FORTUNE — Ben Horowitz, co-founder of venture capital firm Andreessen Horowitz, is bullish on Bitcoin.

Horowitz’s comments came Thursday in Aspen during Fortune BrainstormTech, during a conversation on how technological innovation is shaped by popular culture. And they came a day after Sequoia Capital partner Michael Moritz expressed skepticism toward the digital currency.

Horowitz believes that Bitcoin is essentially software, which means that its success or failure will be based more on cultural adoption rather than on its early feature set. And Horowitz believes that such adoption is occurring, and that it will help improve the technology’s breadth and applicability to the mainstream.

Horowitz also said that Andreessen Horowitz has made several small Bitcoin-related investments, but declined to disclose them.

I ran into Horowitz afterward, and he explained to me that the thesis is essentially twofold: (1) Even though plenty of us provide credit card information online, there remains a serious trust issue when providing outside of known systems (iTunes, Amazon, PayPal, etc.). What Horowitz believes is needed is a crypto-currency like Bitcoin that essentially is the security equivalent of a hand-to-hand cash exchange. For example, if I hand you a $5 bill, I don’t worry that you may be able to illegally access more of my money based on that original transaction.

(2) Horowitz says that while much Bitcoin discussion has been about currency trading and/or savings, there actually is significant Bitcoin-denominated transactional volume in such illicit things as online drug sales (unclear who at A16Z was asked to do this particular piece of market research). The key to bringing it into the mainstream (and satisfying regulators), he says, is tweaking the code so that it can’t be easily used for such transactions (or worse, like terrorism funding) – but he believes such alterations are possible.

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