Andreessen Horowitz (a16z) – a well-known venture capital firm – has announced it will be creating a second fund devoted entirely to digital currencies.
a16z Creates Fund Number Two
The company says it’s looking to center its focus on new use cases for digital assets including decentralized finance, payment systems and content monetization. The firm first gave rise to a cryptocurrency fund back in June of 2018. Approximately $300 million was invested in it. This second fund will be worth more than $500 million.
General partners Chris Dixon and Katie Haun said that they see blockchain as a solid alternative to systems like PayPal, as it doesn’t require banks or middlemen to be involved in the transactions. Blockchain is a tool that gives the power to all those taking part in the transaction and moving the money in question.
In addition, the firm explained in a statement that bitcoin could potentially serve as a strong alternative to gold and that it could potentially garner “safe haven” status in the coming future. Lastly, bitcoin and crypto account for much stronger means of rewarding content creators.
Dixon and Haun explain:
Rather than engaging audiences through centralized gatekeepers that charge high rents and create self-serving rules, creators can use token models that bypass gatekeepers and give their fans a direct stake in their success… Blockchains enable the creation of decentralized networks that make strong commitments – baked into the architecture of the network itself – as to how control and money will be distributed among network participants. ‘Don’t be evil’ is replaced by ‘can’t be evil.’
The staking process that both figures refer to is an interesting one in that it allows users to gain interest on their crypto holdings by joining them together with the crypto holdings of others. As part of a large pool, these stashes grow larger and that interest money can potentially be used to reward digital content creators that develop work users enjoy.
Bringing Things Closer to the Front
a16z says the process works best by keeping all transactions within a decentralized forum. People pay content creators directly. In addition, it keeps more controlled networks – like Facebook and Twitter – out of the fray. Platforms like Twitter have been known to censor or eliminate posts that they either don’t agree with or feel go against the norms they’ve created. One recent complaint has to do with Twitter shadow banning posts or accounts relating to crypto.
a16z has a long history of appreciating and investing in crypto. The company was one of the first to ever invest in Coinbase – a popular cryptocurrency exchange stationed in San Francisco – back in the year 2013. In addition, many institutional trading platforms – such as Fidelity Investments – are working to give their clients more access to crypto and digital currencies, suggesting bitcoin is becoming more mainstream.