Benner on Tech: Bitcoin's Woes, Feisty Ev Williams, 1990s Redux
People are Talking About…
You may have noticed that bitcoin isn’t doing so well. Or maybe you haven’t. What with the holidays and catching up on post-vacation email and the fact that bitcoin has so few actual uses (speculation, subject of angry blog posts), well, it would come as little surprise if you didn't see the story about hackers attacking a European bitcoin exchange called bitstamp and stealing $5 million worth of currency. (That’s about 19,000 bitcoins, in case you were wondering). You probably didn’t see that the bitstamp fiasco set off a wave of problems in the wider bitcoin economy, including issues with other trading platforms, bitcoin ATMs and price quotes. You may not have noticed that the price of bitcoin has plummeted to around $250, well below its peak of $1,130 about a year ago. It was, in fact, the worst performing currency of 2014.
But if you were on Twitter yesterday, you probably noticed that Marc Andreessen was really, really upset about the idea that these glitches might hurt the crypto-currency’s future. So he penned a 25-part tweetstorm in defense of bitcoin.
The most interesting thing about the currency’s woes and Andreessen’s tweet frenzy is how clear it’s becoming that bitcoin, in and of itself, probably won’t be all that important a few years from now. The currency’s volatility will, in the near term, make it pretty hard to justify as a store of value, a la gold. (Remember, being a proxy for gold was a popular 2014 rallying cry for bitcoin’s greatness.) Bitcoin's plunging price will also make it hard to use as a currency at, say, Overstock.com.
The underlying technology that makes bitcoin work, the blockchain, still has lots of potential for the payments world. We need a distributed network that transfers value without all of the lag time and fees that banks currently rely on (ostensibly for safety, and also to charge lots of fees). I’m hoping that smart entrepreneurs will start moving away from exchanges and start finding ways to integrate that technology into the broader financial system.
** The big deal: My Bloomberg colleagues Alex Sherman and Scott Moritz report that Verizon has approached AOL about a potential acquisition or joint venture. The telecom would presumably be interested in AOL’s ad-tech, as well as paying subscribers and Internet properties.
** If you read one feature today, make it this Washingtonian feature on the West Virginia town without Internet access:
At the northern end of town is the other visible curiosity in Green Bank besides the telescope: a rusted pay phone. If you’re not from there, it’s ostensibly the only way to reach the rest of the world. “Sometimes you get people passing through who get aggravated they can’t get a signal,” says Bob Earvine, owner of Trents General Store. “But just about anybody will let you use their phone.”
Airbnb is investigating a host in Montreal who installed security cameras in the bedroom and living room, presumably to secretly film guests, BetaBeat reports.
Glassdoor, a site where employees can anonymously review their employers, raised $70 million in a round led by Google Capital and Tiger Global Management, Bloomberg reports. The company is now valued at around $1 billion.
Genius (nee RapGenius) has had its share of problems and now it’s trying to pivot. New York Magazine has all the details about the brogrammers and their new mission to annotate the world.
Lyft responded to Senator Al Franken’s request for more information on its privacy policies, the Wall Street Journal reports.
SpaceX was forced to call off its rocket launch today with about a minute remaining before takeoff, Bloomberg reports. The Falcon 9 reusable rocket was supposed to deliver food and science experiments to the International Space Station. Another attempt will be made this Friday.
Uber drivers in Cape Town, South Africa, have had their cars impounded for not having public transport operating permits, reports Bloomberg. The company has been wrangling with the city government for months over what sort of permits drivers must have.
The Internet of Things is heating up. There were 60 IoT-related deals done worth $14.3 billion in 2014, 40 times the activity in 2013, according to 451 Research. For a comprehensive IoT primer, check out Bloomberg’s QuickTake.
People and Personnel Moves
Ev Williams once said that he just didn’t care about the fact that Twitter had fewer users than Instagram. (He actually used more colorful language than that, which I'll allow you to find here.) Well, the Twitter co-founder is back with a full-throated defense of the social media company and its impact on the way we live now, as well as a critique of “monthly active users” as the be-all, end-all metric for Internet company success.
In the wake of the Fire Phone flop, the company has overhauled its Lab126, the Silicon Valley-based R&D group that developed everything from the Kindle to the Echo speaker, Fast Company reports.
** The company acquired the startup Wit.ai, an open platform that lets developers include voice-activation in apps.
** No one was happier about Mark Zuckerberg’s newly found love of reading than Moisés Naím, whose book "The End of Power" was chosen to kick of the CEO’s book club, A Year of Books, according to Bloomberg’s Sarah Frier.
The owner of the Android mobile operating system is lobbying regulators to increase the amount of cheap cell spectrum available to companies, reports the Wall Street Journal. That could let firms like Google offer an alternative to the big carriers like AT&T and Verizon.
The Federal Bureau of Investigation says that it doesn’t need a warrant to use cell-site simulators, which act like cell towers and capture location and mobile phone information, in public places, Ars Technica reports.
The FBI shouldn’t have accused North Korea of masterminding the Sony hack, says my BloombergView colleague Leonid Bershidsky.
The beginning of the end for cable? Dish will offer “Sling TV,” an Internet service that lets viewers stream ESPN, along with 10 other channels, for just $20 a month, Re/code reports.
BitTorrent might not be just for copyright infringers. Thom Yorke used the service for his new album and made up to $20 million, GigaOm reports.
CNBC will no longer use Nielsen for ratings, the Wall Street Journal reports.
News and Notes
The New York Times’ Conor Dougherty explains why Facebook, Google and a host of startups are fighting to index the mobile world and make apps searchable.
Tech in 2015 is basically a late 1990s redux, argues the Verge. “2015 will be defined by the Revenge of '90s Internet: media and tech giants flirting with each other, dominant players throwing their weight around, and portals, portals everywhere. And CES, starting this week, will offer a big glimpse into what all that '90s dark lipstick looks like on a modern face.”
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
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Timothy L. O'Brien at email@example.com