The ups and downs of the controversial digital currency Bitcoin aren’t bothering serial entrepreneur Jeremy Allaire. He’s getting ready to launch Circle, a new enterprise that will let businesses and consumers easily buy and sell everyday items using digital money. Allaire recently spoke about why he thinks Bitcoin represents a massive new business opportunity that could rival the birth of the Internet. Here’s what Globe reporter Hiawatha Bray found out.
1Allaire likes getting into technology on the ground floor. The Internet first caught his attention back in 1990, when he was studying political science, economics, and philosophy at Macalester College in St. Paul.
I got totally excited and inspired by this global network of computers that were all connected. I became convinced that this was the future, and basically for about 2½ years in college, poured a huge amount of time and energy into thinking about the Internet, writing about the Internet, weaving it into my course work.
When Allaire’s brother, Joseph, developed ColdFusion, a program that added powerful interactive features to Web pages, Jeremy found himself leading a software company.
It was a bunch of us just out of college, and the product got put up for sale on the Internet. Thousands of people started buying it. That company went from 12 or 14 of us to, in five or six years, a $120 million revenue, profitable, publicly listed company with 700 employees at its peak. That was wonderful.
The fun continued when the company merged with another software firm, Macromedia. There Allaire came across a program called Flash that let computers show high-quality videos.
Broadband was just starting to take off, and I believed that was going to create a huge transformation on the Web. Video would become as ubiquitous as text on the Internet. New kinds of publishing platforms would be needed to enable the world to express itself in video.
Allaire’s next company, Brightcove, made it easier for companies to develop and distribute online videos. But after a decade, his training in economics and politics was pushing Allaire in a new direction.
I wanted to understand more deeply how the international monetary system worked, what were the safeguards, how did governance over monetary policy work, what were the implications of that for the world economy?
In early fall of 2012, I got exposed to Bitcoin and became really interested and fascinated by it. It was about a year ago that I became convinced that there was a very large opportunity and began to scope out a vision for what is Circle today. It has the potential to have a dramatic impact across the world.
Allaire thinks Circle can fulfill Bitcoin’s promise of cheap, fast, highly secure financial transactions.
It allows you to make payments and money transfers instantly with near-instant settlement, with effectively no cost. It’s highly portable, highly secure, and can be used anywhere in the world. The belief is that over the long run, Bitcoin or son of Bitcoin becomes a global currency.
Bitcoin is a new currency, unbacked by any governments. The value of the currency changes dramatically from day to day. A major Bitcoin exchange, Mt. Gox, just went broke amid reports that millions of dollars of Bitcoins were stolen. But Allaire remains confident about Circle and his visions.
When I started this company a year ago, [Mt. Gox] was an important company in the ecosystem, and my view was, these guys are clowns and they’re going to find themselves in real trouble. I’m actually surprised it’s taken this long. To have this sort of cruft cleared out of the market, to make room for credible companies, entrepreneurs, products that work in a compliant way with government, and are focused on meeting real consumer protection needs, it creates a real opportunity.
One reason for Allaire’s faith: Americans’ faith in technology.
Many of the greatest Internet technology companies in the world have been built in the United States. There’s just an inclination that if there is something that is disruptive, that is technology based, that people want to build innovation around, that America is a great place to do that. There’s just that kind of fundamental belief in risk taking. Free-market innovation and technology-driven innovation, and Internet-based innovation are just part of American society.Hiawatha Bray can be reached at firstname.lastname@example.org.