Here's How Bitcoin Is Like the Early '90s Internet

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March 28 (Bloomberg) -- Estimize Founder and CEO Leigh Drogen discusses Bitcoin on Bloomberg Television's "In The Loop." (Source: Bloomberg)

's estimated $34 million collection.

We will show you how you can bid on one of his picassos or monets.

I will see you back here in two.

? microsoft ceo satya nadella says he will hold nothing back in his effort to get microsoft programs across all devices.

The company believes office software the -- for the ipad, the first time they are putting the program on the tablet.

We have a guest who's latest post is entitled "the enemy of my enemy is my friend -- why ms office is coming toios." is this an admission to a certain extent that life has changed, business has changed, and you need to be competitor -- competitive on all platforms?

He realizes pc sales are flat and mobile is next.

They need their productivity software on mobile.

Apple is where it is at.

For apple, they see that microsoft is not their competitor anymore, it is really google.

It makes sense.

Doesn't mean people will start the work on the ipads?

Culturally, you got use to your ipad as being more of an entertainment device as opposed to a work device.

But that, you think, could and would change?

I see tablet as more of a consumption thing.

But you never know how it will shake out with the enterprise of what people will end up doing on tablets and how it can transform.

But i think right now the tablet is mostly still -- analysts are talking about this is a massive revenue opportunity.

Could this be the thing that really starts to bemis company around?

Let's face it.

This has effectively been this ge of the tech space?

Staid, maybe cap laggard.

Microsoft is treated as such in the market with a multiple it gets and i don't think it will change much because of this.

But microsoft earnings has been rising significantly and resident -- revenue has been rising at a pretty good clip.

Stick with me.

We will talk about the decline in bitcoin prices and what it means.

? ok, you are watching "in the loop" live on bloomberg television streaming on your phone and

I'm just reagan and for betty liu.

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We will be back on the market again in 30 minutes.

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In the statement, the foreign ministry called the leak it despicable attack on national security.

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I want to bring on leigh drogan.

Bitcoin, interesting developments with the irs coming out and saying bitcoin, this is property, it is not a currency.

I know you have written about this and you talk about how bitcoin is a little like the internet in early 1990's. explain your thesis.

I might want to poke some holes in that one.

Think of bitcoin as a put a call just as the internet.

Up until netscape, we did not really have a way for people to get around the internet.

You do not see why the adoption of the internet until then.

Bitcoin is the same way.

I think because people focus on the price of bitcoin so much as an asset, they don't really get the prowler of the underlying protocol.

What we are going to see coming up in the next several years, and it is starting, you will see apps built on top of the protocol that allows people to interact with bitcoin better and you will see the view of the coin moving away from asset that people want to hold as an appreciating thing and more of a tool to transfer value amongst people.

What i would say, i agree with you is it could be an amazing tool to transfer value.

The technology behind this is pretty incredible.

But i also question whether the coin is really the vehicle that ultimately survives.

I think back to the days of napster, for example, what people wanted to share downloaded music.

Napster what hit with a whole slew of legal hurdles.

The music industry coming out and saying, no, you just can't do this.

But it always felt pretty innocent, just a bunch of kids trying to share music files.

They were filling a need in the marketplace.

On the other hand, you got bitcoin, which also is running into a lot of legal troubles, if you would.

There is more incentive before federal authorities to come down hard.

It is not just the music industry but federal authorities who want to come down on bitcoin pretty hard because of the illegal element around this.

In other words, one of the reasons it was first used was to buy drugs on silk

The ebay of drugs.

Is this different in that will authorities have a bigger problem with it because of the origin and because of this painted feeling that it is this -- that is associated with the underworld?

Two major things.

All major trends start with a small group of people with a very specific interest in seeing that technology developed.

They spread out from there.

There was a great blog post.

I don't remember who it was written by, but basically what would happen if the federal government introduced cash into the market and cash had not existed before?

And all the issues you with the around cash.

Basically all of those things are worse than bitcoin.

But you think of cash is a mechanism for buying and selling illicit things.

Even better than bitcoin is at doing that.

About not online.

I completely agree.

And harder to transfer cash, say, from country to country then with bitcoin.

So the biggest thing with bitcoin the government is worried about the taxation.

This is where the irs willing the other day really has come in and heard the coin the past couple of days but i do not believe will hurt it in the long -- -- if you bought bitcoin for $500 from that -- today and three days from now it was worth 500 and $50 and you bought a lattee with that bit of that bitcoin, you need to pay taxes on the appreciation of the bitcoin even though you used it to buy a physical good and you have to track of the appreciation and what you bought.

What people are saying is it will make it unduly -- this is what i am saying.

You have a government -- not the music industry -- a government that is not supported and looking for ways to regulate it.

Ultimately, does someone harness this technology work with the government or have more regulation involved to create a product that can do a lot of what bitcoin can already do but does it within the confines of a legal structure?

There will be regulated apps basically, but when you think about the difference between napster and bitcoin, napster was a company.

It was not an open source piece of software.

That is why it got taken down at the end of the day because the founders could not deal with all the pressure being on themselves and the legal ramifications personally.

But bitcoin, nobody controls bitcoin.

There's nobody to sue.

You can see the individual apps but there is always another one.

But then it runs in the circle of, do i want to put my money in bitcoin if i am worried about the volatility?

Here is the important aspect.

You will see apps on top of bitcoin where there is no currency risk of using bitcoin as the protocol.

You can basically build a new ach on top of bitcoin where money gets transferred from your bank account to something like queen base and cooling base immediately to the coin.

-- coin base.

There was this instant transfer.

But he is now under house arrest

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