Tech Crunch: VCs getting more involved in Bitcoin

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Chris Dixon joined our co-editor Eric Eldon this morning at Disrupt NY 2013 to discuss his move out to San Francisco for a job at Andreessen Horowitz. One of the areas that interests him the most is the much-hyped Bitcoin space.

The reason why Dixon is so interested is because it solves many problems for those who have tried to start a financial company in the past. He said: “There’s the whole problem of fraud online, which is a massive problem, along with all of the payment fees. The interesting thing with these math-based currencies is that you can do transactions without trusting the person at all.”

He went on to discuss the beauty of Bitcoin, mostly the anonymous aspect of it, requiring no authentication or trust on either side of a transaction. Dixon stated: “The Internet is an anonymous network, but it requires authenticating identity. The exciting thing about these new currency schemes is that you have these anonymous payment systems grafted onto anonymous networks.”

An example of the type of companies that Dixon is interested in investing in when it comes to Bitcoin are the companies like “Pay For Bits,” who would like to be the PayPal of Bitcoin. Due to regulations alone, there’s been a massive wall in between startups and doing something like this with actual money.

Dixon feels like the best entrepreneurs on both coasts will probably start getting into Bitcoin and that means that we’ll see more innovation in the space.

While top entrepreneurs won’t necessarily jump off of what they’re doing to start a Bitcoin company, but there are elements of the anonymous currency that could creep into existing products. For example, Reddit added Bitcoin as an option to purchase gold on the site, and we’ll have to see more of those types of things happen before the real products and investing starts.

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