these tiny little micro-transactions where credit cards don’t really make sense.”
The primary use of the Share&Charge program is for electric vehicle owners with bitcoin accounts to pay at charging stations with electronic wallets.
Electronic wallets are encrypted applications, the equivalent of bank accounts, which allow the owner to store digital cash on mobile devices. Bitcoin—the identity of its creator or creators remains a mystery—was designed to circumvent traditional banks and financial service providers. Original uses included transferring money between countries and among people. It’s capped at 21 million units, and only about 15 million are in circulation.
One bitcoin was worth about $1,029 last week and briefly surpassed the price of gold in early March.
Share&Charge will allow electric vehicle owners to let friends and relatives with electronic wallets use their personal charging stations.
Users will also be able to receive funds electronically from utility companies that pay them to delay charging sessions during times of peak electricity demand to reduce strain on the power grid.
Davis said nine major automakers are working to put a global standard into electric cars that will enable them to communicate with charging stations. Oxygen is in talks with automakers about a next step—the integration of blockchain wallets in electric cars to develop a seamless charging station payment system that would eliminate the need for an app. Drivers could just plug in and pay, with their electronic wallets being automatically charged via blockchain technology.
“That’s a big investment,” Davis said. “It (would) take a lot of engineering to get it right.”
Share&Charge is part of Germany-based innogy SE, Oxygen Initiative’s main investor, which Davis said has put in several million dollars.
Bitcoin ATMs
Irvine-based Blockchain BTM LLC launched in January to set up bitcoin ATMs, known as BTMs, around the country. Founder and President Javad Afshar said he wanted to capitalize on the opportunity to give people access to small amounts of bitcoin.
“They can’t easily do that on an exchange, but they can do it through a BTM,” he said.
Afshar said he sees bitcoin as the “currency of the future” and that there are already many applications for it in international business.
“A lot of entrepreneurs have to hire designers and web developers overseas, and it’s always a hassle to try and figure out the payment system because there are so many fees with Freelancer.com and Paypal,” he said. “It’s really complicated, and bitcoin makes it so much easier. And there’s much less fees involved.”
His company has installed three BTMs in OC to start, one each in Fullerton, Lake Forest and Santa Ana. The machines augment the handful of BTMs that had already been set up by Irvine-based National Bitcoin ATM and other companies.
A National Bitcoin ATM spokesperson said it was the first to install BTMs in OC, in early 2014. It has four here, including in Irvine and Costa Mesa. There are about 800 BTMs scattered throughout the U.S., Afshar said, all cash-only.
He said he believes bitcoin will exponentially increase in value.
“Because of the limited supply, the price will go up.”
The currency doesn’t come without challenges. Early ones include cybersecurity issues and slow transaction speeds. The federal government has recently been putting pressure on San Francisco-based digital asset exchange company Coinbase to turn over large amounts of customer records as part of a tax-evasion probe, raising privacy concerns, according to news reports.
But bitcoin is gaining more acceptance around the world as some well-known companies, such as Subway, Microsoft and Expedia.com have started to accept it.
Tech Side
Dana Point-based private equity company Hudson Morgan Investments LLC has been incubating blockchain technology company QubeChain LLC for the past year.
Founder and Chief Executive C. Rees Morgan II said he plans to launch the company on May 15.
Hudson Morgan funded QubeChain with $250,000 in angel money. The startup will seek about $700,000 in seed funding sometime this year.
The company will offer several verticals, including healthcare, government, employment staffing and blockchain consulting services.
QubeChain collaborated with an undisclosed company to serve agencies such as the U.S. Navy and Department of Defense, for increased cybersecurity, Morgan said. It does so by moving existing security features into the blockchain.
The company’s healthcare vertical has several subsets, and Morgan said it will add more as it grows.
One of the first is genomic testing. The process starts when QubeChain mails a genomic test kit to a patient via its app. The patient completes the test and sends it to an independent third party for processing.
QubeChain has proprietary genomic information on the sequencing data of four viruses for matching purposes, including HIV, leukemia and the retro virus, which can cause 34 other diseases, Healthcare Practice Lead Kang Hsu said. When it matches a patient’s results to one of the viruses or diseases, it prescribes a personal medication treatment plan.
The free app is scheduled to hit the market in mid-May. Patients can use it to create a QubeChain account secured through cryptography to protect autonomy and control, then store their medical data. The process is enabled by blockchain technology.
Morgan started his career working for the CIA. He’s the sole employee for now, although there are several advisers, and he plans to bring on employees in midsummer.
“Like all the companies I have built, we avoid employees until we have closed our seed round,” he said.
