If Andreessen Horowitz has any say in the matter, crypto regulation could be just around the corner.
As unsavory as it may sound, Washington tends to be more swayed by powerful interest groups than the will of the general public. And if any sector of the American economy needs a lobbyist to represent its interests, it is the blockchain and cryptocurrency space.
Andreessen Horowitz has had a storied history in Silicon Valley and there are few who who are likely to have more sway over policymakers when it comes to the regulation of cryptocurrency.
Crypto investors, both active and casual, may have finally found a vehicle through which their voices can be heard on Capitol Hill and by financial watchdogs. That is, of course, if regulation is indeed the best route from here.
Clandestine Meeting Between Andreessen Horowitz and Government Officials
Details of the Crypto Regulatory Summit, which was hosted by Andreessen Horowitz in California, have only just begun to emerge. The summit was held in May, just before the announcement of Facebook’s crypto-in-the-making, Libra.
In a fireside chat during the summit, Marc Andreessen drew parallels between the beginning of the internet and the beginning of cryptocurrency, describing the remarkable similarities of their growth paths.
“[T]he evolution of the internet over time has so many echoes and comparisons to what we’re seeing, what I’m seeing, with cryptocurrency and blockchain,” the Netscape co-founder said.
Andreesson noted that the internet began as a decentralized mechanism, designed to withstand a nuclear attack. Before 1993, the internet was publicly funded and solely used as an academic forum.
Enlightened regulators and policymakers decided to legalize commercial activity on the web… and handed the internet’s backbone to the telecom companies.
Those early days were characterized by small and marginal players, he noted, and largely dominated by fly-by-night operators. Security was weak, commercial viability was questionable, and mainstream adoption was hampered by technological processes most people couldn’t understand and cumbersome procedures most couldn’t be bothered with.
The parallels to crypto, in the eyes of Andreessen Horowitz, are stunning.
The Original Sin of the Internet
According to Andreessen, the internet suffered from one ‘original sin’: browsers lacked a buy button. Early internet developers were unable to integrate a payment structure, and banks and credit card companies were not interested.
The result was an internet dominated by advertising, bringing with it all the high-profile privacy and data problems the internet has created, along with “eighty percent” of what annoys people online.
The proliferation of cryptocurrency, Andreessen reckons, could help revisit that original sin. At present, he notes, cryptocurrency is not unlike the early days of the internet. “[I]t’s like a fringe activity but it’s not quite mainstream yet and it’s still kind of too hard to use,” he said.
“[I]t feels to me like its 1992,” Andreessen added. “[T]he useability gap still has a ways to close although it’s getting closer.”
If he is right, the breakout years of enhanced useability and significant user growth are not far away. The resources and capital are there. The talent is abundant and the economic inclusion features and freedoms which crypto would confer are pressing.
The only ingredient missing, especially if crypto is to be as U.S.-centric as the early internet, is a critical mass of enlightened policymakers. Let’s hope Andreessen Horowitz’s unofficial lobbying efforts can pay dividends in Washington.