US-based blockchain start-up Dirt has secured $3 million from several venture capital firms and Coinbase co-founder Fred Ehrsam to develop a decentralized data platform, Dirt founder Yin Wu revealed in a Medium post on Wednesday.
Among the companies that took part in the seed round were General Catalyst, Greylock Partners, Lightspeed Venture Partners, Pantera Capital and Digital Currency Group.
The Dirt protocol they backed is an Ethereum-based platform where users will collaborate to share and assess information by using digital tokens.
“Data in the 21st century is like oil in the 20th century - an immensely valuable asset that is critical to the economy,” commented the 29-year-old serial entrepreneur.
Nevertheless, free access to data is limited and also expensive, and information can be biased – problems which Dirt is allegedly trying to solve.
Sharing certain similarities with Wikipedia, Dirt will let anyone spread information. However, each data contributor will bet virtual tokens on their truth claim which they can get back only if the other participants determine the information as truthful. At the same time, users can earn tokens for disputing and identifying incorrect facts.
In practice, the truth is decided by the side that has received most of the votes. While Wu claims that placing bets on truthfulness makes it “economically irrational for misinformation to persist in a data set”, the system of token-based voting has its weaknesses. Finder.com author Andrew Munro wrote that Dirt has “plenty of grey areas”, as discovering the truth is less of a concern than being on the winning side of a dispute.
Asked to comment on the potential harm people with a lot of followers can cause to the Dirt domain, Wu admitted this is an issue the Dirt team will work to solve, Business Insider reported.
At first, Dirt will cover blockchain projects but then intends to spread to other industries, too, according to Business Insider.