(Wired) — Just a
year ago, a bitcoin was worth $13. And today, the same piece of digital
currency is valued at more than $800 on popular online money exchanges.
But Chris Dixon believes that’s still a serious bargain.
Dixon, a partner with the big-name
Silicon Valley venture capital firm Andressen Horowitz, is adamant that
bitcoin could become the primary means of making payments on the
internet, and if that happens, the price of a bitcoin will skyrocket. “I
think it could be easily worth $100,000,” he says.
That may seem crazy, but Dixon is not
alone. Many among the bitcoin faithful believe that current bitcoin
prices are on the low side compared to what they will become. You see,
there are only a limited number of bitcoins — the worldwide software
system that drives the digital currency will stop minting money sometime
in the next century, when there are about 21 million in circulation —
and this means that a spike in popularity will likely drive a huge
increase in price.
Still not convinced? Dixon points to
what has happened with another scarce but widely used internet resource.
“Domain names are an analogy,” he says. “It would have been absurd to
say in 1993 that domain names were worth $10 million each.” But now,
that’s a reality.
Sure, $10 million domains aren’t the
norm. But according to Dixon, the startups funded by Andressen-Horowitz
typically pay a “couple of hundred grand” for a domain name that
includes a no-more-than-average word. “Probably the best investment in
computer history would have been buying domain names in 1993,” he says.
“Better than Amazon. Better than Google.”
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