Wednesday, March 5, 2014

Digital Currency and Bitcoinmania. Is ProfessorVC too Late to the Party?

Perhaps if my intention was to be a 49er and join in the Gold Rush and speculative frenzy...Unfortunately as much as I'd like to make a quick buck as the next guy or gal, I've never been very good at timing the market.

For example, I was on the waiting list for close to a year prior to the first Tesla Model S rolling off the robotic assembly line in Fremont.  When I finally bought the car in January, 2013, a single Bitcoin was worth $15. Had I skipped the car and bought Bitcoin instead, I'd have a nice $3.5M (assuming I didn't park it at Mt. Gox) and could buy 44 Teslas, enough for my entire extended family, a few students, and of course, some loyal readers of my blog.  Of course, I would've missed out on picking up the car after the Tesla factory tour (pic below).   I could've used the cash to buy Tesla stock at $33/share, which would now be worth over $600K.

Congratulations to those early miners and speculators who made a killing on Bitcoin.  For the rest of us, it is early days in the digital payments space and fortunes will be made by those starting, investing, and working at companies building payment infrastructure and applications.

We are excited to announce the launch of CrossCoin Ventures today, a Digital Currency Accelerator investing in entrepreneurs building on and advancing the Ripple ecosystem in collaboration with Ripple Labs.  Ripple Labs also announced it's developer portal and support of the CrossCoin accelerator

For those not familiar with Ripple, it is an open-source, distributed payment protocol. It enables nearly free and instant payments to merchants, consumers and developers with no chargebacks and in any currency -- including dollars, yen, euros, and even Bitcoin. Ripple's goal is to make payments just like communications -- global, distributed, instant and free.  Ripple Labs developed the protocol, promotes it's use, supports developers, and builds applications and SDKs to enhance it's utility worldwide.  If interested in learning more, here is a great primer to get started.

Why are we bullish on digital currency and Ripple specifically?  The banking industry is antiquated, inefficient and not built to support many areas of the information economy, including international commerce, financial services for the underbanked, and microtransactions.  Friction and fees are prevalent and we are beginning to see consumer adoption of alternative currencies with Bitcoin the obvious leader.  We love that Ripple works with Bitcoin, traditional currencies, and any other unit of value from frequent flyer miles to loyalty cards and in the future will support smart contracts for the exchange of specific assets. 

Some people make the analogy of digital currencies being at the same stage the Internet was at in 1994.  Huge new Internet businesses were created at that time and one of my partners in CrossCoin, Gary Kremen, invented online dating with the founding of  Clearly, we are not alone in this belief as many astute investors including Marc Andreessen, Jeremy Liew, Chris Dixon and Fred Wilson are backing companies in this space. 

If you are an entrepreneur or developer interested in leveraging the ripple ecosystem and looking for capital along with help in launching and building your business, we'd love to hear from you.  Some of the areas we are interested in involve remittance, wallets, analytics, along with other enterprise and consumer applications.  We are open to all ideas. You can find more information and contact us at CrossCoin Ventures.