North Canton tech company Squirrels LLC has spun off a sister company to enter the world of cryptocurrency and blockchain technology.
The new company, Squirrels Research Labs (SQRL), was formed in spring but planning for it began last fall, said Andrew Gould, Squirrels chief operating officer and co-founder. SQRL has released a new hardware product — Acorn — that works with computer graphics cards and increases the effectiveness of cryptocurrency mining and blockchain verification, company officials said.
Although the two companies are separate entities, they share leadership, employees and many resources. And SQRL expects to bolster its ranks this year.
“We have been exploring the space of the cryptocurrency and blockchain space both from a sort of personal interest and also looking at a business opportunity there,” Gould said.
“It’s a developing market, so it is still finding its legitimacy and trying to shake out the illegitimate people that may try to take advantage of a new thing. We’ve been watching the space and waiting for it to mature.”
Squirrels has been pushing the technology envelope since its two co-founders Andrew Gould and David Stanfill joined forces in 2008 to form Napkin Studio, going on to release one of the early apps in Apple’s App Store.
In 2012, the company released two of its first screen-mirroring apps — Reflector and AirParrot. They were a hit, and Napkin Studio became Squirrels LLC as the founders and employees focused their efforts on wireless collaboration and presentation technology.
And now company leadership feels good about the prospects for the virtual cryptocurrencies, which are built on blockchains that act as their decentralized, digital ledgers. Blockchains could have many potential uses beyond serving cryptocurrencies. They could be applied to logistics tracking, medical records, order histories, even voting, among other things. It’s the potential of blockchain that’s helped drive interest in cryptocurrencies.
Different blocks in a blockchain are validated through the process of mining using a computer, or “mining rig.” And the “miners” are typically rewarded in portions of a coin or token that represents cryptocurrency. The most popular tokens include Bitcoin and Ethereum, but there are estimated to be well over 1,000 kinds in existence.
SQRL’s Acorn product can be updated via software to accelerate almost any blockchain-based technology”, company officials said.
And while the cryptocurrency can be a cyclical market, SQRL has “faith the blockchain technology is only going to continue to rise and become more prominent as businesses and entire industries apply it to their operations. We don’t see it going away because the benefits of blockchain outside of cryptocurrency are undeniable,” said Tom Crilley, Squirrels director of communications and public relations, in an email.
SQRL did keep an eye on the cyclical cryptocurrency industry when deciding when to launch the company.
The industry typically ramps up in the fall, Gould said. Last fall, one form, Bitcoin, soared to nearly $20,000, which generated a lot of hype, but in the spring, the price of all cryptocurrencies came down, which is typical. It often trades “sideways” in the summer before ramping back up in the fall and early winter.
SQRL’s springtime launch positioned it to be in place to maximize this year’s fall uptick, Gould explained.
SQRL isn’t worried about a cryptocurrency “bubble,” though, he said. “There is intrinsic value to cryptocurrency today, and as more companies move critical things to the blockchain, the work of validating those blockchain transactions, paid in cryptocurrency, will continue to increase,” Gould said in an email.
Acorn works with computer graphics cards to offload parts of the mining process that typically create bottlenecks.
“Imagine an assembly line of 10 different steps, and each point along that is doing one particular thing over and over again. If step seven is running much slower than the other nine steps, the conveyor belt through the assembly line can only run as fast as that slower piece is,” Gould said.
By handling the slower aspects, Acorn allows graphics cards to do the steps for which they are best suited. This increases the overall speed of the process. It can also lower the amount of electricity that is being used, allowing users to remain competitive if the value of cryptocurrency dips enough to jeopardize their profit margin.
There is a huge potential market for this product, SQRL officials said. About 16 million graphics cards around the world are currently used for cryptocurrency mining, and a user can pair up to two Acorns per graphics-processing unit to get maximum acceleration.
Acorn is priced at varying levels based on speed, ranging from $199.99 to $329.99.
Blockchain technology may seem like an obscure topic to some, but Gould said miners come from all walks of life, ranging from independent miners, who have one or two graphics cards, to massive data centers that can run tens of thousands of devices.
And SQRL’s target market, for the moment, is any of those miners.
“It’s not quite fashionable to be a large entity talking about mining publicly, but there are major investments being made in this space. SQRL products appeal to all of these miners, big and small,” Gould said.
SQRL initially planned to sell about 1,000 units this summer but has upped those projections to more than 20,000 over the next six months due to stronger-than-expected interest in the presale period. Shipments will begin in late August.
The company is preselling peripheral accessories called Acorn Nests, custom-designed adaptor cards. Plus, SQRL is working with a California company called Xilinx, which creates field-programmable gate arrays (FPGAs), the chips that power all of this hardware.
The two companies created a special version of a Xilinx board that is being exclusively targeted into the cryptocurrency market.
“This is a highly programmable board that miners can use to mine a variety of different coins,” Gould said.
SQRL also has complete mining solutions in the pipeline, and anticipates prototypes will be available by September, with sales by October or November, but they declined to offer details now.
All of this means a need to build up staffing. SQRL and Squirrels currently share about 40 employees, and company officials expect to grow the SQRL side by 20 to 40 people in the next 12 months.
SQRL is actively recruiting engineers, and hardware and software developers and will be hiring staff for warehousing, shipping and final assembly.
SQRL operates out of 16,000 square feet of warehouse and manufacturing space near Squirrels’ existing headquarters in North Canton. The additional property more than doubles the footprint of Squirrels in the area and allows SQRL to expand when needed.