PayPal Bids $500M to Acquire Crypto Startup Curv

https://www.financemagnates.com/cryptocurrency/news/paypal-bids-500-million-to-acquire-crypto-startup-curv-report/

by jeanniesarah • 5 years ago

124 153 5 years ago

staticelf• 5 years ago

Cool, never heard of it and visiting their website it is not exactly clear to me what their product is.

I have never quite understood how companies just have a single landing page with no publically available product or service (as it seems) and still get bought for several hundred millions.

monkeydust2• 5 years ago

It is odd but then I remember many years back working for a fintech, the founder was against putting up any proper marketing materials online, we had a crappy website. Its now a multi $BN company. The website is a 'bit less' crappy.

dazc• 5 years ago

Berkshire Hathaway being a classic example of this ethos.

https://berkshirehathaway.com/

wslh• 5 years ago

It is an decentralized exchange / automated market maker. A comparison with Uniswap and Balancer here: https://blog.coinfabrik.com/automated-market-making-mechanis...

rawtxapp13• 5 years ago

curve!=curv, unfortunate naming.

hi5eyes• 5 years ago

paypal cosigning a dex is a really strong signal for Lps to look at this over uni/other dexs

rawtxapp13• 5 years ago

Because you're not their target market, they are going after institutional investors who need crypto wallets.

nassycheezy4• 5 years ago

I've built a similar product for a well-known company in the space (and competitor to this company & Coinbase) and co-led the development of the crypto custody at Novi (Blockchain subsidary of Facebook). Happy to answer more questions though they do not provide much insight into their technology publicly.

Curv provides MPC-based crypto custody solution wi. I'll be over-simplifying but they allow private keys that protect large sums of cryptocurrencies to be split in encrypted portions called 'shares'. These shares are both created and used in a fully distributed manner (just like threshold signing / or 'multi-sig'). You generally define a threshold 'm' out of 'n' that's mathematically required to get a valid cryptographic signature.

An attacker would need to compromise a sufficient quorum of these keys simultaneously in order to sign blockchain transactions that would extract the funds somewhere else. As you can imagine, the complexity of such attack is highly correlated (and actually tends to grow exponentially due to several factors) to the quorum threshold 'm'.

Curv seems to allow financial institutions and all kind of institutional investors to create the shares, manage them and use them securely to sign transactions.

The argument they provide which makes little sense to me is that there is no 'private key'. They just seem to play with jargon as the shares are pretty much equivalent to individual keys in a multi-sig system, or at least hold the same power and have same results in compromise scenarios.

maayank2• 5 years ago

The difference between multi-sig and no private key is that the former is an implementation of the blockchain protocol (e.g. different in Stellar and Ethereum) while the latter is a generic algorithm/service. Different layer.

thebean11• 5 years ago

Heh, the $150 Trezor Model T supports the "m of n" key thing. Repackaging the tech and selling it to business is really not a bad startup idea.

TacticalCoder• 5 years ago

Happy to answer more questions...

Does these kind of solutions work for every cryptocurrencies? For example does is support Bitcoin? Or is this something that needs some kind of smart contract like those provided by Ethereum?

And another question: what about optionally fully anonymous transaction as in ZCash, does the scheme work to sign tx done using ZK proofs too? Or fully anonymous ones, like David Chaum's upcoming "xx coin"?

maayank2• 5 years ago

Disclaimer: I work for a competitor.

Multi-party computation (MPC) enables you to participate in public key cryptography with shares ("parts") of a private key divided between multiple participants from the get-go, i.e. without ever having the private key in memory at any point in time.

So for example, if you divide the shares between mobile devices and servers then all of them would need to communicate with one another to sign a message without any of them knowing the private key. There are variants (e.g. 2 out of N, etc.), but that's the gist of it.

Connecting it to cryptocurrency wallets, you can then use this scheme to create accounts where the control is shared between multiple devices and "mathematically" it doesn't matter then if one of the devices is compromised - it could never do anything on its own.

jcpham2• 5 years ago

Like my children’s m of n trust fund hopefully I didn’t typo the priv key amirite. That might suck for them after I die.

G3rn0ti7• 5 years ago

What’s the advantage over a „multi sig“ wallet?

hahla• 5 years ago

$500m for what I understand to be a crypto bank account?

nikanj• 5 years ago

"Board says we need to invest in crypto. This is crypto."

rawtxapp13• 5 years ago

Are you implying that a company that processes hundreds of billions of dollars in transaction volume is thinking of acquiring this company for the hype alone?

cinntaile• 5 years ago

https://www.curv.co/use-cases/

From the use cases you can tell they basically manage the risk of holding crypto for institutional clients while providing an easy to use interface, that's definitely worth a ton of money if done properly.

jyu2• 5 years ago

Remember that there are people behind these decisions and they are largely rational actors. Someone at PayPal is getting a big promotion and bonus from pushing this deal. If crypto goes nowhere and they shut down this project, then it can be rationalized as "getting in too early" or some other "unforeseen externality" that happened, totally out of their control. But the promotion and risk taking executive will have solidified his/her position with headcount and other markers of success.

There are always things we don't know going on behind the scenes for these types of moves.

Remember when Marissa Mayer was poached from Google to run Yahoo, and the first big move she made in a series of bungles included buying Tumblr for $1.1bn. Then she termination the option for employees to wfh. Then was later revealed that she had consecutive bad performance reviews at Google and was not going to get further promotions there before she jumped ship.

Edit: I'm just bringing up Marissa Mayer as an example and maybe misremembering the specifics since this was 8 years ago at this point. There are plenty of other examples of executives doing weird stuff that seem nonsensical from the outside. Jamie Dimond proclaiming bitcoin is a fraud while consecutively JPM buys a hefty investment in bitcoin. Or Bill Ackmann crying on CNBC while financially positioned for the exact opposite.

seibelj• 5 years ago

Crypto has been around for 12 years and has gone from zero to well over $1 trillion mcap. I doubt it will go back to zero.

janandonly• 5 years ago

You misspelled “bitcoin” there. Bitcoin has existed for 12 years now and gone over 1 trillion dollars.

loceng4• 5 years ago

It's all artificial value.

If the actual money people paid was destroyed/transferred into Bitcoin instead of just transferred to whomever you bought it from, then the value would be real - but it's not.

ceejayoz2• 5 years ago

Every time I hear about a cryptocurrency's "market cap" I think of https://signalvnoise.com/posts/1941-press-release-37signals-....

37signals is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1.

CamelCaseName• 5 years ago

Do you have a source on Marissa Mayer getting bad performance reviews? I wasn't able to find anything on that.

wj• 5 years ago

I hadn't heard about the performance reviews and when I just Googled I saw results about her implementing performance reviews at Yahoo. Curious if you have more background on that?

jyu2• 5 years ago

For middle managers and above, lack of promotion for several consecutive years at a company with as many growth opportunities as Google speaks loudly.

I never worked there and was interested in her story so I dug a lot around that time and found bad reviews that have long suffered from link rot.

"But then, suddenly, her peers were promoted past her. Responsibility for the look and feel of Google’s entire suite of consumer-facing products, including the Google home page, was taken away from her. She was moved to a less important product: Google Maps. She was removed from a council of executives that met with Google’s CEO. To industry insiders, this sudden change was a demotion for Mayer." - The Unofficial Marissa Mayer Biography published in Business Insider https://www.businessinsider.com/marissa-mayer-biography-2013...

The specific criticisms from former coworkers begins around the middle of that long article.

PragmaticPulp6• 5 years ago

Anything cryptocurrency related is very hot in the fintech investing space right now. Companies don’t necessarily think that crypto is going to supplant traditional currencies, but they do salivate over the unbelievably high fees that cryptocurrency business can charge their customers.

If you’re a stock brokerage, $0 trades are the cost of doing business these days. Meanwhile, companies like Coinbase are more than 60X more profitable than traditional exchanges simply because the industry hasn’t become a race to the bottom (yet). Bitcoin remains popular despite the fact that it costs $10 or more per transaction. There are huge opportunities for companies to come in and create ways to transact in Bitcoin-denominated transactions without touching the blockchain or L2 networks.

They’ll gladly collect exchange fees in both directions, because exchange fees are profitable whereas moving money around is not. As much as we hear about cryptocurrency upending the traditional banking system, having an environment where users have to deal with all of the complexities of managing, holding, exchanging, and transacting with crypto is a dream come true for financial companies who thrive on extracting a couple percent here and there at every friction point in the system.

CPLX• 5 years ago

Bitcoin remains popular despite the fact that it costs $10 or more per transaction.

Indeed. In precisely the same way that the $10 service charge ATM’s in the lobby of a casino remain popular.

ryanSrich• 5 years ago

That is a wild, painfully irrelevant analogy, even for HN. The amount of hate people have for crypto here knows no bounds.

bidirectional• 5 years ago

Or Bill Ackmann crying on CNBC while financially positioned for the exact opposite.

No, he was positioned in exactly the way he said he was. He went on CNBC to warn about the dangers of the coronavirus, having already expressed this view in the market. It's his job as a hedge fund manager to do so.

Also, he won big on the credit default swap trade while losing massively as the market plummeted, the individual trade was massively profitable, but in aggregate it was just a hedge against the downturn.

qeternity• 5 years ago

$500m to hedge a $300b business. Could it be done cheaper? Perhaps. But this seems like a pretty obvious transaction. In 5 years if crypto is just a flash in the pan, nobody will even remember $500m. If however crypto is the future, then Paypal remain relevant and $300b of market cap is defended.

ceilingcorner4• 5 years ago

I have no interest in cryptocurrencies and I don’t own a single cent in any of them. But the continual barrage of hostile comments in every single HN article looks mostly like groupthink to me.

Clearly cryptocurrency will continue to play a growing role in the future. Denying this seems simply delusional.

PragmaticPulp6• 5 years ago

Cryptocurrency isn’t going away, but it’s dishonest to pretend that it’s not without major problems such as the energy consumption issues. The popular narrative has also become almost indistinguishable from a pump scheme, where we’re all supposed to buy and home (never sell) until we’re all rich.

If cryptocurrency becomes commonplace, it likely won’t look anything like our current crypto infrastructure. The problem is that this isn’t what all of the current holders want to hear, because they only want people to buy into whatever crypto they personally hold. This makes it difficult to have honest conversations because so many of the participants are biased toward convincing others to buy into their investment while ignoring anything else.

ceilingcorner4• 5 years ago

Lots of things have environmental problems. I don’t understand why Bitcoin mining gets singled out for it. If the benefits of using it outweigh the downsides, then I don’t see the issue.

trident50006• 5 years ago

I can name 10 other uses of energy that could be categorized as "wasteful" which is completely subjective. From large homes with the AC cranked, to rendering of pointless video on youtube and social apps, to destination aeroplane travel, idle electronics, etc.

BTC for many is a way to stop central banks from eroding their lifetime savings which they paid for with their physical labor and time. Thats not a waste of energy in my opinion.

G3rn0ti7• 5 years ago

major problems such as the energy consumption issues

You don’t seem to know much about crypto currencies to name energy usage as a real problem of crypto.

While Bitcoin will keep it’s “proof of work” approach to mining in the foreseeable future, there are now quite a few alternative crypto currencies in circulation employing “proof of stake” that do not suffer from large computer power usage e.g. Cardano, Solana or Algorand just to name a few. Furthermore, Ethereum, the second largest Crypto currency in circulation, plans to migrate to “proof of stake” by 2022. Stakes are already online.

So please inform yourself before stating that Crypto will destroy the planet. No one is forcing you to like Bitcoin but you need to keep in mind this project has been invented over 13 years ago. It would have been impossible for the creator to anticipate its popularity and fix all its technical issues including energy consumption.

terhechte• 5 years ago

Most markets only work because people don't sell their share at the same time. If everybody would sell their house at the same time, the values would tumble. Same for the stock market, same for gold. I don't get why this is a criticism of cryptocurrencies.

Geee2• 5 years ago

The energy consumption issue is silly. It's like saying that Google won't be successful because they consume so much energy. It's not a major issue, it's just a silly talking point for those who oppose or don't understand cryptocurrencies.

Also, there is no such popular narrative. Your argument is like saying, "so we're supposed to buy stocks until we're all rich, that's a scam". Everyone makes their own investment decisions based on the available information. Brushing off good investment opportunities as a pump scheme is not very wise.

mastermojo2• 5 years ago

I think I would agree that cryptocurrency is probably a less worthy allocation of energy than keeping homeless people warm or something. However, money/energy are finite resources allocated based on free market mechanics. People use energy/money how they want.

It's not a very constructive use of time to criticize how the free market allocates resources. People are going to buy and run basketball teams, Ferraris, bitcoin mining rigs whether you yell at them or not.

f430• 5 years ago

The ponzi scheme will end one day and it will continue to be traded OTC without a way to redeem it for fiat.

ahelwer7• 5 years ago

I think it's an interesting example of people being too close to something, technically, to really see its totality. I'm a distributed systems person so I basically blew off Bitcoin two bubble-cycles ago because of the 3 tx/sec issue and the obvious deficiencies of the proposed lightning network workaround. I also took an in-depth look at a cryptocurrency with a supposed better protocol (Nano) and was very unimpressed - they didn't have a real solution to the network partition double-spend issue (a coin with a similar protocol, IOTA, solves this with a centralized "coordinator" node that they swear will be removed any time now... it won't). So I found myself in the interesting situation of knowing more about these things than 99% of people with money in them, but missing out on the large gains in value. There is a probabilistic protocol I legitimately find very interesting (Avalanche) that might succeed on a technical level, but analyzing these things at the technical level hasn't really meant much so far.

It's possible this is an enormous bubble that will all go to zero. Of note is that the entirety of Bitcoin's history fits within this larger bull market we've been in since 2008. It will be interesting to see how cryptocurrencies fare in the inevitable wider market downturn, whenever that happens. Regardless it's probably a good idea to hedge against your own ignorance by putting 1% of your money in or something like that.

trident50006• 5 years ago

Just to be clear, 3 tx/sec is just incorrect and easily disproved by dividing the total transactions per day (readily available online) by the total seconds in a day.

Also the btc main layer is a major settlement layer. It doesnt even compare to ACH or wires in frequency. The fees going up if its tried to be used in that way will force it, and that is a good thing.

A chain cannot grow so fast with high tx so that it bloats and exceeds hard drive capabilities for distributed nodes or it becomes centralized. Its performing exactly the way it should. L2 solutions will take care of coffee transactions.

tgraves832• 5 years ago

Since you are using an appeal from authority citing your distributed systems background, could you provide some actual detail of the "obvious deficiencies" of the lightning network?

Specie33• 5 years ago

I did the same thing. Following since before MT GOX. Never purchased because of that TPS issue which i felt killed the system. Was interested in SOL because they supposedly solved that problem, still havent purchased. Feel smuuckish now.. But there you go

mikkel2• 5 years ago

Can you elaborate on the network partition issue that you found with nano? As far as I know nano has been live for years without a doublespend or downtime and thats pretty impressive.

piplikoc• 5 years ago

What do you think about Cardano/ADA? I am not an expert in the space, but to me it seems that they have a lot of research behind their blockchain and they solved the energy consumption problem with a proof of stake system, and their fees are pretty cheap compared to Bitcoin or Ethereum.

mastermojo2• 5 years ago

Interesting. I found out about Bitcoin in 2012, took a distributed systems seminar in 2013 covering byzantine fault tolerance, paxos etc and at that point Bitcoin metaphorically blew my mind. I feel like anyone who understood how seminal Paxos was could easily draw parallels to Bitcoin.

Despite all of Bitcoin's shortcomings, I'm a strong believer in the technology and the protocol. If we compare it to the internet and TCP/IP it is pretty designed. In real life its not necessarily the perfect protocol that wins. Sometimes a "crappy" one gets a head start, but it's good enough, and people will patch it along the way. The network participants will also end up using the network in novel ways that were not designed for originally.

mirekrusin• 5 years ago

I think people have problem with assesing concepts that can only improve with time.

For some reason people seem to think that all things behave like a runner "he can run fast now but he'll have to slow down and stop" kind of thinking. As if those concepts have possibility of reverting to become worse than what they are.

You could hear similar voices around wikipedia, saying it'll never compete with professionally edited encyclopedia, you can hear similar voices around AI etc.

People don't seem to understand that a) things will keep changing and b) the only reasonable change is in direction of improvement.

I'm not saying that crash is not possible - it is, but underlying concept will not crash, it'll only improve, which means with time the system will be better than it is at the moment and there is no reason for it to perform worse than today.

zucker426• 5 years ago

Sometimes inventions improve continuously over time, but sometimes they stop improving and stagnate. You can't just assume away criticism of technology with the assertion that things will improve in the future.

I think what a lot of cryptocurrency bears see is that blockchain-based currencies, especially BTC, have fundamental problems. Blockchains are fundamentally not scalable; since the more throughput a blockchain has, the harder it is to run a node, since every node processes every transaction. Another current problem is the massive energy usage of PoW blockchains. Concerning is that the biggest cryptocurrency by market cap seems to have no plans to research fixes to these problems, let alone implement them, and there is widespread opposition to change in general. Also, my personal experience is that 9 out 10 cryptocurrency projects lack clear technical explanations of how they work, with all the details. These problems coupled with the fact the industry is filled with hucksters, pumpers, and scammers makes people have a rather dim view of cryptocurrencies.

Perhaps these problems can be overcome (ETH is trying) but perhaps they can't, and if they can't then cryptocurrencies will be little more than what they are now (to a large extent), which is objects to fuel speculation.

And to be clear on my personal opinions, I wouldn't classify myself as a cryptocurrency naysayer, but enthusiasm is tempered and I believe that the current market caps are driven by speculation.

loceng4• 5 years ago

Hostile comments in which direction?

It's an interesting perspective too when you realize:

- people who have counter-narrative to the Bitcoin propaganda aren't financially incentivized to be negative about it, and obviously their commentary will be negative

- people who own Bitcoin are financially incentivized to speak positively about it, while also suppressing those with a counter-narrative

That Bitcoin has a future that isn't going to lead to regulatory capture trying to cause the rest of society to adopt it, so they can realize the unnecessary wealth transfer from later adopters to earlier adopters, isn't so clear - that is if you've actually thought through it.

rawtxapp13• 5 years ago

people who have counter-narrative to the Bitcoin propaganda aren't financially incentivized to be negative about it

They are incentivized to be negative about it, because whether you like it or not, not buying into it has real opportunity costs. If it ends up becoming the global currency, then you'd be left behind.

agumonkey• 5 years ago

I don't attach value to web3/cryptos but I kinda recognize that there is way too much wind behind it to ignore it. It can be a total empty bubble.. and burst into nothingness, but I believe that some of it will stay alive and evolve into functional and useful ideas for another wave.

mr_woozy3• 5 years ago

the continual barrage of hostile comments in every single HN article looks mostly like groupthink to me.

I think its more a sensational narrative that angry geeks don't realize they're being used to advance.

grey-area4• 5 years ago

Denying this seems simply delusional.

Is this sentiment based on the price or the actual use of it as a currency?

PragmaticPulp6• 5 years ago

This seems like a clear “sell picks and shovels” play. With more and more companies rushing to add crypto to their services offering to capture some of the highly profitable exchange rate and other fees, it makes sense to provide services to securely hold crypto for these companies.

ffggvv• 5 years ago

agree though i’d say they usually don’t make much money from selling shovels. but their stock soars when they announce they are selling shovels

justjonathan• 5 years ago

In case you were confused by the headline... no relation to curve.fi

bobkrusty• 5 years ago

Companies Buying bitcoin is a trend. As people bought btc. I think this is kind of marketing. Haha

distribot• 5 years ago

I've recently been reading a bit about the history of Israel and the prolific tech industry there. Funny enough the founders are Israeli (company was in NYC), and one of them had a leadership role in the Talpiot program--something akin to the Navy seals for science and technology in the IDF.

Really remarkable country, seemingly overflowing with human capital. A population smaller than New Jersey but so much innovation and startups.

NorwegianDude• 5 years ago

Can we just take a moment to appreciate how insanely garbage the linked to site is?

The first thing you see is a large floating ad in the middle of the screen. Then there's a huge banner at the bottom of the screen asking for permission to send you notifications. Then there's a large banner at the top asking you to subscribe to a newsletter, and right under that there's an ad asking you to download (in my situation) curve. Once you close all that out, there are more banners underneath telling you that the site uses cookies.

A perfect example of how not to do things.

flibberaloo• 5 years ago

BTC is the energy saviour to the USD. USD is the largest energy suck of any currency ever known when you actually start adding up the system to keep it's value in place (i.e. militaries, central banking system, wars, oil, etc.)

mattfrommars• 5 years ago

With Coinbase going public and another crypto start up to be acquired. Anyone else here believes that "dumb people buy crypto, smart people make marketplace"?

To me, it seems that is the main money maker and not 'day trading bitcoin/eth/ and alt-coins'? Unless you the founder of a brand new coin and make truck load of money from ICO only - which has been the case so far.

PayPal Bids $500M to Acquire Crypto Startup Curv

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