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Bitcoin fever spreads to Silicon Valley - FT

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December 1
9:35 PM 2013

A report in the Financial Times said the Bitcoin fever has now spread to Silicon Valley. In recent weeks, digital currency firms have received venture capital funding in early rounds. Some of the firms include Circle Internet Financial which is headed by media technology industry entrepreneur Jeremy Allaire and Ripple Labs founded by Chris Larsen who also established Prosper, a peer-to-peer lending firm.

Accel Partner Jim Breyer who was also one of the early investors of Facebook and the venture capital unit of Google are just two of the investors who have backed companies in the bitcoin industry. Google's venture capital arm has poured money in Ripple as well as in Bitcoin exchange Buttercoin.

According to the investors, the shared protocols and common technology standards used by the Bitcoin are similar to the internet's open technologies. This, they say, may make the establishment of a low-cost standards-based financial system possible. That system will be independent from that used in the traditional banking industry.

Jim Breyer who also acts as a Walmart Director of Retailer said the Bitcoin system reminded him of the internet protocols used in the mid-1990s. He said merchants see a huge ecommerce opportunity for Bitcoin because it enables them to bring down transaction costs and facilitate easier online purchases. Breyer invested USD 9 million in Circle.

Larsen agrees. He told the FT, "It's sort of like we're in 1996." According to the report, this may make possible the same disruption in the field of finance experienced by the media and communications industries at the advent of the internet. Larsen added that with an open digital currency platform, startups may be able to make a wide variety of financial applications. This can be likened to the way Google and similar companies built on the HTTP protocol of the internet to break into the media world, he said.

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