Andreessen at CoinSummit: Bitcoin Today is the Internet in 1994

Marc Andreessen helped start the Internet revolution when he co-wrote early web browser Mosaic and co-founded Netscape. Now he views bitcoin as the next technological revolution on the scale of the Internet. Andreessen Horowitz, the venture capital firm Andreessen runs with longtime collaborator Ben Horowitz, has invested about $50m in Coinbase and other bitcoin companies, and Andreessen recently vowed to invest hundreds of millions more in the space.

Balaji S. Srinivasan is a general partner at Andreessen Horowitz and is a vocal bitcoin proponent. Srinivasan co-founded Counsyl, a genetic screening company.

Andreessen and Srinivasan kicked off CoinSummit San Francisco with a 'fireside chat', moderated by Forbes reporter Kashmir Hill.

Like the Internet in 1994, bitcoin today is seen by the mainstream as "weird and scary," Marc Andreessen said in the opening session of CoinSummit San Francisco on Tuesday 25th March.

Like bitcoin, he said, the Internet "arrived as a fringe technology. It arrived with fringe politics and it arrived with fringe characters. [...] I don't know how you get fringe technology without fringe characters and fringe politics."

But, just as he saw it happen with the Internet, Andreessen now sees a crop of high-quality entrepreneurs stepping forward to prove bitcoin's usefulness to the mainstream. Somewhere along that journey, he predicts, these "fringe characters" will feel alienated and move on.

Investment plans

With that comparison in mind, Andreessen Horowitz is looking to invest in a whole ecosystem of digital currency technology.

Said Andreessen:

"In 1994, as a venture capital firm, it would have been a good idea to take the Internet seriously and it would have been a good idea to invest in a cross section of [Internet] companies [...] the venture firms that did do that did extremely well."

Andreessen Horowitz is looking to fund two specific kinds of companies, Srinivasan said.

One is a company that would do for the Bitcoin protocol what Red Hat did for Linux, he said, professionalizing work on the open-source code. The other is a sort of Underwriters Laboratories for bitcoin, to verify the security and quality of bitcoin implementations.

Once these infrastructure companies are established, the opportunities for bitcoin to enable technological applications is almost limitless, Andreessen said.

He offered an example of an app that would allow drivers in San Francisco to find available garage spots and buy them from their mobile devices, maybe even through a real-time auction. Another idea would be to stop spam by imposing tiny fees on each email address selected by the sender, an application of bitcoin's usefulness in micropayments.

Explained Andreessen:

"Twenty years ago, we were talking about this idea, and we just had no way to work out the payments."

Emerging from the shadows

After four years of obscurity and perceived ignobility, bitcoin is finally emerging as the game-changing technology it was all along, the pair said.

The technology community needed "four years of bashing on it in different ways" to prove that the code is reliable, in part because of the protocol's possibly pseudonymous origin, Srinivasan said.

Bitcoin has finally moved beyond its association with the Silk Road drug marketplace, an association that was "overblown" to begin with, Andreessen said.

"The exact same thing happened in the early '90s with the Internet. It was just this horror show, for God's sake, you would not want your teenager to go on this crazy Internet thing. By '95, '96, everybody went, 'Oh, this is actually pretty cool'."

Hill wrapped up the session by asking Andreessen and Srinivasan for a response to Berkshire-Hathaway chairman Warren Buffett's now famous dismissal of bitcoin as a "mirage".

"The historical track record of old white men who don't understand technology crapping on new technology is 100%," Andreessen quipped.

He received an appreciative chuckle from the bitcoin-friendly crowd.

Replied Srinivasan:

"Bitcoin has outperformed Berkshire-Hathaway by a lot in the last year."

Image by CoinDesk