Posts from hacking finance

Everyone focuses on the price of Bitcoin these days and it is no wonder why. But for Bitcoin to be anything more than a store of value, we need to see a transactional ecosystem develop. When the citizens of the world will be able to buy and sell from each other and from retailers of all shapes and sizes via Bitcoin, then we will have truly realized the potential of a global digital currency.

Furthermore, transactions can help stabilize what is a very volatile currency today. There is an imbalance of supply and demand right now. If there was as much transactional activity as there is speculative activity, there would be more supply of Bitcoins in the market (as retailers who recieve them turn them into their local currencies).

So everyone who wants to see Bitcoin succeed should want to see transactional activity rise and the sooner the better. This holiday season is a great time to make that happen. We have been involved in a campaign called Bitcoin Black Friday to encourage buyers and sellers to transact in Bitcoin this holiday season.

If you have products to sell and you accept Bitcoin go here and sign up.

If you want to buy your holiday gifts this year with Bitcoin, go here and sign up.

The idea is very simple. Sellers list their products and buyers get alerted when the deals go live and big retailers sign up. I plan to do my holiday shopping with Bitcoin. I hope you all will join me.

I have written about the Fintech Innovation Lab here before. It's one of the first vertical accelerator programs that have cropped up in NYC and its one of the best. They take a handful of promising fintech companies each year and give them introductions to the top execs at the leading financial services companies in NYC.

If you are running a fintech startup and feel like you could use some mentoring, visibility with investors, and above all, some intros to potential customers, you should think about applying.

The application deadline is in three weeks, December 6th. Details and the application page are here.

I found this video in my YouTube suggested video feed. It's a Jason Calacanis interview of Ben Milne, the founder of our portfolio company Dwolla. It's a good discussion of why the credit card system is very expensive and why we need something better. Dwolla is trying to create something better.

Bitcoin was in the news this week and once again the association wasn’t all that positive. As I have said publicly, privately, and on this blog numerous times, I think so much of the discussion of Bitcoin misses the big point, which is that at its core, Bitcoin is a technology, protocol, and platform for entrepreneurial innovation.

Bitcoin is simply a transactional commerce layer for the global Internet. And once you wrap your head around that, the opportunities for innovation on top of Bitcoin turns out to be enormous.

But how does it work? Well, its not simple to understand. I think this video does a good job of explaining it.

There was a consensus in the comments to my post on General Solicitation the other day that I should submit my comments to the SEC.

So I did that this morning. My comment has not been posted publicly, but I suspect it will at some point.

This is what I said:

It is my opinion, and that of those who we do business with, including our securities lawyers, that these proposed rules effectively make General Solicitation a non-starter for startup companies. If the SEC's intention, with these proposed additional rules, is to neuter General Solicitation to the point that it is legal but nobody avails themselves of it, they will succeed.

The full blog post is here along with 138 comments at this time

http://www.avc.com/a_vc/2013/08/some-thoughts-on-the-secs-rulemaking-on-general-solicitation.html

Fred Wilson, A Venture Capitalist

When our kids were born, some of our friends and family gave them savings bonds. I think we still have those savings bonds somewhere in a file in my office. I should check on them.

What are this century's savings bonds? Bitcoins, of course. I have a friend who gives Bitcoin at Bar/Bat Mitzvahs. I love that move. I plan to do it myself.

So how does one give Bitcoins? Via our portfolio company Coinbase of course.

It's this simple.

1) Go to Coinbase and open an account

2) Connect your checking account to your Coinbase account like you do at Paypal

3) Buy Bitcoin and store them in your Coinbase account

4) When its time to give Bitcoin, you just send the Bitcoin via email to the lucky recipient. They click on the email and claim the Bitcoin in a their very own Coinbase account. 

Of course this lends itself to regifting without worrying that you are regifting something back to the person who originally gifted it to you. I have a friend who actually did that. Makes me laugh every time I think about it.

So the Brooklyn Castle Crowdfunding campaign is over. Here is the project page that outlines what happened. If you don't want to click on that, a total of $67,784.99 was raised from 308 donors. Of that total, $57,617.24 went to IS 318 to fund their chess team. $10,167.75 went to DonorsChoose to support their classroom project crowdfunding platform.

The AVC community was a huge part of this. We provided the early funding that gets a project off the ground at DonorsChoose. We contributed $13,166 of the total and that came from 127 of you. I want to thank each and every one of you who gave. It means a lot to me and to the folks at DonorsChoose that the AVC community is so supportive of projects that I highlight here.

I promised a $10,000 match from the Gotham Gal and myself that never got contributed to this project. It was funded in its entirety without the help of that match. So we are going to contribute that $10k to another DonorsChoose chess project. It will either be next year's IS 318 campaign or possibly other NYC public school chess team projects. I will work that out with the DonorsChoose folks over the next few days. But rest assured that we are going to come up with that $10k as promised.

I'd like everyone to consider exactly what happened here. My friend Maureen pointed me to a blog post. I went and read it and thought, "there has to be a way to get this program funded." I got the assitant principal John Galvin's name from Maureen and emailed him. He agreed to do a DonorsChoose campaign. And then we and others got behind it. Now his kids have the funds to keep playing chess and winning tournaments and learning valuable life skills.

All of this happened on the Internet. I've never met John Galvin or any of his chess players. I've seen the movie though. That certainly helped a lot. If you havent' seen the movie, you really should. It's on Netflix (ie on the Internet). This global interconnected network that a couple billion people are on every day is a big deal and can be used to solve all sorts of problems. We just witnessed that. It feels good.

Update: John Galvin sent me this photo this morning. It is for all of you from the kids.

There's a piece in the NY Times this weekend about Lyft and Sidecar changing the dynamics in the Los Angeles taxi market. Get ready to read lots more pieces like this in the coming years.

The internet, mobile phones, native transaction systems, and a global network that connects billions of people in real time are changing a lot of things and assets that sat wasting are now going to get activated.

None of this is news for readers of this blog. In fact, this is all old news. But I think we are just seeing the start of this trend.

Let's look at self driving cars, another topic that the NY Times wrote about recently. Maybe we won't all own one of them. Maybe investors will own them and put them into networks like Lyft and Sidecar which will then dispatch them to pick us up and take us where we want to go. Self driving cars may turn out to be more like income producing homes, apartments, and oil wells than something that sits in your garage.

Investing in the networks that light up the sharing economy, like Airbnb, Lyft, Sidecar, and many others certainly looks like a good idea. But they may just be opening up a massive new investment market in physical assets that produce income. We are seeing lenders move their money from banks and bonds to peer lending markets like our portfolio companies Lending Club, Funding Circle, and Auxmoney. I think in time investors will move their capital into the assets that power the sharing economy as well. And that may turn into a very large capital asset class.

Our portfolio company Coinbase introduced a new feature yesterday, the ability to buy Bitcoins instantly. I've always thought speed was the single most important feature of any app. And in the case of buying Bitcoin, the four day wait time that was the norm at Coinbase was certainly problematic. Now, if you are a fully verified user, you can buy and sell up to 50 BTC instantly.

Bitcoin is a fairly immature technology at this time. The opportunity for entrepreneurs is to build technology, systems, processes, procedures, and a lot more on top of it so that it can become something "normals" will be comfortable using.

There are reasons why it used to take four days to settle a BTC purchase at Coinbase. And they've done a bunch of things to make it possible for a verified user to buy instantly. Over time, I expect they will build more things that will make it easier for a new user to get this kind of capability.

Many people are focused on the price of BTC and whether it is going up or down. Speculating on BTC is obviously one way to make (or lose) money right now. But I think the bigger opportunity is in making Bitcoin easy to understand, buy, stell, store, and transact in. And that will take a lot of engineering, innovation, and other efforts. So I am glad to see Coinbase engaging in that activity and rolling new stuff out. That is going to be good for both them and the market in general.