A failure to adopt bitcoin will rob our nation of future economic growth and job creation. This fundamental fact should spur Congress to understand this new currency and create a bright line regulatory environment.
Congress is playing an increasingly important roll in introducing bitcoin to the American public. Most recently, the House Small Business Committee heard expert testimony on the benefits, and challenges, of cryptocurrency for small entrepreneurs.
The engine of America’s prosperity remains its unwavering support for entrepreneurs building their own future. Thanks to new technology platforms developed in the past few years it has never been easier for anyone, anywhere to build a business in their living room, using tools like Amazon Web Services, BigCommerce and Facebook to go from conception to sales.
Consumers around the world are clamoring to buy America’s goods. They already have the ability to browse our stores online, but in many cases they are unable to submit payments using existing infrastructure.
Traditional credit card merchants saddle entrepreneurs with high processing fees while providing consumers with questionable security.
In short, our present payments system is directly harming the ability of America’s small businesses to compete in a global economy, precisely at a time when Main Street needs access to remote customers.
With bitcoin, small business owners don’t have to worry about credit card fraud, processing fees or whether a customer is buying domestically or internationally. Through its design, bitcoin solves all of these problems, ensuring that transactions are guaranteed once they are processed. Even people in the world without bank accounts, but who have mobile devices, will finally be able to take part in the world economy.
More importantly, bitcoin allows for the creation of entirely new business models that will empower entrepreneurs. Imagine getting paid a penny each time someone views your music video on the web, or reads an article you posted. Every time a million people download your content, you make $10,000.
Today, such micropayments are impossible due to fees and infrastructure, but with bitcoin, such payments will become seamless. This means that content creators could more easily make a living from their work, encouraging more innovation and creativity in our economy.
As a venture capitalist, I see incredible potential for bitcoin to evolve and become the central ingredient for all kinds of new businesses. To get there, we need to solve several intricate problems that will require Congressional cooperation.
Chargebacks are impossible with bitcoin, even in cases of fraud, as is counter-party verification. The security of the system is dependent on robust digital wallets, but there are few good options on the market today. bitcoin’s design also makes it difficult to track cash movement and prevent money laundering.
Solving these problems is not easy, which is why it is critical that founders of startups like Circle, Coinbase and BitPay team up with policymakers in Washington to ensure that we can build bitcoin into a sustainable and profitable technology for everyone.
Startlingly, the European Union is ahead of the United States in having a more flexible and robust regulation regime to handle bitcoin, and Europe has been the launch pad for many entrepreneurs in the space. To compete we must rapidly change our regulatory environment around taxes, securities laws, and banking to better encompass digital currencies like bitcoin.
Through my own experience as co-founder and chair of Advanced Energy Economy, a nonprofit policy group focused on advancing advanced energy legislation, I believe the only way to get so many disparate parties working together is to convene all of the relevant stakeholders and begin to lay out a vision for the future. There is a lot of work involved here and limited time to get it right, but only by working together in common cause do we stand a chance to seize this opportunity.
Jobs are the currency of politics today, and bitcoin has the potential to unlock the latent entrepreneurship of Americans across the country. Regulators should not turn their backs on the future of commerce just as we are getting started. By working together, we have the opportunity to support the next generation of small business owners, and add some more fuel into America’s innovation engine.
Hemant Taneja is a partner at General Catalyst. The firm has invested in BigCommerce, Circle, Stripe, and ZenPayroll.