On Bitcoin

The subject of Bitcoin has come up a few times over the last few weeks, and for anyone who is interested, I thought I would post a few links.

Here are a few things that I think are interesting and worthy of attention:

First, this article came out in the WSJ on Saturday, and I think it’s worth reading. It provides a current overview and is well written.

Coinbase is a “Bitcoin services provider” which in its own way is trying to become the McDonalds of Bitcoin. (AOL is probably a better comparison, because they were the first experience most Americans had with the Internet in the early 1990s.) Last week, they announced a $75 million Series C funding round. That’s more money than any Bitcoin company has ever raised.  I thought it was interesting that the list of investors includes Spanish Bank BBVA.  Bitcoin companies have had a hard time getting bank accounts. In this case, the Bank appears to be investing, but still not willing to allow the company to open a bank account.

Also, today Coinbase announced that they received approval to open a regulated exchange in the US.  This could be a significant factor, especially if it entices new institutional investors to hold some assets in Bitcoin.  (The current value of all Bitcoins is about $4 Billion, so it should not require a huge amount of new capital to move the market significantly. However, you should recognize that is a highly speculative statement.  This is certainly no Ben Graham ‘Margin of Safety’ bet.)

One investor that making significant bets on Bitcoin companies is venture capitalist Marc Andreesen.  He was the guy who created the NetScape browser when he was a student at the University of Illinois Urbana-Champaign.  Andreesen later took the company public in one of the first internet IPOs in 1995. In 1999, near the very top of the internet stock bubble, AOL acquired the company for $10 Billion.  Before selling, the code base for the browser was transferred to a new non-profit organization called Mozilla, which may sound familiar because of its browser, now called “Firefox”.  Andreesen said that if Bitcoin were around back then, he would have built it directly into the browser.  About a year ago, he wrote this piece in the NY Times called Why Bitcoin Matters.  It’s a good overview.

The article that first piqued my interest was in the New Yorker.  It was from October 2011 and called, “The Crypto-Currency: Bitcoin and its mysterious inventor.”

Andreas Antonopolous is a commentator who describes bitcoin well.  His talks are coherent, persuasive arguments for the adoption and growth of Bitcoin.  Here is a link to one of his talks, though there are many others available on YouTube.  He also recently published a book which is available on Amazon here.  It’s mainly for developers, though the first few chapters are a non-technical overview.  You can read a pre-publication version of the book on GitHub here.  He is one of the best, most informed, and and most articulate speakers on the topic.

Links
WSJ – http://www.wsj.com/articles/the-revolutionary-power-of-digital-currency-1422035061

NYT – http://dealbook.nytimes.com/2014/01/21/why-bitcoin-matters/

New Yorker – http://www.newyorker.com/magazine/2011/10/10/the-crypto-currency

Andreas Antonopolous – YouTube – https://www.youtube.com/watch?v=3mUcpsbnhGE

Andreas Antonopolous – Bitcoin Book – https://github.com/aantonop/bitcoinbook

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