Binance Labs, the seed incubation and funding arm of the world's largest cryptocurrency exchange, made its first investment this year, supporting the decentralized HOPR startup for privacy. Announced last week, Binance Labs conducted a $ 1 million round seed in HOPR, which also received funding from Focus Labs, Spark Digital Capital, Caballeros Capital and Synaitken.
The investment in HOPR, which takes data privacy to the next level with a token-supported mixnet solution, has long been underway, explained Binance strategy officer Gin Chao. "We will make much less investment, and these are the types of projects we will focus on, in areas that we believe have some sort of immediate adaptation to the product market," Chao said in an interview.
Beyond Tor
Chao said that data confidentiality has shown value in traditional markets and cryptocurrencies, and HOPR also has the right kind of credentials - with an upcoming token sale and the prospect of becoming a legally recognized Decentralized Autonomous Organization (DAO) in Switzerland. HOPR is not another chain privacy solution for blockchain transactions, explained HOPR co-founder Sebastian Bürgel, but a general network-level protocol that allows users to exchange data privately, in the same way as Tor ( the onion router) or a Virtual Private Network (VPN).
The problem, Bürgel said, is that when two computers communicate, many third parties - such as telcos and Internet service providers (ISPs) - are aware of that data, not to mention a variety of metadata. The data transmitted via the HOPR network "jump" from one forwarding node to the next, in which each participant mixes that message with other traffic before sending it. "Anyone can participate and be paid for the traffic forwarding service and thus create privacy for you," said Bürgel. “Payment is made in HOPR tokens like the miners on Ethereum - here the quotation in real time - get paid in ETH. "
Monetize privacy
In terms of earnings forecasts for participants in the HOPR network, Bürgel said it is difficult to make an estimate, not least because the network will not be centrally controlled in any way. "I think it should be something comparable to a VPN subscription, which is an order of around $ 10 a month."
The network is still in the testing phase, but a use case related to data transmitted between a hospital and a cloud service provider has been explored. Other aspects to which the startup will have to work concern regulatory requirements such as the General Data Protection Regulation (GDPR) and also things such as the "Travel Rule" of the Financial Action Task Force. “HOPR is perfectly positioned to manage the GDPR and to facilitate the exchange between regulated entities. We have already discussed this with the Swiss OpenVASP, "said Bürgel.
