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Former Coinbase CTO believes crypto will transform venture capital

Former Coinbase CTO believes crypto will transform venture capital

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 “flow like water.”

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 “turned every single user into a publisher.”

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.”

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,” responded 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.

Filed Under: , ICOs, People of Blockchain, Venture Capital
Priyeshu Garg

Priyeshu is a software engineer who is passionate about machine learning and blockchain technology. He holds an engineering degree in computer science engineering and is a passionate economist. He built his first digital marketing startup when he was a teenager, and worked with multiple Fortune 500 companies along with smaller firms. When he is not solving transportation problems at his company (Ola), he can be found writing about the blockchain or roller skating with his friends.

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