Marc Andreessen and Balaji Srinivasan, two of bitcoin’s biggest bulls in the venture capital industry, stepped up their rhetoric against skeptics of the crypto-currency today at the Coin Summit conference in San Francisco.
Addressing Warren Buffett, who recently called bitcoin a “mirage” and warned investors to stay away from it, Andreessen joked that the “track record of old white men who don’t understand tech crapping on tech they don’t understand is still at 100 percent.”
Srinivasan, who recently joined the firm as its youngest general partner, also joked that bitcoin has outperformed Berkshire Hathaway.
The two said they’re planning to invest hundreds of millions of dollars into startups around the cryptocurrency. They’ve already put $25 million into Coinbase, a leading wallet and payment processor for merchants, plus they have a few other unannounced investments. Both have been extremely public, appearing on national media and writing op-eds in support of the ecosystem and their investments.
They’re not fazed by the currency’s most recent wave of volatility on the back of the Mt.Gox bankruptcy filing.
“I think the relevant comparison point for bitcoin is 1993 or 1994 for the consumer Internet,” said Andreessen, who created the Netscape web browser back then. “It arrived with fringe politics and fringe characteristics. But you just have to go through a maturation process, and along the way, the fringe characters can get alienated.”
Andreessen added, “My prediction is that the libertarians will turn on bitcoin. The libertarians will discover that the blockchain is public,” referring to bitcoin’s public ledger of transactions. While transactions are supposed to be anonymous, it’s possible to view the movement of bitcoin through the blockchain, which undermines that.
Nor are they overly concerned with criticism around how the currency might be used to fuel money laundering or other types of illicit transactions. They say that concern is overblown.
Andreessen pointed to a reactionary letter from U.S. Senator Joe Manchin of West Virginia who called for federal regulators to ban bitcoin a month ago.
Manchin wrote: “Bitcoin has also become a haven for individuals to buy black market items. Individuals are able to anonymously purchase items such as drugs and weapons illegally.”
Another U.S. Congressman, Jared Polis representing Colorado, sent his own parody letter, calling for a ban on the use of the $100 bill citing the exact same reasons.
“Speaking of anonymous currency, the U.S. $100 dollar bill can be transported all over the world and is used to buy drugs and guns at about 1 million times the level that Bbitcoin is,” Andreessen said.
Both VCs are still hunting for more concepts in the space, and they’re saying the quality of entrepreneurs, teams and ideas keeps getting better.
Srinivasan said he’s looking for a Red Hat of bitcoin, referring to the seminal “open-source” computing company. He’d also like to fund a sort of “Underwriters Laboratories” model for bitcoin, which could support something like PCI compliance standards so that consumers can look for a label that could engender trust in third-party bitcoin wallets and services. Underwriters Laboratories, or UL, is that independent, nonprofit that does product-safety testing and certification. (You’ll see UL stickers on electrical home appliances.)