A Financial Times Journalist and a Writer For The Economist Beat Up On Marc Andreesen

First up, Glenn Fleishman who publishes The Magazine on Medium and who our readers may know as a contributor to The Economist's Babbage blog
From Medium:

On the Matter of Why Bitcoin Matters

Marc Andreessen was a big part of turning the Web into a mainstream experience, but seems to misunderstand Bitcoin profoundly, writes Glenn Fleishman.

Marc Andreessen wrote an essay for the New York Times about Bitcoin, “Why Bitcoin Matters,” in which he attempts to explain the relevancy of the digital currency for the future of commercial transactions. He uses analogies, allegories, history, and ostensible facts to build his case.

However, I believe he fundamentally misrepresents or misunderstands key aspects of the technology, ecosystem, and impact, despite Andreessen Horowitz, of which he is a founding partner, having just under $50m in investment (fully disclosed) in “Bitcoin-related startups.” I own no Bitcoins; Marc has a “de minimis” amount. (I will note that someone owning Bitcoin investments and not Bitcoins is the same as owning gold-mine investments and no gold.)

I recently spent weeks researching an article about the technology challenges affecting Bitcoin for the Economist: “Bitcoin under Pressure.” Some of my insight is drawn from talking to miners, academics, and software engineers about Bitcoin’s past, present, and future.

Pained analogies to the past

Andreessen attempts to draw a parallel between the birth of the personal-computing era and the explosion of the publicly accessible Internet and Bitcoin. These are fundamentally flawed analogies.

A mysterious new technology emerges, seemingly out of nowhere, but actually the result of two decades of intense research and development by nearly anonymous researchers.…What technology am I talking about? Personal computers in 1975, the Internet in 1993, and – I believe – Bitcoin in 2014.

There’s a significant difference between anonymous and unheralded or perhaps even so many millions of people we don’t track them individually. While there are a number of significant milestones and breakthroughs in both PCs and the Internet on the road to mass adoption, there is no single figure like Satoshi Nakamato, the pseudonymous creator of the Bitcoin protocol and initial software implementation. (He may be an individual or a collective that operated under that name.) We know where CPUs, MS-DOS, TCP/IP, SSL, and the like came from and sometimes even every step of their design. (Marc was involved in creating SSL, for instance.)...MORE

Coming in from a slightly different angle is FT Alphaville's Izabella Kaminska writing at her personal blog, Dizzynomics:

Segregating Bitcoin’s value systems

I hate to bore people with more Bitcoin stuff. But I need a platform to express a point I’m trying to make on Twitter long form.

I appreciate this is only my opinion. Given it contradicts the opinion of someone like Marc Andreessen — who is obviously a much better authority on monetizing digital protocol systems than me — I appreciate it’s going to be hard to digest by some people.

But the point I’m trying to make is that Bitcoin’s “store of value” value is entirely disconnected from the value of the Bitcoin open-ledger system.

The former’s value is transitional – the product of speculative inflow into a scarce synthetic asset that has no utility, or mutual interest holding users together other than its capacity to be pumped & dumped via the conventional speculative ponzification effect.

This value is entirely dependent on wider economic conditions. If interest rates on conventional currency go up to 5 per cent, the risk of sitting in a zero-yielding asset like Bitcoin begins to outweigh the potential benefits. It’s an economic preference game. End of.

It’s true that unlike gold or commodities, Bitcoin’s value cannot be disrupted by new supply. This gives it a theoretical advantage. But that advantage is meaningless because there’s nothing stopping substitution into a different asset altogether if and when the price gets too high. Just because Bitcoin regulates its own supply doesn’t make it immune to the laws of supply and demand, and those laws state when something gets too pricey demand falls, and substitution begins to make sense.

Seigniorage flows to a new asset entirely.

In something like a currency system that incentive is heightened if the distribution of wealth within the original system gets more unequal over time. After all, it makes much more sense to take a punt on pumping and dumping a new substitute at a certain price level, for much larger relative rewards, than being a late entrant into an overly pumped network....MORE

 Poor Mr. Andreesen never saw what hit him.