Eric M. Jackson, CapLinked and Christopher Grey, CapLinked 11 months ago
In a 2014 editorial titled “Bitcoin is the New PayPal,” we made the case that PayPal’s history could provide insight on Bitcoin’s future. Specifically, we argued that, in the short term, the Bitcoin ecosystem would expect a bumpy ride from fraudsters, but with some precautions the various players in the ecosystem could ultimately prevail.
Fast forward three years, and it’s largely mission accomplished. Bitcoin is safe and has entered the mainstream. The fallout from Mt. Gox was short-lived, and the ecosystem is thriving. If you need more proof than Bitcoin’s price soaring past $11,000 this week, then consider the fact that earlier this fall it was added to Google’s payments API.
In some ways our three-year-old editorial is starting to look prescient. Not only has Bitcoin soared past its early stumbles with fraud, but with its current trajectory it really is starting to resemble the new PayPal. And not just in terms of its ubiquity. Yammer cofounder David Sacks — who served as PayPal’s first COO — recently told CNBC:
[Bitcoin] is fulfilling PayPal’s original vision to create “the new world currency.” We actually had T-shirts printed in 1999 with that mission statement. … We believed that, if we could get enough people to participate, money would never need to leave the system. PayPal could become the database of money. … When we got acquired by eBay, that project kind of stopped. But cryptocurrencies like Bitcoin are now fulfilling that original vision.
As Sacks alludes to in his comments, PayPal’s original vision was much more ambitious than just becoming the defacto payment service of eBay. I (Eric) wrote about this vision in my book The PayPal Wars. Here’s my account of a speech given by CEO and cofounder Peter Thiel during a company meeting in late 1999, just a few weeks after PayPal’s product launch: