Apple Pay is the next big thing that’s “freaking out” financial services companies right now, but, in the long term, bitcoin will prove to be the real innovation, Marc Andreessen has said.
Andreessen was participating in a fireside chat with Bloomberg West anchor and Studio 1.0 host Emily Chang yesterday in San Francisco on the final day of Salesforce[1]‘s annual cloud computing conference, Dreamforce 2014[2].
This week marks 20 years since Andreessen created Netscape Navigator. He now sits at the helm of venture capital firm Andreessen Horowitz[3].
With the Netscape anniversary in mind, Andreessen told Chang that he anticipates more change in the payments space in the next five years than there has been in the previous 20, and that there would be two major drivers of that change: Apple Pay and bitcoin.
“What we say from our [Andreessen Horowitz’s] standpoint is that, in the long run, bitcoin is by far the most innovative and radical thing,” he said, adding:
“It’s the thing that will actually have a big impact over 20 years, but Apple Pay is the thing that’s going to have a big impact in the next three years. And the combination of those two is going to cause enormous change.”
The chicken-and-egg problem
Apple CEO Tim Cook introduced ApplePay last month[4], describing it as an “entirely new payments solution”. Andreessen, however, diplomatically asserted that it is anything but that:
“[Apply Pay] is innovative, but in a way [it’s] very consistent with the status quo. If anything, its big selling point is it doesn’t require massive structural change.”
He went on to describe the dilemma that exists in today’s payments industry, maintaining that there is a network effects problem in that no one will use a new payments system until both the merchant and consumer sides of the industry embrace it fully.
“You have to get through the chicken-and-egg problem to get to the other side of universal adoption. Apple Pay is very cleverly calibrated to skip right through that […] It sort of plugs right into the existing system.”
Bitcoin is different. It’s the exact inverse of Apple Pay, according to Andreessen, but because of the same chicken-and-egg scenario, larger transaction volumes could be a long way off:
“Bitcoin is truly radical, Cryptocurrency, more broadly, is a truly radical, truly revolutionary, fundamental breakthrough in computer science, completely different way to do transaction processing, potentially a replacement for a very large amount of the status quo, but has the big chicken-and-egg challenge.”
Betting on bitcoin
Venture capital isn’t a batting-average business, Andreessen went on, but rather a “slugging-percentage” business. He remains open to the prospect that bitcoin may or may not work. For every 10 bets he takes on startups, he assumes he’ll lose five – a typically venture capitalist approach to take.
“It’s not a question of how often you’re right,” he said. “It’s a question of when you’re right – how right are you?”
Andreessen added:
“I would put bitcoin squarely in that kind of bet. I’m completely enthusiastic to take that – that’s a classic venture capital risk to take. People who understand that risk should feel very good about taking it.”
Andreessen Horowitz, he estimated, has invested almost $50m in bitcoin companies to date – including Coinbase[5] and TradeBlock[6] – and is actively searching for more bitcoin-focused opportunities.
Rounding off the talk, Andreessen declared his confidence in the concept of cryptocurrency and the likelihood that it would become “vitally important”.
He concluded:
“I think it will be in the form of bitcoin, but, even if it’s not bitcoin, it will be something else. Even if it’s not this year, it will be five years or 10 years. It will happen, and it will be a very big deal. From that standpoint I both do care what happens in the short term, since we have to live in the short term, but I also have tremendous faith in what’s going to happen in the long run.”
Reddit has announced a new $50m funding round that could lead to a unique way for the social network to give back to its community – its own cryptocurrency.
In a post on the company’s official blog[1], CEO Yishan Wong revealed Reddit had secured funding from a number of well-known venture capitalists and VC funds.
Perhaps most notably for the digital currency community, however, was that all of these investors agreed to set aside 10% of the round’s proceeds to give back to the community.
Wong wrote that the move was a recognition of the central role the digital currency community has played in Reddit’s ongoing success, but provided few details on the company’s potential plans.
When asked by CoinDesk to elaborate on the concept, Wong said only:
“We’ll have more to announce in the future.”
The use of digital currency as an ownership token, has long been held as a future use case for block chain technology in general, and the concept is a focal point for many crypto 2.0 projects and frameworks.
Still, Reddit isn’t the only major company to announce it intends to experiment with the emerging technology, following similar statements from Overstock[8] in July.
Asset-backed approach
In comments posted on the r/blog subreddit, Wong was more detailed, saying that the company may seek to create a special-purpose cryptocurrency that would be backed by the value of the shares created during the $50m funding round.
Wong explained:
“We are thinking about creating a cryptocurrency and making it exchangeable (backed) by those shares of reddit, and then distributing the currency to the community. The investors have explicitly agreed to this in their investment terms.”
Wong added that he feels the idea is worth the attempt given its potential benefits for site users, but that the company hasn’t moved beyond the initial exploration phase with the idea.
Bitcoin-friendly backers
Among those who took part in Reddit’s $50m round are some investors who would no doubt be receptive to the company’s use of block chain technology.
Altman’s Y Combinator is no stranger to bitcoin startups, having played patron to bitcoin services provider Coinbase[9] and bitcoin ATM developer BitAccess[10], among a host of other digital currency startups.
According to Wong, the caliber of investors Reddit has attracted reflect its long-standing commitment to free speech and open internet activity.
Wong wrote:
“We have been entrusted with capital by patient, long-term investors who support our views on difficult issues. We believe in free speech, self-governing communities and the power of voting. We find that this freedom yields more good than bad, and we have chosen investors based on this belief.”
Coin Center, a new public policy organisation dedicated to digital currency research and advocacy, has launched with widespread backing from the bitcoin industry.
The Washington, DC-based group is supported by prominent figures such as VC investor Marc Andreessen[1], SecondMarket chairman Barry Silbert[2], bitcoin developer Jeff Garzik[3] and a host of the industry’s most prominent companies.
In an open letter to the community, executive director Jerry Brito[4] said that one major goal of the group is to help shape the global regulatory debate that could decide the fate of digital currency usage in the US and abroad.
Brito, a former executive director and research fellow at noted market research organisation Mercatus Center[5], wrote:
“Digital currencies like Bitcoin will be an important part of our economy, and policymakers are now beginning to consider how to regulate their use. As a result, there is a need for an organization that can be a trusted and credible source of information about the regulatory implications of digital currencies. We seek to be that trusted and credible source.”
Notably, Brito recently co-authored a critique[6] of the BitLicense that was published by Mercatus. He formally left the organisation on 18th August, cryptically announcing by email that we would be moving on to another venture.
Star-studded support
In addition to Brito, Andreessen and Garzik, the group’s board of directors includes angel investor Alex Morcos[7]; Stanford professor and Ripple Labs advisor Susan Athey[8]; and Andreessen Horowitz general partner Balaji Srinivasan[9].
Coin Center will have an initial budget of $1m to support its efforts.
The organisation received funding from a variety of well-known bitcoin investors, companies and venture groups including:
Move toward advocacy
The group’s emergence comes at a critical juncture for digital currency adoption as regulators and governments worldwide debate if and how the technology should be regulated.
Speaking to CoinDesk, Jeff Garzik explained that there is demand for more information about bitcoin, both on the policy front and beyond, and that as a result, new groups are being formed to fill this need.
Given the fact that regulators are still working out how they plan on defining digital currencies, he said that “new policy research and study is needed”.
“The time was really right for this effort,” he argued.
When Steve Jobs was a boy, he looked up the name “William Hewlett” in his local phone book and was able to reach the founder of Hewlett-Packard at home. The elder technologist offered the future Apple Computer founder advice, some free components and a summer job.
Anecdotes like that[1] make it clear how geographical proximity can help one wave of innovation set up the next. Even now, when it’s unlikely any young entrepreneur will be able to find Mark Zuckerberg in the Palo Alto phone book, hopefuls with ideas still flock to the stretch of towns flanking the San Francisco Bay. The accelerators are there, as are the venture capitalists’ offices, the networking events and the pool of engineers.
Would bitcoin benefit from geographic concentration as much as the tech industry has? Silicon Valley veteran and investor Marc Andreessen raised the idea in a recent article[2] titled “What It Will Take to Create the Next Great Silicon Valleys, Plural”.
“Imagine a Bitcoin Valley, for instance, where some country fully legalizes cryptocurrencies for all financial functions.”
Venture capitalist Tim Draper, who recently purchased 30,000 bitcoins[3] that the US government had seized from the Silk Road, says he already sees Bitcoin Valley forming, within Silicon Valley.
“I believe that the concentration of bitcoin companies around the Boost.vc accelerator will give those companies a real leg up,” Draper said, referring to the San Mateo accelerator[4] founded by his son, Adam, whose portfolio includes BitBox[5], BitWall[6], Coincove[7] and other bitcoin startups.
Bitcoin is not high tech
Concentrated talent and easy exchange of ideas would be good for any burgeoning industry. Yet bitcoin is so different from high tech that it’s unclear that what’s good for one would be good for the other. Unlike the chip and equipment manufacturers that sparked Silicon Valley, bitcoin companies don’t need to set up factories or physical R&D labs to do their thing. And it feels ironic to try to pin down a physical headquarters for an industry based on a global, distributed technology whose very virtue is that users’ geographical location doesn’t matter.
“Bitcoin Valley, anywhere you want it to be,” Draper joked in an email to CoinDesk.
Most bitcoin leaders admit to having two minds when it comes to the concept of a Bitcoin Valley. Such a thing might be helpful, but is it really needed?
“Now that the internet already exists, something like that is less necessary because everybody can communicate with everybody else,” said bitcoin evangelist Roger Ver[8] in a recent Skype call from a Tokyo restaurant.
Talent pool is vital
To Hemant Taneja of General Catalyst Partners[9], even in a distributed world, companies still need to position themselves where the talent pool runs deepest, and for bitcoin that could be one of several contender cities.
“New York would give Silicon Valley a run for its money,” he said, pointing to the depth of financial industry talent in the Big Apple.
He continued:
“You can look at talent one of two ways. If the issue of consumer-oriented parts of the bitcoin stack that need to be created is where the winning companies will reside, it will likely happen here in Silicon Valley. If you think the understanding and appreciation of regulations and compliance and financial instruments is the way the next generation of companies will be built, I’m inclined to say New York is where that talent resides.”
Taneja pointed to Boston, home of General Catalyst payments company Circle[10], as another strong contender, boosted by the Massachusetts Institute of Technology, which is currently conducting an on-campus bitcoin experiment[11].
A distributed industry
Meyer “Micky” Malka[12], founder of Ribbit Capital and funder of Coinbase[13] and other bitcoin companies, sees a more distributed future for the bitcoin industry, with companies cropping up where the user cases are.
With his background in international finance companies, Malka sees a lot of pain points in the developing world; companies in far-flung places may take longer to develop and get funding, but it will happen, he said:
“We’re seeing a lot of good ideas all over the world, but the capital is still very concentrated [in Silicon Valley].”
How to become Bitcoin Valley
It may be possible for any location to throw its hat in the ring to host Bitcoin Valley. Bitcoin insiders advise hopeful local or national governments to skip the traditional measures, such as offering companies financial incentives or building R&D centers, and focus on creating a welcoming regulatory climate for bitcoin companies.
Draper warned:
“Our federal government needs to lighten up on the banks using bitcoin, or we will lose all the business to other countries.”
Other countries could compete with the US as centers of bitcoin innovation with innovative regulatory approaches, some have suggested.
“Allowing more experimentation in financial services could help those in countries that don’t have stable currencies (let alone banks) to more easily save and move their money across borders,” Andreessen wrote.[14] “Some of these places would leapfrog, innovation-wise, through something like bitcoin”
Ver said he is involved with an undisclosed Caribbean jurisdiction, helping it position itself as a potential bitcoin hub.
“Myslf incuded, thousands of bitcoiners are willing to move anywhere in the world” where conditions are favorable, he said.
However, Taneja pointed out that no matter how favorable the local market conditions are to bitcoin adoption, most companies will only locate a headquarters near the necessary talent. If there ever is a Bitcoin Valley, it will probably be in a location that has both benefits, he said:
“States with the right talent will have an advantage if they create an environment for bitcoin adoption in the market.”
Online cryptocurrency data and research provider TradeBlock has raised $2.8m in funding as part of a new investment round led by Andreessen Horowitz that also included SecondMarket CEO Barry Silbert, Devonshire Investors and FinTech Collective.
For Andreessen Horowitz, the venture capital firm led by early internet pioneer Marc Andreessen[1], the move represents its latest major backing in the bitcoin ecosystem. The investment follows the firm’s December investment in US-based bitcoin financial services provider Coinbase’s $25m Series B round[2].
TradeBlock, rebranded from Genesis Block, began last year as a site where its co-founders Greg and Jeff Schvey could share their analyses and opinions on cryptocurrency market data. When the company hit peak demand for more specific data analytics, Greg told CoinDesk, the business began quietly incorporating its data products and services for some clients.
With $2.8m in new funding, BlockTrade is now focused heavily on improving its order management system for over-the-counter trading.
Greg told CoinDesk:
“We look at block chain technology as a protocol through which any titled asset can be transferred.”
Andreessen Horowitz has to date invested less than $50m in bitcoin companies[3] according to its own estimates, but aims to increase this figure with strategic investments.
Leading market analytics
Armed with this new capital, TradeBlock is looking to empower its customers with improved offerings. Greg specified that TradeBlock works exclusively with institutional clients, and aims to increase their efficiency in “analyzing, understanding and transacting within the new technology”.
With bitcoin, he explained, the underlying protocol itself is open source and by the way it works, has to be publicly available. This means that, for those with the tools to access it, bitcoin already provides a wealth of free data.
However, Greg maintained that no one in the ecosystem is providing analytics the way BlockTrade does, saying:
“The data is out there. The block chain itself you can just download. No matter how much work you wanna put into pulling out intel on your own, there’s a host of places you can go and get indexes and charts on the block chain but if you want to get analytics on it, I’m not immediately aware that anyone else is getting it quite like that.”
Venture capital in the ecosystem
The move comes amid a surge in investment in bitcoin companies and service providers, with second-quarter investments topping $70m.
TradeBlock is the first proprietary research company in the ecosystem to publicly receive venture capital investment. In February, about 30 bitcoin companies had – almost all of which fell under the exchange, financial services, mining hardware, payment processor and wallet categories.
Greg noted this upswing in investment interest, saying that TradeBlock has seen “significant interest from historic Wall Street firms and hedge funds” as opposed to existing players in the bitcoin space.
However, the round was also joined by bitcoin industry leader and venture capital Barry Silbert, who recently invested in Argentina-based fiat-to-bitcoin processing service BitPagos[4].
Bringing bitcoin to the forefront of mainstream society is no easy task.
The novelty of decentralized digital cash and the potential that bitcoin has to disrupt a variety of industries make it a polarizing entrant to the tech scene.
Those who believe in bitcoin’s capabilities are steadfast that the digital currency will prevail as a new kind of financial institution.
Others, similarly passionate about their beliefs, argue that bitcoin is a bubble, too volatile to amount to anything permanent in society.
For every hardworking developer, entrepreneur[1], investor[2], politician or activist fighting to bolster the bitcoin ecosystem – of which there are many – there is someone on the other side of the fence, working hard to maintain the status quo.
No matter what side you’re on, it’s safe to say that this year has been an eventful one for bitcoin.
Here are the eight biggest bitcoin heroes and villains of 2014 (so far):
1. Marc Andreessen
flickriver.com
Arguably bitcoin’s most influential[3] evangelist, Andreessen has put his money where his mouth is in supporting the bitcoin ecosystem.
His venture capital firm Andreessen Horowitz led a $25m series B fundraising round[4] with its investment in Coinbase[5] in December, and the Internet pioneer shows no signs of slowing down with investments in bitcoin startups anytime soon.
Notable Quote:
“I’m on record that bitcoin, and cryptocurrency broadly, is one of the most important tech breakthroughs of our time.”
2. Barry Silbert
cnbc.com
As CEO of asset-trading platform SecondMarket, Silbert has been working hard[6] all year to bring bitcoin to Wall Street.
Balancing a busy schedule of rallying institutional investors[7], working with financial regulators in New York, and raising awareness for bitcoin with public appearances, Silbert has solidified his position as one of the digital currency’s prominent advocates.
Notable Quote:
“[I have] requests from 38 institutional investors representing +$250 billion to meet with me [about] bitcoin at Barclays Emerging Payments Forum tomorrow.”
3. Jared Polis
bizjournals.com
It often takes the courage of a few bold risk takers to disrupt the status quo of any institution, including the US government.
Congressman Polis emerged as one of those brave figures this year when he publicly showed his support for bitcoin, and eventually went as far as vouching to fight government regulation[8] that stifles innovation in the industry.
Notable Quote:
“If there was an agency that reacted in an irrationally negative way to digital currencies, I would be happy to rally support [in Congress] to restrict their funding.”
4. Gavin Andresen
squarespace.com
Even though he only spent four months of this year as the lead developer on the bitcoin core before passing the reigns[9] to the new head dev Wladimir van der Laan, few would argue Andresen’s influence on both the technology and the community.
In his new role as the Bitcoin Foundation’s chief scientist, Andresen stays busy working as a trusted liason between the core developer community and the less tech-savy bitcoiners. As one of the few people who once had regular contact with bitcoin’s creator[10], Andresen has remained loyal to the betterment of the bitcoin ecosystem from its earliest days.
Notable Quote:
“Do not treat the core development team as if we were a commercial company that sold you a software library. That is not how open source works; if you are making a profit using the software, you are expected to help develop, debug, test, and review it.”
5. Ben Lawsky
capitalnewyork.com
Lawsky is another government official that has come into the spotlight for his involvement in the digital currency industry.
Though the impact of his work may not be as public as other heroes on the list, as New York’s superintendent of financial services, Lawsky’s progressive stance on bitcoin[11] cannot be dismissed.
Notable Quote:
“My hope is that if we can get appropriate guardrails in place to prevent money laundering, we can take a deep breath and really focus on trying to ensure that virtual currency firms flourish and continue to develop and innovate.”
6. Patrick Byrne
economist.com
When Overstock.com began accepting bitcoin payments, the online retailer became the largest company to immerse itself with the digital currency.
Byrne, Overstock’s CEO, has since been very public about bitcoin’s success on the website, and recently pledged to donate[12] 3% of bitcoin profits to bolster the ecosystem.
Notable Quote:
“Any revenue from bitcoin sales that Overstock.com donates will go to support the adoption of cryptocurrencies in general, not necessarily bitcoin in particular.”
7. Jason King
freedomwat.ch
As the founder of Sean’s Outpost[13], one of bitcoin’s most visible organizations, Jason King has dedicated himself to using the power of bitcoin to feed the homeless in his local Florida community.
In addition to providing 60,000 meals to the needy, King recently completed a cross-country fundraising run[14], raising awareness about bitcoin’s potential to impact charitable organizations along the way.
Notable Quote:
“We have guys who got really into bitcoin. They’re on reddit and forums all the time. We have guys who got off the street because of bitcoin.”
8. Mike Hearn
youtube.com
Hearn, a well-respected bitcoin developer, has not been shy about[15] his concerns that core bitcoin developers aren’t receiving enough support.
For bitcoin to flourish, it’s important for the protocol to constantly be improving, and Hearn’s calls to action will hopefully bring enough attention to the issue for progress to be made.
Notable Quote:
“I’ve been very worried for a long time that the core bitcoin system is radically underfunded and underdeveloped from where it needs to be.”
1. Mark Karpeles
dailymail.co.uk
The downfall of Mt. Gox[16], once the biggest bitcoin exchange in the world, affected countless people’s lives and was a blow to bitcoin’s public image.
There’s still quite a bit of uncertainty about Mt. Gox’s collapse (including some 744,000 missing bitcoins[17]), and while Mark’s intentions may not have been malicious, it’s natural that victims of the whole ordeal will point the blame on the bankrupt exchange’s CEO.
Notable Quote:
“As the company head, my mission was to protect customers and employees. I’m deeply sorry. I’m frustrated with myself.”
2. Warren Buffett
adweek.com
Normally a shrewd businessman with a keen eye for a good investment, Buffett took a surprisingly archaic stance[18] on bitcoin this year.
Arguing that bitcoin isn’t a currency[19] and warning investors to “stay away” certainly didn’t help bitcoin’s reputation, and Buffett’s clout as a revered business magnate certainly influenced some to dismiss the digital currency.
Notable Quote:
“[Bitcoin is] not a currency. I wouldn’t be surprised if it wasn’t around in the next 10-20 years.”
3. Mark T. Williams
affordablehousinginstitute.org
Williams is notorious for his prediction[20] in December 2013 that bitcoin’s price would fall 99%, leading to a price of $10 per bitcoin by June 2014.
Here we are in July of 2014, and clearly the Boston University finance professor was off with his estimates. Instead of admitting that his prediction was a bit hyperbolic, Williams remains steadfast that time will vindicate his prediction[21].
Notable Quote:
“I continue to stick to my 2013 prediction that bitcoin is grossly overpriced and the price will eventually adjust dramatically downward as the priced-for-perfection expectations set by bitcoin promoters cannot be met.”
4. Leah McGrath Goodman
cbsnews.com
Newsweek pulled out all the stops in March when its cover story was revealed to be a deep investigation into the real identity[22] of bitcoin’s creator, Satoshi Nakamoto.
Goodman, the journalist who wrote the story, pinned California resident Dorian Nakamoto as the mastermind behind the digital currency. Dorian’s personal information was leaked to the public shortly after, and Goodman held firm that her reporting was accurate, even in spite of Dorian’s denial[23] and evidence against her claims[24].
Notable Quote:
“I have learned this about the fanatical bitcoiners: they will see this all in a different light once they hit puberty.”
5. Joe Manchin
politico.com
Of course, not all politicians are as receptive to bitcoin as Congressman Polis. Enter US Senator Joe Manchin, who wrote a letter to federal regulators in February, calling for an outright ban[25] of the digital currency.
While the bitcoin community may not be swayed so easily, news of a politician like Manchin speculating that bitcoin could hurt the US economy undoubtedly cast the cryptocurrency in a negative light for many Americans.
Notable Quote:
“There is no doubt average American consumers stand to lose by transacting in bitcoin.”
6. Jamie Dimon
dealbook.nytimes.com
It’s no secret that bitcoin has big banks, and their executives, a bit rattled.
Dimon, the CEO of JPMorgan, was not shy about his feelings towards the digital currency this year. His company released an eight-page report bashing bitcoin[26] in February, and Dimon made public comments ridiculing the technology.
“[Bitcoin is] a terrible store of value. It could be replicated over and over.”
7. Seng Song Cheng
news.cn
China’s stance on bitcoin caused considerable uncertainty in the industry at beginning of the year. The People’s Bank of China was averse to the idea of the digital currency, but ambiguity[27] about actual regulatory decisions led to market speculation.
“Bitcoin is merely a utopia for technology supremacists and absolute liberalists.”
8. Danny Brewster
twitter.com
All eyes were tuned to Cyprus in February, where the world’s first brick-and-mortar bitcoin portal[29] opened to offer residents bank-like services for bitcoin.
It wasn’t long until Neo & Bee, the company running the operation, faced allegations of fraud and shareholders saw the value of their holdings plummet[30]. In the fallout, Brewster faced arrest charges as the company’s CEO, and community members felt that he had more excuses[31] than answers about what happened behind closed doors.
Notable Quote:
“Yes, I bought a Bentley back in December, before any issues with MtGox and getting bitcoins out. Anyone that understands the price difference in cars between Cyprus and the UK they will understand exactly why I sold my own bitcoins to buy the car.”
The death bells tolled loudly for Mt. Gox this week as the threads of its elaborate cloak of cover-ups, lies and poor business practices came undone, first with the release of documents the revealed a struggling company[1] desperately seeking new capital, then ultimately with its formal bankruptcy filing[2] on 28th February.
The news reverberated beyond the industry, with mainstream media plunging headlong into the sensational story that was likened to some of the more infamous debacles in the history of the traditional financial system, such as Lehman Brothers and Bear Stearns[3].
Still, increased pressure from the outside world galvanized an impressive display of support and resilience from the bitcoin community as it worked to set facts straight and fight against the most recent wave of negative PR.
Notably, major names in the industry like principal of Winklevoss Capital Management Tyler Winklevoss, noted VC investor Fred Wilson and early Internet entrepreneur Marc Andreessen, along with a host of others[4], went on the offensive for both bitcoin the technology and bitcoin the community.
The result was a growing sentiment that an integral chapter in the bitcoin story had been written, and that the coming year will still give way to the increased investment and higher levels of adoption that were expected at the end of 2013.
Tyler Winklevoss weighs in
Tyler Winklevoss spoke out about Mt. Gox via a blog post[5], noting that the bitcoin market wasn’t exactly suprised by the news. For example, he indicated that he personally stopped using Mt. Gox last summer, when it “started to look like a roach motel”.
But, Winklevoss didn’t just talk about bitcoin as an investment. He also embraced the idea that the sudden end to Mt. Gox[6] was necessary for the ecosystem, citing it as evidence of the need for the US to work quickly to ensure the creation of regulated exchanges.
Said Winklevoss:
“The Mt. Gox ‘crisis’, as it’s been reported, has really been more of a speed bump on the road to mainstream maturity.”
Further, he revealed that he hasn’t sold any bitcoin despite the panic, saying “in fact, I have taken this as an opportunity to buy more” in a statement that could do much to encourage investment.
Fred Wilson reflects
In contrast to his sometimes brash public demeanor, Fred Wilson struck a more somber and reflective note in a blog post on 25th February[7], choosing to emphasize the sadness he felt at the passing of the first bitcoin company he transacted with.
Wilson continued, noting that bitcoin’s ability to withstand such a collapse was actually an advantage over the existing financial system.
Explained Wilson:
“The wonderful thing about a globally distributed financial network is that if one of the nodes goes down, it doesn’t take the system down.”
He also noted the increasing investment and suggested that “failures, crashes and other messes” are just par for the course with any new disruptive ecosystem.
Andreessen on the offensive
Noted early Internet investor Marc Andreessen was one more the more vocal voices from the bitcoin community, as he took to major news networks[8] to defend bitcoin and its underlying technology.
Andreessen, too, suggested that bitcoin would emerge from the latest setback stronger than ever, now famously stating that Mt. Gox “had to die” as part of this transition. He’ll likely have more time to help move this narrative forward at coming major industry events[9].
For a full review of the Mt. Gox story, view our complete timeline of the exchange’s entire history below:
