Former Coinbase CTO believes crypto will transform venture capital ๐จ This article is 5 years old...
Former Coinbase CTO believes crypto will transform venture capital
2 min read
Updated: Aug. 6, 2019 at 8:06 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Balaji Srinivasan, the former CTO of Coinbase and general partner at Andreessen Horowitz, believes that cryptocurrencies will bring about significant changes to the world of investing. The industry has created new ways of raising capital, allowing it to come off the sidelines and โflow like water.โ
What’s next for crypto?
Blockchain and cryptocurrencies have infiltrated some of the biggest industries today and have deeply impacted the way people see money. After disturbing the foundations of supply chains, money transfers, and gambling, many were left wondering what crypto would shake-up next.
Balaji Srinivasan, angel investor and former CTO of Coinbase, believes that the next thing crypto will conquer is venture capital. With companies like Earn, Counsyl, Teleport, and Coin Center under his belt, Srinivasan provides a unique perspective on the future of the industry.
In a lengthy Twitter thread, Srinivasan said that cryptocurrencies have the potential to turn everyone into an investor. He compared cryptocurrencies to the advent of the internet, which instantly โturned every single user into a publisher.โ
He also seemed to believe that digital assets offer a new and exciting channel for investing. “All this capital comes off the sidelines and flows like water,” Srinivasan wrote. He explained that apart from the right pitch, crypto companies need very little to raise a significant round of funding “in real time.”
What's next? Crypto may turn everyone into an investor just like the internet turned everyone into publishers.
All this capital comes off the sidelines & flows like water. With the right pitch, raise a round in realtime. Influencers like entrepreneurs, followers like investors. https://t.co/nA0efaI8e2
— Balaji S. Srinivasan (@balajis) August 6, 2019
The industry going the right way despite the obstacles that await
This isn’t only theory, Srinivasan wrote, as there are already many examples showing that the industry is heading in the direction he predicted. The rise of initial coin offerings (ICOs), equity crowdfunding and influencer monetization shows that cryptocurrencies have already deeply impacted the way people raise money.
Pioneer App was cited as a great example of how blockchain has enabled the creation of platforms that allow people to raise money for their cause or startup almost instantly.
“Capitalist networks like this would be to today’s online crowdfunding what Twitter was to Blogger. Faster, easier, slicker,” he said.
However, cryptocurrencies as a method of fundraising still have a lot to prove. Peter McCormack, the host of “What Bitcoin Did” podcast, said that despite all of the possibilities they open, cryptocurrencies still have a long way to go before they can directly compete with venture capital rounds.
“Crypto as a method of fundraising has a lot to prove. Yes it may open up the opportunity to more [money], yes capital might flow like water, but: 1) The checks and balances of VC rounds are helpful, 2) Idiots raising large sums from inexperienced investors, 3) The incentive model is screwed,” respondedย McCormack.
While no hard conclusion was reached, Srinivasan’s thoughts started an interesting conversation. Many different voices contributed to the discussion, but almost every single most agreed that despite the obstacles, the crypto industry is changing venture capital.
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Coinbase
Coinbase is a digital currency exchange and wallet service that allows individuals to buy, sell, and store digital currencies, such as Bitcoin, Ethereum, and Litecoin.
a16z
Andreessen Horowitz (known as “a16z”) is a venture capital firm in Silicon Valley specializing in investing in seed, start-ups, early, mid-stage, growth, and late stage.
Balaji Srinivasan is recognized for his influential roles in the tech and cryptocurrency sectors, most notably as the former Chief Technology Officer (CTO) of Coinbase.
Hailing from the United Kingdom, Peter McCormack stands out as a preeminent figure in the cryptocurrency podcasting realm.