When Steve Jobs was a boy, he looked up the name “William Hewlett” in his local phone book and was able to reach the founder of Hewlett-Packard at home. The elder technologist offered the future Apple Computer founder advice, some free components and a summer job.
make it clear how geographical proximity can help one wave of innovation set up the next. Even now, when it's unlikely any young entrepreneur will be able to find Mark Zuckerberg in the Palo Alto phone book, hopefuls with ideas still flock to the stretch of towns flanking the San Francisco Bay. The accelerators are there, as are the venture capitalists' offices, the networking events and the pool of engineers.
Would bitcoin benefit from geographic concentration as much as the tech industry has? Silicon Valley veteran and investor Marc Andreessen raised the idea in a recent article titled “What It Will Take to Create the Next Great Silicon Valleys, Plural”.
Venture capitalist Tim Draper, who recently purchased 30,000 bitcoins that the US government had seized from the Silk Road, says he already sees Bitcoin Valley forming, within Silicon Valley.
“I believe that the concentration of bitcoin companies around the Boost.vc accelerator will give those companies a real leg up,” Draper said, referring to the San Mateo accelerator founded by his son, Adam, whose portfolio includes BitBox, BitWall, Coincove and other bitcoin startups.
Bitcoin is not high tech
Concentrated talent and easy exchange of ideas would be good for any burgeoning industry. Yet bitcoin is so different from high tech that it's unclear that what's good for one would be good for the other. Unlike the chip and equipment manufacturers that sparked Silicon Valley, bitcoin companies don't need to set up factories or physical R&D labs to do their thing. And it feels ironic to try to pin down a physical headquarters for an industry based on a global, distributed technology whose very virtue is that users' geographical location doesn't matter.
“Bitcoin Valley, anywhere you want it to be,” Draper joked in an email to CoinDesk.
Most bitcoin leaders admit to having two minds when it comes to the concept of a Bitcoin Valley. Such a thing might be helpful, but is it really needed?
“Now that the internet already exists, something like that is less necessary because everybody can communicate with everybody else,” said bitcoin evangelist Roger Ver in a recent Skype call from a Tokyo restaurant.
Talent pool is vital
To Hemant Taneja of General Catalyst Partners, even in a distributed world, companies still need to position themselves where the talent pool runs deepest, and for bitcoin that could be one of several contender cities.
“New York would give Silicon Valley a run for its money,” he said, pointing to the depth of financial industry talent in the Big Apple.
He continued:
Taneja pointed to Boston, home of General Catalyst payments company Circle, as another strong contender, boosted by the Massachusetts Institute of Technology, which is currently conducting an on-campus bitcoin experiment.
A distributed industry
, founder of Ribbit Capital and funder of Coinbase and other bitcoin companies, sees a more distributed future for the bitcoin industry, with companies cropping up where the user cases are.
With his background in international finance companies, Malka sees a lot of pain points in the developing world; companies in far-flung places may take longer to develop and get funding, but it will happen, he said:
How to become Bitcoin Valley
It may be possible for any location to throw its hat in the ring to host Bitcoin Valley. Bitcoin insiders advise hopeful local or national governments to skip the traditional measures, such as offering companies financial incentives or building R&D centers, and focus on creating a welcoming regulatory climate for bitcoin companies.
Draper warned:
Other countries could compete with the US as centers of bitcoin innovation with innovative regulatory approaches, some have suggested.
“Allowing more experimentation in financial services could help those in countries that don’t have stable currencies (let alone banks) to more easily save and move their money across borders," Andreessen wrote. "Some of these places would leapfrog, innovation-wise, through something like bitcoin”
Ver said he is involved with an undisclosed Caribbean jurisdiction, helping it position itself as a potential bitcoin hub.
“Myslf incuded, thousands of bitcoiners are willing to move anywhere in the world” where conditions are favorable, he said.
However, Taneja pointed out that no matter how favorable the local market conditions are to bitcoin adoption, most companies will only locate a headquarters near the necessary talent. If there ever is a Bitcoin Valley, it will probably be in a location that has both benefits, he said:
“States with the right talent will have an advantage if they create an environment for bitcoin adoption in the market.”
Silicon Valley image via Shutterstock