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Dfinity raises $61 million for platform that rivals ethereum

  • Dfinity, a new product that rivals ethereum, just raised $61 million by well-respected investors Andreesen Horowitz and Polychain Capital.
  • This is the first token Andreesen Horowitz has invested in.
  • The $61 million raised in this strategic round bring Dfinity's total project funding to over $100 million.
Andreesen Horowitz partner Marc Andreesen speaks during the Fortune Global Forum.
Justin Sullivan | Getty Images News | Getty Images
Andreesen Horowitz partner Marc Andreesen speaks during the Fortune Global Forum.

Dfinity, a new product that rivals ethereum, just raised $61 million by well-respected investors Andreesen Horowitz and Polychain Capital, which has investors ranging from Sequoia Capital to Union Square Ventures.

This is the first token Andreesen Horowitz has invested in. Chris Dixon, general partner at Andreesen, led his firm's investment in Dfinity. Ryan Zurer, venture partner at Polychain Capital, led his fund's investment, which is its largest to date.

The $61 million raised in this strategic round brings Dfinity's total project funding to over $100 million.

Dfinity's Chief Scientist Dominic Williams told CNBC that Difinity has the power to disrupt the world of technology, calling it the "internet computer that will become the cloud 3.0."

But what sets Dfinity apart from the rest?

Williams says Dfinity runs extremely fast and doesn't have the security risks that many cryptocurrencies have fallen victim too.

"Dfinity is ultimately a new technology protocol with no back doors where hackers can get in," said Williams.

The security component is perhaps most compelling to investors given the number of hacks the cryptocurrency industry has seen in the last 12 months. The latest one in Japan involved over $500 million of tokens being stolen from consumers' digital wallets.

Time is also Dfinity's friend. Williams says he's built a technology that offers 3-5 second transaction finality, which is about 150 times faster than ethereum and over 900 times faster than bitcoin.

If this holds, experts say Dfinity could upend the cryptocurrency market.

"This is extremely important for scalability and transaction throughput on the network and will be important for any use-case that requires high-frequency transactions such as IoT or enterprise solutions. This will be the beginning of an architecture that becomes the new internet," said Zurer.

One of the challenges in transacting with bitcoin is the amount of time it can take. But software enhancements like the "lightning network" are said to dramatically increase the speed at which one can buy or sell bitcoin. Lightning Labs CEO Elizabeth Stark told CNBC that once the lightning network is rolled out, it could make bitcoin much easier to use and transact with. Bespoke Investment says its bullish forecast on bitcoin is contingent on the lightning network being enabled in the coming months.

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