In Science and Space: According to one of its key partners, Silicon Valley venture capital firm Andreessen Horowitz is counting on cryptocurrencies to shatter the overly concentrated Big Tech power, which the company helped to create.
I don’t think any of us anticipated this kind of focus, he said on the Tech Tonic podcast of the Financial Times. “Our company invests in entrepreneurs, so I don’t think it’s a positive consequence from a social and business standpoint. The concept that five businesses would monopolise the Internet is tremendously detrimental to entrepreneurs and bad for VCs. “
Chris Dixon, the head of Andreessen’s cryptocurrency division, claimed that a small number of firms, including Facebook and Twitter, which the VC firm backed early on, had seized control of the internet.
His remarks came as the firm launched a new investment strategy built around cryptocurrencies and digital tokens to replace traditional equity investments made by VC firms and create a new, community-led model for investing in high-growth start-ups. seeking to rectify.
Venture capital firm co-founder Marc Andreessen is one of the longest-serving board members of Facebook owner Meta. The firm made $78 million from its seed investment in Instagram when it was acquired by Facebook in 2012, a 300 percent return.
Andreessen also invested $80mn in Twitter before it went public, and was among financial backers of Elon Musk’s initial bid for the platform earlier this year. Dixon believes that blockchain technology provides protection against anti-competitive activity by creating rules in smart contracts written in computer code.
“Undoubted, [business people] Will try to create monopolies and large businesses and maximize shareholder value,” he said. “What we can do to build a better Internet is to create new systems where network effects accrue to the community rather than to the companies.” Since its crypto fund was launched in 2018, Andreessen has raised over $7.6 billion to invest in cryptocurrencies and related technology companies.
Instead of acquiring traditional equities, it is investing in tokens, which are a form of digital asset built on a blockchain that can be traded. “It’s a completely different kind of economic model in Web3 in which our investments are mostly in tokens rather than companies,” Dixon said. “And that was a big change. That’s why we created a separate crypto fund. . . It requires a completely different legal structure.”
“I haven’t seen any evidence that [dominant] Companies will present,” he said. “We have a much wider berth to operate our start-ups than in areas like AI and virtual reality, where existing ones are making significant investments.” While cryptocurrency prices were in a gradual decline since the end of last year, the market collapsed following the collapse of the TeraUSD stablecoin in May. Market volatility drove the price of bitcoin to pre-pandemic levels and contributed to the collapse of many crypto lenders and hedge funds.
Dixon said crypto was an opportunity for new entrepreneurs and start-ups, as companies such as Amazon and Google focus on other emerging technologies such as artificial intelligence and virtual reality. Andreessen’s portfolio includes crypto exchange Coinbase, NFT marketplace OpenC and FlowCarbon, a crypto carbon credit venture founded by former WeWork chief executive Adam Neumann.