Weekend news round-up: Bitcoin not a currency, tech bubble’s silver lining

31 Mar 2014

In our round-up of tech news from the weekend, bitcoin is a property, not a currency, cheap services might be the silver lining of the tech bubble, and what motivation makes a great Silicon Valley venture capitalist?

Bitcoins unworkable as currency

Finance blog Credit Slips reported that the US Internal Revenue Service (IRS) has ruled that bitcoins are property, not currency.

“For a payments geek, the real lesson from the IRS bitcoin ruling is that for a currency – or any payment system – to work, its units must be completely fungible. One reason dollars work really well as a currency is that one $20 bill is entirely fungible with another $20 bill. This means that when I pay, I don’t have to make a decision about which $20 bill to use (unless I have some idiosyncratic attachment to the crisp ones or the like). It means that when I accept a payment, I don’t care which $20 bill I am given, in part because I know that my ability to spend that $20 bill will not depend on which $20 bill it is.

“If payment were in, say, camels, then it would probably matter a great deal which camel were tendered. Camels aren’t fungible. And we know that’s not going to make for a very good payment system.”

Leblond leaves Microsoft

Antoine Leblond, one of several senior Windows executives sidelined in a restructure at Microsoft, is to leave the software giant after nearly 25 years with the company, according to Re/Code.

“Leblond spent his first 20 years in the Office unit, working much of that time with former Windows chief Steven Sinofsky. He moved to Windows when Sinofsky did, developing the cloud services and store for Windows 8.”

He said: “Every single day I have had here has been amazing in its own way, and I will never look back on all of these years with anything but fondness, pride in what we’ve accomplished together, and a real appreciation for having been lucky enough to be part of so many awesome things.

“I am sad to leave all of you, but also incredibly excited for what comes next.”

BlackBerry squishes Ryan Seacrest’s Typo in first skirmish

Reuters reported that BlackBerry has won a preliminary injunction to pan TV host Ryan Seacrest’s tech company Typo from selling a phone case after a judge agreed Typo may have infringed BlackBerry patents.

“US District Judge William Orrick in San Francisco said that the Canadian mobile phone maker had established a ‘likelihood’ of proving that Typo infringed its patents, while mentioning that Typo had not sufficiently challenged the patents in question.

“The preliminary injunction prohibits Typo from the sale of its keyboard, which is a part of the relief sought by BlackBerry.”

The Spartan venture capitalist

Forbes carried an interesting profile of the leaders of veteran Silicon Valley venture capital firm Sequoia, which has a modus operandi and motivation quite different to the rest of the multi-billion dollar venture capital industry.

“When Doug Leone arrived in Mount Vernon, NY, in 1968, the 11-year-old Italian immigrant didn’t have a clue. He flunked a math quiz in school because the terms ‘true’ and ‘false’ bewildered him. He wore unsightly slacks from Sears that invited classmates’ teasing. After school he watched McHale’s Navy alone on a black-and-white television, hoping to learn colloquial phrases that would help him fit in.

“A few years later Leone began to get his bearings. ‘I was working on boats as a teenager, sweating like a pig during a summer job,’ Leone recalls. ‘I could look across and see all the kids at the country club’s swimming pool. The young guys were talking to the girls. And I was saying to myself: ‘I can’t wait until I meet you in the business world. You just made your big mistake, letting me in.’

“Ambition. Vulnerability. Vindication. Lots of successful immigrants bottle up those feelings as they rise to prominence. They hide old slights and do their best to blend into America’s aristocracy. Not Leone. Even in his perch as a managing partner at venture firm Sequoia Capital, Leone still carries himself like a hard-luck striver, scrambling for his first decent break. ‘A lot of what keeps me going is fear,’ he confides.”

The silver lining of the tech bubble

The New York Times had an interesting perspective on Box, one of the latest cloud companies to plan an IPO.

“Whether or not Box’s business pans out, isn’t it amazing that investors are financing a company that is giving away 25m cloud-storage accounts for free?

“Box isn’t alone in its apparent generosity. Thanks to the high hopes and deep pockets of tech investors, a host of high-profile tech firms are now offering incredible business and consumer services at impossibly low prices. The trend is playing out across a range of industries, including business IT services, communications, media, payments, local delivery and e-commerce. And because these start-ups are exerting pricing pressure on established market players, even customers who don’t use their services might benefit from their rise.

“This is the silver lining of a tech bubble. If investors and acquirers keep throwing money into tech – at companies from Box to Dropbox to Square to Uber to WhatsApp to Postmates and more – we’ll get more great products at low prices. We might even get services completely for free, even if it imperils the companies offering them. So as long as you don’t make the mistake of investing in dubious tech dreams, you may be able to ride out the bubble to some pretty great swag.”

Broken bitcoin image via Shutterstock

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John Kennedy is a journalist who served as editor of Silicon Republic for 17 years