Marc Andreessen revealed in a recent Bloomberg interview that his favorite piece of investing advice is: “Put all of your eggs in one basket and watch that basket closely.” The legendary venture capitalist attributed that quote to Warren Buffett (it appears to date back to Andrew Carnegie in 1885), which is striking as Andreessen has blasted the Berkshire Hathaway CEO in the past, and Buffett doesn’t exactly follow that mantra.
Buffett warned investors to avoid bitcoin in 2014, labeling it a “mirage” and describing the idea that it’s inherently valuable as “just a joke.” He compared the cryptocurrency to a check or money order, dismissing it as just another method of transmitting money.
Andreessen, the cofounder of Andreessen Horowitz, shrugged off Buffett’s bitcoin critique as ignorant at a CoinSummit event that year. “The historical track record of old white men who don’t understand technology crapping on new technology is at 100%,” he said, according to his interviewer.
The venture capitalist elaborated on Twitter shortly afterward. He described Buffett as a “personal hero” of his and a “world-class expert in many areas,” CNBC reported, but he didn’t value the Berkshire chief’s uninformed opinion of bitcoin.
“I know nothing about railroads,” he added, likely referring to Berkshire’s ownership of the BNSF Railway. “Correspondingly have no view.”
Andreessen and Buffett both make concentrated wagers on businesses they like, whether it’s a high-flying technology company like Facebook or Airbnb in the VC’s case, or the likes of Geico and Bank of America for Buffett.
Although Buffett keeps more than 99% of his fortune in Berkshire stock, and 5 stocks make up 75% of his portfolio’s value, he rejected the idea that he bets the farm on a single company during Berkshire’s shareholder meeting in 2005.
“When we own Berkshire, we don’t think of all our eggs being in one basket, because we have a lot of good businesses,” Buffett said, underscoring the fact that Berkshire has scores of subsidiaries including See’s Candies and PacifiCorp.
Still, Buffett would undoubtedly agree with Andreessen’s recent recommendation of a S&P 500 index fund over something “fancy.” Buffett has encouraged the vast majority of people to invest in tracker funds for years, and instructed that 90% of his estate be invested in a S&P 500 index fund for his wife upon his death.
Andreessen Horowitz (a16z) announced Thursday it is launching a $2.2 billion crypto fund to deploy more capital across blockchain and digital asset projects.
The fund, called “Crypto Fund III,” is a16z’s third and largest crypto venture fund.
“The size of this fund speaks to the size of the opportunity before us: crypto is not only the future of finance but, as with the internet in the early days, is poised to transform all aspects of our lives,” Katie Haun and Chris Dixon, partners who will co-lead the fund, said in a blog post.
The Financial Times reported in April that the venture capital firm would be raising $1 billion for a crypto fund. After that news, several VCs told Insider that firms have been scrambling to get into crypto deals.
A16z’s first crypto-focused fund in 2018 ushered in $300 million of LP commitments. Its second fund, which closed in April 2020, brought in about $515 million.
A16z is also adding a swath of new hires to the crypto team. Among them is Bill Hinman, former director of the SEC division of corporation finance, and Brent McIntosh, former Under Secretary of the Treasury for International Affairs.
An NFT platform that’s branding itself as the “Shopify for NFTs” raised $19 million in Series A funding from investors including Andreessen Horowitz (a16z) and Jay-Z.
Bitski is an NFT marketplace that aims to enable brands to easily create and sell non-fungible tokens through its platforms. Its website encourages content creators to “jump in, zero blockchain experience required,” and allows users to purchase digital art with credit cards.
A16z’s Sriram Krishnan said the venture firm led the Series A funding round and he will be joining the Bitski board.
“We have a number of investments focusing on NFTs and the metaverse – from Dapper Labs to OpenSea. It only stands to reason we invest in the infrastructure that makes NFTs accessible,” Krishnan said in a blog post.
Other investors in the funding round include Serena Williams, MrBeast’s Night Media, and Ari Emanuel, Endeavor CEO. Galaxy Digital, Winklevoss Capital, and Coinbase Ventures participated in a $1.81 million seed funding round in November 2019 for Bitski.
The popularity of non-fungible tokens has boomed in 2020, though some warn that a bubble is forming and ready to burst, particularly in the market for NFT art.
A new “green” cryptocurrency called Chia is set to start trading next week. It was created by Bram Cohen, the inventor of BitTorrent, and uses what’s called “proofs of space and time” to “farm” rather than “mine” new coins.
The model is a less energy-intensive method of producing digital assets compared to bitcoin’s “proof of work” concept, which has led that currency to be criticized for using as much energy as some entire nations.
Chia and the company behind it, Chia Network, have already attracted significant attention from investors.
Chia Network boasts big-name backing from the likes of Andreessen Horowitz, Naval Ravikant, and Cypherpunk Holdings, according to data from Crunchbase.
The company also has attracted publicly traded crypto mining companies like iMD Companies.
“We’re going all-in on Chia,” Rick Wilson, iMD CEO, said in a recent press release. “With our extensive research, we believe that Chia is here to stay and will be utilized on a global financial level. We believe our early decision to farm Chia will result in increased revenues for iMD.”
Chia Network released a Business Whitepaper describing its new cryptocurrency (XCH) on February 9 and launched “farming rewards” on March 19.
Chia will begin transactions and trading on May 3.
Here are six things to know about the new cryptocurrency before it starts trading.
The ‘proofs of space and time’ model
The “proofs of space and time” model is central to Chia’s value proposition. The idea is that users, called “farmers,” will “seed” their hard drives or solid-state drives (SSDs) with software that puts cryptographic numbers into specific “plots.”
These “plots” are then awarded with blocks from the blockchain based on the percentage of total space a farmer has compared to the entire network. Then a VDF server, known as a “Timelord,” verifies that block, allowing the chain to move forward and awarding XCH to the farmer.
Chia Network says the system will provide better security than Ethereum and reduce the energy expenditure costs required by bitcoin’s “proof of work” model.
Chia’s “proofs of space and time” model may be an energy saver, but the method is already creating issues for hard drive and SSD suppliers.
A recent report from DigiTimes revealed the Taiwanese memory and storage manufacturer Adata has seen a 500% increase in SSD orders since the start of April.
The South China Morning Post also reported that Chinese e-commerce platforms, including Alibaba’s Taobao and JD.com, have seen multiple models of enterprise-grade hard drives with large capacities selling out.
“Many people have inquired about large hard drives for Chia mining in the past few days,” one customer service agent at a Taobao online told the South China Morning Post.
The rise in hard drive and SSD sales is a result of the new requirements for storage to “farm” Chia.
If the cryptocurrency ends up being anywhere near as popular as other altcoins, the business model could put real pressure on memory and storage manufacturers’ supplies and pricing moving forward.
A new transaction programming language
Chialisp is Chia Network’s new smart transaction programming language.
The company says its language combines the best aspects of bitcoin’s “UTXO model” and Ethereum’s “Solidity model” to allow for more secure, less energy-intensive functionality.
Unlike many other cryptocurrency offerings, Chia has a formal company behind it, and they intend to go public.
“We hope to file and list our equity in the next six to 12 months,” Gene Hoffman, the CEO and President of Chia Network told Decrypt.
Not only that, but Chia Network has also said it will embrace regulation because management has seen “scams and farces” in the space hurt investors.
“It should not be controversial that investors deserve protection through public disclosure and certainly the public shouldn’t be sold investments without that legally required transparency,” the company’s whitepaper states.
An at-home farming push
Bitcoin mining has become increasingly difficult for at-home miners due to the expansion of publicly-traded mining companies like Riot Blockchain and Marathon Digital Holdings. These companies use ASIC miners that have greater computing power than the average at-home miner could afford.
This has made it so the rewards for mining bitcoin at home no longer make financial sense for many miners, especially when energy costs are considered.
With Chia, that could change. At-home users will have the capability to compete to earn XCH by “seeding” their SSDs or hard drives and, at least for now, the lack of competition should allow for a more profitable experience.
Chia is also a very accessible cryptocurrency. Gene Hoffman, the CEO and President of Chia Network, says it was designed that way on purpose.
“It is super simple. Just download the Mac or Windows version and double click,” Hoffman told CoinDesk. “I’m pretty sure this will be the easiest cryptocurrency to validate for normal people ever.”
New cryptocurrencies are a dime a dozen, but it’s rare to see big-name investors in the crypto space come together with top developers to address a common criticism of crypto, rising energy consumption.
While no one can say whether or not Chia will be a success, it’s clear the cryptocurrency is offering something that most new altcoins don’t with its “proofs of space and time” model.