VCs investing in bitcoin

[BitCloud]

http://www.businessinsider.com/why-venture-capitalists-love-bitcoin-2013-4

Those thousands of tech-savvy folks who run the bitcoin system have created a new and very low cost method for transferring money around the world

[BitCloud]

article contains some points I wasn't thinking about previously such as "Americans gave $218 billion to charity in 2011" and how bitcoin will lower transaction costs for charities.

Would be nice if people would associate bitcoin with charities rather than SR

[BTCisthefuture]

I think that VC was dead on in saying bitcoin security needs to be improved and is a good focus for VC's.  I believe strongly for bitcoin to become more mainstream we need much better security in the industry and much safer security for the average user out there who may not know much about computers.  Say what you will about banks, one reason people prefer banks over storing cash in their home is that usually your money is pretty safe in a bank.

Interesting point about charities using bitcoin to help keep government away from regulating it or claiming it's used to fund terrorism and drugs. I do worry that an over zealous politican(s)  will use the terrorism or drug card to try to clamp down on bitcoin in the future. If a lot of charities are using bitcoin to reduce fees it adds a good argument against that.

[bit777]

VCs invest in bitcoins as they see a money making machine. It is a no brainer. VCs love to invest in hyped products and companies as their investment multiplies pretty quickly due to the hype.

[Melbustus]

VCs invest in bitcoins as they see a money making machine. It is a no brainer. VCs love to invest in hyped products and companies as their investment multiplies pretty quickly due to the hype.

Actually, good VCs like to build companies over the course of many years. Companies that continue to grow organically. Yes, there's often a "me too!" mentality in investing circles that can be hype-driven, but I think your statement unjustly belittles the diligence, intellect, and medium/long-term thinking that good VCs bring to the table.

[atomium]

VCs invest in bitcoins as they see a money making machine. It is a no brainer. VCs love to invest in hyped products and companies as their investment multiplies pretty quickly due to the hype.

i agree with this but sometimes they could want to be part of something big regardless of big hype in the price

[BitCloud]

VCs invest in bitcoins as they see a money making machine. It is a no brainer. VCs love to invest in hyped products and companies as their investment multiplies pretty quickly due to the hype.

i agree with this but sometimes they could want to be part of something big regardless of big hype in the price

That'd be more applicable to "Angels" - VC's typically have to raise a fund from pension funds, rich individuals etc. and will have to to explain the reasoning behind their investments at some point.

[bit777]

Well of course they do due dilligence, and some of them are passionate. But essentially, it is a numbers game. A casual VC invests in 10-20 companies per year. 8-16 (80%) of them fail miserably, 1 or 2 make it to the IPO stage and multiple cashout. Of course they would try to protect their investment, but in most cases in the tech world VC investments are hype driven. A few examples would be:

1. daily deals market - 1 major site showed incredible growth, hundreds of VC backed sites were born to crash miserably later.
2. social gaming and casinos - same story
3. social networks - same story
4. online food ordering - just a few of those sites sticked, the rest were closed or acquired
5. even the startup incubators are based on hype. techstars and 500 startups had a great success and every second VC thought he could have his own incubator...why?...because when you invest in 30 startups 20k each, that's 600k investment, but if just 2-3 of those 30 make it to the IPO stage you have a multi-million exit.... A numbers game.

Don't praise them too much as they are entirely driven by greed.

Now bitcoins are the hot topic so they all want to jump in and bank big time, as they always did.