Three reasons why LinkedIn founder is bullish on Bitcoin

Reid Hoffman, a billionaire investor in the venture capital circle, co-founder of LinkedIn, and former senior vice president of PayPal, has invested in more than 60 startups, including Facebook and Digg.
The billionaire has now made it clear in an interview that he is bullish on the future of Bitcoin. Let's hear what he said.

Reid Hoffman has always had a keen eye for identifying which tech startups have the most potential. As the former chairman of LinkedIn and an early investor in Facebook, Airbnb, and Dropbox, his past resume has repeatedly proven his unique vision in the tech circle, picking out gold-like tech startups when others are still in a state of ignorance.

Recently, there has been a rumor in the technology circle that he is about to bet on Bitcoin.

As a full-time partner at venture capital firm Greylock Partners, he claims that his main focus is currently on finding “   Looking at entrepreneurs around the world, especially those who can bring new business ideas, which may create a very considerable and new market space for us   ". Wences Casares, co-partner of Xapo startup, is an entrepreneur who meets the conditions in quotation marks. Xapo is a startup from California that acts as a Bitcoin wallet and Bitcoin storage business. Under Hoffman's promotion, venture capital firm Greylock invested $20 million in this technology company targeting the future of Bitcoin last year.

In his investment statement written in July last year, he said: "Behind Bitcoin is a technology with great disruptive influence. It is currently the leader in digital currency and its growth rate is amazing."

Then, in November of that year, a month before Bloomberg declared Bitcoin the worst performing currency of 2014, he announced his own big personal investment in the industry: $21 million into Blockstream, a Montreal, Canada-based startup that aims to improve the core technology of Bitcoin’s “blockchain,” the foundation on which the digital currency currently rests.

Today, we are honored to invite this most talked-about investor on the Internet to talk to us about the future of Bitcoin and why Bitcoin, such a controversial thing, is destined to gain a foothold. Next is our interview time, and the content has been edited for simplicity.

Q: When did Bitcoin first interest you? When did you become a believer in Bitcoin?

Ever since I talked to Wences Casares (a leading figure in the Bitcoin community), Wences Casares is, in my eyes, the “Patient Zero” of the “Bitcoin Viral Effect”.

In the past, I had paid attention to the Bitcoin market because Wences promoted the concept of Bitcoin to several people around me, such as Charlie Songhurst, the founder of Katana Capital. But no one thought Bitcoin was a big deal. Later, when people kept mentioning Bitcoin, I finally became curious. So in the summer of 2013, I asked for Wences' contact information. After we met, we had an in-depth and detailed conversation. He explained the Bitcoin theory to me in the clearest language, and I was immediately excited.

ask:   What do you think is the most interesting thing about Bitcoin? What is its appeal?

Once I dug deeper, I realized that there are actually three aspects to Bitcoin’s future.

First, it is an asset, like digital gold 2.0; second, it is a currency, a new type of digital currency that can completely get rid of physical currency; finally, it is a platform on which you can develop various financial products and other related products.

These three characteristics together lay the foundation for the future of Bitcoin, and we are sure that it will be one of the currencies used worldwide (if other digital currencies come into view). Even if Bitcoin does not become a global currency, there will definitely be other electronic currencies to replace it.

I believe that if a global currency can be both an asset, a currency, and a platform, it will bring us unprecedented space for innovation. After breaking through national and other restrictions, it will be able to bring new products and services to everyone.

Q: You have made it clear that you are not very concerned about the daily trading price of Bitcoin now. You are more concerned about the long-term investment returns of Bitcoin. Can you explain your thoughts to us?

My investment philosophy is super long-term. I never do short-term speculative trading. For example, "Oh, I held this stock for a year and then I sold it." I only invest in long-term trends, which is one of the important reasons why I chose to be an angel investor. When I invested in Airbnb, no one knew about it. It was just a small sprout that had just broken through the ground. At that time, most people said, "This is impossible! No one wants to give away their rooms to strangers to sleep!" But I don't see the problem that way.

When I invest, the questions that linger in my mind are: "What should the world look like? Is the company I'm investing in part of the future? Is this business plan the best way to achieve that future?"   So I won’t care about it for at least 5 years after I invest. When it comes to Bitcoin, the above is my investment thinking.

Q: The price of Bitcoin once soared to over $1,000, but since the end of 2013, its price has begun to fall sharply. What do you think is the reason?

I think it's still about speculation. A lot of people actually think, "Oh my God, I have to get in on this." And then they see it as an opportunity to get rich quick.   Bitcoin's surge and plunge are all due to speculation. Speculators are not long-term investors, they just calculate how much they can get from selling this time and then get off the ship quickly.

To tell you the truth, I don't even look at the price of Bitcoin. I don't even know how much Bitcoin is now. I estimate it's about $200. If it falls below $200, then its fluctuations won't be so drastic. . Today, the price of Bitcoin is tending to normal value.

ask:   How far do you think Bitcoin is from being widely adopted by the public? What obstacles are preventing the widespread adoption of Bitcoin?

There aren’t enough use cases for Bitcoin to become truly popular.   To be ideal, it must be easy enough to use and reliable enough to meet people's daily needs.   In fact, the market that needs this kind of digital currency the most is not the United States, but Argentina, Ukraine, and Russia. In these places, Bitcoin is still a long way from truly meeting the daily needs of the public.

Once you expand your Bitcoin business to these regions, you must figure out in advance when and where people will need to use Bitcoin for transactions. Is it a cross-border transaction? Or is it something difficult to operate and has strong special transactions?

Although Overstock accepts Bitcoin payments, every American now has a credit card and can use it to pay at Overstock, so there is no need for them to change their trading habits.   Most technology products are not accepted by the public simply because they are cool. If they are to be accepted by the public, they must cater to a specific need.

Q: Do you have any good advice on Bitcoin investment?

In short, this is very much like venture capital. I want to tell angel investors who invest in Bitcoin businesses that although I have said that the possibility of Bitcoin's value falling to 0 is very, very low, if you are not willing to take risks and are not mentally prepared, then I suggest that you should not invest in Bitcoin.

If you are really interested in Bitcoin, if you really believe that the future of the world should be like this, and if you are willing to contribute your own strength to promote the realization of the future, then join.   If you don’t have a safe place to store your wealth, and if you don’t trust banks or government-issued currencies, then Bitcoin will provide a more ideal place for your wealth.