It seems like there’s an accelerator specializing in everything: there are women-oriented accelerators, accelerators focused on specific towns and accelerators dedicated to the trendiest technologies. The Boost Bitcoin Fund falls into that last category.
Its appearance in May came in the middle of discussions of the long-term viability of Bitcoin. Essentially, Bitcoin is a trendy technology — it’s virtually unknown outside of its tech-centric user base. The announcement of a startup accelerator dedicated solely to improving the ecosytem around Bitcoin can seem like a risky venture, when you consider that no one knows if the currency will crash or be legislated out of existence in the next few years. Venture capitalists, however, look for big risks because they can lead to big wins.
The problem with the concept of a Bitcoin accelerator isn’t that Bitcoin is a risky technology to bet on. The real problem is much deeper.
On-Trend Accelerators
Everyone’s talking about Bitcoin these days, at least in certain circles. It’s interesting and timely. The same could be said about Facebook’s platform four years ago, when Andrew Chen remembers visiting incubators where everyone was working on Facebook apps. Given that Facebook has such high adoption rates, the creation of so many Facebook-based apps isn’t a surprise. However, from our current vantage point, the idea of creating an app solely on the Facebook platform today is likely to be considered a bad bet.
At the time, though, there was a certain sense that this was the next big thing; that the Facebook platform had major potential. There was also an appeal to having something so on-trend attached to your name, whether you were a developer or an investor. Being able to tell people that you’re involved with whatever is currently cool, even just at the level of investing, can feel good.
Trendy Beyond Investment
It’s interesting to note that investors aren’t the only ones suddently interested in working with Bitcoins: the currency has caught the attention of hackers. Mt. Gox, the most popular Bitcoin exchange regularly faces attacks, resulting in plenty of downtime. Bitcoin’s lesser known competitors, like Litecoin, face minimal attacks because they just don’t have the same level of popularity — there aren’t enough people using those currencies to make stealing them worthwhile.
Most of the interest in Bitcoins these days is because of its notoriety and technical challenges, but the sudden popularity shouldn’t be taken as a sign that anyone should dive into working with the currency. For those entrepreneurs who see a deeper reason to commit to Bitcoin — or any other trendy platform — that’s great. But for those people who just keeping hearing the terminology and want to get involved because of the cool factor, it’s well worth reconsidering.
Image by Flickr user FutUndBeidl