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The Inside Story of BitTorrent’s Bizarre Collapse

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The Inside Story of BitTorrent’s Bizarre Collapse

How a group of valley outsiders blew through the company’s cash and nearly left it for dead.


5 min read
5 take-aways
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What's inside?

The BitTorrent protocol remains an unmatched innovation. So why is the BitTorrent company such a flop?

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What happens when a brilliant piece of technology can’t find a profitable business niche? Consider the case of the BitTorrent protocol – one of the most common protocols for file sharing on the Internet. Journalist Jessi Hempel digs into the strange history of BitTorrent, the company created to monetize Bram Cohen’s groundbreaking invention. In tracing the many attempts by an ever changing cast of executives and investors to transform the BitTorrent protocol into a successful company, Hempel constructs a kind of morality tale for tech entrepreneurs. getAbstract recommends this article to tech investors, executives and inventors.


When computer programmer Bram Cohen invented his open-source BitTorrent protocol – which turns massive files into small pieces, sends those pieces through a peer-to-peer network and then rebuilds them – he revolutionized the world of data sharing. Surely, Cohen thought, he could leverage this tech to turn a profit. In 2004, he founded the BitTorrent company and raised $8.75 million from venture capital firm Doll Capital Management (DCM) to launch a platform that would allow people to sell bandwidth-intensive content. Unfortunately, the venture floundered...

About the Author

Jessi Hempel is the head of editorial for Backchannel. She writes about the business and the culture of technology.

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