Despite Little Growth in Bitcoin Usage, Leading VC Marc Andreessen Still Bullish on Virtual Currency

Last January I had an interesting conversation with web browser pioneer and leading venture capitalist Marc Andreessen after he wrote a New York Times essay on why Bitcoin is so important to the future of the Internet. He was bullish despite little growth in actual usage of Bitcoin, and since then, usage still remains low. (It's grown slightly in recent weeks, as this chart captured at left shows, but is still below its peak transaction rate in January.) This despite the fact that media attention and investment in Bitcoin projects has continued to be pretty active, with Bitcoin ATM machines appearing around the world (with the latest one just announced), top retailers like Dell supporting Bitcoin, and even Hollywood nail salons accepting the virtual currency as payment. Despite all this surface activity, Bitcoin is still regularly used as money only about as much as the Seychellois rupee, official currency of the Republic of Seychelles, off the coast of East Africa (population: 84,000).

All that in mind, I wondered if the continued slow growth of Bitcoin usage had made Andreessen less bullish on its future. I put that question to him on Twitter, and this conversation followed:

Hi @pmarca, is the continued slow growth of Bitcoin transactions making you less bullish on the currency? http://t.co/33SZzL0NGY

— Wagner James Au (@slhamlet) August 13, 2014

@slhamlet Nope! Lots of development happening. Right on track.

— Marc Andreessen (@pmarca) August 13, 2014

@pmarca OK, thanks. If daily Bitcoin transactions are still below peak by end of 2014, will you still be bullish? If so, why?

— Wagner James Au (@slhamlet) August 13, 2014

@slhamlet Amara's Law: "We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run."

— Marc Andreessen (@pmarca) August 13, 2014

(Roy Amara was a researcher, scientist and past president of the Institute for the Future, by the way.) I pressed on:

@pmarca Amara's Law may apply in this case, but I'm left wondering if Bitcoin advocates' bullishness is falsifiable in any way. Is it?

— Wagner James Au (@slhamlet) August 13, 2014

@slhamlet Let's check back in 10 years.

— Marc Andreessen (@pmarca) August 13, 2014

@pmarca Setting the bar to 10 years seems pretty high, but OK, will check back with you on this in 2024. :)

— Wagner James Au (@slhamlet) August 13, 2014

Thing is, while Andreessen is doing really well and can ride on his Bitcoin investments to see what happens to the currency in ten years, most others who've staked a lot of their lives and fortunes on its fate probably can not.

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Comments

[Vanadis Falconer]

Marc Andreessen has invested 25 miljon US-Dollars in Bitcoin, of course he talk nice about Bitcoin

[Arcadia Codesmith]

In general, putting most or all of your eggs into ANY one basket is not a good investment strategy, even if it's a really solid basket. If it's still a little vapory around the edges, then you're not investing at all, you're speculating. Which is fine, as long as you never put in more than you can afford to have completely wiped out overnight.