Last updated on April 15th, 2014 at 02:44 pm
Whether it’s in relation to the technological advancement or its investment capabilities, a lot of finance and tech experts make the case that bitcoin is akin to the early days of the Internet and could very well be a revolutionary innovation.
Speaking in an interview with the Business Insider on Monday, Fred Wilson, co-founder of Union Square Ventures that has made investments in Twitter, Foursquare, Zyna and Tumblr, discussed his viewpoints on the digital currency and made the comparison between the Internet and bitcoin.
Wilson first heard about bitcoin three years ago when a friend of his was launching a bitcoin-related venture. He didn’t know what it was at the time and his friend had told him about it so he performed his due diligence. After about a year of research, he and his firm invested in Coinbase, a bitcoin exchanged headquartered in San Francisco, California.
“I guess we were interested in Bitcoin for a long time and Coinbase was the first company we saw that was built on top of Bitcoin that we thought was a good investment. It’s turned out to be a great investment,” stated Wilson. “The fundamentals of the business are great in terms of their revenues and their users. They have over a million hosted wallets now — that’s like a million bank accounts basically — which is amazing. It’s a million people.”
He went on to elucidate that Internet technology of the 1990s changed everything forever, even the entities that are as outdated as AOL, Compuserve email or Prodigy email. These elements did wonders for establishing services that we enjoy today.
“I just really like the technology of Bitcoin,” added Wilson. “The thing that I believe in more than anything is that when you have technologies that open up markets, lots of good things happen.”
Wilson explained that any individual would have the opportunity to apply a Web server on the Internet and anyone else could open up a browser and access that same server. The same thing can be said about bitcoin, according to Wilson, who described it as an “open system” that “nobody controls.”
“It’s not owned by a company. It just is. It’s bitcoin.”
Moving forward, similar to the 1990s, Wilson believes the structure of blockchains will be replicated repeatedly to various applications, but it won’t be bitcoin. Instead, it will be Mastercoin for exchanges and Namecoin for identity, for instance.
“There’s all these new blockchains that are coming up that support different use cases. I think this architecture is really, really important. That’s what got me excited about it,” concluded Wilson.
Last week, Jeremy Allaire, CEO of Circle, compared bitcoin today to the Internet two decades ago in the sense that the idea is fantastic but a lot more development and experiments need to take place to fully establish the virtual currency’s future.
“The early technologies were crude, but they served the basis for worldwide commerce,” Allaire noted. “We’re at this point in evolution. These transformations take a long time.”
In March, Marc Andreessen, the co-founder of Netscape Communications, also likened bitcoin to the early days of the Internet when he lambasted Warren Buffett, who called bitcoin simply “a mirage” and urged investors to tread carefully.