A Mad Rush To Build A New Digital Finance Industry
The Financial Times has published a full length article describing how California’s Silicon Valley has taken a strong interest in the digital finance industry surrounding Bitcoin. Richard Waters, writing from San Francisco, describes multiple venture capital firms taking a stake in the Bitcoin field.
“Silicon Valley is starting to catch Bitcoin fever – though the entrepreneurs and venture capitalists being drawn to the virtual currency claim that the biggest profits will come from using it to build a new digital finance industry rather than just as a vehicle for speculation.
Digital currency companies that have attracted early rounds of venture capital in recent weeks include Circle Internet Financial, headed by Jeremy Allaire, a serial entrepreneur from the media technology industry, and Ripple Labs, whose founder, Chris Larsen, was behind pioneering peer-to-peer lending company Prosper.
Prominent investors who have been drawn to the field include Jim Breyer, a partner at Accel and early backer of Facebook, as well as Google’s venture capital arm, which has invested in Ripple and Buttercoin, a Bitcoin exchange.
Bitcoin’s tech industry backers argue that the shared protocols and common technology standards on which it is based echo the open technologies that lie at the heart of the internet. That could make it the foundation for a low-cost, standards-based financial system independent of the traditional banking industry.
‘It reminds me of the internet protocols in the mid-1990s,’ said Mr Breyer, who is also a director of retailer Walmart. Bitcoin was an ‘enormous ecommerce opportunity’ for merchants, because it could greatly reduce transactions costs and make it easier to buy online, said Mr Breyer, who contributed to a $9m investment in Circle – the biggest first-round financing for a payments start-up, according to the company.”
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