Venture capitalist Ben Horowitz has some serious money to back him up and possibly the future of bitcoin. Horowitz and his firm Andreesen Horowitz have invested in major companies like Facebook and Twitter.
More impressive is his firm’s belief that bitcoin will be the dominant way to pay online in the near future. The firm has already invested $50 million in bitcoin-related start ups.
However, skeptics like Felix Salmon feel bitcoin is not what the future entails in conjunction with online transactions. In Salmon’s essay, ‘The Bitcoin Bubble and the Future of Currency’, he writes of how bitcoin is doomed to fail.
“I said, ‘Why don’t we just bet? I’ve read enough of Felix’s stuff to know that would be irresistible to him.”
Salmon accepted Horowitz’s offer anxiously, saying:
“Being challenged by Ben Horowitz is kind of the high point of my career. So I immediately said yes.”
Ben Horowitz Bets With Felix Salmon
Planet Money invited both men to discuss the terms of their bet face to face, and both men accepted for the meet.
The bet claims that 5 years from now in January 2019, a poll will be conducted on Americans. If 10% of those people say that they have used bitcoin for a purchase within the past month, Ben Horowitz wins. If less than 10% have used bitcoin within the past month, Felix Salmon wins.
The winner of the bet gets a pair of alpaca socks, known to be one of the first items obtainable with the digital currency. Many early adopters of bitcoin lost out on millions of dollars as they bought the socks, rather than saving their bitcoins.
Salmon refused to accept bitcoins for the bet, as he believes their worth will only decrease as time moves on. He says:
“There’s no way that bitcoin is going to be a common payment mechanism in five years’ time. It probably will not even exist. It’s just going to be a vague memory.”
However, Horowitz is confident in bitcoin, and believes that he will soon be wearing a pair of the warm alpaca socks.