Announcement of Apple Pay has created a stir in financial services companies.
While all these companies are eagerly waiting for the payment system, Marc Andreessen thinks Apple Pay’s popularity will be short-lived and in the long term, Bitcoin will secure a position as the real innovation.
A few hours ago, Andreessen took part in a fireside chat with Emily Chang, Bloomberg West anchor and Studio 1.0 host. This happened on the last day of Dreamforce 2014, Salesforce‘s annual cloud computing conference in San Francisco.
It has been 20 years since Andreessen founded Netscape Navigator. Now he runs the venture capital firm, Andreessen Horowitz.
Netscape’s anniversary is in this week and keeping that in mind, Andreessen said that he expects more changes in the payments industry in the next 5 years than the changes it faced in the last 20 years.
He also pointed that Apple Pay and bitcoin are the 2 most important driving factor of the change.
The team at Andreessen Horowitz believes that bitcoin is the most radical and innovative thing.
He added that the digital currency is something that can have more impact than 20 years whereas Apple Pay will probably dominate for only 2 to 3 years.
It will be interesting to see how the combination of these 2 will cause an enormous change.
Tim Cook, CEO of Apple, revealed Apple Pay last month and described it to be an entirely new payments solution.
The concept is very novel. However, Andreessen diplomatically asserted the statement to be false.
He agrees that Apply Pay is innovative but he thinks the innovation is very constant with the status quo. Its selling point is that it doesn’t need any massive structural change.
He said that one needs to face the chicken-and-egg problem to reach the other side of universal adoption. Apple Pay is calibrated to avoid that as it kind of plugs into the existing system.
It’s not the same for Bitcoin but Andreessen thinks larger transaction volumes could be a long way off because of the same chicken-and-egg scenario.
Andreessen added that venture capital is not a batting-average business but it is a “slugging-percentage” business. He accepts that Bitcoin might fail but he is hopeful.
For him, it’s not only about being right but it’s about how right he is.
He shared that Andreessen Horowitz invested approximately $50m in bitcoin companies including TradeBlock and Coinbase.
The Venture Fund is always in search of bitcoin-focused opportunities.
He finished the chat with a conclusion stating that he is very confident about the concept of crypto currencies. He also strongly believes that the likelihood of Bitcoin becoming vitally important is high.
In his conclusion he said that be it this year, next year or 10 years later, crypto currency will rise. Apple Pay might govern the market momentarily but Bitcoin technology is here to rule in the long run.
Andreessen spoke with great confidence and really believes in the digital currency’s power to make changes.