Benedict Evans, general partner of Andreessen Horowitz (A16Z), one of the most successful venture capital companies in the world, said that the development of cryptocurrency is very similar to the development of the Internet in 1993.
As in the case of any other new technology or new market, over the past few years, the cryptocurrency space has suffered from fraud and failed attempts to develop some projects. However, according to Benedict Evans, if investors pay attention to the negative sides of the cryptocurrency world in the exponentially growing cryptocurrency sector, this will be like the abandonment of the Internet in 1993.
"Cryptocurrencies today are like the Internet in 1993 or in 1999. Huge potential with improper use, ingenious inventions, but combined with “foam”, fraud and delusions (...) But the failure of cryptocurrencies, like a useless scam, is similar to the situation with Usenet, Cuecat and Boo.com, or the rejection of the internet." – Twitter, Benedict Evans, General Partner of Andreessen Horowitz (A16Z)
A few months earlier, Ben Horowitz, the legendary venture investor and co-founder of A16Z, stressed that one of the deceptive aspects of new technologies (such as cryptocurrencies or mobile phones) is that at first, they seem much worse than existing ones.
Consequently, due to the inconsistency of efficiency and practicality between new technologies and the solutions already used, it is easier to abandon the new. After all, innovation is often like fraud.
As in any other new market, a large proportion of investors are trying to inject investments into each project to wreck the jackpot. If you recall, several crypto-projects have already reached multi-billion scales at the end of 2017. It is easy to notice the positive development statistics, considering that in the same 2017, the cryptocurrency market valuation reached 800 billion dollars.
According to Benedict Evans, as the market matures, new prospects will emerge for the global use of cryptocurrency. He also noted that the technologies used for projects in the cryptocurrency sector will improve and develop.
"Looking at cryptocurrencies as a complete fraud, the situation is similar to the attitude to work with the Internet in 1999 – a solid focus on the vision of a "bubble". Looking at cryptocurrencies and not seeing any opportunities to use them is like the situation with the Internet in 1993, when the network had no more than 3% of traffic" – Benedict Evans
As for the popular argument against crypto-conversions, in which they allegedly have no obvious ways for practical use, Evans said that in 1993 there were not enough reasons for using the Internet.
The difference between cryptocurrencies in 2018 and the development of the Internet in 1993 is only in the fact that cryptocurrencies already have several options for implementation that exceed the efficiency of outdated systems. For example, as a method of cross-border payment: it’s much cheaper to send a payment to Bitcoins than through banking systems. For example, a small calculation: from Bitcoin payment in the amount of 194 million US dollars, the commission is only 0.1 USD.
For investors, venture capital companies and hedge-funds, it is much easier to abandon the cryptocurrency market than to understand and recognize its potential in the long run. But, if the crypto-"industry" really reaches full implementation in the financial market: investors who do not consider the potential of the blockchainBlockchain
is a continuous and sequential block chain of information (digital linked list). When building a blockchain, copies of related blocks are simultaneously stored on multiple computers.Details technology will "burn out", as seen in the case of the Internet in 1999.
Editor: Yuliya Soroka