HashChain Technology to acquire blockchain technology company NODE40
HashChain Technology (TSXV: KASH) (OTCQB: HSSHF) announced the company has entered into an agreement to acquire blockchain technology company NODE40, which includes a team of experienced blockchain experts and software engineers.
This acquisition marks HashChain’s initial move to diversify its cryptocurrency mining strategy with blockchain-based solutions.
HashChain pays US$8 million in cash and a total of 3,144,134 common shares in the capital of HashChain at two points over the next year.
NODE40’s business comprises two major segments – a cryptocurrency accounting solution for cryptocurrency trading and Masternode hosting.
Cryptocurrency accounting solution
NODE40 Balance is a robust cryptocurrency reporting software that integrates directly with certain major cryptocurrency exchanges. Members of the blockchain community transacting in, trading, or mining digital currency, have likely triggered a taxable event and can be unaware of how to properly disclose these transactions to the government.
With a cryptocurrency market size of $537 billion, government intervention into the cryptocurrency market is certain as is the need for more defined accounting solutions. To address a strict regulatory environment, NODE40 uses a coin-holder’s transaction history and analyzes the blockchain to determine accurate valuations for every input and output comprising a transaction. Once a value has been assigned to every transaction, the service can report the current total asset value, income, and any realized gains or losses.
It is expected that a greater number of countries will join those that have already imposed a higher degree of regulation like Australia, Israel, and South Africa. NODE40 Balance is strategically positioned to work directly with tax authorities globally to adapt to their specific requirements. Coinbase, one of the leading exchanges for cryptocurrencies with billions of dollars exchanged on its platform, recently received a court order from the IRS to hand over information on all customers who made a transaction worth $20,000 or more between 2013-2015, which is estimated to total 8.9 million transactions impacting more than 14,000 different account holders, according to Forbes.com.
“Cryptocurrency mining remains an important focus for HashChain, as we continue to acquire more Rigs and generate revenue on a large scale. The acquisition of the NODE40 Business is an important next step of creating a global blockchain technology company,” said Patrick Gray, CEO and founder of HashChain. “Cryptocurrency accounting and reporting for tax purposes is a major concern in the industry at the moment. The recent Coinbase subpoena from the IRS highlights the significant need for the software developed by NODE40.”
Masternode Hosting Services
NODE40 also provides Dash masternode hosting services. The company frees cryptocurrency investors from the technical hurdles and time investment needed to run Dash masternodes. Masternodes are full blockchain nodes that run the Dash blockchain and provide services to the network, such as locking transactions with InstantSend and voting on budget funding.
Masternodes require 1,000-Dash collateral, and an ability to run 24 hours a day without exceeding a one-hour connection loss. Masternodes get paid 45 per cent of the monthly block reward as an incentive for providing services to the network. As part of the acquisition of the NODE40 business, NODE40 will pay to HashChain certain masternode rewards earned over the 26 months following the closing.
Additions to the HashChain team
Perry Woodin, co-founder of NODE40 and current HashChain advisor, is the company’s new Chief Strategy Officer. Mr. Woodin will be instrumental in making decisions on the direction of HashChain as the company continues to scale their mining operations and invest in other important businesses related to blockchain technology. He has extensive knowledge of Dash and other forms of cryptocurrency and is considered an authority in the field of cryptocurrency accounting.
“The acquisition of NODE40 by HashChain means we can rapidly grow our blockchain service offerings,” Mr. Woodin said. “We will be able to accelerate the integration of additional incentivized Blockchain applications into our hosting service. We expect to expand the NODE40 Balance accounting service to support additional transparent blockchains and integrate with many more exchanges.”
Joining Mr. Woodin from NODE40 is co-founder and CTO Sean Ryan. Mr. Ryan is now the CTO of HashChain.
“HashChain’s acquisition of NODE40 brings together two complementary organizations in the blockchain industry,” Mr. Ryan said. “I am excited about leading the technical discussions required to support the rapid growth and acceleration of our infrastructure services and our increasingly important blockchain accounting service.”
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