Legendary software developer Marc Andreessen’s tech venture fund Andreessen Horowitz launched a new venture fund and released a 200-page white paper this week outlining its plans to dominate the cryptocurrency world.
Of course, we’d have to be idiots to write about it honestly, given the critical mass of chaos that it would stir up. A joint decision to release the white paper by Andreessen Horowitz and cryptoite Chris Larsen was hardly lost on bitcoin enthusiasts.
But the actual details of the white paper – a beautifully written treatise on ways to totally upend the cryptocurrency market, and is set to one day introduce a new development platform for blockchain – should not be missed.
In the paper, Andreessen’s team presents it’s vision for creating the ultimate digital platform that can address the pitfalls of current markets, and where there’s another edge: the endless redundancy of infrastructure.
“You need to fundamentally unmake all existing structures,” said Andreessen Horowitz Partner Brad Feld.
This is a blow to all current cryptocurrencies, in particular.
When former Bush executive Vivek Kundra, now at Andreessen Horowitz, says “there are hundreds of data sources, more or less,” the inevitable implication is that everything will need to be replaced.
That’s called “switching costs,” and millions of people have spent their entire lives to get off of those platforms. Bitcoin customers have stayed on the platform since it became the world’s most popular digital currency three years ago, but now that Andreessen Horowitz plans to overhaul the cryptocurrency, what comes next?
“We need a big change,” said Feld. “Yes, I worry about the internet replacing the internet.”
To give an example of what a switchover might look like in the financial world, Feld cites a hypothetical scenario where the cost of running an asset like a bank is prohibitively high. Would it pay to crash the banking system?
Larsen told the audience that the “first five years are going to be completely about finding out what issues they have.”
The white paper offers numerous ways to radically lower switching costs in the financial sector, notably by giving customers a choice between partnering with a dedicated innovation platform like Andreessen Horowitz’s new Amvona, or turning to existing services like Facebook, Stripe, or PayPal to conduct their transactions.
We are all going to start to use that Switched framework.
Andreessen Horowitz’s vision is so rosy for the crypto space that it anticipates that the company will eventually have power over trillions of dollars of market value, as well as power over the integrity of the world’s money.
“Blockchain technology at its core is storage,” said Kasper Archibald, a partner at Andreessen Horowitz. “Nobody does this better than Amvona.”
But the white paper outlines more than just a big, bold vision for the future of the cryptocurrency industry. It also breaks down how Andreessen Horowitz’s preferred blockchain platform, Amvona, will build up an ecosystem that will enable it to create new products and services without the need for traditional platforms.
“Given that the intrinsic value of cryptocurrencies is not underlying asset, it’s a foregone conclusion that the blockchain industry is going to expand into other things,” said Archibald.
In fact, the white paper says that, in the long run, there’s a greater market potential for blockchain development than for mainstream markets like stocks and bonds.
In the short term, Amvona plans to disrupt the ICO market, giving ordinary investors the chance to participate in the future of the crypto industry. Meanwhile, Andreessen Horowitz’s ambitions are even loftier, and span the gamut of end-to-end crypto tech.
“I don’t think this is a flash in the pan,” said Andreessen Horowitz partner Eric Paley. “There’s a utility to get people out of their banks and credit cards.”