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As Satoshi Bows, Bitcoin Slow on Wows

SALT LAKE CITY, UT - APRIL 26: A pile of Bitcoin slugs sit in a box ready to be minted by Software engineer Mike Caldwell in his shop on April 26, 2013 in Sandy, Utah. Bitcoin is an experimental digital currency used over the Internet that is gaining in popularity worldwide. (Photo by George Frey/Getty Images)

By Scott Martin for WSJ Venture Capital

Bitcoin was all the rage with investors until it wasn’t.

Like any hot trend of the moment, it enjoyed a few boosters. In this case those included the likes of Andreessen Horowitz co-founderMarc Andreessen and General Partner Chris Dixon.

But the consumer bitcoin dream hasn’t become full reality. The notion that major merchants would jump in and make it a real consumer currency never exactly went according to plan.

For what it is worth, the cryptocurrency enjoyed a spectacular roller-coaster ride, driven in no small part by the mystique of its formation. You can’t make up a better founder story: a mathematical wizard shrouded in mystery creates a cryptocurrency that could potentially challenge the Fed. It is the stuff Silicon Valley’s libertarians eat for breakfast.

Talk of bitcoin as an investment and its creator, who went by the pseudonym Satoshi Nakamoto, have since faded. On Monday, Australian businessman Craig Steven Wright identified himself in a blog post as the man known as Satoshi, creator of the bitcoin digital tokens exchanged on decentralized computer networks.

Maybe it was time to retire the mystery, or maybe the real Satoshi remains unknown. But one thing is for certain: the cryptocurrency has lost its luster. Since its high of nearly $1,000 in late 2013, bitcoin has shaved off half its worth and has failed to climb back in value,according to the Coindesk price index.

That comes as the vision of bitcoin startups driving a consumer movement has been slow to play out. Most of the $1.1 billion invested in bitcoin startups since 2012, based on Coindesk data, went into consumer-focused startups.

Many of these companies are looking for alternative paths now–none of which can enjoy the magical mystery ride of a Satoshi creation myth.

First appeared at WSJ VC

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