Venkat Nallapati launched KryptoPal to remove barriers to mass adoptions of cryptocurrency and blockchain. (Photo by Abdel Jimenez)
Valley entrepreneur hopes KryptoPal becomes the Paypal of cryptocurrency
A new blockchain-based company in the Valley aims to remove the barriers of mass adoption to cryptocurrency by creating a technology that would make it easier for people to use. Venkat Nallapati, owner and CEO, launched KryptoPal in January in hopes to make cryptocurrency use the same way trendsetters like PayPal and Venmo have made it easy for customers to process payments.
“The moment I like something I just want to do something in it,” Nallapati said referring to his passion for blockchain.
KryptoPal will feature a new technology called the software development kit and platform, or SDK, which connects multiple applications and devices people use to perform blockchain functions such as processing cryptocurrency payments, Nallapati said.
The chief technology officer for KryptoPal Jaycen Horton said the KryptoPal SDK is more like “these new connective pieces of code that allow … you to start implementing these new functions.”
Horton joined the team after years of experimenting on blockchain at Arizona State University back in 2010, which led him to KryptoPal.
The company is looking for solutions to the blockchain that would allow people to access the currency from any device, make it faster and more connected across the world.
Cryptocurrency is a digital currency that acts more like a software than tangible money. It’s value is determined by the free market, a topic of an ongoing debate. Although cryptocurrency can be used as real currency, it is currently used for long-term investing, like having gold or stocks.
“They are not spending, but they are seeing their values going up. Pretty soon they want to spend their cryptocurrency on greater causes,” Nallapati said.
KryptoPal would give people access to various blockchain functions from devices such as gaming systems, mobile applications and even point-of-sale applications
“This could be the game changer what we are working on at KryptoPal,” Nallapati said.
Nallapati has experience with emerging technologies and has been following the cryptocurrency craze for a couple of years. The idea for KryptoPal began after Nallapati noticed a revenue-making industry through blockchain.
“Blockchain is a very scalable and secure technology,” he said.
Blockchain is the technology which helps run many cryptocurrencies like bitcoin. It is a public ledger that keeps record of all the company’s transactions.
KryptoPal will offer about 200 free tokens to Ethereum users as part of its launch. Initial token offers, or ITOs, are a means of raising capital from the public to build the KryptoPal network. Nallapati said the company is expected to raise more than $60 million from its ITO.
Horton, said, “These tokens are the entry type of mechanism that allows people to start utilizing and operating all of the different features (on the blockchain).”
Initial token offerings, or ITOs, sometimes referred to as initial coin offerings, or ICOs, are an unregulated process to raise funds for a new cryptocurrency venture. The process is similar to initial public offerings that lets people invest in the company through stocks, but ITOs are used to circumvent the regulated capital raising process required by venture capitalists.
Victor Benjamin, an information technology professor at Arizona State University, said initial token offerings can be a form of a pyramid scheme for lesser known cryptocurrencies that can leave investors vulnerable to market manipulation.
“One person can really control the market for some of the smaller cryptocurrencies. There’s a complete lack of regulation because you can’t really do that on the stock market — it’s illegal. But in terms of cryptocurrency trading there’s nothing stopping one person from manipulating the market for an alt-coin,” Benjamin said.
To avoid pyramid schemes from initial coin or token offerings, Benjamin suggests investors should check to see how much power and influence the company or top investors have against newer ones.
KryptoPal is more focused on providing a software service to businesses and consumers alike rather than issuing its own cryptocurrency.
“We want to make it very simple so that consumers can use it just like any other button that application is going to have and for the consumer it’s going to be very straightforward,” Nallapati said.
KryptoPal is also trying to make payment processing on the blockchain faster.
Nallapati said it takes about 30 to 35 seconds to process a payment just to get a coffee. The company is working on a way to produce faster results.
Benjamin attributes the latency issue of blockchain to its intensive energy usage.
“Each coin that is generated is tied into some real world costs to how much electricity it takes to generate the coin,” Benjamin said.
With the fast rise of blockchain-based companies, Benjamin advises investors to be informed before they invest in any cryptocurrency.
“You really want to take a look at the development team,” he said.
A company’s management team is usually a good indicator as to how a stock will perform in the stock market, Benjamin said. He said investors should look into the development team with blockchain and cryptocurrency startups.
Nallapati hopes KryptoPal will capture a big market in cryptocurrency and blockchain by turning a complex topic such as blockchain into an everyday use like sending money to a friend.
“I think people are smart,” Nallapati said. “And to get rid of all the confusion and make it simple that’s when KryptoPal comes into play.”