Today, Nader Al-Naji is the CEO of Basis — a hot cryptocurrency startup, with grand ambitions to replace regular money, and which recently took in a $133 million investment round
from firms including GV (formerly Google Ventures and Andreessen Horowitz.
The origins of Basis, however, go back to Al-Naji’s days studying studying computer science at Princeton, when he learned that the university provided students with free electricity. At a friend’s suggestion, Al-Naji, who had recently learned about bitcoin, decided to put his dorm room power toward a profitable pursuit.
“If you built a mining rig for $1000 in 2013, you could make your money back in about a month,” Al-Naji told Business Insider.
Al-Naji went to work building a powerful computer with two graphics cards and then, he said, “I just started mining away.” Over the course of the first 6 months, Al-Naji said he mined a total of 22 bitcoins.
At Princeton, Al-Naji’s interest in bitcoin led him to take courses in monetary history, where he spent office hours arguing with his professor about monetary policy, and the potential for decentralized currencies.
The basis of Basis
After graduation, Al-Naji’s obsessive study of cryptocurrencies grew only deeper.
Later, while working as a software engineer at Google, Al-Naji revisited an idea he’d stumbled upon with two friends while at Princeton: What if they could create a digital currency that, unlike bitcoin, didn’t wildly fluctuate in value?
The volatility of bitcoin has made it more useful as a vehicle for speculation than as a currency, say critics — when the value can change drastically from hour to hour, it introduces undesirable risk for sellers and buyers alike.
Along with his friends, Lawrence Diao and Josh Chen, Al-Naji began working on a digital currency that used the blockchain as a form of monetary regulation.
In 2017, Al-Naji posted an early whitepaper for the currency, which is now called Basis, to his Facebook.
The whitepaper described a “stable cryptocurrency” that will maintain a relatively fixed value, so that it can be used to make purchases. Unlike the stable token Tether, which has a steady value that’s tied to the US dollar, the value of Basis is controlled algorithmically, on the blockchain.
“It’s built on a digital constitution that’s very difficult to modify,” said Al-Naji. “It’s easier to trust the blockchain [as means of monetary regulation] than the government.”
Al-Naji’s whitepaper received immediate enthusiasm from friends within the cryptocurrency community.
“A lot of people told me, ‘This is really interesting, you should really do this,'” he said.
The overwhelming enthusiasm for the project inspired Al-Naji to pursue it more seriously, and, a short while later, he posted to Facebook again, this time saying that he was going to quit Google in order to work on Basis full time.
The future of Basis
At first, Al-Naji and his friends decided that they would use their own money to fund the business, but when investors like GV (formerly Google Ventures), Bain Capital Ventures, Lightspeed Venture Partners, and Andreessen Horowitz began expressing interest, they reconsidered. And the $133 million investment came to be.
“When you’re trying to build a cryptocurrency, you need mind share,” said Al-Naji. “One way to get that is by having influential people buy into the project.”
Al-Naji said the money will be used to develop several potential use-cases for the technology, but declined to comment any further. At the time of the investment, Basis highlighted how the technology could be especially useful for those in the developing world, where there’s little existing financial infrastructure to speak of.
As for those bitcoins Al-Naji mined back in 2013?
“I’m still HODLing,” he said, referring to the cryptocurrency acronym that stands for “hold on for dear life.” (At the time of publication, 22 bitcoins is valued at around $200,000.)