LinkedIn founder and chairman Reid Hoffman told CNBC he remains a believer in bitcoin, but he says the digital currency is only in the first inning and it is not for everybody.
"The advice I give my friends is don't buy any bitcoin that you wouldn't be comfortable losing, rather like a seed investment in a technology company," he said Thursday during a "Squawk Box" interview from the World Economic Forum in Davos.
Read More Bitcoin finds a place among the world's elite
Hoffman, who owns bitcoin and invests in two bitcoin companies, said the least interesting part of the digital currency is its trading price, which has been volatile.
Bitcoin as a platform for machine-to-machine transactions is where the real value lies, he said.
"As you think of your car becoming a software vehicle, it could automatically handle parking, bridge tolls, all the rest of it if it had a machine-to-machine currency," he said.
Read More Russians move into bitcoin as ruble tanks
The currency also holds the potential to bank the un-banked in markets where it is too expensive for the banking system to support digital transactions, he said.
