About three years ago 30,000 bitcoins were worth $20 million. Currently they are worth about $220 million…now that’s one big bang of an appreciation.
With cryptocurrencies’ continually increasing value making traditional national currencies look like a country side cottage sitting next to the empire state building, most founders of tech startups are beginning to envision a world where fiat currencies are useless. And this is not some hundred years from now robot invasion world, but just about a decade – or half from now.
Venture capitalist, Timothy draper, says that if in five years’ time if you are still on fiat currencies “they will laugh at you”. He believes that in the next half decade bitcoin and other cryptocurrencies would have become so important and key to our lives that there would virtually be no reason to still have national currencies or most commonly referred to as “fiat currencies” around.
With bitcoin having begun the new breed of currencies that will come to be known as cryptocurrencies, it has become the prototype we all look to whenever cryptocurrencies are mentioned. It has its market cap presently at over USD120 billion. This may seem rather tiny as compared to the value of the global fiat currency which sits at a hefty USD 2 trillion. But that does not rule out the fact that Bitcoin has in 2017 alone increased by over 700%.
Draper seems very hell bent on bitcoin and cryptocurrencies, but then who wouldn’t be. After making over $200 million dollars on an investment you made with just $20 million in a space of three years (which is quite the story of Tim), just who wouldn’t be so enthusiastic about such a bargain.
One would realise that whereas cryptocurrencies may not be perfect in themselves, they happen to quite solve the problem that national currencies have, i.e the restriction to borders. A country’s currency is most powerful within its borders, outside those borders there is a very big problem – depreciation. Take for instance the Argentine Peso, outside of the country it is basically of no value, the Nigerian naira depreciates by about 30% outside the country’s borders. But then some currencies to fare pretty well outside their borders too, take the USD and the British Pound for instance. But Draper believes that this problem could solved with the advent of cryptocurrencies.
Now that new cryptocurrencies are been made out of thin air every passing day, the question for Tim’s big “assumption” is “which one were we going to use?”. Well this is what he believes
“They’re all going to interrelate … and there will be exchange rates for all of them,” “My guess is that it will centralize around a wallet that you have, and when you pay for that Starbucks, your wallet will optimize to whichever currency has most value.”
Yet, this doesn’t sound so simple…but Tim always has an answer for you
“If it doesn’t get simplified it won’t get adopted … good marketing people will simplify all use of these things. And we might have a johncoin and a timcoin …we might be trading those in realtime, putting a value on our time and attention.”
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