Last June, at a swanky, strobe-lit event in Washington, DC, Brendan Blumer, the 33-year-old CEO of a blockchain company called Block.one, unveiled a new product with Steve Jobs-like theatrics: a social network called Voice. A year earlier, Blumer’s company had raised $4 billion selling a crypto token called EOS. It was, by far, the largest-ever initial coin offering—more money than just about any US initial public offering that year. But unlike an IPO, it wasn’t clear what exactly participants had bought, apart from rights to a token that did not yet exist, based on a technology that didn’t exist either.
That was the story of most ICOs. But even in that high-flying, speculative world, Block.one’s approach was unique. Many groups doing ICOs funneled their funds into foundations in places like Switzerland, governed by bylaws that required the money be used to build relevant technology. But Block.one was a for-profit, Cayman Islands-based entity that, after it delivered the platform and tokens, could spend the money as it pleased. “That raised many questions in my mind,” says Jill Carlson, an investor and adviser to early ICOs. Plus, the money had been raised over the course of a year, longer than most ICOs, with no cap on how much Block.one could accumulate.
In that time, there had been plenty of globe-trotting hype by Block.one, based on promises of EOS’s world-changing potential. John Oliver roasted the company as emblematic of the irresponsible crypto frenzy. “You’re not investing, you’re gambling,” he said.
Shortly after the 2018 ICO, Block.one delivered what it had promised token buyers: an open-source technology platform that others could use to launch a network. EOS is now run in a “decentralized” fashion, with developer groups around the world voting on changes and keeping the network secure. EOS tokens collectively are now worth about $5 billion. But the network hasn’t spawned many interesting applications. Instead, it’s filled with spam, games, and gambling apps.
Voice was an attempt to quell the haters. The vision, Blumer tells me, is to use blockchain to tackle the well-trodden problems of social media, avoiding both the control of big tech companies and also the misinformation and trolling that a lack of control begets. It would also show how EOS could deliver on its promise to provide “the most powerful infrastructure for decentralized applications,” which rely on a network of computers owned by different people, rather than a single entity like Google. That, at least, was the pitch during the token sale: an upgrade from older blockchains like Ethereum, which are too slow for most use cases.
On both points, the jury is still out. As of Friday, Voice is in beta, and there’s a new company running it, spun out with $150 million from Block.one. It uses Block.one’s blockchain technology, but for a “private” blockchain that runs on Voice’s servers; its currency is a new “Voice” token. Blumer points out it’s only the beta, and that the company will consider decentralizing Voice in the future, perhaps making use of the EOS network. But doing so means wrangling a daunting set of technical and regulatory issues, and Blumer wouldn’t commit to specifics. “It’s going to come down to what regulators will tolerate,” he says.
“I look at something like Voice where there’s a lot of centralization, and my first question is: Can you do it without using a blockchain?” says Carlson, the investor and adviser.
Currently, Voice (the company) has one employee, Salah Zalatimo, who was previously chief digital officer at Forbes. This week, he was on the hunt for office space in Brooklyn, which he expects to fill with the types of people found at other social media companies, from engineers to content moderators. Some of those employees may come, initially, from Block.one. (Blumer says the company has already spent $150 million developing the site, including $30 million for the domain Voice.com.)