SILICON VALLEY, November 22 2014: Bitcoin is alive, well, and ready to be spent.
That’s the thinking of Adam Draper, 28, who’s Boost VC accelerator will now focus exclusively on all things bitcoin, the digital currency that has become notorious for allowing anonymous purchases. Draper is betting bitcoin will soon appeal to mainstream consumers wanting to make secure purchases without expensive bank or credit card fees.
The 2-year-old accelerator, which previously invested in a broader range of technologies, announced Friday that it intends to fund up to 30 bitcoin companies within the next six months. That’s on top of the 26 it’s already funded. Draper is particularly interested in companies that supply the technical underpinnings needed to run a secure and bulletproof ecosystem of exchanges, service and transfers, he said.
“We made a promise to the bitcoin community to back 100 bitcoin companies in the next three years,” he said. “[This new focus] gets us there faster.”
Draper comes from a long line of venture capitalists, going back to his great-grandfather. He’s the son of famous venture capitalist Tim Draper, of VC firm Draper Fisher Jurvetson, who made headlines for his proposal last December to split California into six separate states. The elder Draper is also a well-known bitcoin supporter who purchased nearly 30,000 bitcoins in July after the government auctioned bitcoins seized from black-market website Silk Road.
Some people also view bitcoins as an investment, buying them in the hope they will rise in value — much like gold or silver. The price of one bitcoin climbed to around $1,130 at the end of November last year, but has fallen steadily since. It was about $350 on Friday.
The real value of bitcoin rests in the technology that powers it and the regulation that will define it, said Wedbush Securities analyst Gil Luria.
“When services are built out and there’s clarity around regulations, then we’ll start seeing those very significant benefits and services for consumers and retailers,” said Luria. When those things come together, “you can achieve secure, very fast, efficient transactions without requiring a central agency like Visa or the Federal Reserve.”
The Drapers aren’t the only Silicon Valley technorati who are bullish on the currency. Marc Andreessen, creator of the Netscape Web browser, said in an interview last month he wished he had inventedbitcoin.
People look at bitcoin the same way they viewed the Internet in 1993, when it was slow and difficult to access, he said.
“When we tried to get investors for Netscape, most of them said ‘you’re out of your mind,'” Andreessen said. “This is the thing that’s most like that of anything I’ve seen in the last 20 years.”